Rachel Cruze, money expert and daughter of financial guru Dave Ramsey, has made a name for herself by giving people solid, actionable advice on how to make an achievable budget, control spending and build wealth. She’s the author of “Know Yourself, Know Your Money,” host of “The Rachel Cruze Show,” and a prominent influencer on social media channels.
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Here are 11 of her top tips that GOBankingRates pulled from her YouTube channel on how to manage your money to live better, save more and achieve financial freedom.
Live Debt-Free
Growing up in a household that had experienced bankruptcy fostered a deep fear of debt in Cruze, especially high-interest credit card debt. It influenced all of her financial decisions, and she insists that a debt-free existence is possible for almost anyone and is your best bet to becoming wealthy. Her advice: pay off small amounts first to gain momentum, which is also known as the debt snowball method.
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Live Below Your Means
When it comes to saving money, Cruze advocates for making a budget that is well within — i.e., below — your means and sticking to it with military discipline. Living below your means gives you the ability to create an emergency fund as well as invest for the future or retirement.
Stop Eating Out
Cruze revealed that dining out sometimes busted her budget. She’s likely not alone. According to a U.S. Foods study, as of last year, Americans spent an average of just under $200 a month dining out. That’s nearly $2,400 a year — not exactly healthy for the bottom line.
Pay Off Your Mortgage Early
If you have a mortgage, chances are it’s your largest monthly expense. Cruze advocated paying it off early, which will be extremely financially liberating and dramatically increase your net worth. She said that most people find they can do it within 10 years if they are dedicated. Use a mortgage payoff calculator to help strategize.
Never Compare Yourself
There’s a saying that “comparison is the thief of joy.” Cruze believes comparing your lifestyle to others can also be the thief of wealth. Always remember that you — and your financial reality and goals — are unique to you. Make decisions with that in mind, budgeting for your dreams, not someone else’s.
Prioritize the ‘Four Walls’
The “four walls” of your finances include your housing, food, utility and transportation expenses. These are essential, so Cruze said, especially in inflationary times, you should make sure you cover these, then look for ways to save on them. It’s vital to wealth building since you can’t save or invest until these are met.
Invest in the Long-Term
Impulse buys, “just this once” splurges and feel-good binges can add up fast and steal your wealth even faster. Cruze said to adopt a long-term mindset instead. Understand that becoming wealthy is usually the result of consistent and enduring smaller investments that grow over time.
Don’t Cheap Out on Certain Needs
Penny-wise and pound-foolish, as they say, is not a good formula for your budget. So, there are certain things Cruze suggested you don’t skimp on, since cheaping out will cost you more in the long run (remember, think long-term). The list includes items big and small: car repair, childcare, athletic shoes, garbage bags, paper towels, travel gear, sunscreen and more.
Take a Personal Finance Class
Cruze said educating yourself in the ways of personal finance is a crucial step in attaining wealth and prosperity. It’s no surprise that she suggested her father’s Financial Peace University course, which starts at $99.99, but there are many others available as well.
Invest 15% of Your Take-Home Pay
Cruze said at a minimum you should be putting 15% of your take-home pay toward your retirement. And if that’s an unattainable amount to hit now, make it a goal and start working toward it. Keep in mind, however, she suggested becoming debt-free and building a six-month emergency fund first.
Take Full Advantage of Any Employer Matching
If your employer offers any matching contributions to your 401(k) or 403(b) retirement funds, take full advantage by contributing at least the amount they will match. This is free money. If you still have money to invest, contribute to an IRA or other retirement savings vehicle.
Caitlyn Moorhead contributed to the reporting for this article.
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This article originally appeared on GOBankingRates.com: 11 Genius Things Rachel Cruze Says To Do To Become Wealthy
