Money Habits – Rachel Cruze
MUST HAVE RESOURCES
SUMMARY
KEY TAKEAWAYS
Our money habits reveal who are. How you spend your money shows your dreams, your fears, and your values in life.We can always improve on our money habits, and there’s no need to have shame about that.
Quitting the comparisons is one of the money habits of going debt-free.
Working on gratitude in your life helps you get out of the comparison trap.
People who serve and celebrate others, and are givers, have better quality relationships. They thrive in life and have the best money habits.
A budget doesn’t limit your freedom. A budget gives you freedom. It gives you permission to spend. It gives you permission to do the things you value.
It’s harder to spend cash because there’s no emotion when you pay with plastic.
Spending with cash is a great everyday money habit that you can implement. It makes you second guess and rethink your purchase.
The average family in America does not pay their credit cards off every month.
Debt is a thief, and not only robs your income, but it steals your peace of mind.
When your income is not going out to pay off debts, you’re able to invest more. You’re able to give more. You’re able to spend more.
TRANSCRIPTION: MONEY HABITS – RACHEL CRUZE
Money Habits
Kamala Chambers
In this episode, we’re going to be talking with Rachel Cruze about money habits that are hurting you, and ones that are helping you.
As a communicator and Ramsey personality, Rachel Cruze has been speaking to groups as large as 10,000 people. She is the daughter of Dave Ramsey and, she is the one who helps keep everyone out of debt. She is a number one New York Times best-selling author of Love Your Life, Not Theirs: 7 Money Habits for Living the Life You Want, and we’re so excited to have Rachel on the show.
Luis Congdon
All right. Welcome to Thriving Launch.
Rachel, are you ready to launch?
Rachel Cruze
I am ready. Thank you guys first and foremost for having me on. I appreciate it.
Luis Congdon
I love it. I love the work around money habits that you and your dad are up to.
Both of you have had an impact on me because I’ve had terrible money habits for most of my life. Money habits is a subject that most of us don’t want to talk about. We’re willing to talk about everything from the sun to the moon and everything in between. But money just seems to be one of those things that just terrifies most people and is so taboo.
I’m curious to ask you. Why do you think money is that one thing that you just absolutely can’t talk about it?
Change Your Money Habits To Change Your Life
Rachel Cruze
Statistically speaking, struggle with this area in general. When there’s something in life you struggle with, you don’t want to talk about it. You don’t want to vocalize that because that’s not fun.
Money reveals parts of us.
How you spend your money shows your dreams, your fears, and your values in life.
Rachel Cruze
It’s a lot more of a vulnerable subject than just talking about dollars and cents because there are hearts and minds behind it.
If you are struggling with money, no matter who you are, we can always improve on our money habits and not let it be a shameful, hopeless subject but of hope in our lives.
Kamala Chambers
This is so cool. I love how you’re shaping it out for us. One thing that I know that you talk about in your book is seven money habits.
I’d love to hear some of those money habits from you to live without debt or stress or worry.
Rachel Cruze
Yeah.
I think one of the habits that is probably the most prevalent that I see in our world today in regards to our money is the idea of being able to quit the comparisons. Because the comparison game in today’s world is magnified because of social media. We get a picture and a glimpse of everyone else’s life, and we only put the best parts of our life on social media. It’s everyone’s highlight reel. Because of that, we think that everyone is living this amazing life.
Practicing Gratitude And Having Better Money Habits
Rachel Cruze
So, we end up spending money. Money that we may not have to keep up a lifestyle that we think everyone else is living and we’re missing out.
Comparison doesn’t just affect our joy and our contentment, but it affects our paychecks as well.
So I think that’s a habit people don’t focus on, but it’s one of the big parts of my book. The title is Love Your Life, Not Theirs. So the comparison is woven off of that book. But it is an essential part of our money habits that we have to get in line so that we can reduce our debt, stress, and worry.
Luis Congdon
Social media is taking over and is such a big piece of most people’s lives.
We’re currently on vacation with my family. There are 18 of us here in Maui. It’s incredible. We’re having an amazing time.
