I couldn’t wait to sat down with Rachel Cruze to chat about budgeting. Host of the popular financial podcast “The Rachel Cruze Show,” Cruze lives by a mantra that I strive for in my own life: “Money should be fun, not stressful.” She joined me for the first episode of the new podcast “Live Richer” to tell me about the trick to balancing the fun and responsible sides of money, especially in big spending periods like the holidays.
She co-authored “Smart Money Smart Kids” with her father, famous personal finance expert Dave Ramsey, and in 2016, she published “Love Your Life, Not Theirs: 7 Money Habits for Living the Life You Want,” and early on in our conversation, Cruze shared a few interesting lessons she picked up from her dad. She and her siblings were given their first checking account when they reached the age of 15. And then her parents did something unusual … They used this time to let their kids fail and learn from their mistakes.
“Growing up, Mom and Dad did a great job of letting us fail from our mistakes. When you can teach your kids to make mistakes under your roof there is a level of protection and they are usually less expensive mistakes than if you are someone handling money for the first time in a car lot.”
Cruze also shared some surprising information – she is someone who loves to spend money! Most people fall into two categories, she told me: Spenders or savers. And both are fine, but there needs to be moderation in all things. Some savers are so obsessed with saving money that they miss out on life, she said. Meanwhile, some spenders get themselves in an endless cycle of debt that lessens their overall happiness.
Budgeting is key to both savers and spenders, especially during the holiday season.
By budgeting, you create areas in which to spend money including your home, vacation, clothing and miscellaneous expenses. That also should include putting money away for saving and investing. The goal is to develop patience and save up for the things that you want.
“If you can get control of your finances, things can change,” said Cruze.
Living paycheck-to-paycheck is a reality for a huge percentage of Americans. And consumer spending is always high around the holidays and this year it is considered to be even higher. So, she said, you have to have a plan and that begins with a zero-based holiday budget. How can you get out of this cycle?
“A budget gives you such freedom,” said Cruze. “I knew what we had to spend and it just gives this more enjoyable, stress-free approach. So the budgeting thing is big.”
A way to avoid it is to do an honest audit of your income and outgoing expenses, especially during the holidays. If you’re thinking about a last-minute present, Cruze suggests a different kind of financial gift (and no, we aren’t talking about NFTs here). While stocks and investments are good options, they don’t always seem practical. So, if you know a loved one is working to get their finances in order, how about offering to pay for a subscription service such as Netflix instead so they don’t need to worry about making the payments and would have one less bill to worry about.
What other suggestions does Cruze have for holiday gifts? Click here to get the whole story in Rachel’s full interview on “Live Richer.“
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