The Rachel Cruze Show - The Secret to Mastering Your Money with Chris Hogan

Episode Date: November 9, 2020

In this episode of The Rachel Cruze Show, you’ll learn: Which of the Four Money Classrooms you grew up in The Seven Money Tendencies that are affecting your bank account Financial expert Chris Hogan’s surprising money habits How to communicate about money in your relationships Resources: Know Yourself, Know Your Money Tuft and Needle Minno Take my new money quiz Learn more about your ad choices. Visit megaphone.fm/adchoices

We're not here to defend your parents. We're not here to bash them, but we are here to tell the truth. The truth reveals a lot, and it's a really important act to do to say, okay, I'm going to look back and just tell the truth. What was it like growing up with money? Hey guys, welcome to another episode of the Rachel Crewe Show podcast. So glad that you are here. In this episode, I'm going to be interviewing Chris Hogan on money tendencies. It's a good one because we actually get into my money tendencies and his as well. And I'm going to be answering the question I get all the time at what baby steps should I upgrade my vehicle. But first, I want to dive in to the money classrooms. I write about this in my new book, but it is so crucial, you guys, to understand which classroom you grew up in because it really shows you why you make some of the choices you make, decisions you make today with your money.

So think back to how you grew up with money. because there's a chance that you duplicate exactly what your parents did, right or wrong, or you run completely to the other side, the other direction. You're like, nope, I'm going to do the complete opposite, right or wrong. But acknowledging it and knowing it is really important. So I think one important thing, too, is to realize when you're talking about your parents and how they handled money and how you were raised with money, we're not here to defend your parents.

We're not here to bash them, but we are here to tell the truth. The truth reveals a lot, and it's a really important act to do to say, okay, I'm going to look back and just tell the truth. What was it like growing up with money? Now, parents communicated two ways about money, verbally and emotionally. So verbally, either they were open about money, talked about it's out there, or closed, where you never heard them talk about it at all, no matter what. And emotionally, they communicated as well. Was there stress and tension and anxiety around money? or was it calm and stable and just, okay, yeah, money's fine, not a big deal. So what ends up happening is you fall into one of four money classrooms. And your classroom really is where you learn life's lessons, which was your childhood home.

So you either grew up in an anxious classroom, an unstable classroom, an unaware classroom, or a secure classroom when it comes to money. So here are a few questions for you to figure out which classroom you grew up in. Did you have a hard time telling your parents that you needed money for school? Did you observe your parents' money habits rather than hearing about them? Did you feel tension around money rather than hearing an actual argument? Did you feel like you didn't have any freedom to ask questions around money? If you answered yes to most of these questions, then you probably grew up in an anxious classroom.

This is where communication was closed. You never heard about it. And the emotion was stressed. So if that was you, one of your challenges is going to be talking about money openly to say, no, I'm actually going to engage this kind of uncomfortable conversation with friends, family, spouse, whatever it is. So that could be your challenge. Now, did you never think about money? Never have anyone teach you how money works? Did you find out later your parent's actual financial situation, whether it was good or bad? Did you hear your parents say that you don't have to worry about

money? If that's the case, then possibly you grew up in an unaware classroom. This means that communication was closed, but the emotional state of the home was calm. If that's the case, then one of your challenges is going to be apathy. It's kind of like this ignorance is bliss. Like, everything's fine. Don't worry about it. It's all going to take care of itself. So watch out for that. All right, did you hear your parents always argue about money? Did you feel like things were either feast or famine, like it swapped quickly between shopping sprees or barely being able to cover bills? Did you never hear your parents actually have a plan for their money? Did you feel like money issues were just never resolved?

If that's the case, then you possibly grew up in an unstable money classroom. This is where communication was open, but the emotional state of the home was very, very stressed. So if that's the case, then you possibly will have a challenge around communicating about money and the conflict around money. Because you're going to feel like anytime money's brought up, there's going to be unhealthy conflict, which, again, is not always the case. Now lastly, did you hear your parents talk about money often and openly? Did you hear calm intention around their money decisions?

Did you actually witness them doing a budget and meeting together? Did you experience your parents being on the same page with their money? If so, then you probably grew up in a secure money classroom. If that's the case, then one of your challenges is going to be understanding all the work an intention it took to create that environment. And I encourage anyone, no matter how you grew up, to really try to get your family there, where money is openly talked about,

but also the emotion of it is calm. Now, you don't have to have a lot of money in order to do that. You could still be on a tight budget, but you're actually in control of your money. And so that stable classroom is really, really key. As I was writing, I realized as a Ramsey kid, I was like, yeah, I mean, my memories started around six years old.

