- Hey you guys.
Welcome to another episode of The Rachel Cruze Show.
And as you can see next to me,
your second favorite personal finance expert is here.
- Could be the fourth or fifth.
- Dave Ramsey.
He might be down the list.
I don't know. - Yeah, there we go.
- That feels about right, no.
Thanks for being back.
- My plan's working.
Thanks for letting me come back.
- Yes, so we're in January.
And so we're starting off 2021,
and a lot of people have New Year's goals,
New Year's resolutions to fix their money.
We see that a lot.
A lot of people talk about health,
and a lot of people talk
about their financial health as well.
- Yeah, I mean we,
30 years ago, I started doing this.
January 1 is quit smoking, lose weight,
save money, get out of debt.
So money goals are always top of mind
because we're setting a new year.
And with the dumpster fire of 2020 in our rearview mirror,
we need some goals,
we need some stuff to go after here.
- Yes.
But don't you think,
I mean, it's not like a magic wand
and when the calendar turns to this year,
I mean, ugh.
- You know it's not-
- I'm gonna be Debbie downer for second.
- It's not, but what it does, it gives you perspective.
- Yes, that's fair. - Because you say okay,
it's a milestone, there's a marker here that says,
okay, new stuff ahead,
old stuff behind, it's not perfect,
you always carry some of it with you into the next year
but we also know we get a fresh start,
we get a do-over.
We get grace.
We get a whiteboard
that doesn't have anything written on it.
- Yeah there's like a mentality shift
when you start the new year.
So we want to do some things that are different this year.
So there's 10 things that we're gonna walk through
about, all of you watching,
what you can do different this year.
Number one, you're not gonna be surprised by this,
but get on a budget.
Okay, a budget, it really is.
It's the easiest way to get in control of your money.
When you get on a budget,
you feel like you got a raise
and you're actually intentional.
You are telling your money where to go.
You are controlling your money.
Your money is not controlling you.
And I think this is one of the biggest mistakes people make,
is they don't live on a budget.
They don't live on a plan.
- Well, not only do you write it out,
but then you do what you wrote out.
I talked to a lady on the radio the other day.
She'd done budgets for six months and they just didn't work.
And it was like she had $300 for groceries
in a family of five.
And I said, "Well, you're not living on that."
"Oh, I know."
And so she had like this theory on paper,
but then over here was her life.
So you actually have to freaking
do the thing you wrote down, and then you will see movement.
The thing about the budget is, budget equals power.
And I have never talked to someone
in Financial Peace University,
in one-on-one coaching, or on a radio call that didn't,
when they finally actually wrote it down
and then lived on what they wrote down,
didn't get a sense of power.
It was the first time they were on top of money,
instead of money was on top of them.
- Mmm hmm, that's exactly right, yeah.
And it's one of those things you're gonna look up
on April 15 when you do your taxes next year and be like,
oh yeah, I know exactly where all my money went, right?
Because most people, they're doing their taxes,
and they're like, "Oh my gosh, where did all my money go?"
Yeah, because you don't live intentionally.
And so the budget has to be a part of your financial walk.
I mean, it's so hard to win financially without it,
so do the budget.
Number two, stop using debt.
- No, that's on the list, really?
- I know, so shocking, so shocking.
But a lot of people have a credit card as their safety net,
it's their emergency fund.
They depend on debt,
either because they're buying stuff
they just simply can't afford and they want it,
or they're not planning well.
And I talk to a lot of people like this.
They use it for their bills
because they don't feel
like they have enough money coming in.
And it's kind of, yeah, it is that safety net.
So the idea of just stop digging yourself in that hole
is important.
- The first step to getting out of debt is stop, just stop.
Stop borrowing.
If you stop borrowing and you pay minimum payments,
42 years later, your credit cards will be gone, on average.
By the way that is about right.
Your car will pay off,
eventually your house will pay off.
Even old Sally Mae'll eventually get paid off.
If you don't do anything extra,
if you don't do any special,
if you just stop, that's the first step.
Now, of course we want you to do extra,
we want you to do the debt snowball,
we want you to change your whole mindset around debt
because that's the shortest distance
between where you are and your dreams,
where you are and changing your family tree,
where you are and wealth and outrageous generosity.
- Yeah, and then people do get sucked into the idea,
okay, well, I'll have my credit card
because I want the points,
I want to live on all of this.
And so what you have to realize, though, is that game
you never get ahead.
You never get ahead, and you never win.
We always laugh about this, but it's true.
