Tag: save money

A few years back, I was always in the very 
frustrating place where bills would constantly   pile up and yet I had no money to pay them off 
(If you have ever been in this situation then   you probably that it can be really stressful 
and hard on you). The good news is that,   over time I did manage to prowl my way out of 
this situation, and you can too.

Therefore,   in today’s video, I’ll be sharing with you all 
tips, tricks and strategies that you can use   to get out of this situation, and hopefully get 
ahead in your own personal finances. Stay tuned. However, before I get into the topic, 
do me a favour – subscribe and hit   that like button because it really 
helps with the YouTube algorithm. Thank you, and now let’s get into it. Alright, so, the list begins with…

1. Keep track of your spending. You’ve probably already heard this a million 
times and you are going to hear it again today,   simply because it works and because you are 
probably not doing it. Basically, it should always   be a priority. Make sure that every single penny 
you spend is clearly accounted for. The basic goal   of expense tracking is to find and get rid of 
inefficient spending patterns in your financial   life.

Additionally, maintaining control over 
your finances and encouraging better financial   practices like saving and investing will come 
from continuously keeping track of your costs. Basically, in the words of Peter Drucker, “If 
you can’t measure it, you can’t manage it”. So this is what you should do to get in 
control of your spending habits: First,   analyse your categories of spending to determine 
which are the most crucial. Perhaps you might   even find out that you've been paying for a 
subscription that you’re not using (I know I have,   and maybe you are too). Most people 
consider that cutting back on these   “non-essential expenses” is a wise approach 
to saving money. You might also want to go   for activities that are less expensive now 
that you can see where your money is going. And on top of saving money, you’ll 
be getting educated on some of the   topics you’ll be reading about.

So, there 
really isn’t much to lose by doing this. 2. Make a budget. I never understood why most people didn’t 
have a budget until recently. You see,   most people are worried about all the paperwork 
to be done to complete a budget. Well, in truth,   it’s a lot of work, but it most certainly 
is worth it. You see, you should look at   budgeting from a different angle. Look at the 
positives and look at how much is it going to   benefit you. And once you’ve got a rhythm 
going, make sure you stick to it. I’ve   found this to be the only way that works. 
So make sure you don’t lose the momentum. If you create a budget and then store it 
away in a file or folder on your bookshelf   or filing cabinet, it’s simply worthless.

So 
make you’re constantly updating and review it,   you can also use digital apps and software 
to make this task a lot easier. There are   a bunch of really good free ones online, 
which you can find with a quick search. And if you are interested, I created a 
free savings and budgeting guide which   you can get with the link in the descriptions. 3. Give yourself a limit on unbudgeted spending.
Buying something in the spur of the moment that   you hadn't budgeted for, can be enjoyable 
and emotionally satisfying – literately   everyone knows that. However, that 
emotional high may pass quickly,   leaving you with impulsive purchases 
you don't actually need – or want. If this is you, then then the 
bitter pill to swallow is that,   this has to stop! In fact, it’s the 
entire opposite of good money habits. Next time you are in the mall, try using the 1% 
rule for spending money. This rule states that,   you have to wait a day before buying anything that   costs more than 1% of your yearly gross 
income, so if you make $60,000 a year,   the rules states that you need to a day 
before making a purchase of over $600.  This guideline applies to discretionary 
spending on items you desire but don’t require,   basically, the inner battle in your mind of 
“do I really need this” vs “do I want this”.

The 24-hour cooling-off period gives you time 
to reconsider your purchase. Why not take an   additional day to consider if you actually need 
it? After 24hrs you might not anymore. So next   time you go shopping remember what that 
guy from practical wisdom told you to try. 4. Save for big purchases. Seeing a beautiful $4,000 advertisement 
of a stunning 90-Inch flatscreen,   8K Television – I mean, Imagine the 
things you can see on that TV… Dose   not mean that you should immediately pick up 
your phone and credit card and start dialling   the number on the screen. That’s a really 
bad idea. Remember the rule that rule the   guy from Practical wisdom told you 
about, the 24hr one? Remember that? So, experts suggest that if you really want 
that big TV then it’s best that the money comes   from your savings account which is dedicated 
for such purchases. Not a credit card loan,   unless you have a really good plan to pay 
the money back, which 99% of people don’t. Also, there are countless advantages that 
come with saving for a big or expensive   purchase. You may be able to negotiate 
a cheaper price, or at the very least,   better financing conditions, if you save up 
and pay cash.

