The Rachel Cruze Show - Proven Methods to Getting Out of Debt (That Actually Work)

Episode Date: January 29, 2024

With thousands of voices telling you how to handle your money (lookin’ at you, TikTok), it can start to feel overwhelming. The good news? Money doesn’t have to be like that. Today, I’ll talk about just five things you need to do to win with money. Plus, Jade Warshaw joins me in the studio, and you’ll hear an emotional moment from The Ramsey Show. What you get in this episode: How to Escape Debt at Any Income Level The Secret to Overcoming 6-Figure Debt 5 Ways to Achieve Financial Goals Helpful Resources:  Get Jade Warshaw’s new book, Money Is Not a Math Problem. Then, listen to how she paid off $460,000 in debt. Start budgeting for free with EveryDollar. Learn more about Christian Healthcare Ministries. Sponsors pay the producer of this show, The Lampo Group, LLC, advertising fees for mentioning their services or products during programming. Advertising fees are not based upon or otherwise tied to any product sale or business transacted between any consumer or sponsor. The following sponsors have paid for the programming you are viewing: Christian Healthcare Ministries. Learn more about your ad choices: https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy: https://www.ramseysolutions.com/company/policies/privacy-policy Learn more about your ad choices. Visit megaphone.fm/adchoices

Do you ever feel like winning with money is just kind of complicated because maybe you're scrolling through social media and you see hundreds of opposing views when it comes to money? And it can be really hard to figure out which advice to believe. And so it's hard to narrow it all down. Hey guys, welcome to this episode of the Rachel Cruz Show podcast. I'm so glad that you're here. In this episode, we're going to talk about how one of our listeners tackled her financial hurdles and how you can do the same. Then I'll go over five ways to achieve your financial goals this year.

But first, I want to share a conversation I had with fellow Ramsey Personality and my friend, Jade Warshaw, on how she stopped living paycheck to paycheck and paid off six figures of debt. Take a listen. Well, hey, you guys, today, I am so excited about this

because one of my good friends, Ramsey Personality, co-host of The Ramsey Show, and again, one of my great friends, Jade Worshaw is here with us. And she's been on the show before. And Jade, you talked about how you've paid off so much debt to you and your husband, Sam, six figures worth. And you guys have such an incredible story.

So for you, what would you say is kind of that moment that you decided to break the paycheck-to-paycheck cycle? Because it's a cycle that a lot of people are in. And you and Sam walk through this. And so what was kind of that story for you guys? You know, there were a couple of those moments along the way because our story was seven and a half years. But the one that stands out to me the most is, My sister was in Orlando, which was about three hours from where we lived, and she had like a medical episode and ended up in the hospital.

And I wanted to go see her in the hospital, but we didn't have gas money. Like, we didn't have money in our account to be able to drive to Orlando to see her. And when that happened, it was like, okay, this is bad. Like, this is sad and bad. And I remember having to call my dad and being like, can I have, like, in my 20s, can I have some gas money to go see my sister? And that was like rock bottom. Yeah, we talk about a lot that the sick and tired moments, right,

that a lot of people with their money journey have. And some people's are more devastating than others, right? That's what happens, though. And that's where money, I think, is such an interesting part of our life because it coincides, right? Like, we kind of sometimes think our money life and then our regular life, but they are all in one, right? Yes, 100%.

But the money affected how you dealt with that family moment. Do you find that to be true? Like, when you're talking with people and even in your own story? Absolutely. I mean, I literally just said that today. I was doing a social post, and the post was all about how people start this money journey, whether it's, I'm going to start budgeting, I'm getting out of debt, whatever that is, and they start to realize, wait a minute, I'm arguing with my spouse more, but it's the kind of argument

that's like, okay, we're like, we're getting on the same page, right? Or you start realizing, like, look at my grocery budget, look at how I'm eating, and that turns into a whole thing about what you're putting in your body. Or you just start realizing my career, I'll never be able to earn the money I need in this career, or this career is not satisfying me. So it starts to go into these areas of personal growth. At first, it feels very uncomfortable, but I'm like, no, keep going through it because it's so worth it.

Money touches every area. Oh, it's so true. It is such a part of our life. And in order to get control of it, we teach people this thing called gazell intensity. So those of you on baby steps, two and three, you know this, where we're like, hardcore, you're going to be doing this, like, especially getting out of debt, right? It's just like, I mean, it is scorched earth. And you guys had seven years of that.

