The Rachel Cruze Show - Simple Ways to Clean Up Your Spending

Episode Date: August 19, 2024

💵 Start your free budget today. Download the EveryDollar app! Think of your budget like the foundation of a house—your budget must be solid before you can reach your money goals and build wealth! That’s why today you’ll learn ways to make budgeting quick and painless and prevent overspending before it starts. In This Episode: ·      3 Ways to Quickly Simplify Your Budget ·      How to Make Budgeting Effortless ·      5 Proven Ways to Stop Overspending Offers From Today’s Sponsors ·      🏥 Learn more about Christian Healthcare Ministries! ·      🧩 Use code Rachel20 for 20% off your TruPlay annual subscription. Listen to More From Ramsey Network 🍸 Smart Money Happy Hour 🎙️ The Ramsey Show   💸 The Ramsey Show Highlights 🧠 The Dr. John Delony Show 💰 George Kamel 💼 The Ken Coleman Show 📈 EntreLeadership   Ramsey Solutions Privacy Policy Learn more about your ad choices. Visit megaphone.fm/adchoices

You all know the drill. You know, you start the month off with the best intentions possible. You stay strong. You stay on budget. But as soon as that paycheck lands in your account, our good intentions sometimes can go out the window. And we start spending like we only have 30 days to live. Well, hey, you guys, welcome to this episode of the Rachel Crew Show podcast. I'm so glad that you're here. So in this episode, we'll discuss ways to make budgeting effortless. Then we'll chat about five proven ways to stop overspending. But first, I want to talk through three ways to quickly simplify your budget. Take a listen. So what if I told you it only takes me five minutes to budget every month? Mm-hmm. Now, it might sound too good to be true, but actually, it is true. Now, obviously,

a few other things have to be true as well. I still look at my every dollar budget every single day, and yes, I make changes to my budget throughout the month. Yes, Winston, my husband and I, we are on the same page when it comes to our spending. We're checking in a lot. But also, it does only take about five minutes. Now, we've been doing it for about 15 years since we've been married. But again, the idea is that when you create a habit, something even like budgeting, it just becomes a part of your rhythm and you get better at it. So I know some of you guys are in the trenches right now when it comes to budgeting. Like you're like, oh my God, this is so hard. And maybe you've been working towards a really big financial goal for a while, or maybe you're

stuck on a certain baby step, but whatever it looks like for you, it's always helpful to reevaluate your process every now on them. So today, I want to share three ways you can simplify your budget. So first, let me explain what this all started for me. I saw my friend Dawn, who is minimum mom. You guys may know her channel or listen to her, but she was giving her take on a recent home organization trend called House Hushing, which is very interesting. And this was kind of really founded by The Nestor, who I've had on this show as well, which is so great. But if you're not familiar with this house, hushing, is where you take everything out of a room in your house, except for just like the large furniture and rugs, curtains, that kind of thing. But you take

everything out. And the idea is you start with a clean slate only to bring back in items that truly spark joy, if you know what I mean, and that you only are really going to use regularly in that space. And sometimes the clutter in your house can just feel like noise in a way. It's just so noisy when you walk in. So that's really. the hushing comes in. It's kind of like a, oh, we're cleaning it. And it's just a quiet room now with less clutter. So I thought, well, that could be really true with your budget, too. I mean, like your living room or your kitchen, your budget is something that you're used to seeing every single day. And so it's easy to become blind a little bit to the chaos or the clutter

of your budget. So here's how I recommend doing a little budget hushing if you're due for a financial reset. Step one, eliminate every category of your budget. except for your four walls. So four walls are food, shelter, utilities, transportation. So again, these things could include that you take out, like subscriptions. And look, we are all human. And sometimes we forget about subscription fees until they finally start adding up. And you're like, oh my gosh. And so it may be worth it to wipe the slate clean and then figure out, hey, which ones do we actually use? Also, cable. I know this for the cruises. We pay you guys like $200 a month. And listen, and I need to do this. I've been saying this for like a year

