The Rachel Cruze Show - Tips for Finishing the Year Stress-Free and Financially Secure

Episode Date: September 9, 2024

💵 Sign up for EveryDollar today to create a free budget! These last few months of the year are prime time for overspending! In this episode, you’ll learn how to be intentional with your money in every season and make a game plan to stay on target. In This Episode: ·     How to Finish the Year Financially Strong ·     8 Ways to Beat Financial Stress ·     Is $186K Enough to Make You Financially Secure Today? Connect With Our sponsors: ·     🏥 Learn more about Christian Healthcare Ministries. ·     🔒 Remove your personal information from the web and get 20% off your DeleteMe plan. 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

I know a lot of people are just feeling the pinch. Life has just gotten more expensive. I mean, everything from food and gas to the housing market, like it is. It's just, it can make you feel behind and you're not behind. Things are just more expensive, which means we have to be that much more diligent with our money. Hey guys, welcome to this episode of the Rachel Cruise Show podcast. I'm so glad that you're here. Now, listen, if you are loving this show, if you will leave a review, it helps us out so, so much. We love to hear your feedback. Now, in this episode, specifically, we're going to talk through eight ways to deal with money stress, then discuss how much money that you need to feel financially secure. But first, I want to chat about some tips

for finishing the year financially strong. Take a listen. We are officially more than two-thirds through the year. Can you believe that? So this got me thinking about how powerful it can be to set money goals according to time. So today, I want to go over some tips for finishing out the year financially strong. So it's the beginning of September, which means we've got a little less than four months left in 2024. So it's not too late to set a goal and accomplish it. And sometimes having a specific finish line is all you need to stay motivated and to make major progress. So let's talk about some simple changes that you can make to see big impact in no time. So my first tip or challenge to you is to finish the year financially strong is to revisit your current goals. So we all,

we're like, yeah, New Year's resolutions, like way back when, right? And then it gets to February, we're off track. I mean, you know, it's just crazy. But that doesn't mean that you're doomed for the rest of time. So looking ahead at 12 months can be really daunting, but looking ahead just four months feels a little bit better, you know, a little bit more doable. So let's say you set a goal back in January, go back to your January goals, and maybe it was a goal to set an extra $100 a month towards your mortgage? Well, if you haven't stuck to that goal the way you wanted to, what if you set a new and improved goal of saying, hey, what if I put $500 towards my mortgage by the end of this year? Or have you ever set a goal and it was just really low? Then revisit

some of the areas that maybe you've been crushing it and see, okay, if we can up the ante just for a few months. So adjusting your goals is a great way to have success when it comes to your money. And even here at Ramsey, different business units will get up and speak to the entire company every single week to report their recent goals. So it's not unusual for them to say, yeah, we initially hit the number that we wanted, but we saw progress and we went ahead and increased our original goal. Now, regardless of whether you go back and you're like, oh, yeah, I made great progress when it comes to my goals, make sure that you are using data to inform your financial goals for next year. So speaking of that, my second tip is to finish the year strong by going back through your budget

and do a deep clean. So the trick I'm back to explain to you is one of the many reasons why I love the every dollar budgeting app. If you open your every dollar app, you can click Insights and you can look at trends of your own personal spending habits.

Pay attention when you might have overspent in an area, or maybe even certain months you'll see, oh gosh, we were over budget here, or maybe we were under budgeted, maybe we ate out a lot during the summer, or maybe there was a birthday party that we forgot to budget for. Like, whatever the patterns

that you're seeing in your budget, think of those for next year. And if you've never tried out the Everydollar budget, it is a game changer, you guys. Go to Everydollar.com slash Rachel to get started right away. All right, my third tip to finish the year financially strong is to focus on debt if you have any. So if you are using credit cards, for instance, maybe you make a commitment to say, no more credit card spending till the end of the year. Or maybe you just ditch them all together, but sometimes it takes people some baby steps. Or maybe you're paying on. debt, but you're kind of in a slump and you're like, oh my gosh, I don't know if I can do this. Remember, time is on your side. Get motivated again and have those bite-sized goals for the end of the