So I can only imagine, as we're talking about this, I'm like, the human factor, though, was seven years of that. I don't think people can, like, sustain that fully. So what did that look like for you guys? Was there kind of the Ramsey-ish sometimes? Or was it like, were y'all perfect, Jade? Oh, never that. At the gazelle intensity.

Listen, listen, definitely not perfect. In the beginning, I'm going to be honest, the hardest part was, and I think a lot of people feel this, credit cards. Everybody thinks that it's their safety net. That's the thing that you think is going to give you security. And we make all these excuses. And I remember our excuse was,

well, the way our job is, and we travel a lot for work. whatever your excuse is to keep credit cards, if you keep them, you will keep putting money on them. And so for us, at first we saw a lot of like two steps forward, three steps back. Yes. And you don't make traction that way. And so again, calling back to that story before with my sister, that was like, okay, we have to stop using credit cards, got to cut them up. And then throughout the rest of this seven and a half journey, it's making milestones and finding ways to celebrate. If you pay off $20,000, find a way to celebrate. If you pay off $40,000, find a way to celebrate, but you've got to put those in place ahead of time so that you know what

you're working towards if baby step three is a long ways away for you. Yes, I know, because it is exhausting. People do this for 18 to 24 months or more like you guys, and a way to sustain it is really important. But for you, you always talk about budgeting. Me and you, it's one of our, one of our go-to topics that we love, we love budgeting. We do because it gives such control, it gives such power, it gives such knowledge and awareness, and you just feel in control. So for budgeting, how do you encourage people that this is really an important tool to use

in your everyday life when it comes to your money? Well, I'm glad that you brought that up, Rachel, because I want to talk. Can I talk about this book? Yes. Oh, my gosh. Y'all, so good. Money's not a math problem. Like, this is all about budgeting.

Okay, so this is my perspective on budgeting, how to do it. Because so many of us, we get the particulars, right? The practical stuff. Okay, I know I've got my every dollar budget. I'm doing it on paper. but then we come up against, wait a second, I'm making this budget, I'm not sticking to it, or my spouse is not involved, or honestly, like, it's hard for me. Like, we don't enjoy it.

And so it becomes something that's a burden to us as opposed to something that's really setting us free. And so in this book, that's what I'm talking about is all of those beliefs that keep us from doing the things we know we're supposed to do with our money. And I love the title, Money's on a Math Problem, because we talk about behavior is so key, right? Your money is not the thing that's like running in and out of your account on its own. and you're having to manage this thing over here with a mind of its own. No, it's working because of what you're doing. That's right.

What it's doing is because of what you're telling it. So so much of us and our mindset is so huge. But for you, you talk about, and in here, too, the lies and the truths. And that mindset of, like, you believe one thing, so you're going to act on that. That's natural. But how do you shift your mindset? How do you learn the truth? Well, you know, Romans talks about transforming your mind and, like, renewing your thoughts.

And so that's really what this book is about. Once you can identify, okay, I've got some messed up thoughts here. Like what I believe, it's natural for me, but I'm starting to realize it's not serving me. And is it really true, right? And then from there, it's like, okay, when you listen to things from Ramsey, when you listen to these podcasts, when you sign up for our live streams, those sorts of things, you're getting that truth about money into your system. Yes. And it's really just like that old adage that like whatever you starve dies and whatever you feed grows. And it's the same thing with this money stuff.

the more you start surrounding yourselves with people who are telling you the truth about money, the more there's really no room for that other stuff to live and grow. And it honestly starts to die and fall away by the wayside. And you'll look back and you're like, oh my gosh, I cannot believe that the things that I once believed, right? Because you're starting to see the fruit of those new beliefs actually grow in your life. Okay, so you know what's so fine. Jay, I'm sitting here. I'm like, I grew up in a household with the money principles we teach here. I was like brainwashed from an infant.

I'm like, I'm like, this is one area of life that what was said to me I still act on today, which is such a gift, right? Such a gift. But I want to know for you and Sam, though, what were like one or two lies that you were like, oh my gosh, no, I firmly believe this. Yeah. And then you're like, I had to completely shift away. Okay. So in this book, I talk about when I was growing up, what we heard all the time, if we asked for something like, oh, I need this or I need that, my dad would say, oh, we ain't got no money for that or I spent no money on that. Like, it was just what we heard. Yes, yes.