So I was like, I mean, I kind of feel like we grew up in a stable classroom. and I mentioned it to my parents, and they both looked at each other and laughed because they're like, oh, yeah. Well, that's because your memories started when you were like six years old. Yeah, six years and below, we were in the unstable classroom. Lots of fighting, lots of conflict around money, lots of stress. So this is not to shame your past by any means, but it is to acknowledge, say, hey, this shapes who I am. And in order to acknowledge that and see that, tell the truth about that, you can learn and grow from it.

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I'm so excited. Chris Hogan is here. Thanks for being back. I'm glad to be back with you. It's just like happy, isn't it? It is. When you come here, you're like, I'm just so glad. I'm at ease.

I'm very much at ease. You should be. But you put me to work. I do. I was like, you need to come on my show, we've got to talk about something. That's right. And you made me take a test.

I know. Okay, so my new money quiz is out. And it's fascinating because it really shows you your money tendencies. Yes. Interesting questions. Kind of figure out, okay, who are you? So I'm going to go through your results. Uh-oh.

I feel like a teacher grading. You know, I'm just like. Here we go. Here we go. Okay. So the first category was spender versus saver. Yes. And you are, da-da-da-da, a moderate spender.

Yes. You too? Yes. Yes. I may have been extreme when I took in. But moderate to extreme spender for sure. But here's the deal. It's good to be able to enjoy money.

Yes. It's good to be able to enjoy some things. Yes. However, on the other side of it, you've got to save. Yep. Right? You can enjoy it, but you need to make sure that you're investing. If you're out of debt and you've got your fully funded emergency fund,

and you are putting money ahead for the future. That's right. So the saving and spending, again, you're naturally bent to be one or the other. Yep. And I have said, be extremes on any of these, not healthy. It's right. You don't want to be an extreme sender or an extreme saver,

because extreme savers just hoard their money. And they don't enjoy. They don't enjoy. So you've got to be balanced. Yes. So find the balance, moderate spender. Moderate spender. Moderate spender. That's awesome.

Okay. Next one is abundance versus scarcity. Mm-hmm. And you are a moderate, abundance mindset. Yes. I believe that there's money out there to be made for everyone, and there's enough for everyone. And so if people are willing to work and get out and take the risk and do what's necessary, they can make money. That's right. That's an abundance mindset right there, people. I lean that way as well. More glass is half full than half empty, that kind of

thing. And again, on extremes of scarcity and abundance, not good, right? If you're too abundance, and you just think everything's going to be fine and I'll just figure it out and it's all going to be great. And it's like, okay, no, there needs to be a little reality. And then scarcity to extreme scarcity, oh, God. You'll hoard. Like, you won't do anything. And so here's the good thing, too, about the abundance mentality. You're willing to give, right? You're a natural giver. You love to be able to support causes that you believe in. Yes. And that's a good thing. For sure. Yes. There's some scarcity people in my life, Winston, my husband. Oh, is he scarcity? Leans more scarcity, yep. So more of a natural saver usually. They kind of, they are more logical and

their purchases, they think through, it has to be like, okay. It's got to make sense. It's going to make sense. Yes. Where I'm just like, Amazon app. Sure. That's great. That's great.

What a great deal. My mom, scarcity. Yes. She's a little bit more. Yeah. Sharon is slow to move with the money. Sharon, man, we have some good stories for Sharon. She's hilarious.

She, my mom still has a library card. Will does not like buying books. And coupons. Coupons. She still will use the coupons. Yeah, buy stuff on sale, all of it. But that comes from something, right? Like in your life, I think that you kind of, you probably naturally with your personality,

gravitate towards one or the other, but also the events in your life could cause you to be one way or the other for sure. And it's good to understand it and really dig into it and if you're married, talk to your spouse about it or your significant other so you can start to understand each other, right? And that allows you to get on the same page. That's right. Think about the people in your life and what they are because it really informs why they do the things with money that they do.

It's fascinating. So your abundance, more minded. Okay, give me an example in your life. Well, in looking at it, it's one of those things where I know that money is available to be made, right? If you work hard, you can get out and hustle and do some things. But I also know that with that, you have to be careful that you're not impulsive. Sure. Because you think that there's always more that can be made.

