Rachel Cruze: 5 Money Skills Everyone Needs To Master

Image of Rachel Cruze smiling confidently
©Rachel Cruze

Everyone tends to believe that earning a higher income automatically translates to getting rich. But according to finance expert Rachel Cruze, this is far from the truth.

In a recent episode of her show, she noted that having a large salary doesn’t mean you’re building wealth, nor does earning a smaller income mean you can’t manage it well. Cruze pointed to a recent survey that found 30% of Americans who make $250,000 a year or more are living paycheck to paycheck.

Making money isn’t the key for growing finances, she said, but how you manage it is. “I really believe anyone can win with money, regardless of your salary.” That said, she noted that managing money is a discipline and takes practice.

Below are Cruze’s five money-managing tips to help you make intentional changes and build wealth in the future.


Cruze advises that whether you’re making a six figure salary or an average salary, the best thing you can do is follow a monthly budget.

“It is the foundation of financial success. It’s not there to limit you, but it is there to free you up,” she said. “It gives you the freedom to spend money in the short-term and the long-term when it comes to your income. And it’s like a built-in accountability for you.”

Living Without Debt

Paying off debt in one fell swoop won’t end your problems, said Cruze, because what you need to change is your money behavior.

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“Debt from the past robs you in the present.” She noted that it’s important to stop taking on more debt and pay off what you do have as soon as possible.

“You are looking in a rearview mirror when you live with debt,” she explained. “You’re paying for things that you’ve already bought, food you’ve already eaten, clothes you’ve already worn, vacations you’ve already taken, and you are living your life like this.”

The money expert argued that mentally, it’s different from living your life looking forward and looking in the present, paying for things as you go or even saving up and paying for things in the future. She recommends going without credit cards, car payments or student loans.

“The only thing you can finance — that we won’t yell at you for — is taking out a mortgage on your home,” she said, adding that it won’t work against you as it’s an appreciating asset.

Goal-Based Savings

The first goal Cruze urges you to save up for is an emergency fund of $1,000. Then once you’re out of debt, you’re going to bump up that emergency fund to three to six months of expenses.

“An emergency fund really gives you a cushion in life to be prepared for the things that you don’t prepare for,” she noted. “Stuff happens all the time, and once an emergency happens, you’re able to take money out of your emergency fund and pay for it instead of going deeper in debt.”

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She also observed that once that emergency fund is in place, then you can also create additional sinking funds for future purchases by slowly setting aside money every single month for that purchase. “Maybe it’s a car you’re saving up for. You’re going to save a couple of hundred dollars every single month towards that car, so in a year from now when you replace your car, you have all the money saved,” she explained, noting that managing your money with practical goals in mind is really key to this.

Saving To Invest

After those initial savings, Cruze recommends investing 15% of your income into retirement or a 401(k) or Roth IRA. “Anything with retirement and being in that habit of putting that money away for it is really, really important,” she argued.

“I can understand it can feel like a black hole, especially if you’re younger,” she continued, emphasizing that you’re putting money aside so when you get to be 65, you can live the bougie life you want. “Saving for the future is really wise, because you don’t want to get to that age and have nothing and [have] to keep working a job that you hate or depend on the government.”

Stick to the Plan

The money host says it’s easy to get off track, but that these small habits that you’re forming right now — these daily behavior changes — are going to give you progress. “When you start feeling that momentum, use that as fuel for more progress.”

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“When it comes to your money, working towards your goals, working on your plan is so big.” She says it’s the fastest way to go from point A to point B when it comes to getting out of debt and building wealth.

“If we don’t make changes, nothing in our life is going to change,” Cruze warned. She says it’s easy to choose the Band-aid mode of getting “rich quick” by increasing your income, but that it’s never going to change your life and who you are.

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