The Rachel Cruze Show - Practical Tips to Simplify Your Budget

Episode Date: January 17, 2022

Your money does what you tell it to do. With a little intentionality, you can make your money go a lot further—we’ll show you how! Listen in to learn: 3 Places You Overspend (Without Even Knowing It) 15 Practical Budgeting Tips 7 Things That Are Keeping You Broke Zander Insurance Download my FREE Meal Planner and Grocery Savings Guide Learn more about your ad choices. Visit megaphone.fm/adchoices

It doesn't matter what your income is if your spending is completely out of control. So the income is not always the problem. Sometimes it's the spending and that we are not intentional. Hey guys, welcome to the Rachel Cruz Show podcast. I am so glad that you're here. In this episode, we're going to talk about all things budgeting. I'm going to go over seven things that might be keeping us from our money goals. and I'll also go over 15 practical budgeting tips to make budgeting less intimidating.

But first, let's go over three categories we tend to overspend on and how to build those forgotten expenses into your budget. Take a listen. All right, if you already have a budget, then you're probably doing really well with your money. I'm impressed. But even if you have a budget, there are categories that we all tend to overspend on. So we're going to walk through three of the most common places we tend to overspend. And then later on, we're going to talk about three ways to safeguard against overspending because it can be so easy. But the first one, the first area we always tend to overspend is online shopping.

You guys, this is a hard one because it is so easy, so easy to overspend because it's convenience, it's a time saver. stuff just shows up on your front porch. It makes it so easy. So the biggest way to not to overspend is just don't spend. Just don't do it. Stop. Don't do it. Now, easier said than done, I know. So I want you to kind of really think through how these online retailers strategically go after you. Okay? They know what they're doing and they want you to spend more and more money so that they can make more and more money. So here are a couple ways that they do that. Free shipping thresholds. Yep.

Who's added an extra shirt just to get the free shipping? Man, it's a sucker though, isn't it? Because when I get to the bottom of a checkout and you see you have to pay for shipping, you're like, oh, man. And if you're just close enough, you feel like, you know, what's spending an extra $12 for the $7 shipping? You know, what's that big of a deal?

But doing it over and over and over and over and over, it's a trap. It gets you to spend more. Also, an easy checkout. So a lot of these places will store your debit card number. You'll have a login. Now on some of the places I go in, like stores online, I guess through social media or something. I don't know. But like everything is already filled out. I'm like, what? It makes it so easy and I'll be honest you guys it's so bad because I have memorized my debit card number so if I have to check out online I know it and it's just like and there we go and I'm in and I'm going where at least like if you don't do that there's a little bit of friction and be like oh crap my purse is in the car you got to go out you got to get your purse get your wallet take it out type in it you know there's at least some

steps involved not for this chika so I really really have to watch it because there is some friction if you don't have your debit card information stored into a website that you really do. There's extra work, but memorizing it, I mean, it's convenient, but man, it can get you. Those impulse purchases, it can get you. But also what you can do, speaking of impulse purchases, is go ahead and just put stuff in your cart online and then wait. Wait a day, wait two days. Because trust me, there will be an email from the store that you're going to get in your inbox, be like, you forgot these items, and it will remind you. And hopefully, you'll be like, oh, I didn't really need that. I call it my ad to cart days. It's like, you know,

some days just kind of go shopping. You never really buy it, but it just feels good just to look and add stuff. And that's it. But when you do that, you're going to get follow-up emails, and they're going to give you ads in those emails, okay? You're going to be able to be like, oh, look at all of these coupons. Look at everything going on. And again, it, it, they're sneaky with it, so make sure you watch that. They also will create loyalty program discounts. So this means you will get lots of emails with advertising. So you can even just unsubscribe to these emails. You can even set up a spam folder and they can just go in that folder. You can delete it later. But watch out because you will get a lot of emails. They also will do new customer discounts.