The price could drop as well. Additionally, for a larger purchase, 
getting a loan may make more sense,   especially if it's an item with 
appreciating value, like a home,   or if it prevents you from taking money 
out of your savings or investment account. As paying in cash for the big expensive 
TV might leave you with little to spend,   therefore it’s wise to save up for a while 
before you buy the products you need or   desire. Therefore, it’s sensible to start 
saving for that specific thing so that your   daily life is not disrupted.

5. Read books about finance It’s true when they say that 
if you want to hide something,   just put it on paper. The sad truth is that 
– most people never bother to read. You see,   some of the things people choose to ignore, 
such as the information contained in books,   has a good chance of making them 
successful if they bother to read them. Learning is a continuous process, and the more 
you do it, the sharper your skills become. The   ability to make wise financial decisions is 
the chief advantage of financial literacy.

It   gives us the information and abilities we need to 
properly manage our finances, including budgeting,   saving, borrowing, and investing. As a result, 
we are better positioned to meet our financial   objectives and establish financial stability. 
It’s kinda like a super power, and it really   puts you in a comfortable situation knowing that 
you are in control of your financial destiny. 6. Lower your monthly bill. Cutting your monthly spending is one of the 
simplest ways to gain control of your money.   While you might not be able to cut back on 
certain permanent costs, like rent or vehicle   payments without making significant lifestyle 
changes, you can cut back on variable costs,   like clothes or entertainment by being adaptable 
and thinking sparingly. To begin saving on   things like your energy bills, you may, for 
instance, use less power, pick a different   life or home insurance company, or shop for 
your groceries at bulk discounts. Additionally,   you shouldn't accept a loan just because your 
salary and credit make you eligible for one. Many people believe that the bank will 
not give them a credit card or a loan   that they cannot afford. But the bank is 
only aware of the income you have disclosed,   and the debts shown on your credit report; 
the bank is unaware of any other commitments   that would make it difficult for you to make 
timely payments.

Based on your income and other   monthly responsibilities, you must therefore 
determine if a monthly payment works for you. 7. Eat at home. Meals prepared and consumed at home may be quite 
cost-effective. All you have to do is reduce your   reliance on takeout. The odd indulgence at a fancy 
restaurant is OK, but starting to cook at home   or carrying packed lunches to work rather than 
dining out every day might save you money.

Making   a weekly food plan may make it simple. Plan your 
meals for the coming week and then stick to them.   Even for those who don't consider themselves to be 
cooks, the internet provides a seemingly limitless   array of culinary and recipe advice. Begin by 
making at least one meal a week at home. Bring   your lunches to work starting next week. You might 
be amazed by how much money you can actually save! 8. Pay off your debt. Carrying a lot of debt, especially on 
high-interest credit cards, is one of   the costliest mistakes you can make. If you want 
to improve your financial situation and open up   new financial opportunities, pay off your debt as 
soon as possible. If you’re the forgetful type,   you should list off all your existing debts, 
including credit card debt, student loan debt,   and vehicle loans, and determine the minimum 
payments you must make to stay on top of each   of them.

Making minimum payments will not get you 
out of debt quickly, so consider your fixed costs   and how much of your discretionary spending 
budget you can set aside for debt repayment. Additionally, you can try to lower the interest 
rate on the debt by requesting a lower rate from   the issuer, merging several loans into one, 
or moving high-interest debt to a low-interest   credit card, such as a balance-transfer card, 
to lower the overall interest rate. Afterward,   create a debt repayment strategy and develop 
responsible spending practices to pay off the   debt as rapidly as possible.

Your monthly 
budget will be larger the faster you pay   off your debt. As I previously said, paying 
off credit card debt must be a top priority.   Unlike your automobile or house payment, it 
increases with time and is hard to cut back on. 9. Stop using credit cards. Credit cards are a great and handy tool to have,   they are a life saver when needed and they do a 
great job getting that credit score up. However,   for some people there lack of self-control 
and an easy and available remedy to their   problems in the form of a credit card means 
that they quick dig themselves into disaster. You could be depending too much on your 
credit cards if you are having trouble   making ends meet each month. If you continue 
using your credit cards as a crutch to get by,   you'll soon find yourself in debt. Your ability 
to pay your expenses, save for retirement,   or pursue other financial objectives 
will be constrained as a result of this. So stop using your credit cards if you genuinely 
want to take charge of your money. To prevent   accumulating more debt, in addition to creating 
a budget so that you don't have to use credit,   try switching to cash or debit cards; 
opening a short-term savings account and   using funds from it for major purchases; 
or leaving your credit card at home.   Credit cards have high-interest rates that may 
quickly accumulate debt if not used wisely,   and can cause significant stress 
in the event of an emergency.