Rachel Cruze
Oh wow. You’re all living it up.
Luis Congdon
We are. We are.
Rachel Cruze
That’s awesome.
Luis Congdon
It’s such a pleasure. It’s because we’ve learned healthy money habits that we’ve been able to save and be able to take the family out like this.
Rachel Cruze
That’s right.
Luis Congdon
One of the things that blew me away is some of my nephews who 4, 5, 6, 7 years old were like, “Add me on Snapchat.” And “Yeah, let’s meet up on Instagram.” I’m like, “You guys are like 4, 5 years old. How do you have Snapchat?”
Getting Out Of Comparison Trap And Knowing Better Money Habits
Luis Congdon
I’m curious from you because social media is taking over. It can be so overwhelming, time-consuming, and result to this comparison trap. What’s one of the things that you can help us not to do that?
Personally, I know that I can do that. I go on social media sometimes, I’m like, “Dang it. That person is just –,“ “Wow! They’re having such an amazing life.” “I need to work harder today.”
Rachel Cruze
Right.
Luis Congdon
How do we get out of that comparison trap especially so that our finances aren’t being hurt?
Rachel Cruze
One thing that I’ve applied to my life and again, it deals more with the heart issue. You set boundaries on yourself with social media. And say, “We’re only going to look at it between these hours,” or “If I get home, I’m going to put the phone away.” And there are some things that you can put in your life to help more tactical things.
Rachel Cruze
But overall, more of the emotional umbrella if you will, I have found working on my gratitude in life helps me so much. I’ve learned that in a heart filled with gratitude, there is no room for discontentment and comparisons.
I’ve started a gratitude list on my phone, which sounds cheesy. In the mornings, I used to grab my phone, and I would check email, text messages, Instagram, and Twitter. I would have my phone on my face before my feet even touch the grounds. However, about a year ago, I stopped that habit. I was like, “What am I doing?” Even before I get out of bed, I’m diving into other people’s lives right now.
Writing Down Money Habits
Rachel Cruze
What I did is I just started to write down two things I’m grateful for every day on my phone. So for me, when I open up the Instagram or I look on the Facebook, and whether it’s a mom who seems like she’s killing it and I’m like, “Oh my gosh. My kids running around naked. We’re in the living room right now, and I can’t even seem to get that under control.” In my line of work, it’s like “They’ve launched the book and its gone crazy,” and all the stuff.
It’s so easy for comparison to creep in. So for me, I go back to that list. I say “Okay. Here is everything I’m grateful for.” Honestly for me, that spirit of gratitude, I have to work on it on a daily basis, but I do. It really does bring contentment, which helps me quit the comparisons.
Kamala Chambers
That’s so important and gratitude is something that so many of our guests talk about.
I have to say that lately, one thing that I’ve been doing is, every day I make a point to reach out to a fellow entrepreneur. Someone else who’s doing amazing things with their life. I send them some profound message of gratitude or some genuine message of gratitude. It has been good for our business, and I’m not doing it for business purposes.
Instead of comparing ourselves, finding ways to have gratitude for what that person is doing, and I find like I feel like I’m boosted to their level. They’re boosted to my level, and it’s such an amazing process of reciprocity.
Gratitude Is The Seed of Abundant Money Habits
Rachel Cruze
Yes. I love that.
There are not people in life that do that with you very well. It’s easy to critic and to compare.
People long for those kinds of relationships. I think people that are doing exactly what you’re doing where you extend, you are grateful and celebrating, and this open-hand mentality, when it comes to your career, your money, your time or whatever it is, those people thrive in life.
It’s amazing. Individuals who are givers, who serve and celebrate with others have better quality relationships. They’re happier and more joyful because they choose not the other emotions. They opt to step into the space to celebrate and be excited for people.
I think that’s such an amazing thing and it’s infectious when people are getting that encouragement. It’s an amazing thing when we are a culture of comparison and being critical when you can be the opposite. That’s so many flourishes. That’s amazing. I love that.
Luis Congdon
Don’t hate. Congratulate.