Yeah, man. And again, if you're going to buy something, sure, you can take. advantage of like this kind of thing that's great. But if you're just just just on a website, just look in and you're like, oh, I can get an extra 10% off, 15% off right now. Oh, but again, it just sucks you in. So watch out for that. Also, the limited time offers that aren't really limited time. Nope. Usually these will circle back throughout the year. But you're thinking, oh, it's on sale. Oh, my gosh, it's limited time. I got to do it now. And some places will have like a countdown clock and it'll like tick down and you're like, oh my gosh, I only have 16 hours before this goes away and they get you all flustered and they get you to spend more money. Also,

if you look at subscription-based discounts, so this is a big one. I always think about Amazon with this, right? You're paying a fee and you do get some savings and even free shipping and different stuff, but you need to look to be like, okay, is the subscription worth it? Like, am I saving enough on the subscription to get everything that I want, right? So making sure that you look at that. Also, bulk purchasing discounts. Again, sounds great. Because you're like, oh my gosh, look at all this stuff I can get. This is awesome. But if you don't use it all, then it goes to waste. And then the bulk pricing, you ended up spending more than if you just bought one or two things. So, again, make sure you go and you look and you see, okay, per unit, if it's something like that, or

or look to see am I actually going to use the product. Also, point of sale financing. Things like afterpay. Oh, man, these will get you. Actually, like that is a super cute, $100 sweater. Oh, and I only have to pay $26.36 right now, and throughout the next four months, that's great, right? That's an easier pill to swallow than $100. Yeah, because guess what? They're getting you into debt. Sully but surely, you're in the fun. and 78% of millennials have missed a payment on these things like karma and afterpay. So just watch out, you guys. It is a place for you to spend more money.

They know what they're doing. So online shopping again, we tend to overspend a lot. So watch out from all of these things that they have out there to suck you in. Okay, another place that we all tend to overspend are groceries. It's a tough one. Food is so hard. It really is. I feel like it's seasonal. I feel like it's, you look, see, okay. You know, what do we have going on right now? Is it a busy season, a slow season? Are we cooking more? Are we not? Does stuff go bad? It's just, it's just hard. It is so hard. But staying within your budget at the grocery store, it is so key. So here are a couple of ways to help you not overspend with groceries.

Number one, I will beat this drum until the end of time. Meal plan. meal plan, okay? I'm telling you, this will change the game. Winston and I've been doing this for years now, but every Sunday night, I just did it. I just did it last night. We look to see, okay, what do we have every single night of the week? What nights are we cooking? What do we want for dinner? And from there is our grocery list. And it does. It helps you because it even helps you on the nights, whether you're getting home from work or the kids are home from school and you're just like, oh, if it's the whole, I don't know what we're going to eat, more than likely, you're going to just get takeout or get food delivered. That's what ends up happening. But being

able to use what you have because you've planned ahead is so great. And you can even try my free meal planner and grocery guide. So this includes downloadable grocery lists and meal planning templates. Oh, it makes it so easy. You just create your meal plan and transfer the needed items over to your grocery list. There's videos. There's recipes. It's amazing. So you just go to ramsysolutions.com slash meal planner or just Google Rachel Cruz meal planner and that will help you a lot. You can also start freezing and storing meals. So this will save you a lot of money and a lot of time. Vegetables are great for freezing. Meat is great for freezing. If you freeze, you're able to say, okay, this is what we have and you just defrost stuff and it makes it so much faster. And again,

we'll save you money. Also, keep a running tally of how much is in your cart. So I, it's probably like a sick game, but I do play this, and then I like challenge myself to be like, is it close to the amount I have in my head when I get to the grocery store check out on? Because I will all like round up and I'll put stuff in my cart. But when you do this and you actually keep a tally of what's going in, then it's going to help you. It's not going to be just like this shock and awe when you get to the register and be like, oh gosh, how much did we just spend?

You kind of are keeping up with what it is and it just helps you throughout your shopping. Also, you can use coupons. So don't buy the item if you don't need it just because there's a coupon. But also, look, there's a lot of great places to find coupons and use them. Those will save you money. Also, don't assume that bulk is better. So compare the price per unit or the price per rounds. We kind of talked about this earlier.

But if you don't need more, don't buy more. That is so hard. I will do this, though, with freezer stuff. Things that don't go bad, but I'm terrible at buying bulk of fruits or vegetables. vegetables, stuff that can go bad, produce. Because it's like so much. I'm like, oh my gosh, we don't need 8,000 blueberries. We only need 4,000 in our house because my kids love blueberries.

But they don't know them that much. Like, it's just, it's crazy. So just for stuff not to go bad, again, because you can overspend. Also, know when to shop. So a lot of experts say to shop on Wednesdays when stores are restarting their shelves and they'll mark down any item that didn't sell last week. You also think about the time of day. So Early Bird gets to the clearance shelves first or score deals on deli and bakery items just before closing time.

So those are great ways to save as well. And shop online or do curbside pickup. And so this is great because you can compare different prices. You can avoid impulse buying when you're just walking. And again, like we were saying earlier where you can kind of tally how much you're spending. You can see it there. So like before you check out, you can just look at the number and know. Okay, is this what I want to spend or not?

