The Pandemic Was Your Wake-Up Call. Now Do This...


Transcript

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- This episode is all about
taking the stress out of money

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once and for all.

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And it all comes down to one thing:

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a fully funded emergency fund.

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(bright upbeat music)

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Hey, welcome to The Rachel Cruze Show.

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Today, we are going to talk about

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the importance of having
an emergency fund.

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Even saying those two words, some of you

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are like, "Oh, wow. I really
wish I had one of those."

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Some of you are saying,

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"Oh, I had it, and it's gone now,"

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"Thank you, COVID- 19."

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Some of you say, "Hey, I have
money in the bank. I'm good."

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But no matter what boat you're
in, this episode is for you.

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So, get ready.

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My dad, Dave Ramsey,

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is back on the show to talk
about what a game changer it is

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to have an emergency fund

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and how to rebuild it if you use it.

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I've got a couple on

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who used their emergency fund
to survive the COVID pandemic.

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Okay, one in four households,
in the middle class said

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that they couldn't pay all of their bills,

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thanks to COVID- 19,

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which means a lot of people out there

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did not have an emergency fund.

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But listen, even in a time of job loss,

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a health crisis and uncertainty,

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you can have peace about your money.

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And an emergency fund
gives you that peace of mind.

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An emergency fund is just
money you've set aside

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for unexpected things in life.

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So, it's really a buffer
between you and life.

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That's always how I look at it.

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It's like the safety net.

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So, you're living life,
something bad happens,

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and it just kinda keeps you from

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completely hitting the ground.

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And what it does, also,

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is it turns this crisis of panic
into just an inconvenience.

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So, I have a voicemail.

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I know I've mentioned this
a couple times in the show

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that people can call and ask questions.

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So, I actually got a call
from Christina in California.

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And her story, it was pretty heavy.

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She has a lot of life

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that's happened to her.

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So her and her husband
who, he's in the military.

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By the way, thank you so
much for your service

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and everything that you
do for this country.

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It's amazing.

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But they moved from
Illinois to California.

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And then they got in a
really bad car wreck.

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Thankfully everyone's okay.

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But a lot of attorney fees,
they were sued a year long,

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just craziness with that.

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And then, on top of that,

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now her husband is being
deployed for nine months.

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So, they had an emergency fund in place,

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and now they've gone through it.

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And they're at this point
of kind of a crisis now,

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because they don't have savings.

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It seems like they're
living above their means.

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And now her husband is being deployed.

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So, what kind of direction
does she need to go?

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The way I always answer
these kind of calls, Christina,

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is that you have to understand

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that money flows two ways.
Money flows in,

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and money flows out.

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So, if the money that is flowing out

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is greater than the money coming in,

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more than likely you
have an income problem.

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Because you're in California,
again, it's expensive.

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That is exactly, kind of where
you guys have moved.

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You know, your husband's
job and his service,

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which is just incredible.

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But you guys are gonna have to make

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some lifestyle changes and
some changes to income.

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So, that may mean

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you going back to work
for a little bit of time.

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Or, again, if there's some income things

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that you guys can cut out.

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Maybe you move to a smaller rental.

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You can make different
decisions to help you guys

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in that buffer,

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because the key here is
now you were on baby steps,

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four, five and six.

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And now you're gonna have to go back

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and replenish that emergency fund,

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which is gonna be really key.

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And so, I think, for you guys,

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a great goal would be to at
least get a month's worth

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of savings before he deploys.

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That's something you guys can work toward.

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It gives you a little bit of that buffer

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and kind of that starting
launch pad to continue to save

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for that emergency fund.

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So, be very, very diligent in the budget.

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Find ways to save money.
Find ways to cut expenses.

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And get that back up as soon as possible.

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And it feels like really,
really, heavy for you

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because you guys have gone through a lot

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in a pretty short period of time,

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a lot of change, a lot of heaviness.

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What you have to realize
though, is that no matter what,

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no matter the situation,
you can do something about

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where you're at.

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And when you lose that
power, when you lose

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kind of that feeling of control,

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that's when the hopelessness
starts to set in.

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But be hopeful in the
fact that you can do

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something different with your money.

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You can actually start
to take control and get

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that emergency fund back.

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Now guys, again, this is a heavy topic.

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And the emergency fund,
it's there for you.

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And then when you go through it,

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that panic can kind of start to come back.

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That's exactly what I felt from her.

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If you guys have any questions
regarding an emergency fund

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or anything with money,

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make sure to call the voicemail.

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Leave your question at 844.944.1075.

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If you still aren't convinced
having an emergency fund

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is totally necessary,

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I've got some incredible stats for you.