It's like, you look at the bank building, and you're like,
mmm hmm, it's a little bit bigger than your house, isn't it?
Yeah, because they're making lots of money,
lots of money off of you people.
So stopping with the credit card, the car loan, everything,
stop going into debt.
All right, number three is get serious about saving.
This is something I feel like I talk
to a lot of people in interviews and different things,
in 2020 specifically, where they were like,
"I'm not a great saver, but now I want to be.
How do I start?"
What do I do to start saving?"
And I think there's a couple of things.
I mean, number one, the budget, we talk about this,
making it a priority in the budget that you actually say,
yes, I am gonna put this amount of money away
and you put it somewhere separate.
Don't keep it in your checking account.
Put it just in a savings account, I don't care,
but actually move an amount of money.
And that's just a small first step
to actually get this grasp of,
okay, I can save money
because there's a lot of people that have, they don't,
they just don't save at all.
- Well, I think the phrase that you've got there
is exactly right. Get serious.
Because listen, if you needed $10,000
that you don't have today to save the life of your child,
you wouldn't need a technique to save money.
You wouldn't need an app to save money.
You'd freaking go find $10,000
because you'd be serious.
When people get serious, because after,
because the pandemic just about wiped them out,
or when I went broke, I got serious,
or when someone lost a job, they get serious.
When you get serious, that's when you'll do it.
And you'll find a way.
And we've got lots of techniques and things
we can show you to make it easier,
but it's not gonna be easy ever,
and so you've got to be serious.
- That's right, that's right.
All right number four, as we're talking about saving,
let's talk about investing.
Stay the course when it comes to investing.
If you're to the point that you're out of debt,
you have a fully funded emergency fund,
and you're investing 15% of your income into retirement,
which is what we teach,
and you're doing that,
don't let 2020 freak you out.
I mean it was a volatile year.
It ended pretty nice.
It ended kinda up, which is nice.
But stay the course.
Remember, your investing is not for short term.
If you're looking at it every single day
and freaking out with the ups and the downs,
don't look at it.
Okay, it's for the long term.
And I think that's hard for people to grasp.
- Yeah the only ones that get hurt on a roller coaster
are the ones that jump off in the middle of the ride.
And if you jumped off in March and April in 2020,
you jumped off at the bottom
and we're on the radio, we're on TV,
we're on all the shows telling you don't do this,
don't cash out your 401(k), don't do this,
unless it's to avoid a bankruptcy or foreclosure,
don't freak out
because now, not only did all of the losses
from the pandemic drop return,
but now there's a gain over that.
And you missed all of that.
You bought at the top and sold at the bottom.
This is not how you build wealth.
- Econ 101, Econ 101.
All right, number five, find a little ways to spend less.
Now, I feel like people kind of get in the mindset
of what's comfortable.
And so they buy the same things from the same stores.
They buy the same type of food from the same grocery store.
And you just kind of like live the rhythm.
And I would say shake up all of your purchases.
Like sit there and say,
okay, what if I shopped at a different grocery store
that was less expensive?
What if I actually bought clothes from a different store
or waited till they were on sale?
Like the little things you can do
just to shake up what you're spending
can actually save you money in the long run.
- What if you said on Amazon,
I'm only doing this category, nothing else.
That gets you out of the impulse land of Amazon, you know?
- Oh, that makes me hurt.
- That one got you, right?
- Mmm hmm.
Number six, if you're married,
combine your checking accounts.
This is a big one.
People do not like this piece of advice.
It's like the one piece of advice I'll put out there,
even on social media, and people get so mad at me.
So mad at me!
But here's the deal,
if you are running on two separate tracks
when it comes to your marriage, on any part of life,
but specifically with your money,
it's hard to win financially
on a logistical level, but also an emotional level.
Like when you say, hey, you know what? We're a team.
We're at this together.
We're not enemies.
We're not at odds.
We together can work toward goals,
and we can actually be a team when it comes to money.
It changes the whole spirit of this conversation.
- If you wanted to be independent and stand on your own,
you shouldn't have freaking got married, all right?
The definition of marriage is a shared life.
There's no way you're gonna win
if you don't get on the same page.
When you agree on your spending,
you're agreeing on your fears.
When you agree on your spending,
you're agreeing on your dreams.
You are combining your life.
You are one, as the old preacher said.
Quit trying to be roommates when you're married.
That's what's wrong with your marriage,
because you're stinking selfish
and you haven't given up your personal little rights
in order to combine with your mate.
