- Would $1,000 give you some peace of mind?
Well, in this episode, I'll show you how to get it.
(upbeat music)
Hey everyone, today is going to be fun
because we are going to talk about your first step
to never worrying about money again.
This is going to be the first step
on a journey for you to take control of your money.
So, we're starting a brand-new series today
walking through the seven baby steps.
So yes, there are seven of them.
And it is a proven plan that has helped
millions of people win with money.
So today, it's the first day of the series
so we're going to start with Baby Step 1,
which is a $1,000 starter emergency fund.
We're going to deep dive into this step.
And also in this episode, we're going to talk about
ways to cover your expenses when unexpected
emergencies pop up.
And I'll answer some of the most common questions
from people like you as they go through
the Ramsey Baby Steps.
And I love this first step because, really,
this is the buffer between you and life.
And $1,000 may seem like a lot,
but there are ways that you can save for it.
So, if you want to keep track of your progress,
head to the show notes of this episode
and get a free printable that you can color in as you go.
All right, some quick ways to save $1,000 . . . Are you ready?
Cut out all nonessentials.
Make a budget.
Use cash-back apps.
Use energy-efficient lights.
Brew your own coffee.
Pack your own lunch. Meal prep.
Wait 24 hours for a big purchase.
Shop your insurance rates every year.
Freeze your spending temporarily. Do a no-spend challenge.
Order water at restaurants.
Switch grocery stores. Try things like Aldi. Buy generic.
Use gift cards at Kroger and then you can use
those points to get gas.
Use your Instant Pot instead of going out for dinner
when you're too tired.
Carpool to work.
Pay with cash.
You actually spend less when you pay with cash.
Save loose change.
Sell your kids' clothes at consignment stores.
Sell things that you don't use anymore.
If you haven't used or worn something
in the past year, sell it.
Sign up for free customer reward programs
that are not credit card based.
Stick to your grocery list.
Find restaurants where kids eat free.
Cancel unused subscriptions.
Do your own lawn care, cleaning, nails, hair—all of that.
Go have a yard sale. Keep selling some stuff.
And finally, if you have whole life insurance,
you need to switch to term life insurance.
So, term life insurance is a policy that you take out,
and in the event that something happens to you,
your family gets a specific amount of money
that is previously decided on.
Now, there are several different options you can choose from,
and I suggest you get a 20-year policy
that is 10 to 12 times your annual income.
Now, a lot of people treat their whole life policy
as an investment rather than insurance.
So, you should not treat these the same, okay?
Your investments and your insurance should be separate.
And whole life insurance costs you so much
more money over time, and the coverage is just not as good.
Now, if you already have a whole life insurance policy
in place, you can cancel it, cash it out, and
get your money back.
But only do this after you've gotten
a term life policy in place.
Now, I recommend using Zander Insurance.
They make everything really easy for you,
and they shop around for the best rates
to keep the costs really low.
So, make sure you visit zander.com to get started today.
All right, $1,000 emergency fund, you guys—Baby Step 1.
This is the easiest step
of all the baby steps, but it's also the hardest.
(upbeat music)
It's the easiest step because it's $1,000.
Now, that may seem overwhelming to you,
but it doesn't have to be, okay?
Look at your budget. Go to the last few episodes
when we talk about budgeting.
Cut some stuff out. It's great.
You can get $1,000 really, really quickly.
But it's the hardest step because it means
that you are changing.
You are changing the way you are dealing with your money.
You are changing the way you are viewing your money.
I mean, everything is about to change.
And no one likes change.
Change is uncomfortable. Change is hard.
It's not always fun.
But there was a moment for me where that change happened,
and I talk about it in Financial Peace University.
So I want you guys to take a look.
Here it is.
All right, confession: I am a spender.
And I hated budgeting.
That's right, some of you probably just like,
fell out of your seats that Dave Ramsey's daughter
hated budgeting, but it's the truth.
It's just not naturally what I'm good at.
I'm kind of like, not great at details.
And just the idea of budgeting was always so hard
for me to grasp.
I actually could understand it, but doing it
is what was difficult.
And I can even remember when Winston and I, my husband,
when we were engaged, we went to premarital counseling,
and even our premarital counselor said,
you guys should do a mock budget together.
I was like, how much did my dad pay you to say that?
Because I was like, oh my gosh, I know we need to.
Just doing it is so hard!
And so, when Winston and I got married, we didn't budget.
We didn't budget for like the first six months
of our marriage.
And then finally, one day, Winston came to me,
and he was like, Rachel, we need to do a budget together.
And I just remember thinking,
you're one of those, aren't you?
But I was like, okay I know. I know I need to.
We need to do this together.
Just doing it . . . I was like, okay, let's do it.
So, I remember, we sat down in our little condo
that we were living in, at a kitchen table,
and we did our first month's budget.
And you guys, it was a disaster.
Like, it was terrible.
I think we budgeted $50 for food or something
for the whole month.
Like, it was so bad.
The second month I remember it got a little bit better.
We learned from our mistakes.
We went, okay, let's adjust these categories,
but it was still a little rough.
The third month, it actually started working.
