Rachel Cruze: 4 Things That Keep You Broke Regardless of Salary
Written by
Ashley Donohoe
Edited by
Zuri Anderson
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
The Northwestern Mutual 2025 Planning & Progress Study found that 52% of Americans had household incomes that weren’t growing enough to keep up with inflation, which was also the top financial concern reported.
But even if you earn a high enough salary to comfortably handle rising prices, that doesn’t mean you’ll make good decisions that build wealth. In a recent video, money expert Rachel Cruze discussed four habits that keep you broke regardless of what you make and gave tips on how to stop them.
Living Beyond Your Means
“If you’re continuing to live a lifestyle that your income cannot support, you’re going to either be in the hole, or you’re going to be draining your savings if you have it,” Cruze said.
Sometimes, this happens if you experience an income reduction and refuse to downgrade your lifestyle accordingly. However, living beyond your means can also become a habit at any income level, especially when you’re not sure how much money you’re making and how you’re using it.
To stop making this mistake, look at your income and all expenses so you can create a realistic budget you’ll stick to. While you’re at it, see how you can make more money and where you can cut expenses. Any budgeting spreadsheet or app will work, though Cruze recommended the EveryDollar app.
Normalizing Debt Payments
Northwestern Mutual’s study showed that the average American had $21,500 in non-mortgage personal debt in 2025, with credit cards, car loans and medical debt topping the list.
Cruze explained that debt and monthly payments seem normal to many people, so they get used to regularly handing over their income to banks and lenders. This can leave you broke, especially if your debt payments are high. Plus, it leaves you with less money to invest and grow wealth.
Cruze recommended prioritizing paying your debts off from the smallest to the largest balance with the debt snowball method. You can use the Ramsey Solutions debt snowball calculator to better understand how the debt is impacting your finances and see when you might become debt-free. Then, you can invest the money you’re no longer paying and start getting a return.
Not Making Saving a Habit
According to the Bureau of Economic Analysis, Americans were saving about 4.9% of their personal disposable income in April 2025. However, many people still lack basic emergency savings and are left borrowing money or facing difficult choices if something unexpected happens.
Cruze suggested making saving a habit by starting with a $1,000 emergency fund and increasing that balance to three to six months of your usual expenses after you’ve paid off your debt. She also said to put 15% of your pay in a retirement account, which will make a big difference in building wealth.
For example, if you’re making $50,000 per year, you’d contribute $625 per month. If you keep up that habit for 30 years and get a 7% return, your retirement account balance would be over $700,000 — and that’s not even accounting for your likely pay increases over those years.
Keeping Up With Everybody Else
Whether you consider yourself poor or wealthy, you might fall into the trap of constantly wanting to buy fancy things, have amazing experiences and impress people. Depending on your financial situation, you might drain your savings to pay for these things or dig yourself into debt.
According to Cruze, wanting to enjoy nice things and experiences isn’t necessarily wrong. However, you should practice contentment, not obsess over comparison and save up for the things you want.
“But if your whole life’s goal is to constantly be in this wheel of just buying the next greatest thing and just trying to be like everyone else, you are going to be a rat in a wheel for the rest of your life, so don’t do that,” she added.
More From GOBankingRates