Rachel Cruze
That’s it about money habits. I love it.
Luis Congdon
I was flipping through the channels one time. And this pastor was talking about something and for some reason, I was captivated. So I stopped, and I had to listen for a moment.
One of the things he said is, “Gratitude is the seed of abundance.” That’s always stuck with me. I don’t know who originally said that, but I love that.
I want to dive into something with you here, though. It’s the B word. Something that you and your dad talked about constantly and most of us are afraid of it. It makes us shiver and quiver. It’s something that we don’t usually want to dive into, and that’s budget. That’s checking how much we’ve spent and how much we have in the bank account.
Developing Better Money Habits
Luis Congdon
Lord knows I’ve been terrible at money habits. I’ve had hundreds of overdraft fees.
How do we even start to feel okay with checking our finances? Most of us are afraid because we know we have so little in there and so, we avoid it. We’re scared of doing budget because it feels constraining.
How do we start getting a hold of that and create a mindset where maybe it’s even going to be a good thing to look at how much money I have. And how much money I’m spending and figuring out where money is going and not going?
Rachel Cruze
I think that’s a great point because when I talk to people and when it comes to their budget, they fall into three buckets.
- People don’t know where to begin.
- It’s like what you’re talking about. “I don’t even want to know.” “I don’t want to look because it’s probably bad so I don’t even want to know.”
- People who say, “Gosh, I feel like when I’m living on a budget, it means I can’t have fun and that it’s cheap. Living on a budget is not fun.
What I do is I try to debunk all those myths because you have to be in control of your money to win. To be in control means you have to know what you have. That fear of,”Gosh, it’s probably awful,” you have to push through that because you have to be able to look at everything you have and take an assessment. “This is reality. This is my life. I have to take control of this aspect to go further.”
Do It Differently To Have Better Money Habits
Rachel Cruze
If you keep doing what you’ve been doing and expecting different results, that’s a definition of insanity. So you have to change what you’ve been doing and for a lot of people that is living on a budget.
For me, I’m a natural spender. I’m a free spirit. For that budget, honestly, is one of the hardest parts of personal finance. This is the part I had to ingrain in myself because I don’t lean that way naturally.
For me, I learned by doing it and pushing through those emotions and living on a plan. After doing that for a few months, it became a habit in my life. I realized one thing.
A budget doesn’t limit your freedom. A budget gives you freedom. It gives you permission to spend. It gives you permission to do the things you value because, in your budget, you get to control it.
You get to say, “Hey, here is where I want my money to go.” There are obviously bills and that kind of thing you have to pay. You can’t get behind on that, but over the scope of the month, you get to say, “No, we want to go out to eat more.” Or “No, we want to be home with the family,” “We want to go shopping.”
Stay Intentional Around Money Habits
Rachel Cruze
You get to decide what to do with your money and living on a budget allows you that permission and allows you that freedom. Because never again when you get to cash registry at the grocery store or the mall, wherever you are and second guess your purchase and think, “Gosh, should this money be going somewhere else?” “Should I be doing something else with this money?” All of these questions are answered because you have planned out and you’ve said, “This is exactly where my money is going.”
I look at people just in every area of their lives and individuals that win. Whether it’s in business, or in their marriages, their parenting, no matter where they are, people that win are intentional. They happen to that part of their lives. They go to marriage counseling. They do date nights. They work on their business. They put people in place to win. They’re so focused and intentional, and money is the same way.
You have to be focused, and you have to be intentional. You have to happen to your money instead of your money happening to you.
The budget is your answer to gain control of your money habits.
Money Habits, Budget And Freedom
Luis Congdon
I hear this so often, and yet, I think about former me especially before Kamala.
One of my best money habits is being with her, and I feel very fortunate. There’s this book called The Millionaire Next Door. One the things they talked about that all these millionaires’ partners were frugal.
I feel very fortunate that Kamala is that way.
But you have another thing there because I don’t know if everybody’s going be that fortunate where their partner is going to be a frugal partner. One of the things you talked that you and your dad talked about is spending cash and allocating money in envelopes, and that helps.