So that is very helpful. And then look at different grocery stores. So there are cheaper grocery stores. Like the exact same item can be different prices just because of the store. So again, Aldi's is a great place to save, even Costco or Sam's Club, if you're going to do big bulk stuff. But just look around to see different stores and what their prices are. Also, on things, pick the generic over the name brands. I do this all the time, especially with, like, my milk or even my eggs, my cheeses, like, all that kind of stuff.

A lot of the dairy stuff, I'm like, oh, yeah, I'll just get the store brand because it's fine. I mean, taste the exact same. I will say, there are things that I am picky, like Honeynut Cheerios. I got by Honeynut Cheerios. I do. I'm sorry, I do. I can taste the difference. But the stuff that you can't just buy the generic version.

It's great. and then also you want to buy meat when it's on sale. And so you can look out for some great deals. Again, when you buy in bulk and then you can freeze some of that, you can do some cheaper cuts like chicken thighs instead of chicken breasts. Just look to see, okay, where are just some ways you can cut a few dollars out. So again, groceries, it's one that people tend to overspend on, but some great ways to help you save.

Another place in our lives that we tend to overspend on is life insurance. So one of the most expensive ways to have life insurance is whole life insurance. So a great way to save money here is to switch from whole life to term life. So term life, again, it's set for a term of your life. So a set number of years, and when those years are over of the term life insurance policy, you're done. I mean, you can always get more if you want, but like it's only like 20. You pay for like 20 years, 15 years, 30 years.

because the goal here for us as you're doing the Rams Baby Steps is that you're self-insured eventually. So we don't have to have insurance for the rest of your life. Because if you have millions of dollars in your 401k and your house is paid for, you're great. Life is awesome, right? And that's the key. So it's inexpensive, but it is. It's the best way to have life insurance. And if you die during the time you have life insurance, then the life insurance company pays out your death benefit or it's also called a payout.

So that's how term life insurance works. Whole life insurance is basically the opposite. It's for your whole life. It's usually more expensive because they have what's called cash value built into it, which means that you have like this investment built into your life insurance. And the insurance isn't always great and the investment definitely is not great. So just remember your insurance and your investing should not be in the same place. Okay.

so like separate those. So again, term life insurance is the way to go. And I want you to get a term life insurance policy today if you haven't, you guys. And I want you to get the best rate possible. So you can check out my friends at Xander Insurance who make it super easy for you. You plug in your information online and Zander will shop around for you and find the best rate and coverage for you and your family. And just go to zander.com to get your free quote today. Yes, it's free.

because remember, we are wanting to keep expenses down, down, down. We're trying to not overspend here, people. All right. The last category that we always tend to overspend on is the miscellaneous category. Yeah. If you've never budgeted before, this is one line item in your budget you want to have because life happens. You forget about stuff.

You're like, oh, crap. And then you've got to go put some money in somewhere. And if it's a zero-based budget, that means all the money is already allocated to other stuff. So that miscellaneous category kind of catches all the stuff you didn't think about. So again, think about annual checkups and co-pays or home maintenance or car maintenance or oil changes, special occasions, taxes, memberships and subscriptions, like, all of it. So just remember, I know, there's a few apps that I do pay for to get, like, the premium version of. And they all seem to hit, like, this was last month. And I was like, oh, no.

who got in this, like my Apple receipt for my app store stuff kept hitting it. I was like, oops, oops. I totally forgot I got to pay for this stuff. And so it does. So the miscellaneous category catches it all. But there are some ways to really plan this out, okay? If you're not a great planner like me always, that will help you. So a sinking fund.

This is key. And this is good for things that you know are coming. So whether it's a vacation, replacing a car, Christmas, a wedding, So what you do is you figure out, okay, here's the amount we want to spend on this big purchase that's coming up in eight months or 12 months. And how much do we need to save per month? So when we get there, we have the money for it. That's what a sinking fund is. And then last but not least, like we said earlier, create that line item in your budget called miscellaneous.