Because they feel like their money 
disappears too quickly each month,   many people develop the bad habit of depending on 
their credit cards. They are tapped out and rely   on their credit cards to get them through till 
payday after paying bills, food, rent or mortgage,   and other expenses. Instead of relying only 
on your credit cards to cover expenses,   stop using them altogether. Until you develop the 
wisdom and maturity to handle such an instrument. 10. Continue to spend quickly. A "spending fast" can be just what your personal 
finances need if you suffer from credit card debt,   difficulties paying payments on time 
or other financial problems.

Basically,   going on a “spending fast” simply 
means that you’re refraining from   making any discretionary purchases 
for a predetermined length of time. This is another great way to help you reduce 
your spending and get your finances in order.   It may sound a bit daunting, but it doesn’t 
necessarily have to be. You may be familiar   with the well-known (and sometimes contentious) 
"detox" or "cleansing" fasts for your body,   such as giving up sugar or gluten for 30 days 
or even surviving solely on fruit or vegetable   juices for a few weeks. But did you know 
that in order to achieve financial wellness,   you may use comparable fasting or cleansing 
procedures to your spending and saving behaviours? These are frequently month-long periods 
during which spending is restricted and   only categories like food, transportation, and 
recurring expenditures are exempted. If you're   ready to live simply for a while, commit to 
this challenge to boost your bank account,   alter your behaviour, and determine what 
you need rather than just what you desire.   Your perspective on money can even 
change as a result of the event. It’s my hope that this has been helpful 
to you.

Now you can always be one step   ahead of your finances by just following 
the steps from this video. Consider the   possibility that you have never had a 
financial problem. That simply means   more money for you. If you have any questions, 
don’t hesitate to leave a comment down below. With that said, thank you 
all so much for watching,   have a great day, and I’ll 
see you in the next one.

As found on YouTube

by understanding your unique circumstances customize these tips to fit your debt management prioritize essential needs and understand the root causes of your wants avoid installment purchases they expose you to a false sense of affordability when we borrow money for Investments or assets that generate income steer clear of settling existing debt with more higher cost debt explore ways to make extra income pay more than the monthly minimum interest payment include debt payments in your income versus expenses calculations discover if consolidating your debts provides better interest rates or tax advantages explore downsizing to use more funds for Debt Pay down contact creditors for possible interest rate reductions they want to keep your debt.

As found on YouTube

You spend your salary before you even receive
it. You want to learn how to save and accumulate
money, to get out of debt. There's no magic financial wand, but a few
simple tips will help you take control of your budget and save money for anything you
want. Here are a few reasons why saving is important
and why it serves as a safety cushion. Saving more money means gaining an additional
degree of freedom and improving your living conditions.

Savings represent the future of your children,
money set aside for vacations and luxury items. If you're unable to save money and it slips
through your fingers, you need to know that you won't save a penny until you understand
exactly where your income is going. Saving isn't as fun as spending, but nothing
is impossible. The golden rules of a family budget, formulated
by financial experts, will help you understand how to start saving money and stay on the
right track.

Now let's look at the secrets and methods
of setting money aside in any situation. Secret number one is expense tracking. How can you decide where to save and set aside
money if you have no idea about your expenses? Download an Excel spreadsheet, customize it
to your needs, and start recording your expenses without delay. Keep a notebook or install financial tracking
apps if you don't like electronic spreadsheets. Once you have a clear picture of your expenses
in a typical month, you can identify problem areas, determine how much to save, and reduce
discretionary and impulsive purchases. This will become evident within a few weeks. At first glance, it may seem silly to write
down all your expenses since you already know everything. But when you have your financial statistics
in front of you, not just for a day or two, but for a month, you may be surprised by the
amounts spent on specific things.

This will help identify where you spend more
and where you can save. After all, in the context of a single day,
these may be trivialities, but in the context of a month, they could be an alternative to
a new refrigerator. This is one of the secrets that shocked me
when I started recording every expense. Has this ever happened to you? Leave comments under the video. And if you haven't started using this secret
yet, start doing it immediately. Develop a plan. Clearly define your goals and set realistic
deadlines for achieving each item. Simply saving money for a "rainy day" is a
psychologically losing strategy. People need a push, a threat to their well-being,
or motivation. Saving becomes easier when there's an anticipated
and coveted dream ahead, like an apartment, a car, or something less monumental but equally
important to you. Goals can vary from a long-desired purchase
of a new TV to a trip to a country you've always wanted to visit.