Rachel Cruze
Yes. Absolutely.
Luis Congdon
That’s something that Kamala does. She’s really into using cash and understanding where the cash is going so that we’re not using this card.
There this thing that seems to be highly promoted in our society is to spend it on a credit card. And you have to go somewhere and log in to figure out what you’ve spent. Use it on a debit card, and you have to go to the bank or log in.
There’s this thing where we don’t want to look at what’s happening with our money.
Rachel Cruze
Yeah.
Cash reveals it all. It shows you if you have a lot right here you can spend, or it’s getting very limited, so you have to cut back. It’s a great accountability partner in that regard.
When you look at your budget and look at the categories that you tend to overspend on and say, “Here is out to eat. Here is for groceries. Here is for clothes. Here is whatever it is,” and cash those out and do exactly what you’re saying Kamala. Put them on envelopes.
Money Habits Of Savers And Spenders
Rachel Cruze
I came out with my own wallet just a few weeks ago because as a woman, I was like, “These dang envelopes. I can’t carry a cute wallet.”
Kamala Chambers
Oh my gosh. I love it.
Rachel Cruze
Yes. I hope you like it. It’s now the clip system I put in place and design the cute wallet to put in my categories.
When you use cash, not only it’s a good accountability partner, but also, it’s harder to spend with cash because there’s no emotion when you pay with plastic.
Even a debit card is a little different because you know there’s cash in the bank leaving but especially with a credit card.
Emotionally it hurts. Carnegie Mellon did a study that showed that when you spend with cash, your brain registers pain. The pain cells in your brain light up when you spend with cash because that hurts. There’s an exchange that has to happen. You have to let go of that $20-50 bill or $100 to gain something else. There’s an exchange happening. Your emotions are driven up, and so it’s good because it makes you check to say, “Is this really what I want to buy?” vs. just swiping something. There’s not a lot of emotion there.
Spending with cash is a great everyday tool that everyone can implement, and it does help especially for spenders.
I’m the spender of my marriage. My husband is more of the saver. For me as a spender, not only does that give me permission to spend to say “I can go out to eat,” “I can go out to lunch because I have cash.” Again, it does make me second guess and rethink that purchase because I have to let go of that cash.
Balancing The Money Habits
Kamala Chambers
That’s so great. We got it. We’re going to be linking to your wallet so everybody can get theirs. This is so fantastic.
I love the way you framed it, Luis. There are a spender and someone who’s more frugal because it’s such an important balance to play.
Just a little tip around money habits if you’re looking at dating someone, are they the spender?
Rachel Cruze
That’s right. Know your money personality for sure.
Kamala Chambers
I didn’t know how much of a spender Luis was but don’t worry, you’ve been corrected.
Luis Congdon
I feel like the girl in the relationship right now.
Rachel Cruze
It’s funny because I talked to couples everywhere. It’s not even the girl or the guy that’s the spenders or savers all the above. It’s funny. Opposites attract and it’s true even with our money.
Kamala Chambers
Yeah. I got to say my claim to fame is I’m 33, and I’ve never been in debt.
Rachel Cruze
I love it.
Kamala Chambers
I think that’s crucial. One thing that has helped me keep out of debt is to know what I want and work hard towards getting that thing.
I’ve been traveling the world since I was 15. I’ve always been able to pay my way because I earn money ahead of time. I had the goal, and I worked towards it.
What are your thoughts on that? Some people say, “Just get in debt but know how to budget it out.”
Rachel Cruze
When you play with snakes, you’re going to get bit.
The idea that I can outsmart the credit card company or the car loan is not going to work. People know what they’re doing.
Money Habits Are Crucial
Rachel Cruze
Do people pay their credit cards off every month? Sure, yeah. But the average family in America today has $16,000 that they owe on the credit cards. So, statistically speaking, the average family does not pay it off every month.
Again, if you play the snakes, you’re going to get bit.
I’m just like you girl. I take no par in the debt world either. Whether it’s a car, something really expensive, we save up and pay cash for. Even it’s just a used car, we’re good with that. We will not go into debt for it. It’s the same with purchases and vacations.