So it's good to have wisdom and talk to somebody before you make a big purchase. Like before you buy a vehicle or before you buy a home, you want to make sure you're getting some wisdom and guidance because you can be so optimistic that everything looks great. That's right. Yeah. I know for us, we were recently talking about Christmas decorations. Such a small thing, I know. But we need a new Christmas tree.

And then I was like, okay, do we need some more ornament? Oh, fake or real tree? We're going fake. We did reel two years in a row. Okay. How do you feel about real Christmas trees? Well, I mean... Do you like them?

Are you fake? I go fake. You go fake? Okay, okay, okay, okay. Because the real ones, I mean, if you don't keep them watered, it can be a situation. Yes. Well, in real Christmas tree, people are passionate about the real Christmas tree. So I just thought, are you a real Christmas tree, or are you a real Christmas tree?

because I'm about to get your opinion. I want an equal opportunity. That's right. That's right. But yeah, so we're like looking and I'm like, oh, I would love like some nice garland, like on the railing upstairs with Christmas lights. And let's add some garland on the mantle in the living room.

Like, are we going to do the, are we going to do Christmas lights outside? We never really do Christmas lights outside. Our Christmas conversation, he was like, babe, that has me so much Christmas. And I'm like, I know, but it's all going to be fine. Like, it's all going to be fine. We can figure it out. Are you going to put up this stuff? Or is poor Winston doing it all?

That's the question. That's the question. What's the answer? I usually help. But usually we tag team. And it's like, I take care of kids, you do a chore. Or I do a chore. You take care of kids.

It's a trade off. It's a trade off. But I was like, Christmas. Yeah, we'll get more here and more here. That'd be fun. Yeah, it's all abundant. It's all good. And he's thinking through every garlands he has to measure and how much per yard something is.

It's a lot of work for Winston. It's a lot of work. Pray for Winston, people. Pray for Winston. Okay, next category. Status versus safety. And what I mean by this, so some people are confused, what is your motivation to win with money?

For some people, it is strictly just to feel safe. That I feel good. Everything's in order. I'm good. I don't need everything, but I just want to feel good. Like, that's your primary motivation. Other people's motivation is, now I want with money so I can do fun things and buy fun stuff and that kind of thing.

So status seems negative in this. I don't mean it to be negative. So it's either or, kind of your reasons, your motivation for winning with money. So yours is a strong safety focus mindset. Yes. So you're worth of safety. Right. So I want to make sure that there's money there in the emergency fund to take care of things that are going to come up. And you're right, that stuff does come from it. Because long before I was a part of the team, you know, you'd find yourself running out of money before the end of the month and that stress that it brings. That's right. That frustration and

irritation. So yes, it is important to have that there. And I think throughout all of this that we've been dealing with. People have learned that having that emergency fund is absolutely essential. Yep, absolutely. Yep. Okay, so I actually lean more status. Surprise. I know. Surprise.

No, because I'm like, no, I want to budget so that we can do stuff. Like, I want to budget so we can go on a great. Like, I will do the things. I will sacrifice. I will put money in the retirement funds. I will make sure our emergency fund doesn't touch. I will do things so that I can do other things. What's one of your key statements?

A budget gives you permission to spend. That is a very status type sentence. It is, but it does give you permission. It does, yeah. And what that does is allow you to be able to enjoy, but to also be able to give. That's right. So it's good to understand this, right, and look at it. And the quiz was actually very insightful.

Thank you. And it was dead on and looking at it. But it is good to know yourself. But more important, like we talked about, you want to know your spouse or your significant other. So you can come up with that game plan for what you want to do. Yes. And you can, again, have that empathy. And I think, too, both extremes, remember we talked about this,

are negative. So the extreme on status is kind of obvious, right? You just, you get into this mindset of, I'm just going to buy, bye, bye, bye. Everything's going to feel better if I just buy, bye, bye, bye. If I have this or that of that, everything's great. And no, that's not the case. Stuff does not equal happiness. Because they're always going to come out with new stuff.

Always. Cars that can park themselves, start themselves. Have you seen the ones that will back up for you? A Tesla? A Tesla? Really, people? Yeah, get in the car. It's my dream car.

