Rachel Cruze: Will Your Habits Make You Broke, Average or Wealthy?

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According to a recent Gallup poll, 55% of Americans reported that their finances were poor or fair, and 53% felt that their finances were worsening in 2025.

Whether you’re struggling to pay your bills, handle debt or save more for retirement, it’s worth looking closely at your usual money habits. You might find that spending or borrowing decisions are stealing your money and keeping you from becoming wealthy.

In a YouTube video, financial expert and author Rachel Cruze outlined money habits that can make you broke, average or wealthy. Learn what you should avoid to become financially healthier.

Habits That Leave You Broke

Cruze discussed payday loans, which tend to target desperate people in lower-income locations. Using these loans can get you in a cycle of being broke due to their high interest rates, which Cruze said can exceed 100%, and their short payback terms.

Buying lottery tickets is another habit that steals money people could’ve used for something with a more likely return, like investing in retirement, saving for emergencies or getting rid of debt.

“The odds of anyone winning the lottery is 1 in 300 million, and what this does is it takes advantages of people’s hope,” Cruze said.

Cash advances, which are convenient but expensive, are another thing that could harm finances. For example, credit card advance fees can be $10 or more, according to the Consumer Financial Protection Bureau, and then there’s the interest. Cruze recommended not borrowing against future income.

Additionally, rent-to-own arrangements, which are common for those who need to make major purchases, such as home appliances or furniture, can cause financial harm. Cruze explained that the fees involved make it much more expensive than waiting to buy until you have the cash.

Habits That Keep You Average

Cruze mentioned that average people might charge things on their credit cards to earn airline miles. But this often leads to overspending, which helps the creditors profit and makes the rewards less worth it. Cruze said that buying the ticket yourself would save money.

Financing new cars is another habit that can keep you from becoming wealthy, with Experian reporting an average new car loan balance of $41,572 in the last quarter of 2024. Cruze said the depreciation and interest make buying and financing these cars unwise and cautioned it could become a cycle. 

Homeowners also remain financially average when they use home equity lines of credit (HELOCs) to get money out of their home’s equity. Cruze said this just increases the debt owed, and that comes with more stress and interest. Plus, HELOCs are secured, so losing your home is possible.

The last average money habit is falling for “buy now, pay later” plans, which increase your debt and may push you into unaffordable or unnecessary purchases. 

“When you spend your money and buy an item outright, you’re going to think differently about that purchase versus if it’s spread out and it doesn’t hurt as bad,” Cruze said. 

Habits That Make You Wealthy

Besides stopping the poor and average habits mentioned, you can maximize your money and have more financial peace if you adopt some of these habits, according to Cruze.

First, aim to live below rather than within your means. That means budgeting your money so that there’s some left for savings and investing goals after all your expenses.

Cruze also recommended living more like a stealth millionaire by opting for a good used car, such as a Toyota or Honda. You’ll pay much less than if you buy new, especially if you use cash to avoid the costly financing trap.

Paying your mortgage off early is another way to save on interest and build wealth sooner. For example, if you had a 30-year $250,000 mortgage with a 7% annual percentage rate and paid $500 extra each month, you’d cut your repayment time to around 16 years and save about $182,000 in interest.

Cruze also suggested contributing 15% of your earnings toward investing in your future. She referenced the Ramsey Solutions National Study of Millionaires, which found that 80% of millionaires used company 401(k) accounts to successfully build wealth.

And when you do have wealth, Cruze recommended being a generous giver to boost your joy.

Sources

• Gallup, “Americans’ Economic, Financial Expectations Sink in April.”
• Rachel Cruze, “Are Your Habits Broke, Average or Wealthy?“
• Consumer Financial Protection Bureau, “Data Spotlight: Credit card cash advance fees spike after legalization of sports gambling.”
• Experian, “Auto Loan Rates and Financing for 2025.”
• Ramsey Solutions, “The National Study of Millionaires.”

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