We need to cut it. We don't use it. We don't use it. And I don't know why I have this, like, need to be like, oh my gosh, but the real housewives are on my DVR. And I know I can watch some other places, but there's just something about when you're in the rhythm and this is what you know, it's hard to change. And for me, it's cable, which I know is so stupid. But I'm like, if I just cut it out of the budget and out of my life, I'm probably not going to miss it, but I need to do that. So I'm saying that for me. Also, things like the YMCA or any other activity-related memberships. So Caroline, Caroline, her middle, she plays soccer. three months out of the year. And Winston used to go work out at the Y. But now we like kind of put some stuff in our garage. So that's where we work out. So we don't use that membership for the nine other months. And guess what? We get charged because we don't cancel it after soccer season. So again, that's a little bit of that clutter that's in there. Also, Amazon spending. So this continues to be one of these places that, man, you can just spend so much. And the majority of what I buy on Amazon, I probably could technically live without. And so there's a little bit of that cleansing that could go on of, like, taking away the instant gratification purchases.

And if you actually needed something, actually going to the store to buy it. And again, it's just to help reevaluate what's going on. All right, step two is adjust your savings category and see how much progress that you can make while your budget hushing. So with all the clutter and the noise gone from your monthly expenses, you may have some extra cash to throw towards savings or investing for a bit. And once you start making progress in these bigger, more important financial areas, you suddenly stop missing all those random subscriptions that you never really use. So again, there's something powerful about seeing that extra margin. And for those of you that may have debt, maybe you throw it towards that.

But there's something about seeing your savings pile up a little bit that just kind of get you motivated. All right, step three, do all of this on paper. So what I mean by that is you visually want to see your numbers out in front of you. So don't try to keep all those details in your head. because again, you're not going to budget well when you do that. And mapping out everything is such a game changer. And if you need a way to do this easily,

you don't have to go back and actually use paper like we did back in the day, you can actually just use a great app. And Every Dollar is my favorite budgeting app out there. It really is. So you can go to Everydollar.com slash Rachel, create your first budget for free and do that, you guys, because this is so huge. So once you reach the stage, take as long as you need.

I recommend about a month, and then slowly start incorporating your high price. priority expenses back in. And the beauty of this budget hushing is that it's going to be unique to your situation and you have the power to eliminate whatever spending you want. You can add things back in. It is up to you. Your budget is never meant just to be fixed, permanent, hard and fast. It is going to be evolving month to month, even throughout the month itself. And again, this all comes back to intentionality and simplicity, you guys. So I'm jumping into something that has been a challenge for a lot of us, keeping our budget simple. So I recently stumbled across a video from another creator who shares

some pretty solid advice on this topic. So today I'm just reacting to his tips and sharing what I would apply or tweak in my own budgeting strategy. All right, tip number one from this creator was to simplify categories. So keep your budget categories broad. Now, I love this piece of advice because for me, I like the idea where it's kind of a bigger bucket. Things are going to come in. You don't want to complicate things, you know, too much because if you're so nitpicky, it's kind of like, okay, where does this thing go? Where does that go? And again, you're kind of simplifying those categories. It makes it quicker to be able to say, hey, here's where this is. So if, you know, maybe a Costco run, for instance, in one category, and instead of sitting down with that long

receipt and assigning it to different things, maybe you just plop it all into a Costco category. That's what we do. And again, it makes the process when it comes to budgeting so much faster and more effective for me. I like this. This is kind of what wins tonight do. But I will say month to month, little things will come up like Caroline's birthday. So like that's a line item right now because she wants to go skating. So we're like, okay, we're going to put that there. We have a trip this month. So we're going to put a line item there. So we will add kind of specific categories depending on what's going on. But our month to month when we use the every dollar budget and it goes and it duplicates the month, I mean, I would say 90% of the budget says the

exact same. So using those bigger categories, again, I like it because it's kind of more of a catch-all. All right, his tip number two is use technology wisely. So here they suggest using budgeting apps and tools to keep track of your spending. And obviously, I'm all for that. It just mentions every dollar, which is a budgeting app that I recommend. And it goes with the zero-based budgeting method, which is what I like with your income at the top. And then all the categories underneath by priority, it's really important. So I love that.

Use technology. I think it's great. All right. Tip number three, emergency fund priority. So this is a big one. The first step of the seven baby steps is to get a $1,000 starter emergency funds. And, you know, obviously I stand behind this advice. And having that financial safety net of margin in the bank is so huge.