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(piano music)

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(whooshing)

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All right, before we dive in,
(calm music)

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Okay, with all the layoffs and furloughs

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that have happened during the pandemic,

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77% of those who are laid off said

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that they expect to get their job back

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once this is all over.

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That means not all hope is lost.
Yes, they just need some time,

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some cash in the bank

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to get them through
these next few minutes,

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and they will be totally fine.

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If you've ever wondered why I
teach having an emergency fund

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and why it's so important, this is why.

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But out of all the examples in life,

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we talked about car crisis,

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job loss, maybe even a health scare,

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which all of those semi-

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are what's happening right now.

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Maybe not the car thing for you.

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But a pandemic was never on the list.

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So, I think that's always
just an interesting thing

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I'm gonna add in the future.

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But the point is, we have
no clue what's gonna happen.

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We have no clue, and we
say it all the time.

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It's not if life is going to happen.

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It is when it is going to happen.

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Having a plan in place, you
guys, having money set aside

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is going to help you when life comes.

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Again, I said it earlier, but it's so true.

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It takes a crisis,

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an absolute freakout, just
into an inconvenience.

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Instead of completely panicking

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that your car is broken down,

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and you have no clue what you're gonna do

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in getting the car fixed

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and having to go into debt for it,

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you've now got a car problem

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and a financial problem.

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When you have an emergency fund,

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it's like, oh, we'll just fix the car.

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Like, it's that easy. We'll just fix the car.

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Having an emergency fund is

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so, so crucial to finding financial peace.

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If you need to save up
for your emergency fund,

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use my free Baby Step 3 goal tracker.

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Thousands of people have used
it to color in their progress.

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Now, let's hear from a couple

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who completely changed
their financial situation,

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which helped them during
the 2008 recession

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and now with COVID- 19.

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Welcome, Jason and Alison.

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Thank you guys for being on.

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- Thank you for having us.

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- Thank you for having us.

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- Okay, so tell me a little bit about your story

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and what made you guys wanna change

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what you're doing with money.

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- Okay, so, back in,

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you know, what they call
the crash, right? Back in 2006

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and 2007 and 2008 . . .

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At the time,

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Alison and I were farmers.

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We actually worked on a farm.

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We made like $43,000 a
year, and we had no budget.

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At the time,

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I think we probably had
$1,000 in our bank account,

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and we had $19,000 in debt.

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I had heard this guy,
Dave Ramsey, on the radio,

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and I just decided,

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we were kind of sick and
tired of being sick and tired.

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Let's just listen to the program,

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see what it's about.

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And let's try to fix the mess

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that we got into.

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That's kind of how it started for us.

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- I love that.

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I think that's the point, right?

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You get to this point, like you said.

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And you're like, hey, I'm
tired of living this way.

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It shouldn't be like this.

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I shouldn't have $1,000 to my name,

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and thousands of dollars of debt.

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Like, this is not working.

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- 100%
- And so you guys

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really buckled down,

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and you decided to get on
a budget and start the plan.

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So I wanna know about the first budget.

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What was that like?

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(laughing)
Did you guys

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sit down to do it?

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What was it like between you guys?

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- So, the budget was interesting.

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I always envisioned a
budget as it was a bad word.

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And I actually just didn't
even wanna to talk about it.

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You probably wanna hear
about our fights, right?

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(laughing)

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- We all have them. We all have them.

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So, yeah. I'll hear yours.

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(laughing)

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- Because when we did the budget, my wife,

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she just trusts me. And
she's like, you do the budget.

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Well, that was not Dave's advice.

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Dave's advice is it needs
to be a group effort.

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So, I created the budget, but
I slid it across the table

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and said, hey look at this,
and can we agree to this?

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And there was one thing
you wanted different.

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- The clothing budget, of course.

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(laughing)

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Before we got on a budget,

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I always felt so guilty

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spending money. Like, every dollar

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I was like, am I taking
from our retirement?

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Am I taking from our kids?

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But after having a budget
for each one of those items,

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it just felt so good knowing that

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that money is for that particular item.

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- That's like the perfect example of

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that a budget doesn't limit your freedom.

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It gives you freedom.

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- Yes.

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- So, your life beforehand,
like you were saying,

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you were questioning every purchase,

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you were nervous that it was
stealing from retirement.

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All these questions,
but they're all answered

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in the budget. You don't have to have guilt

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or shame about it.

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It's there. It's planned for.

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I think that's incredible.

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So, I'm curious. How long
did it take you guys

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to get through Baby Steps 1–3.

0:10:08.990,0:10:12.370
- So, Baby Step 2, to get out of debt,

0:10:12.370,0:10:13.950
we had a fixed income.

0:10:13.950,0:10:16.200
If I made not a single dollar more,

0:10:16.200,0:10:17.780
which was gonna be the case,

0:10:17.780,0:10:19.880
we were gonna go . . .

