The Rachel Cruze Show - Why People with the Same Income End Up Rich or Broke

Starting point is 00:00:05 Have you ever looked back at a time when you made less money and you thought, oh my gosh, if that version of me knew how much money I was making today, I would think, I made it. I would be totally fine. But here's the interesting thing. Most people feel like steady salary growth still has not solved their money problems. So let's talk about why people with the same income can end up in such different places financially and four habits that will keep anyone broke no matter how big their salary is. So make sure to like, subscribe, and share it this episode with a friend.

Starting point is 00:00:38 Okay, you probably heard the term lifestyle creep, but if you kind of need an explanation, this is what it means. It's just like slowly over time, your expectations of life and the way you spend money just keeps getting better and better and better. The quality of your life continues to raise as you make more money. And because of that, you end up spending more money on those things. So as your income grows, so does your lifestyle. And so knowing that people of all income levels experience lifestyle,

Starting point is 00:01:03 creep, the reality is that sacrifices have to be made. If you are still in a process of paycheck to paycheck living, even if you feel like you're making more money today, there has to be some sacrifices in the short term. So once you decide that you're willing to change your behavior around money, here are four habits keeping you broke that you may need to cut out. Okay, before we dive into those, I do want to tell you about one of our sponsors, Christian Healthcare Ministries. Health insurance costs are only moving one way, and that way is not dead. down. The wait times are longer and it's harder than ever to get anything approved. So if you feel like the system is working against you, try Christian health care ministries, a biblically based

Starting point is 00:01:43 alternative to health insurance. CHM is a health cost sharing ministry that's helped hundreds of thousands of families like yours, take care of health care costs, stay true to their values, and avoid getting tied down by miles of red tape. Y'all, there is a better way. CHM programs start as low as $98 a month. So find out more and join at chministries.org slash budget. That's chministries. dot org slash budget. All right, the first habit you have to cut out regardless of your income is living beyond your means. If you're continuing to live a lifestyle that your income cannot support, you're going to either be in the hole or you're going to be draining your savings if you have it. And I even find people are cashing out retirement for this. And you end up, again, going more and

Starting point is 00:02:27 more into the financial whole, again, whether that's spending your savings that you have or going into deeper debt. You are not going to get traction until you live below your means. You have to live within your income. And the number one reason I am able to really do this is because of the monthly budget. A budget will guide you regardless of your income. And I've been doing this, you guys, for 15 years. Like when I was first started working, I started budgeting all the way until now. And regardless of my income, the monthly budget is one of the best things to help you stay on track. And I use the every dollar app. It's amazing. I'll put a link down on the show notes, but make sure to check it out. All right, the second habit you have to break is thinking that payments

Starting point is 00:03:05 are the norm. So a lot of people live with debts. Like the average American, it is just the way you do it. You have credit card debt. You have car loans. You have personal loans. Like you just live with debt. And what ends up happening is your income, which is your largest wealth building tool, goes out to all of these payments and working for banks and the debt industry rather than you. And so what you want to do is actually earn interest on your money by investing and helping you in the long run versus paying interest with all of these payments. So becoming debt free is huge. And you want to do that by listing out all of your debts, smallest to largest, regardless of the interest rate, pay minimum payments on everything, and pay off that smallest debt first. Being debt free, y'all, it is one of the best things you can do with your money.

Starting point is 00:03:47 All right. Number three is not being in a rhythm of saving. So saving is something that you need to be doing. So we talk about the emergency funds, the baby emergency fund, the $1,000. Then once you're out of debt, you bump that up to three to six months of expenses. So that is cash on hand that you have, and it's great. And then after that, you are going to be in a rhythm of saving for long term, like retirement. So 15% of your income should be going into retirement.

Starting point is 00:04:11 And especially once you get to that step, y'all, this is just a part of your rhythm of life, is you're going to be saving. Like, that is it. That has to be a habit long term for you not to live beyond your means. and to set your future self up for a great life. So saving for the future is massive. And number four is trying to keep up with everyone else. Listen, if you are running the rat race and you're just trying to look like everyone,

Starting point is 00:04:38 experience what everyone else is experiencing, I mean, all of it, you're going to be spending so much money on that life versus avoiding comparison, being content with what you have. And sure, upgrading different things when you save up and pay for them, you know, having great experience is like a great trip. That's great if you save up and pay for those things. But if your whole life's goal is to constantly be in this wheel of just buying the next greatest thing and just trying to be like everyone else, you're going to be a rat and a wheel for the rest of your life. So don't do that. Put the blinders on. Now, there's one major way

Starting point is 00:05:10 that I see people spending money and trying to keep up with the Joneses. And I talk about that. In this episode, 45% of Americans are taking on debt for this. You can watch it here. or if you're listening on podcast, click the link below. All right, you guys, remember to take control of your money and create a life you love.

The Rachel Cruze Show - Why People with the Same Income End Up Rich or Broke

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