The Rachel Cruze Show - Weird Things You Can Do to Save Money

Episode Date: March 4, 2024

Ditch paper towels for reusable rags? Cut the end off the toothpaste tube? This week, I’m reacting to some the of weirdest things people do to save money (and fessing up to my own). Plus, I’ll share a few proactive things you can do today to save on unavoidable future expenses, and what to do if you’re completely out of money.   In this episode: ·      Weird Things People Do to Save Money (Including Me!) ·      How to Save on Life’s Unavoidable Expenses ·      If I Lost All My Money Today, Here Is What I Would Do     Next Steps   ●     Find cash you didn’t know you had with my 14-Day Money Finder. ●     🎥 Watch my Find Out What Everybody Gets Wrong About Budgeting video. ●     🏠 Do you have the right coverage for your needs? Find out in just five minutes. ●     💵 Try my favorite budgeting app, EveryDollar. ●     🎥 Watch my The Fastest Way to Become a Millionaire (with Dave Ramsey) video.     Offers from Today's Sponsors   ●     🏥 Learn more about Christian Healthcare Ministries today.     Listen to more From Ramsey Network   🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 💰 George Kamel 💼 The Ken Coleman Show 📈 EntreLeadership     Ramsey Solutions Privacy Policy     Learn more about your ad choices. Visit megaphone.fm/adchoices

The good news is inflation has actually calmed down a bit. But the bad news is auto insurance increased more than 17%. If those that kind of increases start happening, we will all be wishing that we are back buying expensive X again where we are now. Hey guys, welcome to this episode of the Rachel Crewe Show podcast. I'm so glad that you're here. So in this episode, we'll chat about how to save money on life's unavoidable expenses. Then I want to talk through what I would do if I woke up with no money.

But first, I want to share some weird things people do to save money and some interesting things I've done myself. So take a listen. So the internet can be a scary place, but one of the things I actually love about it is that it's full of people who, frankly, you know, could be a little stranger than even me. And, you know, something in me is relieved when I know there's people out there with messier cars than mine. You know, or moms who walk around their kitchen looking ridiculous with their, like, heatless curl or headband things. Right? Like, we all just feel human. we see each other. We're like, good. One weird thing, one weird thing. It's great. So first,

I want to react, though, to a list of weird things I do to save money. Now, not me specifically people on the internet. So it's going to be fantastic. So I'll give you my thoughts on these strategies. And if you stick around to the end, I'm going to share some weird things that I do to save money. Again, that the world and the internet thinks is weird, but I think it's great. All right, here are some weird things that people do to save money. Squish your toilet paper roll before or putting it in a holder because it slows down your ability to unroll the toilet paper too fast and waste the product. Also, no paper towels, reusable rags only.

Unplug appliances, lamps, and chargers before use. This saves on electricity. Use solar power, so this definitely could be worth it if you live in a sunny place. Cut the end of a toothpaste or lotion tube to scoop out more of the product when it's almost out. Now, I get that feeling. I don't have funny when you're just like at the very end you will just, as much as you can, as much as you can't get that product out.

Give thrifted gifts. So thrifting is pretty trendy right now, and so a lot of people are doing this. No overhead lights, just window light during the day. So this could again save on electricity if you just use natural light. Hang blackout curtains when you don't need the light to insulate your home and you can use less AC.

No cable. Cut the cable, just Roku. So again, this cuts down on streaming services. So all you do is pay for internet and streaming services, and for a lot of people, that's what they use. Use an apartment-sized fridge instead of a full size. Hmm. I don't know if my family could survive on that, but that's a good one. If you're single, have a roommate to cut living costs.

So, of course, it always helps if they can help in with the mortgage or the rent. Keep a minimum wardrobe. So capsule wardrobes, again, minimalist idea, save you money. Install a turf lawn. So this will be obviously more money at front. but we'll save on having to do all your lawn care, especially if you have a small yard. Use hand-me-down furniture.