It would be great if your goal could genuinely
inspire you. Your goal should be as specific as possible,
such as a particular model for the TV or a trip of a certain duration to a specific country,
with a rough list of planned places to visit. Set both long-term and short-term goals, calculate
how much money needs to be saved each month, and stick to the plan. Trust the experience of successful businessman
Stephen Covey: "Goals are pure fantasy" if you don't have a specific plan to achieve
them. Distinguish between needs and wants. It's easier said than done, but make it a
rule to pause before making a purchase. Before grabbing another pair of shoes or an
exceptionally wonderful fishing rod, sleep on it for a few days. Besides, research shows that the pleasure
of anticipating a purchase is much greater than the pleasure after the acquisition itself. Treat yourself occasionally. The difference between thriftiness and miserliness
is about the same as between starvation and healthy eating. Secret number two: Pay yourself first. You have probably heard this phrase many times. Do you know why I often repeat this principle? Because it works.

Paying yourself means setting aside a certain
portion of your earnings into a deposit account, a separate account, or simply putting money
aside in an envelope. However, saving what's left of your salary
at the end of the month after all expenses is a huge mistake made by the overwhelming
majority. You should think of savings the same way you
think of any other bills. When you receive a bill for electricity, cable
TV, or phone service, what do you do? That's how you should approach your savings
account. If your goal is to save, let's say, $1,000
per month, prioritize that payment first. Secret number three: Spend less than you earn. No, it doesn't mean you have to give up all
the luxuries. Don't worry, I'm only talking about reasonable
economy and future planning. Think about it, if you earn $5,000 per month
and spend $6,000, your budget balance will be -$1,000.

Most likely, you used a credit card, and you'll
have to repay the debt with interest. So in the future, you'll have to cut expenses
not by $1,000, but by a more significant amount. A zero balance is already better. You know how to plan, but you don't know how
to save money. In this case, you risk being unprepared for
unforeseen expenses that life regularly throws at you. Let's face the truth. Even if you increase your income, your financial
situation won't change; you'll simply allow yourself to spend more. The only way out is to learn how to control
expenses and save money. How can you do it better? The answer is straightforward: do it immediately
after receiving the money. This is the fundamental rule of personal finance
management. By setting aside money right away, you remove
it from your family budget and automatically adjust yourself to the necessary financial
framework. Otherwise, you'll face a typical situation
where at the beginning of the month, you seem to have plenty of money, and it seems harmless
to treat yourself a little.

By the end of the month, your wallet is empty,
and you're only spending on essentials. Unexpectedly, it turns out that you can't
save anything that month. Therefore, the right decision is to set a
specific day (usually a date) when you receive your salary and regularly deposit savings
on that date–deposit the money into your account and forget about it. It's the best way to save money.

If you're interested in the topic of saving
money, please like this video and leave comments. Subscribe to the channel and enable notifications
to not miss out on new videos..

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– 80% of Americans are
living paycheck to paycheck because of debt. So, let's talk about how
to free up your finances and your future. (upbeat music) All right, this year we are doing a series on each of the Baby Steps. So, if you missed last episode, we talked about Baby Step 1, which is saving a $1,000 emergency fund. In this episode, we're gonna
talk about Baby Step 2, which is getting out of debt. So, we're gonna bring
on my dad, Dave Ramsey, who came up with the Baby Steps and has been walking people through them for the last 25 years.

And then we're gonna talk to a couple who are working their way
through the debt snowball, and they're in the middle
of their debt-free journey. It's great, because they're just starting to feel the freedom in getting
control of their lives, and best of all you guys,
they have hope again. Now, a lot of people think
that debt is not bad. Like, it's just a normal way of thinking. That's what society tells us. And in fact, 80% of Americans are living with some form
of consumer debt right now. Listen, you cannot create a life you love while you're in debt. When you are in debt, it forces you to live life looking
through the rearview mirror because you are chained
to stuff in the past.

So, how do you get rid of debt? Well it all starts with the debt snowball. Okay, this is the best way, the most effective way, to get out of debt. And this is the debt snowball: where you list out all of your debts smallest amount to largest amount, regardless of the interest rate, pay minimal payments on everything, and pay off the smallest debt first. And once that's paid off,
you roll all the payments, all the money you were
throwing at the smallest debt, to the second smallest debt. Then once that's paid off, you have the minimal
payments of the smallest debt and the second smallest debt to roll over to the third smallest debt. So it gets bigger, and bigger, and bigger. You're money continues to expand to start knocking down each debt. And I love this because what
this takes is motivation. And once you pay off that smallest debt, motivation comes.

