Rachel Cruze: Is Planning To ‘Die With Zero’ Financially Sound?
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What should you leave behind when you pass on? It can be a difficult question to consider, but it is important to have a plan, wherever you are on the scale between leaving your kids generational wealth or “dying with zero” and spending everything you have.
In a recent YouTube video, money expert Rachel Cruze broke down the pros and cons of leaving nothing left in your estate after your death. Also, learn why estate planning is important.
Dying With Zero
In the video, Cruze discussed the book “Die With Zero” by Bill Perkins and the notion that once you die, you should have used up all of your personal finances — with not a cent left over. Cruze said she found the book “really interesting” and that 85% seemed realistic to her.
Cruze admitted that not leaving behind an inheritance or a set amount of money behind to your family initially made her “very nervous.” However, she locked into the notion that Perkins posed about having a more fulfilling life by using the money while you were alive instead of waiting to pass it along to someone else after your death.
Cruze cited statistics that people need the most money from ages 26-38. This is a time in life for paying off student debt, buying homes and upgrading vehicles. Perkins suggested helping your younger loved ones now, during those expensive times, instead of waiting until you have passed away.
Here are the Cruze’s three main takeaways from the book.
Giving Your Kids Money
Cruze recommended balance if you choose to give your kids more money while they’re younger, rather than letting them inherit when you die.
“I love that idea,” she said. “Because part of changing your family tree is helping your kids.”
Giving them some of your money while you’re alive would allow you to reap the joy of watching the younger generation thrive.
However, she said, “It’s a fine balance, because you don’t want to … throw a bunch of cash at your kids.” Don’t give them so much that they don’t have to work or provide for themselves, but “help them start off on the right foot.”
Donating Money
Giving your money to charity while you’re still alive lets you see the impact of your generosity, versus making a vision come to life post-death. Cruze said she is always “pro-giving,” and this is a magnified idea that can align with your values while making a real impact on the world.
This, of course, depends on how much money you currently have. You still need to budget and meet cost of living needs, but any extra that might go to a charity after your death should maybe be reconsidered for a generous donation now.
Enjoying Your Money Earlier On
Cruze cautioned that this is not a license to rack up a lot of debt. She said Perkins’ point was, “instead of this hoarding mentality … what if you just spent some of it?”
Embracing the idea of abundance and using your money to enjoy your life might be the key to a successful existence, according to Cruze’s interpretation of the book.
She said, “Live like no one else, so later, you can live and give like no one else.” Build yourself strong financial ground to stand on before you go spend money in this fashion.
Ultimately, Cruze did not recommend trying to “die with zero,” but she agreed with Perkins’ points about enjoying your life and found the idea of spending a little more “freeing.” She reminded viewers that they will need money up to the point of their death — and if some is left over, that’s not really a problem.
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