Personal finance expert Rachel Cruze is the host of “The Rachel Cruze Show” and makes regular appearances on “The Today Show,” “Good Morning America,” CNN and “Fox & Friends.” Cruze and her father, Dave Ramsey, co-authored the No. 1 New York Times best-selling book, “Smart Money Smart Kids.” Her latest release is “The Contentment Journal.” Cruze lives with her husband, Winston, and their two daughters in Tennessee.
What was it like growing up as the daughter of Dave Ramsey?
Cruze said even though her dad is a financial expert, she related to money like everyone else.
“I was just like any other teenager wanting to fit in,” Cruze said. “Mom and dad were big on not just giving us money and being a human ATM. They did a really good job of putting things in place so we had to save up for things we wanted. Whether it was clothes or even a car. We had to pay for half of our cars when we turned 16. Dad called that his 401 Dave Plan.”
Cruze wasn’t able to steer clear of conversations about cash, credit cards or creating capital.
“We couldn’t just give into that impulse of, ‘So and so has this and I want it. So I can just get this now because mom and dad will pay for it,’” Cruze added. “It removed that instant gratification. To learn to be patient for something has to be a practice.”
You’re a natural spender?
Cruze categorizes how people relate to money in two ways: spenders and savers.
“A lot of people assume because of the work I do and that I’m a ‘financial expert,’ that I would be a tight wad and a saver,” Cruze said. “It’s kind of the opposite. I enjoy spending money. I’ve definitely fallen into the camp of, ‘If I could just have that, I’d be happy, or everything will be better.’ I’ve said that about everything from a jacket to a car to the car’s space for our kids. At the end of the day, if the newness of stuff is what funds your happiness, you’re going to be a rat on a wheel for the rest of your life.”
How has the financial culture inflated financial comparison?
The average person is bombarded with thousands of marketing messages a day telling them the pursuit of possessions is synonymous with pleasure.
Cruze said creating contentment in a comparison culture is difficult.
“Thirty years ago, it was just billboards, magazines and seeing people in person,” Cruze said. “Fast forward to today, it’s so much worse. You’re constantly carrying around the Joneses in your back pocket. Seeing what everyone else has, is doing and what you need to buy—it’s so much more accessible than even a decade ago.”
How has comparison consumed our bank accounts?
Comparison has led people to chase a new and better lifestyle.
Cruze said the effect of comparison is that we allow other people to define our values.
“The lifestyle bucket is where I probably see it the most,” Cruze added. “Everything from cars to houses to vacations to clothes. Even something as simple as where you go out to dinner. When we see those pictures posted over and over again, we have an expectation that that’s how our lifestyle should look and that’s when the avenue of debt enters in.”
Today, 78% of Americans live paycheck to paycheck.
Cruze said even the definition of debt over the decades has shifted in the United States.
“Debt has definitely become normalized to the point that people really believe they can’t live life without debt,” she said. “We live in this vicious cycle of believing that in order to get something you have to get into debt to do it. This old-school mentality of, ‘If you don’t have the money, don’t buy it’ is not around anymore. As a society, we’re not used to being patient and waiting on things.”
How can financial contentment cure us?
Cruze said the cure for comparison is contentment.
“In order to win with money, you have got to be content,” Cruze said. “It’s very difficult to win financially when you are discontent. When you are content, you’re able to sacrifice your lifestyle and get out of debt, live within a budget, give more and put money away to save.”
Cruze aded two tips to tackling impulse purchases:
>Motivation: Why am I really buying this?
>Budget: Do I have enough money to pay for this?