And so I didn't think anything of it as a kid, but as I got older, I was like, oh, like, I ain't got any money. Like, that was just kind of my answer. If I didn't have this, if I didn't have the budget money for that, if I couldn't take this trip, it was because I just don't have any money. And I started to view. That was normal. That was just normal.

And it was okay. Yeah. Yep. And so in this book, I talk about how because of that, I viewed a budget kind of as a punishment. Like, if you have a budget, you don't have any money. Like, and because of that, if you want to be free, you should just be able to spend and spend and spend and spend.

and we know where that gets you. So good. Oh, I love it. Because there's so much of that, whether it's growing up or what society tells us as adults, we're trying to learn how to do this. So you guys, this is so good. I mean, like, Jade has put so much effort.

And honestly, her story throughout here, the practical tips, which is one thing that I love about you. You're so practical and all of your stuff. And so make sure to pick this up, you guys. Money's not a math problem by Jade Warshall. So as we leave, Jade, what's one thing about budgeting? You would tell people like, this is what you have to do. Ooh, I love that.

I would say that a good budget is detailed, realistic, and flexible. Let's say it again. Detailed? Detailed. So that's like your line items, right? You're going in there. Realistic. Like, come on now.

Like, today's prices are not yesterday's prices. Like, we need to accept that. And then obviously, flexible. Like, we're learning this. With your life. It takes time to learn it. And then your life is always changing. And it's okay that you might have to move one category and shift categories.

Like, that's fine. So detailed, realistic, flexible. I love it, Jade. So good, you guys. So make sure to follow. everything Jade's doing on social, so whether it's Instagram, Facebook, all the things. And again, order the book. Money is not a math problem.

So they can buy it at ramsysolutions.com slash store. That's right. So make sure to pick it up, you guys. Thanks, Jane. Thank you for having me. I am really excited about today's episode because I get to highlight one of your amazing debt-free scream stories. So for those of you who may be asking, what is a debt-free scream?

Let me explain. So on the Ramsey Show, which is our syndicated radio show, also on YouTube and podcast. We do calls every single day where people call in to give their debt-free stories, and then at the end of the call, they do a massive scream where we count it down and they say, I'm debt-free. They scream at top of their lungs. We all celebrate and cheer because being debt-free, it's a huge milestone for people. And actually, the first one that ever happened, it was back, gosh, in like the mid-90s. And my dad was on the call with the lady and she just called in and he answered the call and she started screaming that she's debt

free. She's like, I'm debt free. I'm debt free. She started screaming it because she was so excited because of how amazing it felt and she did it and she got out of debt. And so that other people started calling in and be like, I want to celebrate too because I've done this. So it became a tradition and now it's really a beautiful thing. And at Ramsey, people actually fly and drive in from all over the country and watch the show. And so we look out on the lobby and I mean, there's anywhere from 12 to 100 people some days that are sitting out there. And a lot of people will come to Ramsey Solutions and do their debt-free scream live on our debt-free scream stage. And so it's a really beautiful thing because you meet, you know, single parents, you meet people, you know, in their 60s and they've

paid off their house. You'll meet 28-year-old young couple without kids and they have a paid-for house, right? Or the people that, you know, have walked this and it's taken home six years and they've gotten out of six figures of student loan debt. I mean, you just meet everyone from from every walk of life. And it's a really beautiful thing that I feel like we all can unite together and celebrate. And so again, I mean, every time I hear it and even on our team, we talk about it a lot,

it's just a really beautiful thing. Because when you hear that scream, it is like sometimes years of sacrifice, of pain of what got them to that place to decide to do something different with their money and get out of debt. And you just watch it. You watch habits change.

You watch family trees change right before your eyes. And it's really a really beautiful thing. And so it is worth celebrating. And we are all about it. So I know because of that, how wonderful they are, that you're going to love Jacqueline's story because it is so compelling. It is so beautiful.

And it shows that really anybody in any stage of life, any life circumstances can do this. So here's Jacqueline's story. I got a very disturbing call. I just got up and went to work. My nephew told me that I needed to get to the hospital. And I didn't know what. No one knew anything.