So this is going to help you. So again, sinking funds, you can prepare emergency funds, the things that you can't prepare for and they're like really big. But that miscellaneous will help get the catch. all throughout the month. Again, putting those things in there that you forget about, whether it's kids' birthday parties or even taxes, because maybe you have a side hustle and you forgot about that, monthly subscriptions. You know, all this stuff we're talking about. If you forget any of that, that miscellaneous category is there for you. And if you've not been budgeting and you're like, what? What is all this? You want to check out every dollar. Okay? Every dollar is the best

budgeting app out there. You can go to ramsysysolutions.com slash every dollar or just go to the app store, download it and really, really start to plan around this because all of this overspending we're talking about, it can happen, and especially if you're not intentional. So just being aware of what's going on, having a plan for your money is going to give you control. That is what I want for you guys. Okay, we're going to dive into one of my favorite parts when it comes to talking about money. And that is the budget. Yes. I love budgeting. And I couldn't always say that. Back in the day, I hated it because I'm a spender, my free spirit. I didn't like it.

But now that I've been doing it for a long time, you guys, I have learned to love budgeting. I really do. It, for me as a spender, I always say it's like permission to spend. It gives me the ability to spend money without questioning it or guilt or shame. And it just feels good because I'm like, okay, I have control over my money. And I work hard. I come to work and make money.

And I'm like, I want my money to go as far as possible. I don't want to just look up every tax season and be like, I made how much this year and where did it all go? I don't want to live like that. I want to be in control. And so budgeting is the thing that has helped me so, so much. So how can it help you? Well, what it is is it's an action plan and a clear picture month to month of where your money is going. It helps you achieve your goals that you want.

It helps you, again, spending without guilt. It just gives you a plan and lots of communication around. what is going on with your money. So let's dive into 15 budgeting tips for your daily life. It's going to be a lot, but I can't wait because this is going to be so, so helpful for those of you that are like, ugh, about budgeting or some of you that have tried, and you're like, it's just not working. So the very first tip is that I want you to create a budget to zero before the month begins, which is called a zero-based budget. So before the month begins, look at the next coming month and figure out, okay, how much money am I going to make coming up? And if you're on salary,

obviously this is really easy. If your income is inconsistent, it might be a little bit tougher, but just kind of figure out on average, okay, this is what we're going to make. And you're going to list out all of your expenses, including giving and saving, and your goal is your income for the month minus everything that you plan to do with money equals zero. So every dollar has a name. The second thing you want to do is you want to budget together. So this is true, especially if you're married. You want to be on the same page with your spouse. When you do this, you guys, you eliminate so many money fights, money arguments, disagreements,

because here's the plan. Like, you've agreed before the month's this is what we're going to do. So you know what's going on. The communication there is already clear. I mean, it is so huge. So not only on the money side, but also as a couple, when you talk about money, you talk about more than just money. You really do. You talk about your life. You talk about your dreams. You talk about what's coming up in your calendar. You talk about your fears. You just end up talking about a lot. So the unity that's created, even by just doing a budget together every month is massive. Now, if you're single, I would say find someone in your life that you feel comfortable, which again will kind of take a unique friend, but someone that you feel comfortable sharing numbers with. Because you're like, hey, here's the deal. Here's, here's kind of what's going on. Here are some of my goals that I have. And just to help someone else, you know, be in it with you is very, very helpful.

All right. The third thing to do when it comes to your budgets is you want to budget every single month because every single month is different. So you're not going to just do a budget and say, here's my budget every single month for the whole year. You need to look every month. And that means even pulling out your calendar to see, okay, what's going to be? on? Are there birthday parties? Are we going on vacation? Is it back to school season? And we have to spend money, you know, on that? Are we going on vacation? What is going on? And then you're going to be able to say, okay, we need to add some categories in this month's budget because of things happening. Call me a nerd, but this is one of my favorite words from this because I love getting last month's

budget. If you use every dollar or budgeting up, you know this, it just duplicates your budget from the current month to the next month. So then you have to go in and kind of change stuff. and I just like last month I know for us it was just like car repairs my blinker went out we had to do something with the oil the tie I mean it was just like car stuff oh so we had to add an extra little line item in there and pull money from savings and have it in there but when I did my budget and we did the budget for this month I was like oh my gosh you can swipe right and delete that category and that means that much more money is left to budget it's just so exciting I love it I love going months month. I think it's so fun. It's so fun. So if you haven't tried it, you need to check it out. See if you

have as much fun as I do. Okay, the fourth tip when it comes to budgeting is start with the most important categories first. So here at Ramsey Solutions, we always teach to give first. Giving needs to be part of your financial plan, whether you are living paycheck to paycheck, whether you are a billionaire. I don't care where you are. You want to be giving. And I always tell people give a little. until you can give a lot. But there is something to be said when you give, how it changes you. And the whole lie that if I just had more money I would give, I'm telling you, the more I've done this,

the more I realize this issue, it's more about a heart issue than a math issue. And so being able to say, hey, where are places that maybe I can cut some back to be able to give something? So I would challenge you with this. This is why I say it's always the first category in your budget is giving, be giving something.