0:10:20.000,0:10:23.060
It would take 18 months
to get out of debt.

0:10:23.060,0:10:24.410
And then I ended up selling my Jeep,

0:10:24.410,0:10:25.340
and my Jeep was like,

0:10:25.340,0:10:27.640
at the time, was my prized possession.

0:10:27.640,0:10:30.880
I sold that, because it
was paid off at the time,

0:10:30.880,0:10:34.860
and it would catapult us forward so much,

0:10:34.860,0:10:35.860
and it gave us an opportunity.

0:10:35.860,0:10:37.673
I rode my bike to work every day.

0:10:38.630,0:10:41.827
Rachel, we went from
$1,000 in our bank account and

0:10:41.827,0:10:44.410
$19,000 in debt, nine months later,

0:10:44.410,0:10:47.253
we had no debt and $14,000 in savings.

0:10:48.110,0:10:50.980
This is why I credit Ramsey organization

0:10:50.980,0:10:52.360
for saving our life.

0:10:52.360,0:10:55.280
I lost my job. And if
that would have happened

0:10:56.840,0:10:58.880
with that debt and with no money . . .

0:10:58.880,0:11:00.980
I mean, my kids never knew.

0:11:01.140,0:11:02.920
They never knew that I
went like almost six months

0:11:02.930,0:11:04.020
with no income.

0:11:04.020,0:11:07.410
And they never knew because of what

0:11:07.410,0:11:08.530
your organization did for us.

0:11:08.530,0:11:12.700
So, we literally credit
it with saving our life.

0:11:12.700,0:11:15.770
I was not a Christ follower
when I listened to Dave

0:11:15.770,0:11:18.490
originally, and none of my family were.

0:11:19.580,0:11:22.067
He would say, hey, this is
how you should handle money.

0:11:22.067,0:11:23.470
By the way, this guy Jesus said that.

0:11:23.470,0:11:25.390
And I would be like, oh, that's cool.

0:11:25.390,0:11:27.290
I just wanna hear about
the money stuff, right?

0:11:27.290,0:11:30.040
But I now know,

0:11:30.040,0:11:31.260
and at that time,

0:11:31.260,0:11:33.540
we realized all of those things

0:11:33.540,0:11:35.420
were leading us in a certain direction,

0:11:35.420,0:11:37.360
because God already knew
where we were going,

0:11:37.360,0:11:39.020
He already knew what was gonna happen.

0:11:39.020,0:11:41.340
And we were just lucky to hear

0:11:41.340,0:11:43.470
the call to do these things to set us up

0:11:43.470,0:11:45.280
so that we will succeed,

0:11:45.280,0:11:48.130
It was all because of
Dave and Chris Hogan

0:11:48.130,0:11:51.210
and Rachel, and we're so
grateful and blessed for that.

0:11:51.210,0:11:52.089
- That's amazing.

0:11:52.089,0:11:53.519
That's the ultimate.

0:11:53.519,0:11:54.352
(laughing)

0:11:54.352,0:11:55.590
That's the our ultimate goal, right?

0:11:55.590,0:11:56.800
And you even got there.

0:11:56.800,0:11:57.633
That's it.

0:11:57.633,0:11:59.130
The money stuff, like you said,

0:11:59.130,0:12:02.700
we disguise it to show
Jesus to people. So, that's it.

0:12:02.700,0:12:04.096
I mean, you found Jesus,
which is incredible.

0:12:04.096,0:12:07.700
That's such a higher calling
of changing your family tree

0:12:07.700,0:12:08.970
beyond even the money stuff.

0:12:08.970,0:12:11.490
- Yes, 100%. 100%, we agree.
- That's an incredible legacy,

0:12:11.490,0:12:13.070
an absolute incredible legacy.

0:12:13.070,0:12:14.490
So, for you guys, though. Man.

0:12:14.490,0:12:18.850
You change spiritually.
You change financially.

0:12:18.850,0:12:20.910
For the better, in so many cases.

0:12:20.910,0:12:22.940
Right now there are a lot of families

0:12:22.940,0:12:24.500
that they're struggling,

0:12:24.500,0:12:25.333
they're freaking out,

0:12:25.333,0:12:26.720
they've had to dip into
their emergency fund

0:12:26.720,0:12:27.615
because of the pandemic.

0:12:27.615,0:12:29.110
What kind of motivation and

0:12:29.110,0:12:31.470
what kind of hope can you
give those families out there?

0:12:31.470,0:12:33.470
Because you guys have experienced
a little bit of that, you know,

0:12:33.470,0:12:34.303
when you lost your job,

0:12:34.303,0:12:37.777
not through COVID-19,
but earlier than that.

