The Ramsey Show - App - A Message of Hope Series: Rachel Cruze

Episode Date: March 31, 2020

It’s scary out there, but hope is greater than fear. In times of crisis, facts are your friends. So get the facts and other common sense guidance on life and money from thought leaders Dave Ramsey, Ken Coleman, Rachel Cruze, Chris Hogan, Christy Wright, Anthony ONeal and John Delony. Get a FREE trial of our life-changing Financial Peace University today: https://bit.ly/3dFT7ir daveramsey.com/hope  

Hey guys, Rachel Cruz here. And man, what a weird time of life that we're living, right? I mean, I just can't get over really what is happening. So not just the health stuff that is happening with the coronavirus, but the economic side as well. There's just so much going on. There's so much panic. There's so much fear. There's so much, you know, facts that I feel like are thrown at you and you're trying to figure out, okay, is this true? Is this not? And that's how I feel. At least I've learned that I have to like turn off my TV. I have to put down my phone and not worry about everything going on because I can even get caught up in the fear and the hysteria of what's happening. Now I've said it before. I'll say it again. I am not a health professional. I did not go to medical school. No, no, no. And I really do not feel

capable of speaking into anything health related right now. Okay. But what I do feel capable of speaking into and something that I really am passionate about is you all struggling with your money. And what does it look like to control the money that you have today? What does life look like for you in the personal finance aspect of your life? What do you do? What do you do with your money? And so that's why I'm here to help you. And we've said this a lot in Ramsey Solutions

the past couple of days, but it's just true. You have to be able to control what you can control. There are things going on in Washington at the state level that you don't have control over. But what is going on in your home are things that you can control, and that includes your money. So number one, I would say, don't panic.

We make really bad financial decisions when we're fearful and freaked out. Our laugher used to say that you make really bad financial decisions when you're terrified or drunk. Probably one of both too, right? I mean, it's so true. So don't be terrified. Do not

be panicked. I always say fear is a terrible financial advisor. You do really, really, really not smart things, not wise things with your money when you're doing it all based on fear, not facts. So focus on the facts. Number two, all of you out there, you need to be on a budget. This is something that I talk about all the time, but it is so, so important in this time, you guys, being intentional with where your money's going. Winston and I, my husband, we were just talking just two days ago, honestly, about our budget. We were looking at stuff and I even realized, wow, we've kind of been lax. Like we kind of like, we're in like a kind of a groove. Like, yeah, yeah, we're doing it. We're being intentional here and there.

It's great. But now since all this has hit, we've kind of said, okay, you know, we're going to strip it. Like we're really going to focus hard and figure out ways where we can save money. And the budget is going to be your friend in the process. Some people hate the word budget.

They feel like it's constrictive, it's cheap. You know, you can't have any fun on a budget. Okay, all of that is out the window. Okay, I don't care if you feel like it's not fun. This is a time in your life where you have got to be intentional and you have to tell every dollar where it goes. And a simple budget is your income minus your expenses equals zero. So every dollar coming in is assigned to a category. And in your budget, at the very top, what we call your four walls. So you want to be able to prioritize where your money is going. And so your four walls are food. So this can be if you're going out to eat or if you're at the grocery store. And depending where you are, some of you don't need to be going out to eat. You just need to be shopping at the grocery store.

But it's your food, your shelter, so your rent or mortgage, your utilities, everything to keep the lights on, everything going in the home, and transportation, making sure you have gas in your car and you can get to places if you need to go. Those are the four things that you want to be able to focus on. And what's great about this, I love, is it kind of is just taking us back to more of a simple way of living. We've had a lot of wants in our life, right? I mean, the economy was incredible before all this happened. But what you're realizing now is some of you, you really have to really constrict down and say, okay, here are my needs.

Here is what we have to have. And honestly, it kind of is a breath of fresh air. It's to say, okay, all this other stuff, all this other noise in my life really can be calmed down if we just focus on this. And so controlling that is going to be huge. And so doing your budget and making sure that those four walls are covered is really, really important. Now, those of you who have lost an income during this time, there are millions and millions of people and continue to be, I feel

like every day you just hear more and more stats on this, of people who have lost their jobs. And so first and foremost, I know that can be so scary. It can be so, so terrifying. But this is why it's even more important for you to buckle down and be intentional with your money. So I would also say that there are lots of opportunities out there for you. It can be a scary time because there's a lot of industries that are completely shrinking or going away. But there's a lot of opportunities out there for you to do something totally different. And there's industries that are just booming, things that are going on, people, they need help. Some of these industries are screaming for people to say, please come help us.

We can't keep store shelves stocked. We can't get deliveries out fast enough. And so the great thing is, is that there are some jobs out there and maybe something totally different than what you've been doing, but at least you're bringing in an income. But if you have found that your income has stopped because you've lost a job, that's when you're really going to look at your budget and you're going to cut out all unnecessary expenses and you're going to start to save, save, save, save. And this is where you're going to cut things, you know, like cable. Maybe you've had cable for a while. Maybe you lower your cell phone bill.