Number two, I would say is saving. If there's something you're saving for, especially if you're on baby step one and you're saving up your $1,000, even baby step three in your emergency funds have saving in there as well. And then you want to do what's called your four walls, which is food, shelter, utilities, and transportation. These are the four things that you absolutely have to have in your budget to survive, right? I don't want you getting behind on rent or your mortgage. I want you to have money for food. So everything else, okay? That means anything else.

Anything else means cable. Anything else means subscriptions. Anything else means debt. Anything else is off to the side. But those are the most important things, no matter who you are that you want to take care of first. And then from there, you're going to prioritize and say, okay, what else is left? What do we have that we have to pay on? What is the cell phone or the cable or the debt that we have to pay every month?

Then you can kind of prioritize under that. Number five, you want to help with your budget to pay off your debt. So this is going to be a big priority. If you have already saved up your $1,000 on Baby Step 1, your next priority is to pay off your debt. So if there's anything in your budget that you can cut out, like Out to Eat, maybe shopping, clothes for the month, you can cut out, anything that you see,

okay, I can cut this out of my budget to put any amount of money out of the budget, take it out and throw it at the debt so I can pay off my debt as fast as possible. Number six, don't be afraid to trim the budget. So just like what I was saying, do it, you guys. The budget is going to give you power. You're going to be able to see, here's what I spend money on.

And maybe you have a little bit of a discipline moment where you say, okay, I don't need to spend this much on OutTeed. I don't need to spend this much on shopping. I don't need to spend this much on entertainment or whatever it is. And there are places there that you can cut out and trim your budget. And again, some of this will be temporary. You don't have to trim your budget for the rest of your life. It's really going to be for the times that you're saving up for your emergency fund and your getting out of debt. Number seven, make a schedule. So this is going to be helpful to know exactly

when bills are due, especially if you set up auto drafts and money is pulled out of your checking account to pay the bills. You know exactly when the money is going to be out because this is going to be helpful if you're paid weekly, biweekly, or even twice a month. You're able to set up to know when your income is coming in and what bills are due. Number eight, track your progress. So have goals. and say, hey, we want to be able to save X amount or we want to pay off X amount of debt. Have some goals out there. And when you make some small wins, even if it's like my goal is to save $100, I just need to put $100 away this month.

I mean, anything like that, you guys, that is a win because you have set a goal and you've accomplished it. So celebrate those small wins. Number nine, create a miscellaneous category. So because this is a zero-based budget, again, we've already planned out where every going, if something unexpected comes in, you're like, oh, I was not expecting that $200 charge or $400 charge or $20 charge, whatever it is, and you're like, and you don't really have a place to put it, have a miscellaneous category. So stuff can go in there. You can dip out of your emergency fund

if you need to if it's an absolute emergency, but hopefully that miscellaneous category, again, on your daily spending, will be able to catch the things that you forget about. Now, if you look back over the few months and see, okay, the same things keep falling in the miscellaneous category, then create a line item for it because you know what's happening. So just say, hey, here's the line item for that thing that keeps coming up that wasn't miscellaneous, but now we're actually going to make it a line item. Number 10, cut up your credit cards. Use a debit card. Guys, we can get into this rant real fast and I won't go deep in this hole. but it's amazing how much not only do you spend on a credit card,

but when you carry over your balance and you're paying interest, if you're missing payments and it's late fees, how much money you're spending on extra versus saying, hey, I'm just going to spend the money I have in my account and use a debit card. Number 11, use cash for the categories that you tend to overspend on. So people are like, this is kind of an old school way of looking at it, but this is very helpful, even if it's one or two categories

and you tend to overspend, cash it out. I have the Rachel Cruz wallets that has this whole system built in the envelope system because it is helpful. It helps you stay accountable. It helps you to know how much is in there. And it really does, especially if you're early on in budgeting, it's going to help you through this process. Because also visually, when the money's gone, is gone. All right, number 12. If you don't like using paper with your budget, like Excel, even, or a yellow pad, then do it online.

I mentioned every dollar earlier, but it is. It is the best budgeting tool out there. You're able to sync it up with your checking account on every dollar plus. You're able to have a login information and your spouse can have it too so that they have the app on their phone. And if you change stuff, it changes on both. You're able to talk about it. It's so, so helpful.