0:12:37.777,0:12:40.150
So, what kind of advice do you
get for people out there

0:12:40.150,0:12:41.800
who are kind of scared,
they're kind of worried,

0:12:41.800,0:12:43.430
they haven't really started a plan.

0:12:43.430,0:12:45.360
- I can guarantee that
anyone listening right now

0:12:45.360,0:12:47.210
has probably been to a gym.

0:12:47.210,0:12:49.250
And you know the first three
weeks of going to the gym

0:12:49.250,0:12:50.410
is the worst, right?

0:12:50.410,0:12:51.740
It's hard to wake up every day

0:12:51.740,0:12:53.804
and do something that
you physically feel like

0:12:53.804,0:12:55.050
is hurting you.

0:12:55.050,0:12:56.490
- Follow through with it.

0:12:56.490,0:12:58.210
- But after three weeks,

0:12:58.210,0:13:00.750
you start to see a little bit improvement,

0:13:00.750,0:13:01.960
and it starts to get fun.

0:13:02.220,0:13:04.560
And after three months,

0:13:04.570,0:13:06.780
you see a lot of improvement,
and you get stronger

0:13:06.780,0:13:09.210
and faster. And things you couldn't do,

0:13:09.210,0:13:10.210
you can suddenly do.

0:13:11.140,0:13:14.020
It will be hard. There's no shortcut.

0:13:14.020,0:13:15.450
You're not gonna just take money

0:13:15.450,0:13:16.390
and put it into this account.

0:13:16.390,0:13:19.010
It will take time. And it might take years.

0:13:19.010,0:13:20.670
It literally could take years to do this,

0:13:20.670,0:13:21.890
but it is so worth it.

0:13:21.890,0:13:24.530
Because even if you keep your job.

0:13:24.530,0:13:25.940
Even if you don't get sick.

0:13:25.940,0:13:26.930
But what if you do lose your job?

0:13:26.930,0:13:27.870
What if you do get sick?

0:13:27.870,0:13:29.170
These things could happen.

0:13:31.010,0:13:32.530
When those things happen in our lives now,

0:13:32.530,0:13:35.010
we walk different, talk different.

0:13:35.010,0:13:36.300
- Yeah, it's . . .

0:13:36.300,0:13:40.080
Now, it feels so good to be
able to give to people,

0:13:40.080,0:13:41.695
to be in that position,

0:13:41.695,0:13:44.640
people that are struggling
or having a rough day,

0:13:44.640,0:13:46.330
we can give.

0:13:46.330,0:13:49.260
- We're so grateful for the sacrifices,

0:13:49.260,0:13:50.110
that we made up front

0:13:50.110,0:13:51.250
so that we could live this life.

0:13:51.250,0:13:55.143
And I want that for all
Americans because it is possible.

0:13:55.143,0:13:56.490
It is totally possible.

0:13:56.490,0:13:58.070
No matter what income you make,

0:13:58.070,0:13:59.910
you can do this.

0:13:59.910,0:14:02.393
You just have to stay the course.

0:14:03.400,0:14:04.300
- It's amazing.

0:14:04.300,0:14:06.790
Well, you guys are the complete picture

0:14:06.790,0:14:09.940
of what it looks like to
take control of your money

0:14:09.940,0:14:11.320
and do something different.

0:14:11.320,0:14:12.510
You changed your money habits.

0:14:12.510,0:14:13.650
You changed the way you viewed money.

0:14:13.650,0:14:15.360
You found the truth of how money works.

0:14:15.360,0:14:16.510
You applied it to your life.

0:14:16.510,0:14:18.260
You actually did the steps.

0:14:18.260,0:14:19.760
And now, here you are,

0:14:19.760,0:14:21.800
debt-free completely, money in the bank

0:14:21.800,0:14:23.920
and able to take a whole other career

0:14:23.920,0:14:25.490
into real estate.

0:14:25.490,0:14:27.600
It's just absolutely incredible.

0:14:27.600,0:14:28.433
You guys,

0:14:28.440,0:14:31.240
thank you so, so much for being on.
- Thank you.

0:14:31.240,0:14:33.860
- If you want to learn everything

0:14:33.860,0:14:35.830
that they just did, what
they just talked about,

0:14:35.830,0:14:37.960
make sure to go to
daveramsey.com/hope

0:14:37.960,0:14:40.800
and go through our free 14-day trial

0:14:40.800,0:14:43.180
of the nine lessons of
Financial Peace University.

0:14:43.180,0:14:44.230
You're gonna learn so much

0:14:44.230,0:14:46.570
and learn how to take
control of your money

0:14:46.570,0:14:47.800
and be like these guys.

0:14:47.800,0:14:49.440
I mean, absolutely incredible.