Really? A Tesla? Does Winston know? Oh, yeah. And he's kind of like geeky and that kind of... Are you wearing him down? Are you wearing him down? Sully, but we just got the new minivan.

I mean, it's just too much. We can't... You went minivan. You don't know this? No. Chris Hogan. Well, you do have an abundance of children. It's...

It has changed my life. It's pretty unbelievable. I digress. Okay, what were we talking about? We're talking about, oh, status. Yes, and buying stuff. See, I love to buy stuff. I love minivans.

Yes. I like a good Tesla. But here's the thing. If you've got a plan for your money. Thank you. I know, yes. If you have a plan. But we're talking extremes here. Yeah.

If you're extreme status, it's unhealthy. That's right. But if you're an extreme saver, then you won't ever enjoy. Extreme safety, people, not good either. No, it's not because then what you're going to do is you're going to feel this, this tension inside of you, right? And at some point, when you go big, you're going to go real big. And you could really set yourself back financially.

Yep, for sure. Well, and I find that a lot of people will have an ultimate security and money in the safety realm, that money will never offer. It's like you almost get to this point that like you can never have enough money to feel safe if that's the only place your safety and security are in. Like it's not the end all be all. It really isn't. We need to be wise and be smart, all of it.

Yes. But again, those extremes, not healthy. Okay, so you're more safety. Okay, so I told you about my status, my minivan and my Tesla, all the dreams I have of what I can do because I'm budgeting. But for real, what for safety for you? Like, where do you feel that come on? Well, you can imagine, Rachel.

I'm a little excited and exuberant about retirement, right? And so I tend to go that route and looking at the 401K and looking at investments. And if I tweak this, then I could do that. And so I can catch myself in that mode. And then I'm not doing things that I enjoy because my mindset. So it's really good to have people you talk to to get you to kind of come out of that. So I try to plan for the experiences and set aside things to do. each quarter, which allow me to be able to make sure I'm saving for the future, of course.

But at the same time, I want to be in the moment, right? I don't have to live for the day, but I can be in the day. That's so good. So great. Okay. So you have three tips for us as we end this of knowing who you are that really do help. Yeah. So first is, I want you to grow your knowledge.

And that means read books. Get connected to this financial stuff. Really start to learn all the terms and what it means and gain comfort in that. The second one is, is believe you can get better. And all you have to do is start right where you are. So grow your knowledge, believe that you can. And then finally, I want you to dream in high definition. I do want you to have goals for the future that you're striving for because that's your why.

That's what will get you out of bed and it'll keep you focused. I love it. Three things you can do. You can do those now. Do it today? Yes. It's amazing. All right.

Where can everyone find you? Chris Hogan 360.com. That's Chris Hogan 360.com. Love it. Chris, thanks for being. here. Thank you for having me, Rachel. Make sure to check out all the stuff he's doing with retirement,

everyday millionaires, all of it, books, podcasts. It's so great. So thanks for being here. Thank you. And for all you guys, make sure to check out the money quiz. You can do that at Rachel Cruz.com and figure out who you are, safety status, spend, or savor. It's just a matter of minutes.

It really is quick and easy. It's fascinating. But it's insightful. And then send it on to like your best friend or a spouse and see what they are. So good. We're knowing our self people, know ourself, know our money. Thanks again, Hogan. Thank you, Rachel.

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So feel more comfortable about your media choices that you're making and start watching Minnow today. Download the Minow app or visit gomino.com. That's G-O-M-I-N-O-O-com to get your free trial. One of my favorite parts of my job is hearing from you guys. So today I'm going to answer some of your questions. This first one comes from Christina, and she asks any advice you can offer about discussing finances and debt when you're dating. Oh, the dating stage is so exciting. Okay, one thing you need to know is that money fights and money is one of the leading causes of divorce in America. I don't say that to scare you. I say that, though, as a warning sign to know,

okay, if this is one thing that causes so many issues in marriages, let's, like, put that up at the top, that if this relationship is going towards marriage, towards long-term being together, to say, okay, this is an issue that we really need to get on the same page. Because if you don't get on the same page, then you know, again, statistically speaking, it's going to cause tension.

