4 Money Principles From the ’90s That Still Work, According to Rachel Cruze
Written by
Ashley Donohoe
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If you’re interested in boosting your financial wellness, learning how to manage your spending, save and deal with debt are good places to start. But when deciding which strategies to use, you might be surprised that some of today’s key money teachings are older than you think.
In a YouTube video, Rachel Cruze, a financial expert and host of “The Rachel Cruze Show,” shared these four time-tested money principles from the 1990s.
1. Using the Envelope Budgeting System
Also known as “cash stuffing,” the envelope budgeting system has especially become popular with Gen Z on TikTok. According to Cruz, the concept is to get back to the old-fashioned method of using labeled envelopes to budget and track cash for your monthly expenses. You can either use paper envelopes or get a special wallet with many dividers.
By setting category spending limits and using cash instead of a credit card, you’ll increase your accountability and better control your spending. If you buy things online, don’t forget to still account for the expense from the right envelope.
2. Having Sinking Funds
If you often struggle to come up with cash for irregular expenses or big purchases, you can benefit from sinking funds. Cruze explained that these are must-have budget items for putting away money each month toward short-term savings for upcoming costs.
For example, you might add sinking fund categories for holiday gifts, vacations or semi-annual insurance premiums. When the expense comes up, you’ll already be prepared.
3. Putting 15% of Your Earnings Toward Retirement
Cruze advised waiting to invest until you have no debt and have a filled-up emergency fund. Then, you should set a goal of putting 15% of your earnings toward your retirement.
If you need motivation, try an investment calculator to see how your money might grow over many years in a tax-advantaged IRA or 401(k) account. Beyond that 15% goal, consider additional options such as health savings or college savings accounts.
4. Getting Rid of Debt and Living Within Your Means
Cruze said, “I’m telling you the quickest and simplest way to build wealth is to pay off all of your debt and live within your means.” By doing so, you’ll have more opportunities to use cash for your important financial goals. Plus, you’ll experience less stress when you don’t have to worry about how you’ll pay your bills each month or feel burdened with debt.
To simplify the process, consider the snowball debt payoff approach starting with your smallest debt balance. You can also use a budgeting app to better track your expenses, income and goals.
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