The Rachel Cruze Show - This Couple Turned Paying Off $32,000 Into a Game (My Reaction)

Starting point is 00:00:05 I recently heard about a couple that paid off $32,000 in debt, and it all started with a game that they made up called consumption. So they ended up using the debt snowball method and working the baby steps. And since they kind of accidentally fell into the Ramsey Way, I thought we could unpack more of their story today because it is so interesting. And then later I'll share my own top five products that I always have a risk of overconsuming and wasting my money on, so stay tuned. But first, like this video and subscribe to the channel so you don't miss a future episode.

Starting point is 00:00:39 All right, the rules of their game were this. You have to use up all of what you currently have of a specific item before repurchasing it. So this is candles, expired spices, batteries, skin care, clothes that are out of style, but they're still in good condition. So it sounds really simple, but good marketing can convince anyone that they need extra stock of some things, right? they have bogos sales, restock organization videos online, it's like get all this stuff. You think about the COVID toilet paper crisis, never forget. Everyone's like panicking and needing more, and they're like stocking up, sucking up. Now, once this couple started really living minimally, they decided to get one step further

Starting point is 00:01:22 and start paying off their debt with that extra margin. And so using the debt snowball method, they paid off $32,000 in debt in just two years. So if you're not familiar with the debt snowball method, this is the way here at Ramsey, we talk about tackling debt. So this is where you list out all of your debts, smallest amount to largest amount, regardless of the interest, right? You're going to pay minimum payments on everything and attack that smallest debt first. Once the smallest debt is paid off, you're going to take everything that you were throwing at that smallest debt, and you roll it over to the second smallest debt. So again, this is extra margin for your budget. Maybe you got an extra job. Like any extra

Starting point is 00:01:55 money you have goes to that smallest debt. Once it's paid off, you roll it over to the third smallest. And the idea of the snowball idea mathematically is that you no longer now have a minimum payment of the smallest debt and the second smallest debt because they're paid off. So all of that creates more money going to that third smallest debt. So it just keeps going. All right, before we hear the rest of their secrets to financial success, I do want to tell you about one of our sponsors, Christian healthcare ministries. When you go against what society thinks is, quote, normal, it might seem weird at first, and that's okay. We want you to be weird if that means you're doing things intentionally, including how you spend your health care dollars. And one way to be

Starting point is 00:02:33 intentional is with Christian health care ministries. CHM is in health insurance. They're a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of health care costs without sacrificing their freedom. Program start as low as $98 a month, so find out more and join at chmistries.org slash budget. That's chmistries.org slash budget. All right, so good habits build on themselves. And so eventually they actually started working the rest of the baby steps. And in the article, she says, now we have an emergency fund and a brokerage account, Ohio savings accounts, and retirement accounts. So this is amazing because when you don't have debt and you don't have payments, suddenly your income comes in and you have all of it.

Starting point is 00:03:17 You get to decide what to do with it. And so with the baby steps, they did the correct order. You know, when you start off Baby Step 1, it's getting a $1,000 emergency fund. And with this, you can just put it in a high-yield savings account. Baby step two is paying off all of your debt using the debt snowball method that we just talked about. Then once all your debt is paid off, everything but your mortgage, you're going to bump up that starter emergency fund to three to six months of expenses. So that's your fully funded emergency fund. This is not invested.

Starting point is 00:03:44 Again, you can just put this in a high-yield savings account. And there's something just so powerful about having no payments and a ton of money just saved in case you need something. So that's all over there. And then they mentioned retirement. accounts, which is Baby Step 4. So that's funding 15% of your income into retirement. And so this could be your 401k, a 403B, your Roth IRA, any type of retirement accounts you're putting 15% of your income into. And then from there, you can save for kids college, pay off your house early,

Starting point is 00:04:14 and Baby Step 7, the last one, is to build wealth and be extremely generous. And so it is powerful to have a method to the madness of money and to have steps that are guiding you. And you, along the way. It's really important. And I think it's important from a behavior standpoint to knowing like, okay, this is what I'm doing. I'm making progress with my money. I'm not just spinning in this wheel, not knowing like, am I doing the right thing? These steps really give you power and control over your money, which is what we want. And stories like this prove that the Ramsey way isn't crazy, right? It's just common sense. Like this makes sense, you guys, do live on less than you make, be doing a budget, telling your money what to do, having savings for a rainy day,

Starting point is 00:04:53 planning for the future, like all of it, but it's just putting it in a good system. But it's a lot easier said than done. So now it's time for me to come clean. And when they were talking about overconsumption and overspending on things that they had to wait until they're empty, here are five things in my life that I stock up on. And I'm like, I could use this underconsumption idea. My first one is shampoo. I usually always have a backup. Paper towels. I love paper towels. I know they're terrible for the environment, all the things, but I love paper towels, and I always have a backstuck of them. I just love seeing a lot of paper towels makes me feel good in life. Makeup, I mean, I rarely get to the point where I'm, like, scraping it at the end of not

Starting point is 00:05:33 having a backup. And it's so funny because I'll buy something because I'm like, I need it because I'm running out. And then that running out lasts me still like another three to four weeks before I even have to open the new thing. And so, again, I mean, these are, these are ones that are just hard for me. Candles is another one. I think about books, that picture of Cameron Diaz in the holiday, you know, when she's like on the plane and she's like, all these books stacked up. I love books. And I do read them eventually, but like I'll get on a roll where like I see like two or three and I'm like, oh yeah, yeah, yeah. So I have a backlog of books for sure. Oh, so that's mine. I'm curious what yours are. So comment down below because, again, I think we can all overconsume at times

Starting point is 00:06:12 and have those backups and we end up spending money sometimes within a month that we really don't need to. Okay, we've covered a lot today, including two very specific Ramsey methods, the baby steps and the debt snowball. If you want more of a step-by-step guide to all of us, make sure to check out FPU. Financial Peace University is our course that helps you when it comes to your overall money landscape and teaches you, encourages you, and motivates you to get control of your money. So I'll put a link down below. But for more creative solutions to getting out of debt, you'll want to check out my episode

Starting point is 00:06:44 called The Fastest Way to Pay Off Debt in 2025. I'll be sure to put it here. So click there. Or if you're listening to on podcast, I'll put a link down below. All right, you guys, remember to take control of your money and create a life you love.

The Rachel Cruze Show - This Couple Turned Paying Off $32,000 Into a Game (My Reaction)

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