And they said it was something about your husband. I'm going through the hospital, just frantic. So the doctor came back, and they took me in the back and they said, Miss Terry, they were sorry. I didn't know I was going to get emotional. But anyway, he told me they were sorry that they couldn't revive him. Oh, my. Yeah, he was killed in the car accident. Oh, my. He ran into a concrete truck, and he lost his life. With me and him, we were already struggling, trying to make ends meet. If I wanted something better, if I needed to be the best example to my children, I had to do something different. So one day I went to lunch with a friend of mine. I didn't know it at long, but she showed

her with lunch with some envelopes. One envelope said food. I said, well, what is that? She said, well, I'm on this Dave Ramsey program. So then later on in life, I was still struggling, struggling, trying to pay this, pay that. And one day I just said, you know, no more. So I started searching some stuff online about getting out of debt. Guess who pops up. Wow. And that's how I end up getting hooked up to your program. What do you tell people the key to getting out of debt is? You got to have tenacity. That's a different. between a person that talk about it, you have to be about it. And that's what I had to do.

I had to be about it. I couldn't be no more. Talk. All right. It's Jacqueline. What a hero. 180,000 paid off in 11 years, making 40 to 65. Count it down.

Let's hear a debt-free scream. Three, two, one. I'm dead free. Oh, my gosh, you guys. I mean, is that not just unbelievable? And I know some of you listening or watching, you're thinking, like, oh my gosh, like how in the world? How in the world? Can she do that? And I love what she said in there. You have to be about it. You can't just talk about it. You've got to do something different. And that was the

other thing. She said, I have to do something different for me and my kids. And it is so, it is so powerful because I just know how many nights of exhaustion she probably had, how many things she probably had to miss for her kids during that season. Like there's just so much sacrifice involved. And then on the other end of that, not owing anyone anything, and having complete freedom and autonomy is so incredible and so beautiful. Oh my gosh, I love it. I love it so much. And that's encouragement to you guys that no matter what you're facing, no matter who you are, you can do this. And remember, slow and steady wins the race. Even if it takes 11 years, you can achieve financial peace. And again, transformation, it takes time. It's not going to happen overnight. But the beautiful

thing is as you start transforming how you're handling your money, delayed gratification, patience, generosity, it changes who you are. So let's talk about how to make this happen. When you look at Jacqueline, like, how do you do this in your life and in your budget? Well, what she walked through were the baby steps. The baby steps are seven steps to guide you through how to handle money. And again, anyone, any walk of life can do this. Your time frame is going to look different depending on your amount of debt and your income. But it is possible. So maybe you're a little. So maybe you're Step 1 is $1,000 you're going to save. Baby Step 2 is getting out of debt, which is what Jacqueline did. And once you do that, you bump up your starter emergency fund to three to six months of expenses.

And then once that's done, you move on to invest into retirement and kids college and pay the house off early. And the Baby Step 7 is you are completely debt-free and you get to be extremely generous. And so what we find specifically with Baby Step 2 getting out of debt, it takes anywhere from 18 to 24 months. We find people are paying off their houses in seven to eight years. So we have all these stats as we watch, we will walk this plan. And you guys, it is a proven plan. And it works. We see it time and time again.

So if you're looking for a change, look here and try something different. So if you take away just one thing from Jacqueline's story today, let it be this. It's never too late. Again, no matter who you are, no matter how much debt you have, no matter how long it's going to take you, you can turn your financial situation around. You can. So either you're going to be getting the same results that you've been getting with your money because you've been doing the same thing, or if you change what you've been doing, you'll get

different results. And if you change to this way and you really follow this plan, you guys, it's going to bring you hope. It's going to bring your freedom. Do you ever feel like winning with money is just kind of complicated because maybe you're scrolling through social media, whether it's Instagram or TikTok or Facebook, and you see hundreds of opposing views when it comes to money? And it can be really hard to figure out which advice. to believe. Does she know what she's talking about? Can I trust her? Right? And so it's hard to

narrow it all down. So today I'm sharing it five proven ways that you can achieve at financial peace and experience true freedom with your money. First step is get debt out of the equation for good. Now, for some of you, this may be old news. If you follow Ramsey at all or you've been through FPU or do those seven baby steps, then you know that I am a firm believer in getting out of debts. because when you are debt-free, I have seen that work over and over again in people's lives. So whether you are struggling to pay the minimum payments every month on your credit cards, or you look at your student loans and you just keep acquiring interest and it just seems to keep growing versus going down,

or maybe you're throwing hundreds of dollars away on a car loan and a payment every month while your car is going down in value. So whatever debt looks like in your life, I will tell you the number one priority you have is paying it, off as quickly as possible. And once you get to a place where your only debt is your monthly mortgage payment, you're going to feel so much freedom with your money. I mean, imagine having no credit card bills, no car loans, no student loans. None of that is in your life. So hundreds, of thousands of dollars every month instead of it leaving your paycheck, you get to keep it. And that freedom