So a couple of things. you don't want to be that crazy person that, you know, you go out on a first date and you're like, how much is in your 401k and how much did you pay on taxes last year? Like, you're not going to do that, okay? We're going to be normal. We're going to be normal. But when you get to the point that you're like, oh, no, this actually is probably going to have a future, then you need to start having all important conversations, including money. So you guys need to talk about the things that have issues in marriage, but money is one of those. So the more clarity you can have on your value system in which you long for with your money, the better off you're going to be. And then the more information you guys

can share. And maybe you want to wait until you're engaged if you want to do that. But I would say, if you're in the dating processes and it's getting serious, why would you not just say, hey, here's my financial situation. There's nothing to hide. And again, this is if you're getting married. You're not going to do this to anyone. But like, if I'm progressing in a relationship and I know I'm going to be with this person for the long haul, be open and honest. Be open and honest. Because the worst that can happen is that they look at you and they're like, oh, I don't know. Well, then you're not going to be with, you're not going to want to be with them in the first place. So setting that foundation of open and honest conversation is really important.

So things like how much debt do you have? How much do you make? What all do you have in investments? What's in your checking account? Like know what is going on. The more communication, the better. All right. The next question comes from Brian,

and he actually sent in a video asking his question to our email. Hi, Rachel. At what point in the baby steps should I upgrade my vehicle? See, I do home health care for living. and my vehicle is my office. And I drive about 100 miles a day. My job is dependent upon having a reliable vehicle. It's a 2002 and has 374,000 miles on it.

I literally drove the wheels off of it, but it's better now. Okay. My wife and I are on early baby step two. We have two children, they're six and eight. And my wife is out of work right now. I imagine that in 2020. but she starts a new career as a massage therapist in about a month. Okay.

We used to make a combined $70,000. We don't know what it'll be once she gets her job going, but we hope we can break 100. But we have about $65,000 in consumer debt. The house is about $145,000, and it is on a 30-year, but we're looking at correcting that. But at what point in the baby steps should I mean? that upgrade. All right, Brian, it's a great question. So a couple of key points. Your vehicle

is your means of transportation for your job. And a lot of people, their vehicle is really important to get to their job, even though it may not be their primary way of how they make money. But that's why we always say within your four walls, food, shelter, utilities, transportation, it's a big one that you must have. And the fact that your truck, yeah, has like over 300,000 miles, I think you said, and it's slowing down. What I would say is, do the repairs you need to do as much as possible. Tape everything, duct tape, I don't care. Like, keep it running as much as you can through Baby Step 2.

But again, if you get to a point that you're spending more on the repairs than what it's worth, that's when you need to say, okay, we're going to save up a little side money over here, pausing Baby Step 2 to actually buy a reliable vehicle. But again, it's not going to be a pretty vehicle. Maybe it has 200,000 miles. The next car you buy instead of 300,000. But again, junker, cheap, I don't care. but to get you through Baby Step 2.

On the other side of Baby Step 2, you can say, okay, here is how much our income is because your wife is starting a new job and try to build up at least three months' worth of expenses before you go and replace a fully nicer vehicle. So really, just think of kind of like your junker cars are getting you through Baby Step 2 till it gets to the point that you're paying more

on fixing it in the repairs than what it's worth. So make sure you have all the details of your truck. You know how much it's worth and you know how much all your repairs are costing you because you really want to keep track of that. So hope that answers your question, Brian. But keep up the great work, you guys. Oh, maybe step two can be a grind, but you guys can do it. All right, guys, love answering your questions so much. So keep sending them in, whether it's on my Facebook community or Instagram, YouTube, you can ask them anywhere, and hopefully I will answer them here on the show.

All right, you guys, I hope you enjoyed this episode. Oh, so much good stuff in there. And I know it's a lot to cover, a lot to think about. But really, I hope you take that knowledge and apply it to your life so that you really can gain control of your money. Now, if you have not subscribed to this podcast, make sure to do that. And if the spirit leads, you can leave a review. And as always, make sure to take control of your money and create a life you love. So if you guys enjoyed this podcast, we have more from the Ramsey Network, like the King Coleman Show. According to a recent Gallup poll, nearly 70% of Americans are disengaged at work. If you dread going into work every Monday morning and you're just trying to make it to the weekend,

the Ken Coleman show is for you. Everyone has a sweet spot. Your sweet spot is at the intersection of your greatest talent and greatest passion. We will help you discover what it is you were born to do and then will help you create a plan to make your dream job a reality. You matter and you have what it takes. Join the conversation on the Ken Coleman Show. To hear full episodes, just search.

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