You look at your grocery budget and you start cutting some of that even down, looking at things that you don't need to spend money on. Subscriptions, Netflix, Hulu, Disney Plus. These things are getting us through the quarantine. I understand that. But when you don't have the money for it, cut it out. So go through, list out everything that you've spent money on and things that are unnecessary and you don't need. Go ahead and cut it out and So go through, list out everything that you've spent money on and things that are unnecessary and you don't need.

Go ahead and cut it out and start saving money. Now, those of you paying off debt, we always teach people to pay minimum payments on everything and pay off the smallest debt first. If your income is still coming in and you feel like it's going to be stable, continue to pay on your debt. But those of you that have lost a job

or maybe your boss has come to you and said, hey, listen, we're probably going to have to lay off some people. If you know that that is coming, stop paying extra on your debt and stockpile cash. Having money on hand is going to be really, really important in the next couple of months because there is so much uncertainty. But when you have an emergency fund in place, it's going to make you feel a whole lot more secure. Now, I've been talking to people on via the internet, in person, like all over the place all the time. And I keep getting the same questions over and over and over. And one of the questions I keep getting is, do I keep paying off my debt? We kind of just addressed

that. But again, you guys, this is really important. If you know that your income is going to be eliminated or you have lost your job. Stay current if you can. Pay minimal payments. And then stockpile cash. Don't keep paying on your debt if your income is not coming in. And there are a lot of industries that are giving a lot of grace periods without fees or extra interest. And so maybe you push out your debt a couple of months if you're able to do that if you've lost your income. But those of you with an income, keep on trekking down the debt snowball.

Keep attacking your income. But those of you with an income, keep on trekking down the debt snowball. Keep attacking your debt. Some people have asked, okay, do I take money out of my investments? Because they're freaking out. They're looking, I mean, I'll be honest, I even looked at what was going on. I was like, oh, I can't look at that anymore. Kind of makes you sick. You're like, what has happened? And it can be really scary. But again, we're not making financial decisions out of fear. Remember that. And so keeping your money in the stock market, it is a roller coaster, you guys. You can look at it and it just, it is up and down. We've gone through a lot of hard times in the American economy over decades and decades. But I believe in the American economy enough to know that we are going to come back from this. We are. We're going to be okay. It's going to be okay. And so to keep your money in. Now,

if you're towards retirement age, talk to your financial planner. But especially you young people, I mean, we have another 30 something years to leave our money in these investments. Okay, do not cash them out. Do not make that decision based on fear. I've also got a lot of questions about buying houses. A lot of people were like, I was about to buy a house. What do I do? Well, listen, when you're buying a house, here's my rule of thumb. Number one, I want you to be completely out of debt with a fully funded emergency fund of three to six months of expenses and then a down payment of 10 to 20%.

So that's going to be your goal. So if you are there and you have all of that in place, go ahead and still buy a house. I think it's great. I never want your largest asset, which is your home for most people, it's their real estate, to be dictated by the market, okay? It needs to be dictated by you

and your financial situation. And so if you're in a place to still buy, then go ahead and buy. But those of you that were thinking about buying but you still have credit card debt and car loans and no emergency fund, you don't need to buy a house anyways. Coronavirus or not, no. You need to be buckling down and getting out of debt and making sure that

you have that emergency fund in place. And so the housing market, we don't really know what's going to happen. I don't have a crystal ball. I wish I could predict everything. That would be amazing, but I can't. But to be able to say, okay, my stuff is in place. I'm ready to buy a home because it's based on your decision, not because of what the market is doing. Now, for a lot of people, you guys are looking at your lives. Everything feels like it's turned upside down. The kids are home. Your spouse is home with you. You both are maybe working from home.

I mean, life just looks so different. But when it comes to the money piece, a lot of people are in kind of two different boats. Some of you are really stressed. Maybe you have lost that job or you don't have savings. You do have bills to pay and lots of debt. And I want to tell you that it's going to be okay. You're going to be able to get through this, I promise. The things we outlined just now, everything from being on a budget, covering those four walls, it's going to be really important. But I want this to be your wake-up call. I want you to be able to say, I'm not comfortable here. I don't like my financial situation. And the beautiful thing is that you get to make that decision. You get to change

how you handle your money. It's up to you. Washington's not going to do it for you. Your governor's not going to do that for you. You get to decide. And even though this is a terrible situation to realize all of this, because it's not fun to be stressed and freaked out, but I want this to be your wake-up call where you say, you know what? I'm going to do something different. I never, ever want to be in this position again. I never want to feel this stress and anxiety around my money. And so that may be the urgency that you need to say, hey, you know what? We're going to get out of debt. We're going to get an emergency fund after this. We're going to do the things to set us up well, no matter what hits, that you're

going to be okay. Because I can tell you, the people that are feeling that emotion are the people that did our baby steps four through seven, that you guys out there who have sacrificed and you've gotten out of debt. You've sacrificed more and you've saved up that emergency fund. You're sitting at a totally different place emotionally. We always say when you get to that point of baby step four, that a crisis ends up being an inconvenience. That's kind of how this could feel for you. You're like, man, this is not fun. And yeah, we may have to dip into our emergency fund here or there, but you're not absolutely freaking out. There's not credit card bills that are piling up or car loans that aren't getting paid. No, you are in a position and you sacrificed all those times.