And you can start small, you know, but it's going to grow over time, meaning that you're going to have that $1,000. And then once you become debt-free, you're going to bump that up to three to six months of expenses. And so, again, allocating spending is so key, especially if you're on one of those two steps. and having it at the top to build up that buffer and to build up that emergency fund is really key. So I like this too because you're able to prioritize what you want, and so that savings needs to be towards the top of your budget

to make sure that you do it to get that $1,000, or again, if you're out of debt, the three to six months of expenses fully funded emergency funds. All right. Tip number four is round. So this is an interesting one, rounding down your paycheck in your budget. So for example, if you make $1,000,000,

$1656, you would budget for $1,600. So you round down. Now, I get, well, this is kind of appealing because it's going to force you then to have a cushion because if you're only budgeting, you know, $1,600, that other $56 or whatever it is, it's just going to be around. And that's, I guess, for this person is saying, well, it's great because it'll automatically give you that cushion. But what I would say, though, is to plan for that $56. And maybe it is for savings. Maybe it is for a miscellaneous category, which I think everyone should have, by the way, in your budget. You need a miscellaneous category. But I do like the idea of budgeting every single dollar. And there's something gratifying that when even my paycheck hits, I literally change it in the every dollar budget to like the exact dollar amount because it's just like, I'm like, I'm going to squeeze out every dollar, every dollar I can to budget. All right, tip number five, regular check-ins. So regular check-ins with your budget, it is essential. So don't just set up your budget and forget it. I think a lot of people feel like, okay, well, I did my budget. That's great. and then they move on with their life. But your budget is there to be in your life.

I mean, almost on a daily basis, you guys, just to know, hey, what's going on. And so that you have that control, you know what's in each category. And I would say this, too, make it a habit that you kind of just check in. And maybe you start off with like every two to three days or maybe once a week.

So maybe it's like, well, Monday, I'm going to review the budget and look at it. But again, when you use an app like every dollar, it's just so easy to check in and track your transactions and kind of know where you're at that for me, like a part of what I do. I'm terrible. I unlock my phone and literally the apps I go to is Instagram,

the weather app, and every dollar. I just sit there and I'm like, oh, here, here, here. So just kind of make it part of that routine. I'll admit, we're semi-addicted to our phones. And I just think, yeah, make that part of the addiction because it actually is going to be good. It's going to be good. Okay, so now that I've reacted some of that advice, here are my top three tips for keeping your budget simple. Number one, reward yourself. So, reward yourself when you hit a major financial milestone. Now, this is different than little treat culture that is out there. So I'm not saying every little thing you do, you just go and reward yourself and spend all that money. But celebrate those big wins. And one of those might be sticking

to the budget. Maybe you do the budget for the first month and it's terrible. The second month, though, you're like, oh, it worked. Okay. So enjoy that. Like celebrate that. Or maybe there's a debt that you're like, are we ever going to pay this off? And then once it's paid off, then it's like, okay, we're going to go treat ourselves, right? And I'm not talking about spending. like a crazy amount of money. Obviously, we want to be realistic, but enjoy life through that process. I think getting new habits and gaining traction, it takes a lot of work and a lot of sacrifice. So there is times to let yourself live a little bit and enjoy life. All right, tip number two is give yourself grace. And this one is huge, you guys, because typically

with your budget, if you've never done one before, it's going to take about three months to get it to work. So do not beat yourself up if you don't get it right away. Be patient and allow yourself to find the time to really make it work. And I'll say this too. Our budget throughout the month, we change it. So I want you to hear that. Things come up and other categories have to adjust. Or maybe you forgot, like, oh, yeah, we had this in the budget and it's not happening anymore so we can take it out. Well, there's some money left over. What are we going to do with that? So throughout the month, it's going to change. And that's okay. But give yourself some grace. Nobody's perfect when it comes to this stuff. All right. Tip number three is make it visual. So this is a really important

part of budgeting. You don't just want it in your head. A lot of people are like, well, have all my numbers in my head. It's going to be really hard to keep track of that, you guys. So having something that you can see the progress, that you're able to adjust very easily, and you're able to really say, okay, I'm going to be able to make changes, and I can do it and visually see the numbers. And I do think, too, sometimes money can be really stressful, and it's so much in our heads. But when you get things down on paper or visually in front of you, it really helps simplify to say, okay, like, this is where we're at. Here's the reality. Not something I'm making up in my head. Here's the reality. And it just gives you power back and control. All right, you guys, that's it.