This is always great if you can find some antique furniture, family heirlooms, or Facebook marketplace. Turn off your water heater in the summer. Interesting. I didn't know you could even do that. Okay, buy all generic products. Yes. Add water to shampoo, conditioners, cleaning products,

make them last longer. There you go. Keep that product going. Install a bidet to save on toilet paper. Well, there you go. Use credit card reward points to purchase Christmas gifts for free. No, bad idea. Don't do that one.

Come on, internet. Use drugstore makeup. So, listen, Walgreens has some good cosmetic purchases. Why not? Buy meat on clearance when it's almost expired and then put in the freezer. A little bit of a risky game, but hey, save money. Use your dog as a home security system. Actually, a recent documentary I watch.

A guy who did break into someone's house told her she should get a dog in the actual burglar. So it's very interesting. Or you use garbage bags. I don't know the internet. I don't know if I can do that one. Hang dry all laundry. All right. Given like Italian village vibes.

You know, why not? Buy a metal detector and look for treasure. I actually knew someone that did this and they actually found a lot of stuff. So I don't know. All right. So listen, some of them a little weird. Some of them actually,

you could be a little inspired by. So there's definitely a few tricks in there that will save you some money. But as promised, here are some of the things that I do that are considered weird. Now, they may not be weird to you if you've followed my show for any amount of time, but they're weird to society and to all the stats that we see when it comes to personal finance. Okay, make sure to stick around, though, because number five on my list, I really want to know your comments on this one.

All right, here's some of the weird things I do. Number one, I don't use credit cards. So you actually statistically spend more when you spend with plastic, specifically credit cards, because there's no emotion attached. So I do that when you spend it. other people's money. Statistically speaking, you're going to end up spending more. So I don't worry about it all. I just spend my own money. Number two, no car payments. Yep, and this is weird because car payments feels like a normal

way of life. But when you don't have car payments, you're not throwing away hundreds of dollars, again, out the window, basically, right, to the car company or the bank. But also, you're not paying interest on something that's losing value. So great way to save money. Pay cash for your cars. Number three, giving. So this may feel like a little bit different here, but this is a weird thing to do because when you live your life though with an open hand and you live where giving is a part of who you are, you'll actually find more peace in life. I really do believe that. May I say you may find more contentment. And may I say when you realize that and you have that perspective, you may not want to buy everything all the time because you're living for something bigger than yourself. It's a real thing. All right, next is to pay off the house early. So this is a really big deal. And we talk about 15-year mortgages versus 30-year, the amount of interest you can save on a 15-year. But even when you work the babysaps, you guys,

on average, people pay off their homes in 7 to 10 years. So when you do that, not only do you free up that mortgage payment, but all that interest, that extra money that's going to the bank. And last but not least, Sharon's popcorn trick. If, yeah, I've said this on a couple of episodes already, but my mom would reuse the popcorn bag back in the day before you got the plastic ones, with the large popcorn bags, you'd get free refills.

And so she'd fold that sucker up, put in her purse. And every time I went to the movie, you should shake that out. We get free popcorn. Huh, stealing or economical. We're not sure. I guess you will have to decide. But if I had to choose one weird thing

for you to start doing with your money, that is to do a monthly budget. So if you have not downloaded every dollar, make sure to do that, you guys. It's our free budgeting app. Dig into it and look at your numbers and actually live on purpose. And it's weird because,

normal is just living your life with your paycheck, not really knowing exactly where it goes, but with every dollar you're budgeting and being very, very intentional. So listen, the world is just doing stuff with their money, okay? Normal up there, sadly, when you look at the statistics, is broke. So if you're being a little weird in life, be a little weird with your money, don't be normal, don't be broke, do some things that are good for you. Get out of debt. Save, have an emergency fund, be investing, pay cash for things that you buy, be a giver.

They're all not normal practices. but when you do that, you actually start winning with money. Around Ramsey, we like to say, don't be normal, be weird. Okay, I've gotten good news and bad news. The good news is that overall, inflation has actually calmed down a bit. Yeah, we saw inflation reach a five-month low in November of 2023, and even though it's made its way up the graph for a few short periods since then, we are still in a better place than we were during Egggate 2022.

