The Rachel Cruze Show - The Wealth-Building Skills You Wish You’d Learned Earlier

Episode Date: May 15, 2023

Budgeting and saving and teaching, oh my! We’re going to talk about some smart money habits you should put into place . . . and how to pass them on to the next generation. Plus, I’m sharing tips for cleaning up your budget, elevating your savings game, and teaching your kids how to do the same. What You Get in This Episode: 16 Ways to Stay on Budget (Even When It’s Hard) How to Double Your Savings Fast Money Skills You Should’ve Learned as a Kid Helpful Resources: Christian Healthcare Ministries Carly Jean Los Angeles with code “Rachel” EveryDollar Enter The Ramsey Cash Giveaway for a chance at $3,000!                                                 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 and Carly Jean Los Angeles.   Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy Learn more about your ad choices. Visit megaphone.fm/adchoices

Celebrate wins, big and small. So any progress is worth acknowledging and celebrating, but it has to be budget-friendly. Okay, don't go too crazy, but also having some joy and celebration in there helps you avoid burnout. Hey guys, welcome to this episode of the Rachel Cruz Show podcast. I'm so glad that you're here.

So in this episode, we're going to talk about wealth-building skills you wish you learned earlier. I'll go over money skills you should have learned as a kid and may not have, then I'll tell you ways to double your savings fast. But first, let's talk about 15 ways to stay on budget even when it's hard. Take a listen. Today I'm going to talk about how to stay motivated when you're living on a budget, because let's be honest, it can be hard. And for those of you who have made the decision to be intentional with your money, you probably have experienced a high level of motivation at first, but then as you keep going, you might kind of start to drag it out a little

bits. But one challenge a lot of people don't expect, and we probably don't talk about enough, is how tough it can be to stay disciplined after you've made some progress with the baby steps. So quick wins are so crucial to this process, but they're not the entire process. Consistency really is the key to long-term money success. So today I want to offer you a long list of simple tips that will help you stay on track and see your money goals through all the way to the end. So number one, surrounds yourself with people who respect your budgets. Okay, this is like what my parents said to me growing up, and I'm going to say it to you. You are who your friends are.

And it's amazing that when you surround yourself with people, how much their influence and what they say and what they do rubs off on you. So spend time around friends and family who respect your money boundaries and cheer you on. Number two, use a budgeting app. So there are people that have never worked a baby step in their life, and they say, still use the every dollar app because it's that amazing. Okay, it organizes every purchase that you make and gives you the ability to personalize each spending category as often as you need to. So I'm going to put a link in the show notes for you to try out a free trial of every dollar. Number three, define your why. Having purpose behind the sacrifices that you're making makes them worth it.

So write down a list of reasons why you're seeking life change. And when daily sacrifices get tough, just remind yourself of these things. Number four, make your goals visible. So whether it's hanging up images around your house, of your why, like maybe a car that you're trying to pay off, or a picture of a trip that you want to go on, a vacation. Or maybe you want to pay cash for something that's like this massive purchase. We'll print it off and have a picture of it.

Or maybe use our Ramsey debt savings tracker to keep track of your progress. Whatever it is, document your wins and have them visible. Number five, work. fun into your budget. So maybe it's an ice cream shop outing once a month or a date night once a week or even a vacation. But the amount you're able to spend on fun will look very different depending on what babysat you're on. But life is a gift, so insert some joy in there strategically. Number six, have an emergency fund. Your emergency fund is in place so that you don't have to slow down your progress when life happens. So getting this in place first is the best way to

protect your momentum. Number seven, be a lifelong. long learner. Some of the wisest, most successful people I know never stop learning. So maybe that's watching FPU, Financial Beach University. Maybe for the first time or the second time or the third time. Listen to a good podcast. The Ramsey Network has a couple of great ones. Or even just read a book by your favorite author. Whatever it is, whatever season in life you are when it comes to money, be on the pursuit to be a learner. Number eight, celebrate wins, and small. You don't have to wait to celebrate until you reach your final destination. So any progress is worth acknowledging and celebrating, but it has to be budget-friendly.