So much so that we were like, oh my gosh, this is great.
This is what living on a budget feels like.
This is amazing.
And Winston and I are not perfect with money,
but I can confidently tell you that we've done
a budget pretty much from that point ever since.
So much so that a budget became a part of our life,
that we took a trip to Florida one year
before we had kids. It was kind of our last big hoorah.
And we were flying down to Florida,
and Winston looked over at me in the plane,
and he was like, "Hey Rachel, listen,
I want you to relax on this trip.
I don't want you to worry about anything.
So you don't have to think about the budget at all,
and you can just spend money."
Mmm hmm, yes he did.
Yes he did.
I was like, wait, what?
I was like, "For real, I don't have to think about the budget
and I can just spend money?"
And he was like, "Yeah.
I mean, if you're bumping up against the trip budget,
I'll let you know. But yeah, just enjoy."
I gave him the biggest kiss in the world.
I was like, "Babe, you're letting me live in my strengths.
Like, this is what I'm good at."
And I remember, when we got down to Florida,
checked into our hotel, went out by the pool.
And it was one of those pools where
waiters and waitresses walk around,
and you can order drinks and food to your seat at the pool.
It was awesome.
And so, this waitress walked by and I was like,
"Hey ma'am, do you guys have guacamole?"
And she was like, "Oh yeah, sure."
I was like, "I'd love some. Thank you."
So, she brings it, I'm eating it. It's delicious.
And I was getting thirsty, so I asked her then,
can I have a menu to look at the drinks?
So, when I opened the menu, the first thing I see
is appetizers.
And I was like, oh.
And I see chips and guacamole: $23.
Mmm hmm, $23!
I was like, did the avocados fall from heaven?
Like, what makes guacamole $23?
I was like, it's okay, Rachel. Just spend the money.
Just spend the money.
So, then I go down and I see drinks,
and I see lemonade. I was like ah, that's great.
In my head I thought, that's what I want to order.
And I look over: $18.
Mmm hmm, $18.
I thought, what? This is crazy.
And at that moment, the waitress was right in front of me,
and she said, "Okay, what would you like to drink?"
And I just had this battle going on inside of me.
And I remember thinking, Rachel, just spend the money.
Spend the money!
Like, go back to your roots.
Go back to who you were!
And I looked at her, and I said,
"I'll take the lemonade, please."
And she brought it over, and I took a sip,
and I was like, well, that was $1.50.
Jeez. And in that moment, I started spiraling.
I started freaking out because in my head I was like,
I just spent so much money on pool snacks
that tonight at dinner we can't get an appetizer.
We're going to have to go to Walgreens and
buy granola bars for breakfast.
Like, what have I just done?
And I was just panicking.
And in that moment, I realized I was not panicking
because of all the crazy expensive prices at the hotel,
even though it was ridiculous, I know.
But I realized in that moment that this was
the first time—at that point, in years—
that I felt so out of control with my money.
That I had no clue where my money was going.
And that's the moment I realized
that a budget does not limit your freedom.
A budget gives you freedom.
A budget gives you permission to spend.
So, I'm telling you guys, this is going to
completely change the way you handle money
because you're going to have control.
But if you've never done a budget before,
give it three months to get into a rhythm
because it's going to take some time.
Winston and I totally are a testimony to that.
It takes about three months.
And you also will realize that money is relational.
You have to do this with your spouse.
Or if you're single, find a friend who is good at money
who can look over your budget with you.
We love finding new ways to save money.
We lower categories in our budget, buy things on sale,
and even use coupons.
But we often forget about the biggest expense we have—
and I'm talking about your mortgage.
If you have been in your home for a while,
there may be options available that can save you money—
not just pocket change, but real money.
The best way to get started and see what options you have
is by the Churchill Checkup by Churchill Mortgage.
A quick call with an expert home loan specialist
can help you figure out what's best for you
and discover incredible opportunities
to save time and money.
To get your Churchill Checkup,
go to churchillmortgage.com/churchill-checkup.
(upbeat music)
All right, now we're going to hear stories
from people like you who have started the baby steps.
- We had our son, who had medical problems.
And medical bills really have traumatized our future.
So we really wanted to tackle as much as we could
to handle those debts and to get them down
as quick as possible.
So, Financial Peace was the best way
we saw fit to do that.
- We started this class mainly so that we can
live our dreams out later down the road.
- So we could give our kids a better future
and show them whatever comes our way in life,
as far as the financial or any burdens,
that we're handling them.
- I grew up with my dad always talking about
Dave Ramsey says this, and Dave Ramsey says that.
And my parents—I think going through
Financial Peace University when I was so young—
saved for a college fund for me,
and so totally had no student loans to pay off.
So, I actually don't have any debt.
But now, being in the class, it's kind of fun
Because I get to apply the things that I already know,
and that I've already learned in my own personal finances.
- I can remember my parents doing Financial Peace
when I was younger.
Knowing that that was great for their marriage
and for us as a family financially.
And so, now that we just got engaged,
and so we're doing it together.
- The funnest thing for me, though,
was the conversations that we've had
about our budget, finding out who is the nerd
and who is the free spirit.