year to keep you going. Ask yourself, what's one goal that could be a quick win for you by the end of 24? And sometimes it's worth it to focus on just one thing to get that momentum going. Okay? So you guys can do this. Ditch that debt by the end of the year. Make progress towards it. All right, my fourth tip for finishing the year strong is to budget for Christmas. I know. I mean, think about all the holidays coming up. You got Halloween. You got Thanksgiving. You got Christmas. And listen, Christmas is usually the one that you're going to spend more money on. So make sure that you're planning ahead for it. So budget for, you know, even the kids, Halloween costumes, yes, budget. If you're going somewhere for Thanksgiving, be thinking about that. And think through, hey, are there limits that we want to

put on Christmas this year? Or there are limits for each spouse and what we're going to spend on each other? You know, think through all of these things because the truth is, it is coming, y'all. The holidays are coming. And the earlier you can budget, the better off you're going to be because you're not going to make impulse decisions and rack up debt and come January, February, March, you're kicking yourselves thinking, golly, why didn't I start saving earlier? Well, here I am telling you, start saving. All right, my fifth and final tip for finishing the year financially strong is to make a goal to

save or invest a certain amount of money by the end of the year. So whether this is contributing, you know, an extra 50 bucks a month to retirement, or maybe you want to save $1,000 before December, whatever it is, have a goal out there. As humans, I think we're tempted to think, oh, yeah, I'll be disciplined later. I just need to get through the holidays. I'm not going to worry about it. This is the time now to implement some really great habits, you guys, and to be thinking through, hey, we can put some money aside and save. Because, again, this whole idea of finishing strong is I want you to have some goals in place that you actually accomplish and you actually say, oh my gosh, at the end of the year, look what we did in the last quarter of the year.

And that's going to really take you into January with a lot of momentum. All right, here's a little bonus tip for you. If you've ever grabbed one of our favorites, Ramsey goal planners, you need to grab yours today. The newest one is out. So shop the link in the description. So you can order yours for the new year. and be sure you're planning all things life and money. So I want to talk about how to deal with one of the most common money problems that I hear about,

and that is financial stress. So if you've ever felt anxious or stressed about your money, you are not alone. And you would be shocked at how many people feel the same way really at any income level. So today, I'm going to be sharing eight ways to deal with your money stress. Now, obviously, we can't just wave a magic wand and get rid of that feeling overshund. nights, but there are some really simple practical things you can start doing to move in that right direction. And be sure to stick around till the end of the list, so you can drop any tips that I may have left out in the comments. All right. So the backstory of this topic I was thinking

about is when I actually saw Inside Out to that movie, if y'all have not seen it. Oh my gosh. It's like therapy in an hour and a half. Like, it is so good. And one of the new characters is anxiety. And there was this moment where she comes to the group of the other emotions and she's introducing herself. And she's like, hi, I'm anxiety. And she's explaining like how anxious she is and all the things. And fear, that emotion was like, oh, we're going to be best friends. And she looked at fear and she said, well, you have to worry about what Riley's dealing with today, right now, what she's facing. I worry about what's going to happen to her in the future. Things that haven't even happened yet. That's my job to worry about those.

Oh my gosh, kids are y'all taking notes? Like, like, does everyone know how profound that is? Because it is so true. So, listen, anxiety can happen. Fear can happen around money. So you may be feeling fear about your present situation and like, oh my gosh, today I have a bill due and do I have enough money for it. Or maybe it is this level of just anxiety about the future of thinking, okay, are we going to be okay? If we keep going down this path, you know, what's going to happen? So when people feel stressed about money, again, it's usually related to that idea of a fear or or a goal they want to achieve. So if that sounds like you, and maybe you are feeling a little hopeless or just frozen, here's where I would start. Okay, you ready? Number one,

take inventory of where you stand with your finances right now. So an easy way to pinpoint where you are in terms of financial priorities is to figure out where you fall on the baby steps. Because a lot of people that are starting off are like, I don't know, am I doing okay? Am I not?