Do you remember that? But the bad news is that the car industry is already taking advantage of this. So the U.S. Bureau of Labor Statistics Consumer Price Index, the CPI, confirmed that as inflation eased in 2023, auto insurance costs increase more than 17%. So that may not sound like a lot, but even if you're just paying the state minimum, which is around $60 a month, you're paying an extra $120 per year with that 17% increase. And if those that kind of increases start happening in all other areas like home insurance and health insurance, we will all be wishing that we are back buying expensive eggs again where we are now. So let's talk about how you can be proactive with saving on some of life's unavoidable expenses no matter how costs fluctuate with inflation.

So first, let's just keep with this car theme. So number one, one simple way to save on car insurance is to ask for specific discounts. Insurance companies offer dozens of discounts, and you probably apply for at least a few of them, like being a member of AAA, which the cruises are as of 24 hours ago, 48 hours ago, that's right. Being a veteran or active military, working as a teacher or a nurse, having safety features on your vehicle like anti-theft or blind spot sensors, parking your car indoors at night, even completing a driver safety course. So listen, just ask and your insurance agent will hopefully help you find the best deal. Now, another way to save on car insurance is to increase your deductible.

So your deductible is the amount of money that you're responsible for paying for before your insurance kicks in and covers the rest. So for example, if you get into an accident and the cost of the repairs to your vehicle was $2,500, you might pay $500 in a deductible and then rely on the insurance to pay the remaining $2,000. And most people choose a low deductible because they want to be a low deductible because they want avoid getting a giant repair bill after an accident. But if you choose a low deductible insurers often raise at your monthly rate to balance out the risk of having it to pay to fix for your car.

So if you raise your deductible to $1,000, which should be covered by your emergency fund if you're on baby step one or above, then you could save up to 40% or more on your monthly payments. So that's about $635 a year. Now, the third way that I recommend saving on car costs isn't necessary insurance, but it's probably the most important part of owning a car responsibly, and that is to buy used and pay cash. Now, before you get all dramatic about this one, let me just remind you that new cars lose 10% of the value the minute you drive them off the lot. And in the first year, their value decreases by 20% after five years by 60%. So cars are a depreciating asset. So unless you are worth at least a net worth millionaire, which is a million dollars, or more is your net worth, then again,

the most practical way for you to buy a car is to buy a used one in cash. And transportation is a basic necessity. And so you don't have to drive a beater though for the rest of your life. So use some common sense, prioritize your goals and just know you can step up in car later. But when you can pay for a car in cash, you are going to save money because you're not taking out a loan and paying interest. Okay, let's go over another type of insurance home. So here's some ways to save. Number one, bundle. Now, I'm sure you've heard commercials saying a bundle home and auto or a bundle and save, and it's true. When you combine insurance coverage for your home, car, and even commercial and umbrella policies, you usually can get a better

overall rate. Plus, it makes payments faster and easier just to knock them all out at once. Another way to save on home insurance is to be choosy with your claims. So this one's a very fine line because what's the point of having insurance if you're not going to use it? So I hear you, but it is a balancing act. So if a few incidences of, occur close together, consider paying for the smaller repairs just out of pockets to keep your premium costs low. If insurance companies feel like you're asking them to cover every little thing, every little hiccup, and they're going to ask more money from you every month. And this is why an emergency fund is a lifesaver. So you have a small cushion of your own to fall back

on. So again, you can soak up some of those costs so your insurance doesn't spike up. The third way for saving on essential costs has to do a specific type of insurance that you have on your home, and that is a PMI. So private mortgage insurance is a type of insurance that you're required to pay for if you purchase a home with less than a 20% down payment. And you want to hear something sad? This type of insurance doesn't even protect you. Nope, it protects the lender.