Some ways to simplify your budgets, which I think is so, so important. And so with these tips, again, have some patience, but create your budget for you and your lifestyle and your life. I want to talk about something that a lot of us deal with, including myself, and that is overspending. Y'all know the drill. You know, you start the month off. was the best intentions possible. You stay strong, you stay on budget, but as soon as that paycheck lands in your account, our good intentions sometimes can go out the window, and we start spending like we only have 30 days to live. And you know, by the end of the month, you're wondering, oh my gosh, where did all my money go? And why did I need five new lip glosses from Sephora?

I mean, what is going on? I know. We've all been there. But what if I told you, there are some simple, proven habits that can actually help you stay on track. So that's what I'm sharing with you guys today. Five habits to cut overspending and saving money. And these habits are easy to incorporate into your routine. And once you get into the rhythm, they have you spending smarter and saving more in no time. All right, you ready? Habit number one. Cache out the category. So if there are categories that you tend to overspend, maybe it's groceries or eating out or clothes, well, them out. Yes, I mean actual physical cash. And why is that? Well, it's actually easier to save when you actually can see your money. Because once you see that cash start dwindling, trust me,

you're thinking twice about Uber Eats. And you're like, huh, okay, we can just make sandwiches tonight. Because the truth is, visually, with your money, when it's gone, it's gone. And being able to see it is so crucial. And I know it's more inconvenient to do this. I get it. But it really can help you with overspending. Habit number two, the leave it in the cart method. This is one of my favorites. I do this all the time, whether it's like Abercrombie or J-Crew or Amazon, whatever it is, I will say, add to cart, add to cart, add to cart, add to cart, add to cart. And then sometimes I go, yeah, you know, I forget about it and I'll, you know, just sleep on it, you know, give it a day or two and see if it's still a purchase that I want to make. And usually

it's an impulse purchase where you look and say, yeah, you get back to it, you're like, I don't even like those shorts anymore and take them off or, eh. No, we don't really need that. I can take that off. And so you start to actually see your stuff dwindle in the cart because majority of the time it is such on impulse. But when you add it to card, it kind of feels like you bought it in a weird way.

It's kind of exciting to be like, oh, here, here, here, here. So you kind of get that fun adrenaline hit, and then you keep your money, which is a great thing. So that is habit number two. Habit number three is the revolving door method. So every new item you bring in, something else has to go. You can sell it, you can donate it, you can trash it. But the idea is to make space for your new item by getting rid of something else.

And I think this is a great way to reinforce the value of what you already have because it's going to make you think twice about buying something. If you know something else has to be taken out. So try this rule for about two months, and it's crazy to see how effective it is when it comes to your shopping habits, because even the stuff you're giving away or selling maybe, you're like, why did I buy that in the first place? And then you're thinking about, oh, I don't really need that when you go to buy something else. Habit number four, the challenge method. So set a financial goal for one month and challenge yourself to see how much money you can save just by cutting out frivolous spending, like those Starbucks runs or maybe that subscription that you don't use a lot.

And you might even make it more fun by bringing a friend into it. it. You know, a little friendly competition. Not bad. Maybe the loser buys lunch one day, you know. So there's something about, again, making small changes that you'll be surprised how quickly your savings comes up and adds up over time when you're just intentional about it. All right, habit number five is the weekly check-in. So set up a chill distraction-free spot in your home just to do a weekly financial check-in. And you don't want to make managing your money feel like a chore. So finds a place that you like, it's enjoyable, right? So maybe you get a cup of coffee, maybe, you know,

getting your favorite spot in your house and just enjoy life while you're doing this check-in. Again, keeping it fresh and fun, I think is really important. And if you've stayed under budget, maybe you reward yourself with like a $5 treat or something. I don't know. Maybe try a sheet mask or try a new candy at Trader Joe's, like whatever it is, but be like, yeah, I did it. I'm going to celebrate. So you can, again, be able to have the best intentions in the world, but if you're not actually budgeting and living with a budget, you're not really doing it.

So overspending, you guys, it is so normal, okay? So don't beat yourself up. But again, there's some ways to help stop that. And I would really challenge you to do it. All right, I hope you guys love this episode. And thank you so much always for listening. And I always love to hear your feedback. So make sure to leave a review.

And while you're at it, subscribe to the podcast. Share it with your friends and family who maybe want to start budgeting for themselves. Thanks again, you guys, for listening. And remember to take control of your money and create a life you love.