So you can kind of figure out, okay, do you have an emergency fund? You know, are you working your way out of debt? How much debt do you have? You know, what do you have in retirement if you've opened up any type of retirement investing? So actually knowing where you're at, because what we do find, too, is that some anxiety and fear with money is creeped up just in our heads because you don't even know really what's going on. And the old joke back in the day was like the bill drawer that when the bills come in, you just put them in a drawer and close it. It's like, I don't even want to look at it when now a lot of things are online.

And so the idea of logging on to your accounts and knowing where you actually are may actually decrease. some of that fear and anxiety because you have logic going in, which is huge. All right, number two, create a monthly budget and start tracking your expenses. So this is one of the best ways to get in control of your money. When your income comes in, knowing where it's going, and every single dollar has a plan, has somewhere where it's going. I mean, I want you to be that exact because there is something powerful about taking control over things you can control.

And again, it's this idea that you are on top of your budget, on top of your income, knowing what is going on. All right, number three, if you have debt, start paying it off. So not having payments will lower your stress that has been proven time and time again. When you don't owe anyone anything, you have a lot of options and freedom on what to do with your income in your life. So if you do have debt, I recommend paying it off using the debt snowball method where you list out all of your debts smallest to largest, regardless of the interest rate, pay minimum payments on everything, and attack that smallest debt first. and this is going to cause a lot of momentum because you're going to get those quick wins,

which is huge. Number four, I would encourage you to work with a financial coach. So handling money should never just be a one-man job. So if you are married, you obviously want to handle money with your spouse, but I would have somebody else in your corner, too. If you have a great financial coach, make sure to reach out to them. Or even, you know, if you're single, having somebody that does this and to be able to say, hey, will you look at these numbers?

And again, that can be a good friend or a family member, but having somebody, with you. But then you can go a step further and getting someone that actually is really professional at this when it comes to investing and having an investment professional on your side. But the idea is kind of getting some experts around you, I think is really, really important. All right. Number five, get a side hustle to earn extra cash. So you can do things like grab a local retail job. You know, if you know guitar, teach guitar lessons. My girls are doing piano. And so we have someone coming to the house to do piano lessons, right? If you want to do, want to tutor even. One of my friends says this. She tutors a bunch of kids in our neighborhood,

which is fantastic. I mean, babysitting, dog sitting, like whatever you can do to earn extra money, I think is really, really key, especially if you're really stressed and even underwater when it comes to finances, you have to get your income up. And remember, this will not be forever. This additional stream of income, it's going to be helpful for you to relieve some of that stress and get on a better plan. And again, you're not going to do this forever and ever, but for a period of time and maybe something to really consider. All right, back to this list to lower our financial stress. Number six on the list, which I love, is to make a gratitude list and celebrate your wins. Okay, and this isn't just like, rah, rah, we're going to just be cheesy and have positive

thinking. But honestly, you guys, I mean, studies have proven that the way we think and what we believe about ourselves and the world around us changes our attitude and our outlook and ultimately our actions. And so there really is something beautiful about thinking, okay, my mind is powerful. And if I sit there and talk about just, oh, how hard it is, how hard it is, it's good to do that. I want you to be honest about where you are and leaning into those hard emotions is beautiful and great. But we don't want to just stay there, right? You want to move to something better and you want to move, not just a plan tactically, but also in what you believe about yourself. And I would just encourage you that people every day, every day from every income level, debt level, every part of the

country, even the world now. Like, it is wild. People are getting control of their money. And it really is a beautiful thing. And I think part of it is that belief. And it's so hard to have hope when you're stressed. But again, that's why the earlier parts of this list, I think, are important to get some of that tactical control. But then really start believing that, gosh, I can do this. And having that positive thinking and that gratitude. And so gratitude is so key. So even writing down one or two things you're grateful for every day. I even was listening to a podcast and someone said before they go to bed, they make themselves think through the day and just pick out two things they're grateful for. Like these small actions, you guys, it changes how we believe and what we think about our