Do this stuff.
I'm telling you, this lights me up
because it is the number one thing
we see holding people back,
is they got two different people
pulling two different ways all the time
And then they can't figure out
why they can't hit their goals
because of their own little selfish self
trying to be independent.
That's just ridiculous.
Hope I wasn't unclear.
- You know The Rachel Cruze Show would say
that it's very vulnerable,
it's very scary to combine your accounts if you never have.
But no, seriously though, but for real,
I know he's the hard love person. We know that.
And it's true, everything, yes, it is all true.
But to a couple that sitting there that may,
they may not have a couple in their life that they say,
oh yeah, that's a healthy marriage.
I want to be like them.
And they're really on their own trying to figure this out.
And the one thing that feels safe to them,
they feel like they're giving up, and they're saying,
okay, I'm gonna combine this with you.
So to that point, though,
it is scary- - It's an illusion.
- and it is vulnerable.
- But that sense of safety is an illusion
because you're damaging
the very progress that you could have made.
And so you've created an unsafe environment
in your effort to be safe.
So it's an illusion.
It's just ridiculous.
Seriously, 30 years of doing this
I can't find any data points
of people who run little separate lives
who go win big time in their relationships,
their marriage, in their money.
It just doesn't exist, guys.
It really doesn't exist.
So quit pushing back against it and decide,
I'm either gonna be married or I'm not.
And if I'm gonna be married, it's gonna be one.
- All together.
And again, not only will that
help you with your money, you guys,
but seriously, the unity that's created within marriage
with your spouse, working as a team,
it changes everything. It does.
- All right, number seven, speaking of spouses,
get on the same page as your spouse.
We kind of just touched on that a little bit,
but getting on the same page and say,
okay, if you make this decision,
yes, together, we are one, we're combining accounts,
we're gonna work.
Then, get on the same page.
Look at your expenses.
Look at your budget.
Look at your goals.
Look at your short-term goals, your long-term goals.
Get on the same page together
with where you guys want to go financially.
- Well, and it does go with the other one
because when you say I'm gonna combine my finances,
it doesn't say you disappeared,
that you have no personal identity.
When Sharon and I combined our finances,
believe me, she has a freaking opinion
and is pretty loud about it.
There aren't any weak Ramsey women, okay?
- Sharon Ramsey's loud,
Dave Ramsey's quite and meek,
so it's fine.
- Not really.
But I mean, she doesn't have any trouble speaking up.
And so we're gonna combine our finances,
but that doesn't mean we lost our individuality.
And we're gonna be on the same page,
but it doesn't mean...
We've got the same goal over here.
We're on the same page.
The page is, this is where we want to go.
Now, we may have some differences about,
personality styles about how we're gonna get there.
She's a saver. I'm a spender.
So her way is to save into it.
My way is to earn into it
and a sense of abundance.
But we all are agreeing, okay,
and we can hear each other,
respect each other's position,
respect each other's personality style,
and still be on the same page.
You don't lose your identity.
- No, no, no, no.
Well, and even on a tactical level within the budget,
you have a line item for you,
a line item for your spouse.
You each have money that you can go spend.
Like it's yes, like you're saying,
you're not losing who you are,
but you're saying,
hey, together, we are a team, and we're one.
All right, number eight
is stop comparing yourself to others.
This is a huge one.
Man, I feel like, especially during the pandemic,
the social media consumption was just like out the roof.
I mean people just live online
and just looking and looking and looking
at what everyone else is doing,
and it is so easy, so easy to compare,
not only like the good parts of life, but what's funny,
you may not know this,
because you don't spend a lot of time on Instagram,
but during the pandemic,
so many moms were home with their kids because of school
and it like became a joke of like wine hour
starts at like 3 p.m.
And everyone's just like,
oh my God, we've got to get through the day.
And it was almost like everybody's struggle
was being compared to other people's struggle,
like who had more struggle,
who had the more kids that struggled more
than the person that didn't.
It's just so funny.
But I'm like, the comparison game is just,
it's constant, no matter what it is.
And so, with your money specifically,
you have to have the blinders on.
You can't be looking at what everyone else is doing
because you're not gonna win
because you're taking on someone else's goals
and someone else's life
versus living in your own shoes and in your own life.
- Someone wrote a book called "Love Your Life, Not Theirs."
It was a number one bestseller.
And it's a good idea to do that.
It really, really is.