0:14:49.450,0:14:50.500
All right, coming up next
(calm music)

0:14:50.500,0:14:52.828
is my dad, Dave Ramsey.

0:14:52.828,0:14:55.161
(whooshing)

0:14:58.300,0:14:59.720
As a mom, every day,
(soft music)

0:14:59.720,0:15:02.720
I take precautions to give
my family peace of mind.

0:15:02.720,0:15:05.680
It's simple things, like
locking the front door,

0:15:05.680,0:15:07.840
making sure the car seats are buckled in,

0:15:07.840,0:15:10.480
and putting my phone
away when I'm driving.

0:15:10.480,0:15:12.900
But we don't always think
about the bigger things,

0:15:12.900,0:15:15.540
like what if something
happened to you or your spouse?

0:15:15.540,0:15:18.090
That's why you need term life insurance.

0:15:18.090,0:15:20.040
It makes sure your family's taken care of

0:15:20.040,0:15:21.650
no matter what happens.

0:15:21.650,0:15:23.700
I trust Zander Insurance.

0:15:23.700,0:15:25.340
They keep my family protected,

0:15:25.340,0:15:27.700
and that gives me such peace of mind.

0:15:27.700,0:15:29.240
They make things super simple

0:15:29.240,0:15:31.760
and find the best options and prices.

0:15:31.760,0:15:33.430
To learn more, call Zander today

0:15:33.430,0:15:35.310
or go to Zander.com.

0:15:35.310,0:15:38.830
Make sure your family has the
term life insurance they need.

0:15:38.830,0:15:41.413
(upbeat music)

0:15:42.900,0:15:44.420
Thanks for coming back on.

0:15:44.420,0:15:45.447
- Obviously wonderful. Glad to be here.

0:15:45.447,0:15:46.870
- One of my favorite guests.

0:15:46.870,0:15:47.760
(laughing)

0:15:47.760,0:15:48.593
Thanks for being here

0:15:48.593,0:15:49.977
- Its mandatory that I'm your favorite.

0:15:49.977,0:15:51.610
- Of course
(laughing)

0:15:51.610,0:15:54.240
So you've been, obviously,
talking to people for decades

0:15:54.240,0:15:57.880
about getting an emergency
fund and the importance of it.

0:15:57.880,0:15:59.120
Everything that's going on in our country

0:15:59.120,0:16:00.940
with the pandemic, everything happening,

0:16:00.940,0:16:03.850
a lot of our tribe, who
has possibly lost jobs

0:16:03.850,0:16:04.740
or being furloughed,

0:16:04.740,0:16:06.800
has had to dip into their emergency fund.

0:16:06.800,0:16:09.070
So, have you seen that really be the case?

0:16:09.070,0:16:10.960
- Yeah, a lot of them have.

0:16:10.960,0:16:11.793
But more than anything,

0:16:11.793,0:16:14.043
they just had peace with it being there,

0:16:15.110,0:16:17.630
and then they were able
to work their budget

0:16:17.630,0:16:20.060
and didn't actually have to dip into it.

0:16:20.060,0:16:21.900
Of course, it's a case-by-case basis,

0:16:21.900,0:16:23.339
if somebody lost their job,

0:16:23.339,0:16:25.080
both people lost their job,

0:16:25.080,0:16:26.640
and they had a bunch of
other things going on.

0:16:26.640,0:16:28.820
But usually they've been
able to manage their budget

0:16:28.820,0:16:29.890
and not hit it.

0:16:29.890,0:16:32.040
But in the case that they
did, that's what it's for.

0:16:32.040,0:16:32.873
- That's right.

0:16:32.873,0:16:34.320
I think a lot of people,
when they dip into it,

0:16:34.320,0:16:37.700
I've heard they feel like they're like,
they lose progress.

0:16:37.700,0:16:39.780
They feel like they're going
backwards in the Baby Steps.

0:16:39.780,0:16:41.270
But just reaffirming to people that

0:16:41.270,0:16:42.220
that's why it's there.

0:16:42.220,0:16:44.420
So, you're not going backwards, in a sense,

0:16:44.420,0:16:46.230
because you're going to fill it back up.

0:16:46.230,0:16:47.063
You're gonna get

0:16:47.063,0:16:48.730
that fully funded emergency fund back.

0:16:48.730,0:16:50.950
But I think a lot of people
feel like they lose steam

0:16:50.950,0:16:51.783
or that they're doing

0:16:51.783,0:16:54.330
something almost wrong by dipping into it.

0:16:54.330,0:16:56.180
- Well, I mean, you are going backwards,

0:16:56.180,0:16:57.893
but it's not like a Baby Step sin.

0:16:58.780,0:17:00.930
You haven't sinned the
Baby Steps or something.