world and who we are. So it's really, really key. This is an important step. I don't want you to miss. All right, number seven is always have a future goal that you're working towards. So the seven baby steps. Those are a great guide because it kind of does show you, hey, here's where you should move on next. But always have that goal. And even, you know, maybe it's, if you're paying off debt, maybe the next goal is that next debt. Maybe it's not being completely debt-free because I may feel very overwhelming. But it's like, okay, we just got to get that next debt paid off. Or if you're saving up for a fully funded emergency fund, maybe it's like, okay, let's just get first month's emergency fund. Let's just get a month's worth. That's our goal. That's our goal, right? It's

these little steps within the steps that are really important, but do those and celebrate those wins. And number eight is to start giving. So giving is something that is going to change your attitude about money. There is something beautiful about this generosity piece of money that, again, some people are like so overwhelmed with their current situation. So I'll just say, give a little until you can give a lot. Even just, you know, paying for someone's order that's behind you in the line, you know, in the drive-through or like tiny, you know, acts of kindness or generosity can go a really, really long way. I mean, it's really beautiful what it does to you and your soul and who you are as a person, but also for the person you're giving to. And so,

again, I think it's really important to be prepared financially with all of your finances and everything. But again, like I mentioned earlier, one of the best ways to kind of keep a finger in a pulse on what's going on in your life is to know, okay, how do I feel during all of this? And what generosity and giving does is it just gives you this wholeness of what your money can do. And it's really, really beautiful. Well, I hope that those eight ways to lower stress help you guys, because I know a lot of people are just feeling the pinch. I mean, today's world, it's so expensive. It is from the grocery store to the housing market. Like, it is. It's just, it can make you feel behind and you're not behind. Things are just more expensive,

which means we have to be that much more diligent with our money. Okay, so I have a question for you. How much money would you need to make you feel very financially secure? Well, according to a recent survey, most people say that they need at least $186,000 to feel financially secure, making that a year. $186,000. Now, for reference, the median household income is around $75,000. thousand dollars. Now, $186,000 a year might feel like a lot to you or maybe not enough. I guess it really depends on where you live, your life's stuff, how much you currently are making. If you have

kids too, hello, child care costs. Maybe if you got a mortgage, you know, pre-2020, when rates were down, or maybe you got them post-2021 and now the rates are higher. So it can depend very much on where you are in life. But why do most of the most of you? Americans feel like they need more than double of their annual income to feel financially secure? Well, on one hand, life has just gotten more expensive. I mean, everything from food and gas and all of it, and I'm sure you've noticed a difference in your grocery bill or when you go out to eat, things are just way more expensive, and our money doesn't go as far as it did five years ago. In fact, $100 in 2024 is about the same as $81 in 2019. And if you've got kids, you're probably

spending way more on child care than ever before. I know a few first-time moms, and I'm like, oh, my gosh, this is your first experience because it's so expensive. It's crazy. Then, of course, rent, housing prices, and interest rates have risen through the roof over the last couple of years, which again makes people feel like they're just not getting ahead. And you guys, it's a lot. I mean, people are really feeling this, and it's really easy just to blame the economy. And Americans haven't been making, though, the best decisions with their current money than they could be as well. And with that, I'm talking about. And with that, I'm talking about debts. Yeah, 77% of American households have at least some type of debt. And the

average amount of debt per adult is around $67,000. So it's no wonder that people really are feeling like they don't have enough money when everything that they make is going out to debt payments. And when you get used to living a certain lifestyle, then you end up slowly spending more and more, which is called lifestyle creep, which is very real. Again, your expectations of life and your standard of living and expectations is just higher at a certain point, and it continues to rise a little bit each time. You just want nicer or nicer things without even realizing it. It can be subconscious, too. So that is why I am a firm believer that feeling financially secure is less about your income and more about how you're managing your income. So let's talk about five things that you can do to feel financially secure.