They've gotten me excited about our marriage
and taking charge of our finances
and getting started on the right foot.
- I love hearing stories of people who are
starting to see real life change.
I mean, I'm sure a lot of you can relate to
some of what you just heard.
And I really want you to have that hope, too.
And I love that they plugged into a
Financial Peace University community.
It always amazes me how quickly people can see
the light at the end of the tunnel.
Now, some of them had some questions for me,
so let's see what they are.
- A question that we would have . . .
Say that we have a little bit of credit card debt
and a car payment heading into our engagement,
and into our marriage.
So, we would love to know if there's any other advice
or any other thoughts that you may have for us
as we move into marriage together.
- Yeah, I think, just, if there's anything
specifically for an engaged couple
moving into a marriage if there's any
specific financial advice or conversations that we could
have on the front end, that would be great to know.
- Oh, engaged couples . . . They're just the best, right?
The bliss before the reality of what
they're about to walk into.
Marriage is awesome, but it's more awesome
when you are on the same page.
So a couple things I would say if you are engaged out there,
or to this couple specifically:
Keep your money still separate.
Not until the day you say "I do" do you need to combine them.
So, I don't know whose credit card debt it was,
or whose car loan. But you keep it separate.
You start working the baby steps on your own.
And then the beautiful thing is,
when you get married, then you combine it all together.
So, I hear a lot of couples say,
okay, well, maybe it's his car loan,
and his credit card debt, and she doesn't have any payments.
Well, for her, she could just be saving up a lot of cash.
And then, once they get married,
she can use some of that money, pay off his debt,
and together, they're moving on together.
So again, keeping things separate until you say,
"I do," is huge.
And also, I would say, don't go crazy with the wedding.
Really, it's like one of the things
people spend so much money on.
Yes, you want to have fun, you want enjoy your day,
all of that . . . But do not go overboard,
and definitely do not go into debt for the wedding.
All right, here's the next question.
- What advice can you give to keep us motivated
going through our debt snowball?
- So staying motivated through Baby Step 2
can be really difficult for a lot of people
especially if you have a lot of debt,
and if it's things like medical debt that you see
that you're like, man, I can't sell it.
Right? Like a car loan, you're like,
"Hey, I could choose to sell the car and
get out of that debt really quickly.
Medical debt is something that does seem to string along.
But I would say have some quick wins
within the big chunk of your medical debt.
So, look at your medical debt almost as a separate snowball.
And just kind of separate it out
and say, okay, this is what we're about to tackle.
Like, it's a huge mountain, and there's so much there.
But put some mile markers in place
and have some celebrations throughout it
because you want to be able to feel those quick wins
even when the bills are staggering
and it seems like that there's so much money there.
Having those quick wins is going to be so helpful.
All right, coming up next is a story of the couple
who is actually coordinating that
Financial Peace University class, so here they are.
- We had been married for 28 years.
And we purchased a house when we moved here with debt,
and we decided that we wanted to pay that debt off early.
And based on some things that we had heard
Dave Ramsey talk about.
And so, we got on that road and went down that path,
and we paid off our house within about 10 or 12 years
after we moved here.
And that just really started our process
of wanting to be completely debt-free.
- So, it's become, really, a way of life.
We've put . . . All five kids have an opportunity
to go to college debt-free.
We have a fund for their wedding fund,
so when each one of them has gotten married,
we've been able to fund their wedding
without going into debt.
And it is kind of amazing to see how
when you have the extra money to sock away in the
401(k) and savings, that there's not much pressure.
There's a lot of peace just to know that
we've been able to bless our children.
And then, we'll be able to retire with a lot of dignity.
- And now we're just living the life
that Dave has told us about.
- And I would say that we were pretty nerdy about it.
We actually enjoy our budget.
After doing this for 20 years,
we've got 20 years worth of data
of what our expenses and income is.
So, we sit down at the first of the year.
and do it on a big spreadsheet,
and then we just really touch base each month
to make sure we're where need to be.
But over that period of time, you know,
we've had a car fund so we haven't had a car debt.
So, to be honest with you, we actually own
two homes debt-free.
I think we got people's attention the first night
when we looked at them and said,
this works 'cause we've done it.
And you can do it too.
If we can do it, you can do it.
So we enjoy seeing the success and seeing the plan work.
And it's really neat to sit in the class—
and our class is maybe unique, I don't know
because we've got some older folks in there.
We've got some folks that are just married.
We've got some folks that are engaged.
And it's really neat to see the light bulbs come on,
and to kind of pay it back a little bit,
and to share what we've learned.
And that's fun just to be a part of knowing that
we've helped them on their journey.
- So, after hearing their stories,
I hope you guys are ready to go out and save that $1,000.
I really, really do. Because again,
it's that buffer between you and life.
Get started on a plan where you never have to
worry about money again!
Thank you guys so much for watching,
and the Financial Peace University class for joining me.
They are awesome.
And if you would like to get anything from this episode,
you can find the links in the show notes.
If you don't want to miss any of my tips,
be sure to subscribe to my YouTube channel,
follow me on Facebook, and my podcast.
And as always, make sure you take control of your money
and create a life you love.