is incredible. But it won't last long if you don't do the next thing on the list, which is save a money for emergencies. So here's something that you could probably relate to. Do you feel like you've been in a spot before where you've made tons of progress financially? And then you just lose it all, it seems like, on an unexpected emergency. It's like that classic one step forward, two steps back. And that seems like how life is working. And I'm telling you, if you want to avoid this feeling all together, the second thing you need to do to find financial freedom is to save three to six months of expenses in an emergency fund. So whether it's a medical expense, a leaky roof, something happens to your car, if anything

comes up, you will realize when you have money in the bank to cover it and there is a plan in place, it really does feel like more of an inconvenience than this earth-shattering event that takes you deeper and deeper in the hole. But honestly, short-term emergencies are nothing compared to the predicament that you might find yourself in if you avoid step three, which is invest in. your future. So I'm talking savings and retirement. One of the most important lessons that I've learned in preparing for the future is that you have to do it in the presence, right? So I know that maybe you have felt this in small ways, like realizing that you didn't save money for Christmas and then

December's here, or maybe in larger ways, like making it to the home stretch of your career and then realizing you don't have enough set aside for retirement. So if you want to avoid being stuck between a rock and a hard place later, you need to be investing right now, like really intentionally. So learning to save money for big expenses. You'll do this in sinking funds. So you're setting aside a little bit of money every single month for big purchases coming up, like Christmas, for instance, and also making sure that you're setting money aside for retirement down the road.

And trust me, your future self will be so grateful that you decided to prioritize financial freedom. So you might be asking, okay, so how do I do this? where do I start? Well, that is for item number four on this list, and that is to learn to use a monthly budget. So this step may seem pretty obvious to some of you, but I have found this is one a lot of people think that they can skip, and I get it. Once you master the skill of budgeting, sometimes you can feel like it's unnecessary at times. But when it comes to your money, you guys, this habit is crucial to building your dream life. Like being intentional with your paycheck, which is your budget, is so key.

which is why this is the fourth thing that I put on this list, and that is to create a monthly budget. And so a monthly budget really does give you control over your money. When you look back over the year, you're going to be able to say, okay, I know exactly where my money wins because you have planned, you have detailed it out, you have documented, you have tracked transactions, you have done it all. And if you have not downloaded our app every dollar,

make sure to do that because it is seriously going to be your BFF when it comes to budgeting, walking right alongside you, to be able to say, hey, this is what this budget does, this is how it works. I mean, it is a tool that is going to help you so much. So make sure to download it. But a budget ultimately means nothing if you neglect the next tip, which is use the margin you have to give to others. And it's something that a lot of people don't expect to hear when it comes to like financial tips and stuff, but you have to realize money has to play a certain role in your life. You have to keep it at this place in your

life where it doesn't overwhelm you or you become obsessed with it or you think if I could just get there financially, everything's going to be okay. Because so much about your money is who you are. And when you are generous and you actually live with an open hand, you look how to help others and selflessness as part of your financial plan, your life is more joyful. There's a better quality to it. So I'm telling you, giving has to be a part of your overall financial picture. and it gives you such freedom, because when you give, you put money in its role that it's meant to be in, where it's not an idol, it's not a thing that you're obsessed with. Again, it's this freedom that you live with an open hand. And so this mindset shift is something that really helps nix out so much of the

comparison that is out there, so much of the, you know, we want to be grateful, but it feels like sometimes we're just stuck in this like not gratitude state, if that's a thing, right? Where it's like, oh, giving changes all of that. It does. It actually allows you to be. be really grateful for what you have. There's so much to be said when you are giving. And it makes all of what we're doing here worth it. Because money is a tool to change your life, to bless you and your family and the people you love, but also to be generous. And I will tell you, it has changed my life in the way I view money. So you guys, you can achieve your financial goals. You can do this. Well, thanks guys so much for listening to this episode of the podcast. Thank you so much, Jade, for

being a part of the show. And if you love this show, make sure to leave a review. We love to hear your feedback. It helps us out so, so much. And while you're at it, if you will subscribe and share this podcast to your friends and family to keep them motivated towards their financial goals and tackle their debts. Thanks again, you guys, for listening. And remember to take control of your money and create a life you love.