Number one, I would look at your housing situation. because for a lot of people, their mortgage is what's keeping them from feeling financially secure. Now, real estate is something that I think should be in everyone's financial portfolio. I want you to be a homeowner. But if you have felt pressured, especially in the last two or three years of like, oh, you've got to get a house, you got to get a house, you got to get a house. More people are going and getting a mortgage that can't afford it. And what's really difficult is we talk to people that, you know, 45, 50 percent of their income is going to their house.

And in that case, you are house poor because if half of your income is going just to one expense, which is always going to be your largest expense, you know, always rent or your mortgage will be highest on your budget. But when it's taking up that much of your income, you don't have as much left to go and, you know, pay for other bills or to do anything you want. So it is really powerful to look at that part of your budget and what you're paying. So ideally it's no more than 25% of your take-home pay. So if you are house poor, this is a really big point here, so I don't take it lightly, but I would consider downsizing. I would say, hey, maybe I have to move out an extra 10 or 15 miles from where I want to be. Because, again, I know this isn't an easy decision to say, oh, we'll just move. But sometimes you do have to make a big change to get yourself in a stable place, and housing might be one of those for you.

Also, the second way to become financially secure might be a career change. Again, I don't say this lightly. These are some big moves. but for some people you've been in maybe the same job or the same industry and you haven't looked at other options because when it comes to your income, this is a really powerful way to build wealth but also taking care of your basic needs. If you're out there, maybe there's growth opportunities for you. Maybe your current role is paying significantly more somewhere else. And again, I don't want you to just job hop all the time. I feel like

that's kind of like the end thing. Like, oh my gosh, every like 18 months you're just to find a new job. But the idea is if you're not being paid market value or you don't see a growth trajectory for your income where you are, this could be something to look at and say, hey, maybe I change jobs or maybe I change complete career paths. And that happens for a lot of people. It's just going to give you options. So that's something to think about. Big change. I don't take that lightly by saying that to you. But again, think about it. All right. Number three is to ditch your debts. So you guys, debt is one of the biggest reasons people do not feel financial. secure. I mean, you look at the average car payment for a new car, you guys, is over $700 today. I mean, that's wild. If you have two of those, it's $1,400 going out in debt payments. So whether it is car payments, student loans, credit card debt, all of that, if you pay all that off and do a budget just for fun on having no payments, how much money would you have? Like, what would that feel like? And I guarantee you you'd feel a lot more secure without that money going out to debt. All right. Number four is to build your emergency.

funds. A lot of people feel financially insecure when they don't have money saved in the bank, which is totally understandable. So that is why you need an emergency fund. So having extra cash set aside and not relying on like your credit card. Well, my credit card's my emergency fund. No, I want you to be your emergency fund. So get $1,000 as quick as you can. After you pay off debt, you bump that up to three to six months of expenses. And again, that just gives you some breathing room that really is the cushion between you and life is that emergency fund. All right. Lastly, number five, you knew it was coming. Rachel's a big fan of this one. Get on a budget. That's right. Seriously, to feel secure with

your money, you have to know where your money's going, you guys. I mean, I can't stress this enough. A budget helps you see where you need to cut back on your spending. It shows you maybe where there are places that you're spending that you don't even realize because things are on just auto draft and like you are able to see a clear picture of your money and your situation. And so making sure that you're doing a budget every single month is so key. Because again, you can cancel subscriptions, eating out, all of that. But it's really hard to do that unless you see what is going on. Because here's the deal, you guys, there is no magic number when it comes to feeling

financially secure. So again, I hope this is motivating to you guys that it's not how much money you make specifically that's going to make you feel secure. It really is how you're handling your business. money. Now, guys, thanks so much for listening. If you can subscribe to the podcast, and share it with your friends, with your family to help them handle their money the right way, it would be so, so helpful because getting this word out is one reason why we do this podcast. So thanks again, you guys, for listening. And remember to take control of your

money and create a life you love.