Your
behavior starts to change. Now, some of you might
be thinking, "But Rachel, shouldn't you pay off the
highest interest rate first?" Yes, technically that would
be mathematically correct, and that method is what they
call the debt avalanche, which is terrible by the way. I mean, avalanche or snowball? Okay, snowballs are way more fun. I don't want to be caught in
an avalanche. No, no, no, no. So, stick with the debt snowball. But again, mathematically speaking, yes, the debt avalanche could
save you a few hundred bucks, mathematically speaking, but when studies have been done of people who do the debt snowball versus the debt avalanche, they actually get out of debt faster using the debt snowball.

Again, because it's all
about your motivation, it's all about your behavior change. And a debt snowball, it has worked for millions
and millions of people, and I promise, it can work for you. But up next, I wanna talk
about something that you need no matter which Baby Step you're on. (light piano music) So, earlier this year
I was at a live event, and before some of our live events we do these backstage experiences. So you can purchase these tickets and me and the other speaker will go back, and answer questions, and
meet people backstage. And during one of these
backstage experiences, this man came up to me, and he
was like six foot something, like huge, he was tall,
big, big, big beard. I mean just like this burly man. And he asked me if he could
talk to me for a second. And I was like, "Yeah, sure." And so he pulled me aside,
and he just started crying. And it took him a second to kinda console himself
to even get his words out.

But he began to tell me that him and his wife were on
the journey of the Baby Steps. And they were working their way through, and she actually watched
The Rachel Cruze Show for motivation, which is obviously so fun
to hear, I always love that. And I could still see though, obviously the sadness from his tears and the way he was talking
that something happened. And so, as he began to tell me his story, three months prior to that live event, him and his wife, they got in a car wreck, and she actually ended up passing away, leaving him with their
three young children. And so, at the time I was newly pregnant, and I mean, you just put
yourself in that situation and I'm like, that's the
absolute worst thing that could possibly happen, and that happened to him and his family. I mean, it's unimaginable. And then he began to tell me though that he had purchased term life insurance, him and his wife, and
they had it in place.

And so, he was saying, "Rachel, this is not the way to
get to Baby Step 7, but because of term life insurance, I don't have to work,
our house is paid for, everything's taken care of. And if we had not gotten that, this entire grieving process
would look so different." And in that moment, I was like, man, that's why we do it, you guys. We talk about term life insurance
all the time on this show, and you know that Winston and
I, we use Zander insurance, I talk about it all the time. And you might be thinking,
"Okay, that's great. Maybe I'll get it one day." But listen, stuff happens you guys, and you want to make sure that you and your family
are taken care of.

And I was so thankful
for him and his story that money didn't have to play a role in their grieving process.
Like, all of that was taken care of. And again, that's not the way you want to get to Baby Step 7. But man, how much more
stress, and heartache, and life heaviness would be on that family if they didn't have life insurance. So, if you do not have
term life insurance, go to zander.com, get
started on a quote today, because they will find you the best rates, and they're going to take
care of you and your family.

Again, if something were to happen, having term life insurance is
one of the best safety nets that you can have for your family. All right, up next I wanna
bring on my dad, Dave Ramsey, and we're gonna get back to talking about getting out of debt because this is one place that can free up your family as well. But debt in general, it's changed,
you guys, over decades now. And so, we're gonna hear all
from big Dave's perspective when it comes to that. (musical tone) All right, you're back. – I am. – Here you are at "The Rachel Cruze Show". – Almost like I work here. – (laughs) Almost, sort of. You're
sort of connected, I guess. Okay, so this episode's
all about Baby Step 2, and you've been known as
the get-out-of-debt guy for decades now. So I'm curious from you, you take calls on the radio everyday, what has changed about debt in 25 years? Like, peoples questions,
have you seen a difference from 25, 30 years ago with debt to today? – I think there's different, we've gone through different ebbs and flows of which kind of debt is
the crisis of the day, the flavor of the day.

When we first started, everybody was talking
about credit card debt, how evil and how horrible
credit card debt is, and we still think it is. – Do you find that people
are in more credit card debt, it's become more normalized
than even 30 years ago? What do you see around
that subject specifically? – 30 years ago people wrote checks. – Yeah. – And so, it was a big deal. – The chunk-chunk of the credit card. – You would run across the thing. – You know what I always
think about? Home Alone 2, when he's lost in New York, and he has to give it to the guy, and they pull it out, and they chunk-chunk, and he
gets into The Plaza Hotel. That's always my thought
of credit cards back then. – It's like pulling out the
cell phone in Jerry McGuire that's this big. Same thing. It shows you the age of the movie, right? So credit cards are,
what's happened with them is, the debit card has
eclipsed first the check, and now checks have
just about disappeared.

