Rachel Cruze: 7 Common Things People Overlook When Trying To Build Wealth
Written by
Ashley Donohoe
Edited by
Zuri Anderson
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If you consider yourself financially savvy, you’ve likely made wise financial moves, such as budgeting your income, having emergency savings and regularly investing. But you might feel you’re still off track and unhappy with how your efforts have shaped your financial situation.
In a recent YouTube video, money expert Rachel Cruze explained that you might be overlooking seven key things many people miss when trying to build wealth. Find out if you’re making these mistakes and which changes you should make.
Having Savings But Carrying Debt
While a large savings cushion feels comfortable, Cruze said that it’s not optimal for your wealth if you still have consumer debt. As your savings sit there and earn a little interest, the interest on your debt continues to accrue, and those monthly payments remain a burden.
Cruze suggested limiting your emergency savings to $1,000 until you’re free of non-mortgage debt. If an unexpected bill arises that those funds can’t cover, you can always pause paying extra toward the debt until you handle the situation.
Keeping Your Emergency Fund in Your Checking Account
A checking account is a bad place for any savings since you’ll often get no interest, and even if you have an interest checking account, the national average APY was just 0.07% on Nov. 17, 2025.
Plus, Cruze explained that having your emergency savings mixed with your everyday spending money could lead you to overspend out of emotion. So, use a high-yield savings account to get a better interest rate and keep your emergency cash separate, safe and accessible.
Spending More Than 25% of Income on Housing
Cruze said, “If you’re spending up to 30%, 40%, 50% of your income just to maintain a mortgage, you do not have enough money left in your budget, in your income, to do the other things in life that you need to do.”
She recommended limiting your monthly house payment to no more than 25% of your monthly income so you’ll still be able to invest and pursue other wealth-building goals. This can be tricky, but you can consider options like waiting to save up a larger down payment, opting for a smaller home, reconsidering your target neighborhood or finding ways to increase your income.
Always Falling for Lifestyle Creep
Whenever you get a pay increase, you might see an opportunity to spend more to have a nicer life. However, Cruze explained that this can become a habit that makes your lifestyle-related expenses keep rising, making it harder to have some margin for building wealth.
While you don’t have to give up all luxuries, Cruze recommended sticking with your current lifestyle and wisely using some of the extra money for important things, like investing and giving.
Having Credit Card Payments
“It has been proven that you end up spending more when you spend with a credit card because emotionally it’s not your money that you’re spending, and you continue to live in the past,” Cruze explained.
Besides overspending, you can lose a large chunk of your monthly income to credit card payments that could have instead gone toward savings and investments. Plus, you’re likely paying a high cost for your debt, as the national average credit card rate was 21.38% in Aug. 2025, per the Federal Reserve. So, consider Cruze’s advice to pay with cash now.
Investing Less Than 15% of Income
While investing even a small percentage of your pay is better than nothing, it can give you a false sense of security that you’ll have enough saved for retirement. Cruze advised upping your contribution rate to 15% of your pay so you can make better progress, but you should fill your emergency fund and tackle your consumer debt first.
Your higher contributions will add up substantially. For example, if you make $60,000, you’d invest $200 monthly at a low 4% contribution rate or $750 at the recommended 15% contribution rate. If you did this for over 30 years and earned an 8% return, you’d end up with around $272,000 versus $1 million, according to this compound interest calculator.
Not Prioritizing Generosity
“There’s something about living life where money is not such this factor where we control every bit of it and we just live our lives like this, because that doesn’t bring peace,” Cruze said.
That’s why she recommended giving away some of your money to both help others and feel more satisfied yourself. This might mean giving cash or possessions to family members, friends or charities. You can also use your time and talents to help others.
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