Okay, don't go too crazy. But also having some joy and celebration in there helps you avoid burnout. Number nine, keep moving forward. It takes a lot of energy to commit to something that creates a lot of effort in your life and a lot of intentionality. But keep going because there are going to be slip-ups. going to happen. So give yourself grace to maintain your forward momentum. You don't have to be perfect. You just have to keep moving. Number 10, find better ways to deal with stress than spending. So replace emotional shopping and spending with free activities that will actually nourish your mental and physical health. So whether that's a hot bath, taking a walk outside, playing a game with your family, even making a cup of coffee in your favorite mug, like these simple things that are free

and enjoyable. That's what we're looking for. Number 11, check expenses like you check your social media. So instead of constantly going through social media and comparing yourself with other people, actually try competing with yourself and look at your expenses. Go in there, log into your bank account, lock into every dollar, and be looking at where your money is going. Number 12, split bigger goals into smaller goals. So let's say you have $60,000 left to pay off your mortgage, We'll split that into six goals of 10,000 each and then celebrate when each 10,000 goal is reached. So fun, because again, it keeps that moment's going. Number 13. Set up auto drafts.

So put some of your more habitual goals on auto draft. So set up automatic retirement contributions, put your monthly savings on auto draft. Number 14, prepare for burnout. You guys, burnout is normal. Okay, we are all human. expect it to hit at a certain point in this process, but decide what foundations you need to put in place right now to preserve your progress. And lastly, number 15, take advantage of sinking funds. So I don't care how nerdy this sounds. Sinking funds are fun, you guys. It's basically you

guaranteeing that you're going to get a reward as you start saving a little bit every single month. So even if it's something frivolous, like maybe it's a bigger TV that you want, set up a sinking fund and little by little throughout each month, you can save some, and that way you have the amount of money at the end of your goal to pay for something that you really wants. All right, you guys, there you have it.

So I hope that at least a handful of these hacks are helpful for you. Today I'm going to talk about ways to double your savings. And I love this topic for several reasons, but a big one is because challenging yourself to double your weekly, monthly, or annual savings can make a huge difference when it comes to the baby steps. So whether you're someone who's never been great at savings, or maybe you're just

not in the habit of doing it, or maybe you're someone that's like, hey, I'm going to save a percentage of my paycheck every single month attempting to double your current progress. Whatever it is will be so rewarding. Now, obviously, this can be super helpful when you're getting out of debt, you're saving up for a big expense, but also these strategies may be ones that you adopt and you keep for the rest of your life for some of them. You're like, hey, for a season we'll do it. and then we'll go back to our normal life. But the idea is to say, hey, I can change what I've been doing and see progress with my money.

And it's powerful to focus on your goals and measure your progress and, again, making progress when it comes to your money. Now, the first thing that you can do to double your savings is to take advantage of passive income. So one example of this is the app Rapify, which will literally pay you as you drive around town because a business will put their advertisement

around your car. Yeah, they'll wrap your car. So again, it's a little bit of a commitment, but it brings an extra cash and no extra trouble for you. The second way to double your savings is to stop eating out for a month. And this one, I know, doesn't come as a shock to you guys, because we talk about it a lot, but it works. So I've seen single adults do this. I've seen families of seven do this, and you can literally save hundreds of dollars every month by just not eating out of restaurants or Uber Eats or takeout or getting coffee out. All right. all of it. Cut it all. The third way to double your savings is to cancel or pause subscription services. So this can be everything from those fancy vitamins you get in the mail to canceling your auto-renew

packages on Amazon, your subscription boxes that you're still getting from 2017. Whatever it is, just say, hey, we're going to cut stuff. And even if you cut cable, maybe you pick one streaming service to keep, but you look at all of your subscriptions and cut them because that is cash back in your pocket. The fourth thing that you can do is clean out your wallet and sell unused gift cards. So it's free to list your unwanted gift cards on raise.com, and they actually have an app as well. And it's crazy because I'm like, yeah, if you have that Office Depot gift cards and you got three Christmases ago and you never use it, turn it into cash. Cash is so much better now than those gift cards that you're probably never going to use. Next is number five, and that is to

unsubscribe from promo emails. So emails that show us. up in your inbox from stores that you have shopped at, this is their job, is to say, hey, spend some more money with us. So to remove the temptation, just unsubscribe from emails. And I know I have emails from gifts that I've bought, you know, for Christmas or birthdays and stuff. And it's like from, you know, Macy's and all these random websites or loft. It's like these places that, yeah, you may still shop at because you see the promo because it's there and it's working. So get rid of them. Number six is to choose a staycation over a vacation. A coworker of mine was telling me the other day about how her parents, who make more money than she does,