And then the debit card
has become so normalized, and we've helped with this.
We've made it very, very popular as an alternative to the credit card. So the credit card kinda looks like the dirty, crazy cousin
of the debit card now. – The crazy thing is that
Millennials, studies are showing, are actually getting into
less credit card debt than their parents were. – Because they have this option,
and it's been put forward.

I mean, people are starting to realize the credit card is the cigarette
of the financial world. It used to be cool, and
all the movies had it, in 1950's everybody's
smoking everything, right? And then people start talking about, hey this stuff kills you. And then the surgeon general came out. And then we put it in
the elementary schools and said, "Oh children, don't
smoke.

It will kill you". – D.A.R.E. programs popped up everywhere. – And that's what's happening gradually with the credit card, only
in a more adult level, to where the Millennials
are coming along going, hey, this credit card didn't
work for our boomer parents. They got screwed by
this. We're not playing. But it's not at the forefront
of society's mind today. Then we kinda went through this thing where we went from car
payments to car leases. Car companies realized they could make a lot more money on leases than they could on regular
payments on regular car loans, and so they start pushing. And today, 78% of the cars
that roll off a new car lot are car fleeces, and the reason is they
make more money on them, but we went through a phase because it was kinda
new and it was faddish.

And then of course we moved into the
student loan epic plague, because it has grown. It's exploded. – But the difference though, of 30 years ago with
students loans and today, is massive, probably
more so than car loans and credit cards combined. – Because of just the volume
of it, the number of dollars. And there's a little
bit of a stigma shift. You know, my generation
to the next generation, those are two previous to today. If they took out a student loan, they kinda did it holding their nose. And now everybody's like,
well that's just what you do. And so, the stigma has gone away from it.

The fear around it has gone away from it. But now this epic plague
is bringing the fear back. Which is good news because
it's waking people up going, this is not working. – So, debt has somewhat changed, shifted the conversations
around it in 30 years. But the way to get out and the mindset around it hasn't changed in the sense of the things you need to do. So, we talk about budgeting
all the time on the show about being intentional, and it's the best step you can take to not just get in control of your money, but to get out of debt. So, do you still find that to be true, that budgeting is still a key
part of getting out of debt? – Well, because you have to
control the fuel that you have to get out of debt with, and the fuel is the money. And the money, the way you
control the fuel, is the budget.

It's you turn it up,
turn it down. And you go, okay, we'll turn this one down, this one down, this one down,
so that more comes over here. And so we're cutting back lifestyle because we're sick and tired
of being sick and tired. We're really angry. We're really scared. We really have had it. We're
really going to change. And we're not going on vacation. And we're not going to a restaurant. And we're gonna dress the
kids in consignment clothes. And we're really, for the next 18 months, the next 36 months, whatever it is, we're really gonna sacrifice deeply, and that shows up in the written plan. That is not just a random
series of decisions. – Yep, so good. And then also, taking responsibility.

When you look at your life
and the mess you've caused, not to put shame, but to say, okay, I've done this. But then at the same time, I have the power to be
able to clean up this mess. Do you see that as still a huge
step in getting out of debt? – Absolutely, the power and the dignity to make their own decision. And, you know, and really the realization that no one's coming. The Lone Ranger's not coming.

Whatever's happening, the
pioneers are all surrounded, they're being attacked, or whatever, and the calvary is not coming. And so, you are the problem
and you're the solution. And that's both wonderful
news, and it's scary news. – Yes, absolutely. And then, the third is a tool that you've been teaching for decades now, is Financial Peace University. And we talk about this,
but getting signed up, going through that course,
being around like-minded people, this is a huge step to help
accelerate your journey. – In a much more intense situation, if you're dealing with
someone who has an addiction there's two things that they do. One is, they quit hanging out
with their friends who drink, if they've got a drinking problem, because you're gonna become
who you hang around with, it's just nature. And you know this because you don't let your
kids hang around people, the kids that are misbehaving, because they're gonna
misbehave like that kid. And so, you can't hang out
with your drinking buddies if you want to quit drinking because you have a drinking problem.

And guess what else you do? You get in a group of
people who are solving this, called 12 Step. And so, you go to Alcoholics Anonymous, and you sit down, and you go, "My name is David, and I've got a problem". Now that's a much more extreme situation. That's a heavier burden than just simply changing
your behaviors on money, but it's exactly the same
equation, only on a lighter form.