All right. Number 13, quit the comparisons. This will help you keep your budget goals intact because it is easy to look at what everyone else has. And when you do that, you tend to overspend and bust the budget. So put the blinders on, look at your life, your budget, your goals. Which again is number 14. Set some goals. You want to be able, again, no matter where you are, I don't care if you're on baby step seven or you're baby step one, you want to have goals out there. This is what's going to keep you motivated. And you're why to know why are you doing this. Have it out there. Again, celebrate the wins,

but it'll help you stay motivated. And last but not least, number 15, give yourself some grace, okay? It's not going to be perfect all the time. There's going to be some months. Oh, man, it just didn't work, and you're having to change stuff. Like every other day, it feels like shifting categories,

all of it, and get frustrating, but I'm telling you, stick with it. Those first few months are the hardest. I mean, the first 90 days, you guys, it's going to be hard, I'm telling you, but push through because once you get in the rhythm of it and you're like and you start actually winning with your money and you're going down the baby steps and you're getting out of debt and you're doing all this I'm telling you it starts to happen it starts to become more and more natural now some of the places that

is tough when it comes to budgeting is if you have an inconsistent income so if you do have inconsistent income like you freelance or maybe you're all on commission I would say budget on the lowest earning month that you can think of and say, okay, here's at the lowest one I'm probably going to make. And then you want to list out your stuff in order. We talked about this a little bit earlier, but remember, it's giving, it's saving, it's your four walls, and anything else underneath, you're going to prioritize. Because as the money comes in, you want those top ones filled in first. And then what doesn't get to the bottom, maybe that month, it's not there. But then if you have a great month, the next month, maybe the money flows all the way down, but you want to be able to prioritize. Okay, some of you

are thinking maybe, okay, so how do I make a budget? Well, one of the easiest ways is to download every dollar. It's going to help you so much. Again, there's a free version out there, and it makes budgeting, it makes tracking your expenses, all of it so, so easy. So go to ramsese solutions.com slash every dollar. And what you're going to do are a couple of steps within it. So step one is list your income for the month. Again, think of your paycheck. If you are going to have a garage sale, freelance job, side hustle, any money that's coming in, you list it as your income. Step two is listing your expenses. So we talked about this. It's your giving, you're saving, your four walls, like food, shelter, utilities, and transportation. And then you're going to list out all of your other

monthly expenses. So again, debt, insurance, entertainment, close, anything else underneath. And then the third step is subtract your income minus your expenses to equal zero. And that is a zero-based budget. Now, if you have more money left over and you said, oh, well, I have more income coming in than I have a lot of, then take that extra money and put it to whatever babysep you're on. So if you're saving up for your emergency fund or paying off debt, put it there. Or if you're on babysaps four, five, six, and seven, and you're like, hey, we kind of do it up our lifestyle a little bit, you can do that too. If you're in the negative and you say, okay, I have too much in the expenses side and not enough income, you can either up your income if you get a side hustle or you have to

lower your expenses. You have to be able to cut back and say, how do I live within my means? My dad has said for years to act your wage, right? Behind what you make and live on it. Live unless then you make. This is a key part to winning with money. And then the last step is track your transactions. This is the best way when it comes to winning with your budget overall. You know exactly where the money's going. So if you go to the grocery store and in every dollar, a little bubble, pop up and show how much you spent there and you can drag that little bubble up to groceries and every dollar does all the math for you, which is awesome. But you keep track of what is going on so that you're not overspending. It helps you stay in line. Now remember with the budget, it is not to limit

your freedom. A budget is to give you freedom. Really, a budget is the thing that is going to help you stay in the boundaries of your income, know what's going on and you have a plan. I think one of the biggest mistakes people make with their money is that they're not intentional. They just kind of live month to month and buy whatever and keep going. And there's no plan. There's no plan. So a budget is going to help you stay on track. So I hope you guys check out every dollar.

I help you check out the Rachel Cruz wallet because all these tools are here to help you win with your budget. All right, doing this for almost 12 years now, there is a theme that I do hear from people. And it's kind of this idea of like, Rachel, I'm trying. I'm trying and I'm doing what I can, but I feel like I'm not making progress. because money can be a really tough subject in your life. And so whether it's life circumstances that are happening, whether it's choices that you've made that are not catching up with you, it doesn't matter. Like, whatever's going on around you, money can be difficult. And you may be like, I just feel broke.