0:17:00.930,0:17:04.410
It's just, you use your
emergency fund for an emergency.

0:17:04.410,0:17:05.560
That's what it's for.

0:17:05.560,0:17:07.500
But that does mean you took a step back.

0:17:07.500,0:17:08.960
And you're going to fill it back up,

0:17:08.960,0:17:10.250
and then you're going to move back on.

0:17:10.250,0:17:11.770
That's okay, though.

0:17:11.770,0:17:12.603
That's what it's for.

0:17:12.603,0:17:14.680
There is a rhythm to life.

0:17:14.680,0:17:17.340
Hopefully, we never have to
touch our emergency fund.

0:17:17.340,0:17:19.280
But the reason we have an emergency fund

0:17:19.280,0:17:21.630
is we know emergencies happen.

0:17:21.630,0:17:24.550
So, it's probable that at
some time in your life,

0:17:24.550,0:17:26.013
you're gonna have to tap that thing.

0:17:26.013,0:17:27.690
And that's okay.

0:17:27.690,0:17:30.050
- So talk about, outside
pandemic stuff, again,

0:17:30.050,0:17:32.253
going back 20 years of talking to people.

0:17:33.120,0:17:35.170
How normal is it for people to say,

0:17:35.170,0:17:36.420
oh, yeah, they call you on the show,

0:17:36.420,0:17:37.910
or you talk to them, and

0:17:37.910,0:17:41.050
they say, yeah, we had to
actually use this money.

0:17:41.050,0:17:43.390
Because again, I think a
lot of people watching

0:17:43.390,0:17:46.870
or that have it, there is
this kind of guilt like, oh,

0:17:46.870,0:17:49.190
it's there, yeah. But I
don't even want to touch it.

0:17:49.190,0:17:50.690
This feeling. But that it's normal,

0:17:50.690,0:17:51.700
that if you're in a situation

0:17:51.700,0:17:53.950
that you have to have that
money, you dip into it.

0:17:53.950,0:17:54.783
And that's okay.

0:17:54.783,0:17:56.380
That's a good thing.

0:17:56.380,0:17:59.500
- Well, if you think about it,
what is the nicknames

0:17:59.500,0:18:00.740
that we give the emergency fund?

0:18:00.740,0:18:05.080
The classic one is, grandma
called it your rainy day fund.

0:18:05.080,0:18:05.913
Why?

0:18:05.920,0:18:09.860
Because sometimes it rains, you know?

0:18:10.540,0:18:12.500
And rain is to be expected,

0:18:12.510,0:18:14.580
so you carry an umbrella.

0:18:14.580,0:18:16.010
And so, that's a rainy day fund.

0:18:16.010,0:18:16.880
One lady,

0:18:16.880,0:18:18.350
we've classically talked about this

0:18:18.350,0:18:19.700
in Financial Peace University for years.

0:18:19.700,0:18:21.840
One lady called it her GOK fund,

0:18:21.840,0:18:23.880
her God Only Knows fund.

0:18:23.880,0:18:25.630
God only knows what's gonna happen.

0:18:26.540,0:18:27.620
Because he does. He's the only one

0:18:27.620,0:18:28.490
that knows what's gonna happen.

0:18:28.490,0:18:30.100
Something's gonna happen, though.

0:18:30.100,0:18:31.670
Life is gonna happen.

0:18:31.670,0:18:32.770
And stuff happens.

0:18:32.770,0:18:34.683
I saw it on a bumper sticker.

0:18:34.683,0:18:37.090
You know, you just gotta be ready,

0:18:37.090,0:18:39.350
and you gotta go, that's part of it.

0:18:39.350,0:18:42.280
It's like saying my transmission broke.

0:18:42.280,0:18:44.370
Of course it did. It's a transmission.

0:18:44.370,0:18:45.520
It's eventually gonna break.

0:18:46.480,0:18:48.360
That's just, stuff is gonna happen.

0:18:48.360,0:18:50.100
You're gonna have things come at you

0:18:50.100,0:18:52.380
that are unexpected.

0:18:52.380,0:18:55.660
And that's the definition of an emergency.

0:18:55.660,0:18:59.080
- So, for people, it's funny. We
classify emergencies like

0:18:59.080,0:19:01.580
with car repairs or a health issue.

0:19:01.580,0:19:04.470
But a pandemic is one
that's never been used

0:19:04.470,0:19:06.920
as an example of an emergency.
(laughing)

0:19:06.920,0:19:07.753
- Well, no. If we had used

0:19:07.753,0:19:08.779
that, we would have been
accused of being crazy.

0:19:08.779,0:19:10.360
- Yeah, some conspiracies . . .

0:19:10.360,0:19:11.760
- Someday, there's gonna be a pandemic,

0:19:11.760,0:19:12.593
and you better be ready.