And so, you can't hang out
with your broke friends who are putting stuff in your
face on Instagram all the time that you can't afford, and
that they can't afford either, and you can't keep hanging out
at the bar, if you're a drunk, with drunks. And you need to get in the group of people who are positive peer
pressure in your church and in your 12 Step that are gonna turn this around with you. And so, you get around a
bunch of people who are going, hey, this is now, in this
group, being weird is normal. – Yes, and walk with it. So you guys, if you haven't
checked it out, do it. Because again, those are the things, besides just the debt snowball and the tactical side
of getting out of debt, that's really gonna help the mindset shift while you're in Baby Step 2.

– It's a very unusual person
that has enough backbone and enough chutzpah to completely change
their lives by themselves and not have people
like-minded around them, and not have continual content and input from new lessons coming at them. If you can just sit in
the corner, in the dark, and change your life, you would've probably already done it. – That's a good point, so good. Always wonderful. (hand clap) Thanks for coming in. – Good times. – So fun, so fun.

All right, coming up next,
Micah and Chelsea are here. They're on Baby Step 2, and we get to see what life
is like for them on this step. (musical tone) – Before we decided to get out of debt, we stayed frustrated with our finances, frustrated with each other constantly. – I was really confused
about how much we had, neither of us knew. – Every time we got a
check it was a relief because we thought, okay, finally, another band-aid to
kinda fix the problem.

We both grew up with money
being a huge stress always, and to start our family,
when we get married, I didn't want that same environment. I didn't want the inheritance
to be frustration. – Especially for our marriage,
and thus for our kids. – I'd heard about Dave
Ramsey when I was early 20s and knew he had written some
books, and that was about it. Something about pay something off and then roll that money to the next. – I had found the app through a friend, but didn't know it was
the Dave Ramsey app, a few years back. And I had shown him, but we had looked at so
many budget apps together, I think I caught him at the wrong time and he was just like, yeah, we're not gonna
do an app right now. It took him finding it and
being like, look at this, and us sitting down together
and really playing with it.

– I think the ah-ha moment for us was probably the same as most people when they do the budget
for the first time, is you see what's left over. She showed me, and I said, "No, that's not
right, you miscalculated". And there is an
unbelievable amount of peace to having every dollar, and
having every thing in control, and you're in control of it. – I tell people all the time,
I think it's actually freeing. It keeps us on the same page all the time. We don't have to fight,
I don't have to ask. – It's good for your finances, but it's also good for your
marriage, and teamwork. There's a transparency there that is necessary in a marriage. It's not just when you're debt-free, but it's while you're
in debt and budgeting. It's brilliantly titled Financial Peace.

It is a really comforting thing. – All right, Micah, Chelsea, thank
you so much for being here. – Thanks for having us. – So we always talk about how you can wander your way into debt, but you cannot wander your way out. And Baby Step 2 is tough because you have to be fully committed. And you can't just be on the plan-ish. We call that ish people. And so, you would say that
you were kind of ish people before being fully committed. So kinda tell me your story around that. – Yeah, so before we really dove into it, I guess we were as ish as it could be. I knew how to spell Dave
and that was about it. – There you go. – I knew Dave Ramsey.
I knew he had written a book, and that was about what I knew. We had some friends that
were hosting FPU, and we went to their house one night and got a cute little folder, and we were like, great, we'll order water
when we go out to eat. And we went to one class
and didn't go back. And also didn't realize it was
a regular thing you attended.

So it was, that started
Daveish, and we always knew, at least I always knew,
that credit cards were bad and snowballs were a thing. And so, we said we snowballed, but we might had done it once or twice. So we don't count out debt-free journey until we really started the budget. We just wandered in darkness and was confused and frustrated. – Yeah so, Chelsea, what
did marriage look like when you guys were in that season? – It was okay, but we just either avoided and/or I wouldn't even say argued as much as just constant frustration and miscommunication.

– Yeah, so were you guys, so you felt like you
didn't really have a plan, it was kinda just like here and there. So what was the catalyst? What was the point that you were like, okay, something has to change, something has to be different? – Every time she grocery shopped it was— – Those were arguments. – Okay, okay. – We felt good because
we had good intentions, but we didn't follow through
with any kinda budget. So we felt like, it's almost like, I think I'll start a
diet, and feeling like, good for me, I thought
about having a diet. (Rachel laughs) I feel thinner already. – I think I'm gonna be a
runner, that feels good. (group laughs) – So that was kind of the
mindset. We just stayed frustrated because there was always confusion. But as income increased, we start to see, I'm making more so we can
pay more, we can do more. And that was a hard part
when we initially started and thought we were gonna go at it, I had gotten laid off,
she had gotten pregnant.