Like I feel like I'm living paycheck to paycheck. I'm not getting traction. What do I do? Well, in this episode, I want to walk through reasons that maybe that's happening. And if something kind of, oh, maybe that is what's going on in my life, this is an opportunity to change it. So I'm hoping I can point some things out that might be going on in your life so that you can change, not just your mindset, but also your money habits. So you don't feel like your entire life, you're running and running this race, and you're getting nowhere. So number one, you might have a mindset problem.

What I mean by this is you have the wrong mindset. Maybe you have believed because of people around you or situation is just that like, well, I'm just never going to get ahead. whatever I do, it's not going to matter. My parents were like this. I'm going to be like this. My friends are like this. That you just really don't even have the belief and that mindset that stays with you like that for years and years and decades for some people, then that's going to be the result. Then you are just going to stay like that. But if you flip your mindset and say, okay, maybe I actually have power over my money. Maybe I actually can say no to a purchase that I would have normally bought, but I'm going to say no to that. I'm going to save that money instead. Maybe

I actually am going to start giving to people who are struggling and find the joy in that. Maybe I am going to put the blinders on and not compare my life with everyone else's because it seems like everything that everyone else is doing is taking my money because I keep spending it. Maybe I can set a financial goal and actually accomplish it. Like maybe. Maybe. Maybe. I can do these things. And you guys, guess what? You can. You can do these things. But a lot of reasons in our life can make us believe that we can't. And you can even look back, I even like to say in the household you grew up in, like think back to your parents. Is there anything there of the habits your parents had with money? Or maybe how they talked about money, their belief system about money.

Maybe you've adopted that subconsciously if it's negative and it's become your way of life. and you have to kind of go back and undo some of those lessons that you learned by putting in new information, whether it's listening to the Rachel Cruz podcast. Maybe it's listening to The Ramsey Show or reading books like the total money makeover, know yourself, know your money, or dreaming about the future, or just believing that it is possible. Changing that mindset, you guys, is so, so key. Number two, lifestyle inflation.

So this happens when maybe you get a little bump. of income because of a raise or bonus and you take your lifestyle right up with it. You're like, okay, now that we're making this much, then we can afford some more payments. We can afford to take on more debt. We can afford a bigger house. We can keep acquiring this stuff. And if you, let's just take the average income in America was around $65,000, you were living up to that, right?

And maybe even beyond that, if you had debt. and then you maybe bump up to 70,000. You're like, well, now we have 70,000. So now we can bump up our lifestyle 5,000 more. And you just keep going, going, going, keep going, going, no, no, no, no, no, no, no, no, no, you can't do that. Okay? So what you want to do is you want to fix what's going on. And instead of increasing your lifestyle, take some extra money that you have and actually

use it for your good, and that's paying off debt or an emergency fund, all of these things versus saying, oh, we made more money. So again, let's spend more on vacation. Let's just spend more and let our kids. be in 80,000 things that cost billions of dollars. Like, no, don't do that, okay? Focus on how you can use that extra income to better your life. All right, number three, that you're not intentional with your time and money.

So it doesn't matter what your income is if your spending is completely out of control. So the income is not always the problem. Sometimes it's the spending and that we are not intentional. And really, the intentionality is the budget. and the budget saying, hey, here's where you can spend in each category per month to reach your goals, to live below your means, all of this, you guys. I mean, it is so, so key. I understand it's easier just to kind of wing it. And yeah, just buy whatever you want at the grocery store, go online and shop and not worry, go on vacation and just do whatever and charge it all on credit

cards and it's not a big deal. You end up overspending in that you don't need to. So again, the budget is so, so key. John Maxwell says that a budget is simply telling your money where to go instead of wondering where it went. And I love that. That a budget, it does not limit your freedom. Your budget gives you freedom. Okay, so that's the intentionality on your money side. Let's talk about intentionality around your time. So think about what do you do on the weekends? What are you doing at night if you get home from work? Is it that you're just, I don't know, watching TV and on social media and just numbing out? We all do that every now and then. I totally get it. Maybe you can use that time, especially depending on where you are financially, to actually use it to better your

life, whether that is maybe looking through your bank statements and cutting out stuff that you don't need. Maybe it's decluttering your house and selling stuff that you're not using. Maybe it is going and getting a new job, maybe at night, a part-time job. Maybe it's, you know, I don't care what it is. But making sure that you are intentional with your time is going to help you when it comes to your money. Number four, you're not saving. So only four and ten Americans had savings to use to pay for an unexpected emergency last year, according to bank rate.