And it can be tempting to just put your house payments on autopilot and forget about how much you're throwing away and extra insurance fees like this one. But recently, there's been a lot of headlines about the rising cost of PMI. So make it a goal. to get rid of this extra monthly cost. Mortgage lenders are required to cancel your PMI once you've paid 20% of the home's value. So whenever you can, find extra money. Make sure to put it in your budget and put it towards extra payments towards your mortgage principle so that you can reach that

minimum requirement faster. All right, you guys, so we've done car, we've done home. Let's talk health insurance. So here's some ways to save. Number one, stay in network. Did you know that you can actually lower prices for medical care if you choose a different provider. So you can make a call or look up your doctor's office online and find out if your insurance coverage is in network. Insurance companies and their policies can change frequently. While people tend to stick with their personal doctor for a long period of time, you can usually expect a small co-pay, but choosing doctors that are within your insurance policies network will save you hundreds of dollars on regular visits. So do your research before your next

visit and make sure that you're covered by the specific doctor that you're seeing. Number two, another way to save on essential health care costs is to take advantage of the HSA, which is the health savings account. This is a great account that can allow you to contribute money to a savings account for personal health care costs that's tax-free. So here's why this is awesome. You can use those funds to cover small healthcare costs that you don't want to have insurance pay for, like dental or an eye doctor. And you can make tax-free contributions that roll over year to year. You can even invest your HSA funds so that they grow again tax-free over a long period of time.

And many employers also offer HSA matches. So I'm telling you, this is great. You never want to say no to free money, right? All right, tip number three on saving for health insurance is to find out if you qualify for the premium tax credits. So to help make the costs of buying a plan more affordable, the government created a tax credit for people with a household income between 100% and 400% of the federal poverty line. So this is for people who make enough that they don't qualify for Medicaid or Medicare, but they're still struggling to afford health insurance.

So if you're buying your insurance on the open market, you might qualify for a premium tax credits. And I know we've covered a lot today because there's so much to talk about when it comes to different insurances, but you need and don't need. And again, everyone is so different. So this is a very grown-up adult thing we all have to do, but I would recommend digging into this, you guys. I really recommend the coverage checkup to make sure that you're covered in all the right areas when it comes to your insurance needs. And this is a place again where you can put money back in your pocket if you're intentional with it. So if you've ever experienced an unexpected job loss or maybe some kind of medical or family emergency,

then you may know what it feels like to be stretched really thin for money. And as I co-hosts the Ramsey show, I talk to people almost every day whenever I'm on that show and I hear so many of their life experiences and really the low point. And it has to be one of the scariest, most stressful feelings that a person can experience. And it happens way more often and even faster than you might think. And if you didn't know, I was actually born the year my parents filed for bankruptcy. And so, you know, it took them years and years and years to try to come out of it. get to this place and it was all because of, you know, real estate investing and all of this.

But for them, they hit that rock bottom. And it's really a scary place to be when you're completely out of hope. So today, I'm sharing exactly what I would do if I lost all of my money. So overnight, if I woke up and there was nothing there, what would I do? This is my thoughts. So I want to be clear that, again, I don't wish this on anyone. And I hope that none of us have to be in that position. But again, life throws some curveballs. And trust me, there's a lot of opinions out there. So I do want to be clear that using the Ramsey plan and knowing what we teach from a principled standpoint

is a lot of what I'm going to do. So if I woke up one day and again, had no income, no savings, here is the very first thing I would do. Number one, I would find income and I would take a job. And I'm not talking about just like cleaning up my resume or starting to apply. Like I would literally take a job just like that.

Anywhere I can find to make money is what I would be doing. Then after that, I'm going to say, okay, I have that baseline. There's actually money coming in because it's probably going to be like, you know, an hourly type job of something you would just get today. Then my next goal is to find actually a salary position with benefits. But until that happens, I'm earning any kind of income I can. And again, at that point, you're in survival mode. So it's not like, oh, this is my passion.

No, no, no, I need money. And even if you're not doing your dream job or making amazing money, just know that having a paycheck gives a level of stability. to your life. It really does. And so for some people that call in on the Ramsey show, they've been looking for a job for a year, right? And at those people, I'm like, listen, you have to find a job. It may not be the job, but find a job, have income coming in. And again, that's really where this all starts, is it starts with income. Then we're going to move on to budgeting, because the second thing I would do is start a monthly budget and just

cut majority of everything out of my life. So anything that is non-essential is leaving. So this is memberships, this is streaming, this is subscriptions, this is going out to eat. Probably my grocery bill, which has grown over the years, I would try to shrink it down where I could. I'm not going shopping, like, I'm doing nothing. So in terms of the seven baby steps, I'm basically at square one. I'm going to be saving for a $1,000 emergency fund. Then we do anything I can.