0:19:12.593,0:19:13.555
Can you imagine the hate mail

0:19:13.555,0:19:15.354
I would have gotten if I had said that?

0:19:15.354,0:19:17.240
- So, what are you seeing from people,

0:19:17.240,0:19:19.990
because of the pandemic and
everything that's happening?

0:19:19.990,0:19:21.740
What is kind of the top emotion

0:19:21.740,0:19:24.230
or so of people, even if they
had emergency fund or not.

0:19:24.230,0:19:26.810
But how is this really
affecting their finances?

0:19:26.810,0:19:28.742
- I think the folks that didn't,

0:19:28.742,0:19:30.540
the phone is ringing.

0:19:30.540,0:19:31.520
When they pick it up,

0:19:31.520,0:19:34.160
they realize it's their wake-up call.

0:19:34.160,0:19:37.620
If you weren't ready, and
this thing came at you,

0:19:37.620,0:19:40.910
this is your reminder to get ready.

0:19:40.910,0:19:44.480
Because it's not gonna be
another pandemic, says Dave.

0:19:44.480,0:19:47.440
But, I mean, who knows? God only knows, right?

0:19:47.440,0:19:49.150
But it's gonna be a transmission.

0:19:49.150,0:19:53.130
It's gonna be Aunt Gertie on the
West Coast passes away,

0:19:53.130,0:19:55.030
and you have to chip in on our funeral.

0:19:55.030,0:19:57.880
There's gonna be stuff
happening in your life.

0:19:57.880,0:19:59.833
And to walk around with no money,

0:20:00.970,0:20:02.963
and deeply in debt and no plan.

0:20:04.430,0:20:05.670
How's it working for you?

0:20:05.670,0:20:06.503
It's not.

0:20:07.960,0:20:10.580
When I went broke, it
was because I was stupid,

0:20:10.580,0:20:12.240
and I didn't have any money.

0:20:12.240,0:20:13.380
I didn't keep any cash.

0:20:13.380,0:20:15.100
I didn't keep any liquidity.

0:20:15.100,0:20:17.050
And I built a house of cards with debt.

0:20:17.960,0:20:19.680
When I went broke, that
was my wake-up call.

0:20:19.680,0:20:21.563
And I had a never again moment.

0:20:22.790,0:20:24.240
Some folks are having
a never again moment.

0:20:24.240,0:20:25.580
The ones that are sitting there

0:20:25.580,0:20:27.220
with the emergency fund,

0:20:27.220,0:20:29.720
they feel like the three little pigs,

0:20:29.720,0:20:30.880
one built a straw house

0:20:30.880,0:20:32.140
and one built a house of sticks,

0:20:32.140,0:20:34.370
and one built a house out of bricks.

0:20:34.370,0:20:35.260
And when the wolf came

0:20:35.260,0:20:36.890
and blew on the brick house,

0:20:36.890,0:20:37.820
nothing happened.

0:20:37.820,0:20:39.100
And they feel like

0:20:39.100,0:20:40.710
they're the pig with the
brick house right now.

0:20:40.710,0:20:43.340
They feel like, hey, I'm set.

0:20:43.340,0:20:45.100
Blow away, big bad wolf.

0:20:45.100,0:20:47.330
I've got my cushion here.

0:20:47.330,0:20:48.500
I don't have any debt.

0:20:48.500,0:20:50.040
Gives me lots of margin.

0:20:50.040,0:20:53.070
Because see, if you don't have
any payments going out,

0:20:53.070,0:20:54.430
and you've got a pile of money,

0:20:54.430,0:20:56.820
even if you do lose your job,

0:20:56.820,0:20:59.480
you can go a long time,

0:20:59.480,0:21:00.640
a long time.

0:21:00.640,0:21:04.410
But the added payments adds
to the drain, the burn rate,

0:21:04.410,0:21:05.450
out of the checking account.

0:21:05.450,0:21:05.980
- It does.

0:21:05.980,0:21:08.500
And that level of fear that's
there when you don't have it.

0:21:08.500,0:21:10.520
- Oh, yeah. It's a total oh, crap moment.

0:21:10.520,0:21:12.251
- Yes.
- Oh, crap.

0:21:12.251,0:21:14.680
You're just, what happened here?

0:21:14.680,0:21:17.400
- So, for people that did dip
into their emergency fund

0:21:17.400,0:21:19.100
during the pandemic for a job loss,

0:21:19.100,0:21:20.980
or whatever the case may be,

0:21:20.980,0:21:23.750
what's your advice to
people to fund that back?

0:21:23.750,0:21:25.804
What are the things that they need to do,

0:21:25.804,0:21:28.330
not only emotionally, to
get Gazelle intense again,

0:21:28.330,0:21:30.480
but also tactically, what can they do?