admitted that they don't have an emergency fund. And one of the biggest reasons is because they keep choosing to go to the beach every summer. So think about how quickly they could get a cushion for themselves if they just didn't go on vacation one time, one time. Just skipped it and save that money instead. And trust me, the security and comfort that you feel when you have margin and you have savings gives you so much more peace than a five-day trip we'll ever bring. Number seven is to sell old furniture appliances, electronics, or designer bags, and shoes. Sell your stuff. So sites like declutter, Craigslist, Facebook Marketplace, and Poshmark, let you resell items that you have kept, and they still have value. So if you want to make your listing look really appealing online, look at the pictures

that you're taking of the item. So like, get some natural light in from a window. Make sure your background is really clean looking. So again, that professional. will come through in the image and make it more eye-catching to the person that is scanning and looking for items. The eighth way for you to level up your savings is to take advantage of retirement funds. So if your employer is offering a 401k match or other investment benefits, take full advantage of that stuff. Now, if you're on the baby steps, I want you out of debt with a fully funded emergency fund first.

But then after that, then put at least 15% of your income into retirement. next is number nine, and that's to grab a side hustle. Now, I know this is not the most glamorous solution, but when you crunch the numbers, they speak for themselves. So working part-time, you guys, for 10 hours a week, two additional hours, Monday through Friday, at $10 an hour would bring you in an extra $400 a month. And that's $1,200 in 90 days.

It's pretty awesome. Number 10 is to incorporate DIY solutions to your to-do list. So again, if you get your nails done every week, instead of paying $60 every two weeks, then maybe go and do it yourself. Get a gel nail kit or something. If you have small projects around the house, look on YouTube and say,

hey, I wonder if I can do it myself, borrow some tools, instead of hiring an expensive contractor. Number 11 is to exchange skills and services rather than paying cash. Now, obviously, you don't want to offend anybody with the professional work that they do, but sometimes people love to trade. One of my coworkers said that she traded two,

full haircuts and a highlight appointment in exchange for her to do invitations to her wedding and address them calligraphy style. And they're beautiful, absolutely beautiful. So it's like, yeah, trade. Everyone wins. It's great. And finally, number 12 is to check your insurance rates. So insurance is something that sometimes you just sign up for and you pay quarterly or yearly and you just keep on moving. But go and shop your rates because you could get a great deal and save a lot of money. And if you check out our Ramsey trusted endorse local, providers or ELPs, they can help you save on average $700. And that amount will boost your savings instantly.

So go to ramsesysolutions.com slash trusted to find the help that you need. All right, you guys, there you have it. Hopefully this is a brainstorming session has caused you to kind of think outside the box and think of new ways that you can save some money. Because again, saving for the future, for whatever reason, whether it's an emergency fund, or maybe you're putting money to get out of debt, you know, or saving up for a large purchase. Having savings is so key. So I want to keep this conversation going and I would love to know your money saving tactics and which ones I've worked for you. So share them in the comments.

Today we're going to talk about teaching your kids the value of money. So if you have young kids in your life, you may have noticed that you need to teach them life skills. Yep, that's part of being a parent. And that usually requires a lot of effort and intentionality. And what's hard is you can teach them and again, make them do things around the house and actually train them, but that's a lot of effort. Sometimes it's easier just to do everything yourself, but actually training them is worth it. So money, when it comes to talking to your kids about money, it can be hard to explain this concept to kids that are still really young and they can't fully understand everything. But as they continue to grow up and eventually become teenagers and they have friends and jobs

and extracurricular activities, you want them to know that hard work is directly. related to the income that's brought into the home. And not to mention, you want to talk about generosity, how bills are paid. I mean, there is so much. So that's why today, I want to demonstrate how you can literally invite your kids to the table so they can see the entire process of money management. Now, I've heard people do this with their kids, and I think it's a really great idea, because visually, your kids are going to be able to see exactly what money is brought into the home every month and how it's going out and how it's leaving. So they actually see, wow, this is everything. When mom and dad go to work, this is the money that they bring in, and here's

how our home is taken care of. Now, we're going to take the average American budget and just see how far that it goes. And again, you can modify these numbers to work in your home, and some of you may feel like, oh my gosh, I don't want to do this with my kids. It's too overwhelming. But it's just great again to visually, even for us to see our money actually leaving and going and knowing where it is. So that visual process is so helpful for adults, but I'm telling you, it is helpful for your kids. So what you want to do is first cash out one month's worth of household income. So this is everything you and your spouse bring in every month. Now, the median household income in the U.S. right now is between $70,000 and $80,000. So we're going to use $75,000 for this example. So after taxes are paid,

