- Well, one of the best parts about the internets
is that we get to talk.
Yes.
So there are so many questions that I get
via my Facebook group, or Facebook in general, my page,
to Instagram, to YouTube, Twitter, all of it.
There's always questions regarding money.
So I always like to do a quick video
and answer some of those questions.
So this is the Ask Rachel Video,
and if you guys have questions
then you can go on any of those channels and ask,
because we'll be searching for them so we can answer them
right here for you.
All right.
The first question is from Nicolette
and she asks,
"I'm from South Africa.
My question is, do the seven Baby Steps apply to us as well
or if we use a different currency?"
So really the overarching principles of the Baby Steps
will apply to you no matter what.
So things like a zero-based budget,
your income minus your expenses equals zero.
That's going to matter whether
you're in a different country or use different currency
or whatever, that still applies.
Getting out of debt.
If you don't have the money, don't buy it.
That still applies.
Having an emergency fund,
that still applies.
Now where things get kind of, probably, a little bit wonky
is like retirement for instance.
Like in America,
we have 401(k)s or 403(b)s.
Different countries are gonna have
different rules, different regulations
when it comes to retirement,
but overall saving into that for the long term
is something you wanna look into.
So is the 15% going to apply to you?
You probably need to run the numbers,
figure out what applies to you, in your country,
with your currency, all of that.
But overall, the philosophies of the Baby Steps still apply,
because well, no matter where you are,
an emergency fund is always a good thing, right?
And being out of debt.
The next question is from Brittany,
and she asks,
"My husband and I are planning on having a child soon,
currently not pregnant.
We are in Baby Step 2,
and so we have a $1,000 emergency fund,
but we also have $2,000 saved up for the baby.
Should we keep saving for the baby
or use that money to pay off debt?
At our current pace, we should be debt free around July
or September of next year."
Brittany, that's awesome.
And so fun you're starting a family.
I love that.
So if I were you,
I would go ahead and throw that $2,000 at your debt
and keep working at that snowball until you get pregnant.
So when that happens, just press pause,
and then you're gonna pile up money.
That's the key.
So this is for anyone,
whether you're going through the adoption process
or you're pregnant,
whenever a child is coming into the works of the family,
always pause Baby Step 2 and pile up money
because you wanna make sure baby is good,
mom is good, everything is fine.
And then whatever money you have saved
that you've been piling up while you were pregnant,
or while you were going through the adoption process,
then take that money and go and just throw it at the debt
after you're done.
So that's always the key.
So if you get pregnant, pause then.
But until then, keep on working the Baby Steps.
The last question is from Ericka,
and she says, "I am great at budgeting for my bills,
but I always struggle with budgeting for the stuff
that I don't necessarily need,
especially on Baby Step 2.
Things like clothes or birthdays or holidays.
What advice do you have for budgeting for these items
during Baby Step 2?"
Well, Baby Step 2 is when you're getting out of debt,
and this is like full-on sacrifice.
So the rule of thumb here is
the more you're willing to sacrifice your income,
your lifestyle, all of it, to throw at the debt,
the faster you're going to get out.
Simple math. Okay?
So the more you sacrifice on the budget,
you throw extra at the debts,
the faster you're gonna get out.
Now, with that said,
life is still gonna happen.
You still have to live life.
So there's some people that are on Baby Step 2
they're like, eh,
I kind of just wanna continue to like do my own thing,
Shop when I want,
if a birthday comes up,
I'm gonna get a great birthday gift for my friends
or my spouse
like I'm still gonna spend money in that area.
Well, mathematically those people,
it will probably take longer to get out of debt
because again they're not throwing all of their money
at the debts,
they're spending a little extra here and there.
On the other side,
there are some people that we meet and they're like,
sorry, I'm gonna give you a card,
get a construction paper like my kids do,
write your little card and that's your birthday gift.
Hope you love it, because we're getting out of debt.
So we call those people gazelle intense.
Right, that they are not being selfish
the fact that they're not buying gifts
or anything like that,
but they just have cut everything out.
They've gone so bare bones, beans and rice,
rice and beans.
They're so focused, and that's their life,
and that's what they're choosing to do,
and those people are probably going to get out of debt
faster.
So what you kind of have to say is,
Where am I on the spectrum?
Well, I hope that you're more on the gazelle intense side
because I want you out of debt.
Again, these short-term sacrifices.
This is not gonna be you for the rest of your life.
But again, for a short period of time,
over the course of your life,
you're gonna gain so much in the future.
So more on the gazelle intensity side is where I like,
but the asterisk is how do you budget for things
that you know are coming up?
Well, the key is, is that again,
life is still gonna happen,
so in order to make your budget accurate,
you have to be realistic.
So you're going to probably need clothes at some point,
If your kid's like, I don't know,
or shoes are too small
you're not gonna make them walk around, like get blisters,
okay people?
I'm not crazy.
So yes, you can buy your kids new shoes,
whatever it is that you actually need,
go ahead and account for that
because if you don't and you say, you know what,
we're never gonna have to buy clothes for three years.
It's probably not true.
You're probably eventually gonna have to buy something
at some point.
So be realistic about that and put it in the budget.
So the more accurate your budget is,
the better all this is gonna be.
So again, kind of shoot for what you're thinking,
and again, planning ahead, it takes a lot of intentionality,
but there are times while in Baby Step 2,
that you have to buy things,
but just plan accordingly and don't go too overboard
on the other extreme
because then you're going to be in debt
for a whole lot longer.
So hopefully those questions help some of you guys watching,
because I know there's so many out there
and there's so many that are so specific to your situation.
So again, I kind of love digging into each of your stories
and helping you out on this money journey
because, whew,
it can be daunting.
It can be hard.
But also, part of the show and why we do this stuff
is for you to create a life that you love.
So again, you can ask questions on any social media
that I'm on.
Go ahead and just post it,
or I have a fancy voicemail, mmm hmm.
I never leave voicemails ever anymore.
Like if I get someone's like,
like if they don't answer the phone,
I'm like, eh.
My sister, on the other hand. God love you, Denise.
She leaves voicemails every time she calls me,
and I make fun of her because she always says,
"Hi, Rachel, it's Denise."
I'm like, mmm hmm.
I know, it shows a missed call from you.
Anyways.
So I don't leave voicemails,
but if I were to leave a voicemail,
I would leave a voicemail on this number
to ask me a question, if that makes any sense.
So you can call this number 844.944.1075
and ask a question, and maybe we'll play the voicemail
here on the show and answer your money questions.
All right, you guys,
as always, remember to take control of your money
and create a life you love.