- 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. 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)