My friend Chris Hogan says, debt is a thief and not only steals your income from you, but it steals your peace of mind, and your sleep at night.
When you owe someone something, the reason you go to work and do things changes because suddenly, you owe someone something whether it’s Sally May or it’s the bank, whatever it is. That changes so much of your life and the emotional state as well.
Again, what people don’t talk about is interest rates. “If I pay this off and then I invest this and borrow on that.” Forget the Math and everything for a second.
Imagine if you had no payments. What if you got to the end of the month and you had no one to pay? It changes so much. It changes what job you’re in. It changes the way you eat. It changes so much of our lives.
Being able to have that freedom is something that I’m very passionate about and living debt-free. Because I was born the year my parents filed for bankruptcy. I was born in April and they filed in September.
Understanding The Financial Hole And Money Habits
Rachel Cruze
My whole life I watched them dig themselves out of this financial hole. As a family, that value is drilled into me that no matter what mom and dad are not putting us back here. No matter what we’re going to be a one car family if we have to. No matter what dad’s going work overtime to pay the bills. No matter what we’re not borrowing money.
The scar is healed now but is on our family’s legacy forever, and it’s nothing to be ashamed of. It’s something for my generation to look at and say, “You know what? I’m going to take the mistakes my parents made and be different,” and say, “You know what? I don’t have to make those mistakes to do well with my money. I don’t have to make devastating mistakes to be wise with money. I can do this. I can make these decisions.”
Is it hard? Yeah, sure. So now, is it hard? Do we want to stay in a nicer hotel in vacations sometimes? Yeah. Do I want to upgrade my car sooner that I can? Sure.
Being able to say “No” in the present and not give into that instant gratification allows you to live a life in the future of one that you value and you want.
Because when your income is not going out to payments, you’re able to invest more. You’re able to give more. You’re able to spend more. You’re able to do so much more things versus sending half of your income to visa and your car loan.
When I look at it mathematically and emotionally, I’ve made a decision on my own life and my husband as well, as a married couple now that we are not going to borrow money.
So, girl, I am with you all the way!
Money Habits Of The Millionaire Mind
Kamala Chambers
All right. I love it.
Luis Congdon
I like what you just said and just a personal story too for everybody listening because I know that these companies that have credit and want you to buy off their credit, and take loans from them, they sound very enticing.
They really want to pull you in because they know the value of a customer, statistically speaking. It’s a high percentage of people that will take out that loan, take out that debt so that they can have the goodies now, and then they’ll be paying off double that amount. So, for them, it’s very worthwhile to make that enticing.
Something that I want to say to you and your dad is you guys got me in trouble. I went to this big event. It was this huge conference. it was called The Millionaire Mind or something like that, and the guy was talking about this money habit, and he said: “We’ll pay for everything on credit and then go into your account and pay it off right away and collect the points.”
He was talking about what a great idea this was, and I ended up standing up at one point and saying “I don’t think that’s a good idea because I’ve gotten in trouble with that. I figured I was going to buy all these cool things and have all these points racked up but then, I ended up having to pay off all these debts and accumulated debt. And so, I think that it’s better to spend in cash and budget what you have and know it, and not do this method that you’re talking about.”
Tips On Building Good Money Habits
Luis Congdon
The guy’s response, he jabbed me. He said, “Well, I send you a postcard from Maui with my free ticket.” I want to tell people that this credit card thing is a part of what’s gotten The United States in trouble. It’s borrowing and constantly doing debts, and we’re living with that.
I highly recommend that everybody check out Rachel Cruze’s work and her dad’s work as well, Dave Ramsey. Both of you have helped me and a lot of people that I know around me figure out this money thing and you guys tell it in a way that no one else does. So thank you so much for coming on the show.
Kamala Chambers
You’ve been listening to the Thriving Launch podcast. We’ve been talking about money habits.
It’s been great to have you all here.
Rachel Cruze
Thank you so much for having me guys. I so appreciate it.
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