You sacrificed that beach vacation. You sacrificed not going out to eat for those six months. I mean, you sacrificed so much in the past to get to a place now where you have some relief. And you get to say, wow, this is what it is and how worth it it is. So I just kind of want to congratulate you guys on Baby Steps 4 through 7 because you're living out what we're teaching. And because of what you've done, the choices you've made, you are in a completely different position than a lot of Americans. But again, no matter what boat you're in, we all can do something different. We all can learn and choose to grow in this situation. So I kind of just want to challenge you, you know, as you're

thinking about your life, you're thinking about your money and where we are in our world today, I really want you to press it and say, okay, what are things that I can learn right now? Because not everything has to be, you know, this, this negative Nancy all the time. We can find some good in this. There is hope in there, you guys, there is hope. So I want you to think through, okay, what are two things that I'm going to learn out of all of this? And I want you to write them down. It sounds kind of cheesy, but for real. We've talked about on the Rachel Kershaw journaling a lot, but I do.

I love writing things down. Write it out and say, okay, these are the things I'm going to learn. Because you're going to go back to this in three months, in six months, in two years and say, wow, that was a crazy time in our country, the coronavirus and everything. But here are the things that anchored me. Here are the things that I learned about myself. Here are the things that I'm going to choose to do differently.

And I'll tell you, you know, mine, when it comes to money specifically, I kind of said it earlier, but it is true. Winston and I realized, oh, wow, you know, when I was on maternity leave, we, don't worry, we followed our budget. I'm not saying we went crazy, but we weren't as strict. We were kind of like, yeah, here or there.

We kind of want this. We'll change categories, you know, here, here and there. And this kind of made us be like, no, no, no, we need a goal. Like we need to be able to say we're gonna have this much saved and that we can do this. And we kind of got back on this train, this motivation. It kind of motivated us to look at our budget and tighten up a little bit. And also, I would say this, the needs versus wants. This was a big thing.

When we were doing that and having these discussions, we're like, okay, what are the things that we absolutely have to have with this? We'll carry over our food budget month to month. And everything else, I was like, man, that is just like loud noise. It was kind of this moment of like the kids are home from school, the girls, you know, their school's canceled. So they're home with us and it's just chaos. It feels like 24 seven, but there's these glimpses of like simplicity of like, wow, here we are as a family, like never again in the history of America is everyone going to be forced into their home again, knock on wood. But that's the truth. I'm like, man, it is such a crazy time,

but it kind of just brings you back to like the simple facts of life of like, wow, you're with the people that you love and focusing on that and again, it's not going to be like that 24-7, I understand but those moments of like, man, this is kind of a sweet time and you get to choose your attitude towards that.

You get to choose your attitude of your spouse working from home with you. Isn't it funny? I hear I went to doing phone calls like down below if I'm like putting Charles to bed? I hear I went to doing phone calls like down below if I'm like putting Charles to bed, I'm like, oh, that's like his work voice. Like you learn different things about your spouse when you work right next to him. And then the kids, you know, there's again, so many crazy things happening, trying to home, you're trying to homeschool them

and all of that. But man, there is, there's just this time of life that, that all the fluff can be just taken out and the simplicity of what really matters and what you truly care about is there. So those are kind of the things that I've been learning through this process. Again, not perfect, but it's important. You kind of hit the restart button and refresh in times like this. And so I want you to hear loud and clear, you guys, that there is still hope in this. I don't want you to be overwhelmed by fear.

There can be things that are is still hope in this. I don't want you to be overwhelmed by fear. There can be things that are scary. I understand that. But sometimes you're going to have to turn off the TV, put your phone down, and really, really focus on the hope that is out there. Because I'm telling you, God has you. He knows what's going to happen. He knows what is happening. He has the control. And that's ultimately where I rest and my peace is. And I know at the end of the day, he has a plan to give me hope and to prosper me, not to bring me harm. And that is a truth that I so believe and I so live by.

But for you guys, don't function out of fear and control what you can control when it comes to your money. You can go to DaveRamsey.com slash hope. And we have so many resources on there for you, including a 14-day free trial of Financial Peace University. This is our nine-week class that we have put millions and millions of people through to help them gain control of their money. And we're giving this to you guys for 14 days completely for free.

So you can binge it while you're at home. Cancel that Netflix subscription and just watch this and learn to control your money. And be tuning in because all the Ramsey personalities are going to be talking about this stuff over and over and over again because we want this in your minds, want this in your hearts, and we want to be able to help and direct you in a time that can seem so chaotic. But we want to give you some peace and some hope in this time. So I pray you guys stay healthy. And remember, man, this is a time for you to springboard specifically with your money

to control your money and win with money like you never have before. Hey, everyone. We all need more good news in our lives right now. So we will be continually updating A Message of Hope with relevant topics that matter from me and other Ramsey Network hosts. Stay connected with the latest episodes by subscribing on Apple Podcasts, following the show on Spotify, or listening in your favorite podcast app.