Four out of ten, you guys, I mean 60% of people had something come off that they didn't have the money for. This is why it is so key to have an emergency fund, the safety net between you and life. Because if you are in that cycle of just living paycheck to paycheck, you keep doing it, you're not going to get out of it, okay? So that living the paycheck, yes, you can do what we've talked about already, shifting your mindset, looking to make some extra money, living on a budget and cutting out expenses you don't need. You know, all of that are really big key pieces. But the emergency fund is that first step to really say, hey, here's where you can put all the intentionality and actually have a safety net, so that when something does come up, you're not going

deeper into debt for those emergencies. You actually have the money there. So you can save for that, that starter $1,000 emergency fund. Once you're out of debt, you can save up your three to six months worth of expenses emergency fund. You can even think about the future and think, okay, how am I going to save for retirement once I get there? Like, all of these things are so, so key, but savings has to be part of this mindset shift so that you don't stay broke.

Number five, you're still using credit cards. So we have a thing we say around Ramsey, we're like, you can't be Ramsey-ish, right? like, well, I'm kind of doing it, but I'm kind of doing my own thing. I'm kind of over here. Listen, the fastest way to get to point A to point B, we have figured out. That's why we teach the Ramsey Baby Steps. I always say don't use debt and to be able to really get in control of your money, because when you are using credit cards, especially, studies show you end up spending more. The average family has around $16,000 in credit card debt, okay? So think about the interest on top of that. And you end up, it's kind of this enabler, that you spend money that you don't have

and you can justify it, you don't really even feel it emotionally, but it's not setting you up to win long term. So getting on a plan, covering your bases with your budget so that you have money for your bills and that the credit card is not going to be your safety net, okay? So getting rid of your credit card, so, so important to this process. Number six, you haven't learned delayed gratification. And this is one when it comes to buying and shopping. I understand. It feels good, right? If you're stressed because of life, yeah, it feels good to buy something because, oh, I don't know, the dopamine hits and the adrenaline goes and it's like, oh, that was fun, that was enjoyable. I totally get it, okay?

But when you live in that, you're going to stay broke. You have to be able to have the mindset to say, I'm going to say no to stuff that I want. And I tell people to add to your cart. Just add to your cart. You know, do a little shopping, add it to your cart, and then don't buy it. Don't buy it. Just get rid of it. Because usually it's stuff that you just want in the moment that you don't really want long term.

But if there is stuff that you think, no, I really do want this. Write it down and wait one month. Look up in a month and see, okay, do I still really want X, Y, and Z? Do I still need X, Y, and Z? And it's amazing what happens when you actually delay gratification. All right. Last but not least, number seven, you haven't set financial goals. This is a big part of winning with money.

Zig Zigiler always says, if you aim at nothing, you'll hit it every time. You got to aim at something. You got to have a goal for your money. Again, whether it's, hey, I'm going to just save $100 this month. Or maybe I'm going to try to get my emergency fund in 30 days or less. Like, I don't care what it is, but you have a goal. We want to pay off debt. I want to have X amount of retirement.

Have goals that you are shooting for. So here's some ways to set goals. Write them down. It's amazing. Writing it down and just having a sheet of paper in your car or at your desk at work or on your bathroom mirror of what those goals are are so, so key. Make them specific. Know exactly what you are shooting for.

So the idea of saying, I just want to be better with money, it's not going to work. But if you say I'm going to pay off $10,000 of my debt this year, then that is exact. It's not vague. You know exactly what it is. And you want to be measurable. So if you want to say, okay, I want to pay $10,000 toward my debt next year, I'm going to have to have $835 extra every month just to put towards my debt or $210 a week. Breaking it down into these bite-sized chunks is going to help you see these many goals throughout

the process and how you can actually hit your goal. And also give yourself a deadline. Don't just say someday I would love for this to happen. Actually have a finish line that you are working towards. And when you are setting goals, make them for you. Make it a goal that you want. So the idea that your sister and brother-in-law are getting out of debt, it sounds kind of cool. It's like, okay. But if you don't want that for you, you're not going to do it.

Like, you have to find the Y in you to be able to say these are the goals that I want to hit. So if you're ready to do this, you guys, it is possible. It's possible to change the way you view and you handle your money. If you do not like the result of where you are today financially, you have to change. Change what you've been doing. Change the way you've been thinking about money. We guys, I hope this entire episode helped you with budgeting. It is such an important key to winning financially. And I just want to say thanks so much for listening. If you have not subscribed to this podcast, make sure to hit the follow button.

And if the spirit leads, you can leave a review. As always, make sure to take control of your money and create a life you love.