And I started a job, and I
was getting $800 a month, and that's what we had, and there was no way of surviving. – The income was the
problem at that situation. – And so, just promotions and job changes, it kind of led and grew quickly, and then we saw we have enough to where we can really go at it. And that's always a Dave thing. If it's not a debt problem,
it's an income problem. And it was initially. – So what was the one thing that really helped you guys
get out of debt, would you say? – The budget app. – The budget app, EveryDollar, okay. So tell me about that? How was that, doing it for the first time? – I mean, it took us a few
months to really get in the groove and really start seeing, but even just the first
month he was like, what? I got done and it was like, we can put this much towards debt.

He was like, no, I don't
even make that much. Are you sure you did everything? And it was really freeing to see how much we could get
done as quick as we could. – And when we had started or
knew about Financial Peace, I kept thinking, financial
peace is when you're debt-free, but part of that peace
is having structure. – Even in the process, yeah. – And that budget brought peace. I mean, we're gonna be
doing our budget meeting on the way home, and that
was the turning point. – So compare your budget conversations before doing EveryDollar,
and all of that, to after, because it sounds like night and day.

– Oh yeah. It used to be, I would write
it down on a piece of paper, and sometimes he would, and
we do math really differently, so he'd show me what he did
and I'd be like, what? – How did you get there? – And vice versa, we'd
do the exact same thing, and neither of us even understood the way each other did math.

And then we'd end up not talking about it because you'd be like, you
know what? No, we can't. Either we're gonna argue or we're just not gonna talk about it, so a lot of times we didn't talk about it. – And so now, it's so opposite because you're on the same page. So would you say, we talk
about, especially with couples, that working together and doing a budget eliminates so many money fights and money problems within a marriage, would you say that's true for you guys? – [Micah] Oh yeah. – And not even just that, I think it's relationship building. It's more than just taking
out something. It's adding. It's changed so much of the
way that we think about it. – Within marriage, and then also, obviously,
with paying off debt, because doing a budget is a
big part of Baby Step 2, getting out of debt.

So what did you guys start with? How much debt did you start with? – Well, we didn't really know, and that was a terrible
feeling, is not knowing. And unfortunately for about a year we would get another letter
in the mailbox saying, hey, your ADS loan has
been bought out by so-and-so, and now you owe us this
with this interest. So ultimately, overall,
once we figured it all out, it was about $80,000–85,000. – Okay, and how much
do you guys have left? – $5,000. – $5,000. You're like, right there. How does it feel? Because, I mean, I know you're
technically not debt-free, you've got one more month, you've got to get that paycheck in, but emotionally it's there. So like, how do you feel? – It feels good to know that our money's going toward the green, it's going towards something, something that's really in the positive. And that alone is exciting. – So good. Okay, so what encouragement do
you have for people watching that are like, okay, I've
got my $1,000, I'm about to embark on Baby
Step 2 on this journey, and I think I'm
committed, I might be ish.

But what encouragement would you say to be fully committed to this process? – I would just say,
especially if it's a couple, just really be open to talking about it, and getting started, and
trusting each other with it. It just helps so much
to get on the same page, and you'll be shocked at
how much you can get done, even if you have a fairly small income. – I had a friend ask me,
how are you doing this? And my response, he took it as an insult, but I just said, well, self-control. And that's what we
don't have as Americans, as just people blessed
with so much that we have. If we wanna get it, we can go get it. Ultimately, I think it's just
self-control and patience. And that's the hardest
thing to have, to pray for, and to just manage. – Well you guys are incredible, I mean, seriously, the
amount that you've paid off, and that you're so close, and that you guys are
working together as a team. I mean, it just transformed, I know, so many different parts of your lives.

And so, I'm so thankful that
you came and shared your story. – Thank you. – Thank you guys so much, and I can't wait for you
to be debt-free next month. – Yeah, thank you. – So exciting, so exciting. Thanks for coming on. – Appreciate it. (upbeat music) I just love their story. And for you guys, I'm so rooting
for you to get out of debt. And so, I hope that this episode
motivated you to do that. Thank you so much to all of my guests for coming on this episode, and
thank you guys for watching.

Now to get everything that we
talked about in this episode, make sure to click the
link in the description. And I always want to hear from you and answer your questions. So, I set up a new voicemail just for you. You can call, leave your message, and I may answer your question in a future episode of
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And as always, make sure to
take control of your money and create a life you love. (musical tones).