When we study people who are inordinately successful
with money,
the millionaire study we did for Chris Hogan's book,
one of the things we find is they,
somewhere along the line in their life,
they matured and just, in most cases,
almost completely lost their need to please others,
their need to be impressive.
And they were more concerned about their goals
than what their next door neighbor
who was broke thought about it.
If your broke friends
are making fun of your financial plan,
that means you're on track.
I mean, so you've got to say,
as for me and mine, this is what we're gonna do.
I had the beautiful advantage
of having gone broke in my 20's. And in that,
I was someone who had,
I was very status conscious.
What I drove, what I wore, the watch, the whole bit.
And I, number one, we went broke and it just crushed us.
But one of the benefits that came out of that was
my need to impress others just completely went away,
what the Bible calls the fear of man.
And it just changed everything.
It sets you so free
when you don't need to be impressive for others.
Instead, impressive is hitting our family's goals.
My husband and I, my wife and I,
for our kids, for changing our family tree.
- So good.
All right, number nine is to focus on at your behavior.
We always say that personal finance is 80% behavior.
It's only 20% head knowledge.
So you can know all of this stuff,
but if you don't do anything with it,
nothing's gonna change.
And so that behavior change is so big.
And change is uncomfortable.
Change is hard.
I mean, I told this story the other day,
but it's true.
It was so visceral in my mind.
Caroline, the 3-year-old,
I switched the car seats,
this was like last month or something,
and she had to ride on the other side of the car,
and it was a freaking mess
because she was like, no, this is not the side of the car,
this is not the side of the car.
So I'm even looking at her, and I remember thinking,
okay, she doesn't even like change.
Like it is uncomfortable,
people like doing the same thing over and over again,
even if it's not getting the result that they want.
And so that behavior change, you guys, is so key in 2021.
If you want a different result with your money,
you have to change what you've been doing.
And I talk about this a lot
in my new book, "Know Yourself, Know Your Money,"
because understanding why you do the behaviors you do
is going to help you advance,
not only with your money, but with your life.
But that behavior change,
focusing on behavior is massive in winning financially.
- If I don't like the way I look, my physical condition,
I don't like the way my kids are behaving,
I don't like the way my marriage is operating,
I don't like the way my career is operating,
I don't like where we are with our money,
then it's illogical to not change.
If you keep doing the same thing over and over,
you're gonna get the same results.
To think otherwise
is what's known as the definition of insanity.
And so if you keep making the cake
with using this recipe, and it's chocolate,
and you wanted coconut,
you probably need to change the recipe.
You know?
Don't keep doing the same stuff over and over and just go,
"I wonder why it's not working."
Well you know why it's not working
because you haven't faced the pain of change.
And when the pain of same,
the pain of where you are,
exceeds the pain of change,
is the only time you'll actually change.
Now you can manifest that.
You can just get disgusted enough to go,
I've got to lose some weight,
which I did a few months ago.
And so I can't keep eating boxes of donuts
and get anything but larger,
something has to stop.
- Something has to change, yeah.
Yeah, and I think too, for people to realize,
okay, that there is hope in the future, right?
Like that hope to say what I'm changing to
is better than my present.
And the beautiful thing is
at Ramsey Solutions,
we've been doing this for like 30 years, you guys,
and the amount of success that we have seen people
that do this stuff,
that they live on a budget,
they get out of debt, they save,
they do the things that you want to change to, it works,
like it works.
And so the future you're working toward
have hope that it is so much better
than where you are in the present
if you're not happy where you are.
All right, number 10, last but not least,
is to live on less than you make.
This is kind of like a Dave Ramseyism,
but it's something you've been saying for decades.
- Yeah, "In the house of the wise
are stores of choice food and oil,"
wise people save money,
"but a foolish man devours all he has."
And I looked up,
when I first read that in my 20's,
I thought, I'm a fool.
I've been devouring everything.
Everything that comes in, we spend it all and more.
And so by definition, I'm a fool.
And I thought, well, fools don't get ahead,
so I probably need to change this.
And it's kinda like, hey, fool, change your ways.
- Living on less than you make.
All right, Dave Ramsey.
- That was fun.
- Dad, thanks for being here, for real.
All right, 2021, you guys,
make this the year that you change everything,
that you take these small 10...
I said small 10 steps.
They're not small, guys.
It's gonna be a lot.
but it's worth it. It's worth it.
Again, if you don't like where you are, you have to change,
and you have to do something differently.
So hopefully this list of 10 helped you out.
And happy new year.
- Happy new year. Good times. - 2021.
(upbeat music)