then usually it's around $5,000 a month. So I'm going to use some good old cash right here for our examples and to show all the spending categories that life ends up with. Now, if you use every dollar, which I do, it's great, you can even show your kids that, right? You would show them, hey, this is where the money's going, here's the budget. It changes every month and you bring them into that conversation. But again, this is an example to do this a few months in a row so they can really just see where the money's going. So first and foremost, you want to start off with giving. We teach regardless of what baby step you're on, no matter where you are financially, you want to be giving. We recommend 10% is a great first step. So for a $5,000 income that is brought into the home,

that would be $500 that's going to go out. Now, if you're a Christian and you go to church and you want this giving to go to church, that's great. If that's not the case, and you find something that you and your family love and you want to give to, whatever it is, I'm not legalistic about it. Just make sure that you are teaching giving. Now, if you are a person of faith, there's a lot of scripture, a lot of reasons why we give through that filter. so I'd say have conversations with your kids around that too, just letting them understand that giving is really, really important and it's part of this process. All right. Up next is your four walls. So this is food, shelter, utilities, and transportation. Now again, this is going to be different, these numbers for every family, but we're going to just do some averages, okay? So we're going to say $500 for food. That's going to be groceries and some out to eat is going to go for food. Then we're going to do water, electricity, gas, internet, and cable. So that will be $300 there. And then, the mortgage, which is the big one. So this is going to include, again, rent or mortgage,

HOA fees, everything in this. So that's going to be $1,700. A lot goes to the house and you'll feel it. You feel it. Okay. Next is gas, car payment, public transportation, whatever transportation is for you, you want to make sure that that is paid. So we're going to do $500 in that category. Okay. At this point, it's really good to let your kids see, hey, let's just count up how much has already gone to these necessities, right? these are your four walls. These are the things that you have to have. This is your needs. These are not wants. This is what has to be paid. And what's crazy is, again, that we pay for things as parents that our kids don't always see. It's like these invisible responsibilities, right? It's like the heat and the water running and keeping a roof over our head and having food to eat. All these things are really

key. So letting your kids see these four walls is big. All right. Next, we're going to move on to savings. So in this case, we're going to save $500 this month. We're going to put $500 here for savings, and then you got some debt. So your student loan payment is here, and that's going to be $500. And that's a great place to talk to your kids about, hey, we're going to talk about college and go into a school that we can afford as a family so that this $500 can be in your pocket and not going out to Sally Mae. And then whatever's left over, you're going to look at your family. Okay, what are the luxuries, the extracurricular activities, what are the things we want to pay for this month? So let's say your kids have a soccer camp that they're going to want to go to.

that's going to be $80. And then mom needs to get her haircut, right? So we're going to do $170 for that. And then there's some streaming services. So, you know, you have Netflix or Disney Plus, a couple of those. We'll put $30 for that. And let's say you have a YMCA membership.

So that's $120. Okay. And then you have $100 left as backup. This can be your miscellaneous category. Just when anything comes up, you have that money covered. And that's it. it. Isn't that wild? And letting your kids see it again. I'm telling you parents, this is a good exercise

for you to do to be like, who, where's all of our money going? Here it is. So bringing your kids in this conversation, I think it's really helpful for them to visually see what is going on. And again, this would be a great time for you to explain, hey, this is money. And we want to give, we want to save, and we want to spend it. We want to take care of our needs. So even when they start receiving money, whether it's for their birthday or Christmas or doing chores, they need to learn to give, save, as well, because that is going to be their responsibility as kids as you're teaching them these things. So if you love the give-save-spend method, check out our new smart saver banks at ramsey's solutions.com, because again, being visual with money and kids is so helpful so that you can

implement talking about money with your little kids. That's really going to help them grow into great money-responsible adults. Oh, I know. We all wish we had learned this as a kid. I get it. I know, but listen, it is never too late to start, no matter where you are. All right, you guys, thanks so much for listening to this episode of the podcast. Make sure to hit that follow button if you have not subscribed and please leave a review. It is so helpful. That's one of the best things that you can do to help the podcast grow. So thank you in advance. And thank you guys again for listening. And as always, make sure to take control of your money and create a life you love.