Any extra margin will be thrown at savings at that point. And again, I'm going to cut everything but my four walls, which is food, shelter, utilities, and transportation. So those are the things that I'm going to be looking at, because that's the third thing I'll be doing, is just making you. just making sure that those four things are covered. Now, once you do that, you can, you may make some adjustments in there

because if you have a really high mortgage payment and if you're going to be at a season where you're not making the income you were, there's a good possibility you're going to downsize. So if it ever came time for me to have to exit my home for a financial reason, I want it to be my decision that I'm doing proactively and not waiting for the bank to kick me out, right?

I don't want to get so far behind on mortgage payments. I would be more proactive in that sense if I could. So anything I could do to avoid something going on my record, like a foreclosure, again, is the best point possible. So selling the house may be an option or other things that you look at to say, okay, what are some big changes that I could make? Now, speaking of selling, step number four is to start selling off everything. So, I mean, this is even selling cars, right?

If you guys have two cars, maybe you go down to a one car family for a bit. Anything around the house that has some level of value, see what you can sell, again, to save up for that emergency fund. So any fancy appliances that you could live without or clothes, I mean, all of that stuff, you guys, it can be replaced. But if you really woke up one day and you're like, oh, my gosh, I'm at this point that we don't have anything. What are we going to do?

That's when you basically turn your whole life into a garage sale. And you do, you cover those basic expenses, but you're saving up for that emergency fund. And you'd be surprised how much money you really can make selling secondhand items. It really adds up fast. And if you are in a pinch for some cash, it's a great option. The fifth thing I would do is pause. any investing that I'm doing. So while I'm laser focused on building up that emergency fund,

I want that cash liquid in case something were to happen. I want that money available. So, again, if there's any investing going on, that's long term, I'll get to that eventually. But for now, I would pause it. And if you're doing this, you guys, and you're getting out of debt or you don't have an emergency fund, I would really have you consider pausing any investing,

even retirement stuff for a period of time. Because I know it's important to invest for the future. But again, making sure that you, have things in the present, money in the present to help you, it is the best thing you can do. And you want to keep a logical order of these priorities. So again, having three to six months of expenses saved before you invest long term. These are the first five things that I would do if I had no savings and no income. But again, if debt was in the mix, this would be a different story too.

And the sad truth is, is that more than 45 million households in America have some kind of debt. So if this were part of the equation, the first thing I would do is probably contact the creditors and just say, can I have a short grace period or maybe adjust my payment plan temporarily while I get my income back to where it was. You know, I'd even share a small bit of my situation with them and the plan that I have moving forward. Again, talking to a human, it really is powerful. Now, obviously, it may not change the situation, but at least you're trying. And you're not trying to get out of all the debt and just say, oh, my gosh, I can't pay any of this, but you really are being strategic with your income and telling them the reality of where you are. And if I had to share my number one

tip for financial planning in a crisis, it would be to take it one step at a time and to have hope. And honestly, this is why we have the Ramsey Baby Steps when people suddenly realize maybe they are broke. Maybe they wake up and whether they've been laid off or not from their job, but they feel like, gosh, we have all these payments. We have no money saved. There are some things that we can start doing. And you want to start with checking a few boxes, like increasing your income, getting rid of debt. And all of this will speed your process up more to feel like you have control over your money. So remember, no matter where you are, you guys, no matter where you are, you can make a decision to do something different with your money. You have that power.

You really do. Well, if you love this episode, love this show, make sure to leave a review. We love to hear your feedback. It helps us out so much. And while you're at it, if you will subscribe to this podcast and even share it with all your friends and your family for them to learn how they can control their money, because that is what it's all about here, you guys. So thank you so much for listening. And remember to take control of your money and create a life you love.