0:21:30.480,0:21:32.810
- Obviously, you need
to pay attention to it.

0:21:32.810,0:21:34.873
You've gotta be ready for the next thing,

0:21:34.873,0:21:36.360
and there will be a next thing.

0:21:36.360,0:21:37.970
It may not be a culture-wide thing.

0:21:37.970,0:21:39.540
It may be an individual
thing to your family.

0:21:39.540,0:21:40.690
But you've gotta be ready for the next thing.

0:21:40.690,0:21:43.220
We have to stop what
we're doing and do that.

0:21:43.220,0:21:44.840
I would just look at your income

0:21:44.840,0:21:45.770
and your budget, and say,

0:21:45.770,0:21:47.360
how fast can we put this back

0:21:47.360,0:21:51.700
if we don't stop our
401(k) and Baby Step 4?

0:21:51.700,0:21:53.460
And if it's gonna take a year,

0:21:53.460,0:21:55.200
you may want to stop at 401(k) again

0:21:55.200,0:21:58.130
and go back to Baby Step 3 and do it.

0:21:58.130,0:22:00.470
But if you can put it back,
and not mess with your 401(k),

0:22:00.470,0:22:02.470
in three or four months, then put it back.

0:22:02.470,0:22:04.340
And just keep doing it that way.

0:22:04.340,0:22:06.980
I don't care either way,
but address the issue.

0:22:06.980,0:22:09.823
Because the very fact that you used it,

0:22:12.200,0:22:13.033
it's just like the people

0:22:13.033,0:22:15.450
that didn't have an emergency fund.

0:22:15.450,0:22:17.800
This is confirmation
that this is a good idea.

0:22:17.800,0:22:18.920
- That's right.

0:22:18.920,0:22:20.770
Okay, so when you look at people's budgets,

0:22:20.770,0:22:22.990
what are the top few categories?

0:22:22.990,0:22:24.920
You're like, yeah, you can cut these out.

0:22:24.920,0:22:26.910
Just fund that and put
some extra cash away.

0:22:26.910,0:22:29.660
- I think you just go
back to beans and rice.

0:22:29.660,0:22:33.580
How bad do you wanna not stop your 401(k)?

0:22:33.580,0:22:35.180
Do you wanna cut some lifestyle out,

0:22:35.180,0:22:36.730
or do you want to temporarily
stop your 401(k)?

0:22:36.730,0:22:38.650
But you may have to do both

0:22:38.650,0:22:41.480
to get the emergency fund, depending on
how big a hit the thing took.

0:22:41.480,0:22:43.620
But that's your worst case scenario.

0:22:43.620,0:22:44.480
If it's me,

0:22:44.480,0:22:46.680
I'd probably back off on
the lifestyle a little bit

0:22:46.680,0:22:47.910
and keep the 401(k) going,

0:22:47.910,0:22:49.740
and let's fix this
thing in a couple months.

0:22:49.740,0:22:51.320
But you could do it either way.

0:22:51.320,0:22:52.160
- Yep, absolutely.

0:22:52.160,0:22:53.330
So good.

0:22:53.330,0:22:54.410
Good practical advice.

0:22:54.410,0:22:55.560
Some motivation to get back

0:22:55.560,0:22:58.340
Gazelle intense to fund
that back. And again,

0:22:58.340,0:22:59.173
the importance of it.

0:22:59.173,0:23:00.006
I know we've been saying this

0:23:00.006,0:23:02.393
during whole pandemic conversation,

0:23:03.230,0:23:05.410
that getting out of debt, and
having cash available,

0:23:05.410,0:23:07.650
and having a plan—it works.

0:23:07.650,0:23:08.587
It works during the good times,

0:23:08.587,0:23:09.746
and it works during the crisis.

0:23:09.746,0:23:12.070
So, knowing that you're in control.

0:23:12.070,0:23:15.091
- If you get the call, and you answered it,

0:23:15.091,0:23:16.280
and it's the wake-up call,

0:23:16.280,0:23:19.940
answer the call and say, never again.

0:23:19.940,0:23:21.500
I'm now awake.

0:23:21.500,0:23:22.810
I now realize about this.

0:23:22.810,0:23:24.140
Maybe I was kind of in a haze,

0:23:24.140,0:23:25.500
and I wasn't paying attention.

0:23:25.500,0:23:27.020
Kind of, I was doing Ramsey-ish,

0:23:27.020,0:23:28.560
or I hated Dave Ramsey, or whatever.

0:23:28.560,0:23:30.970
Dave Ramsey's a cuss
word at my house. Whatever.

0:23:30.970,0:23:32.660
I don't give a crap. Whatever the deal is.

0:23:32.660,0:23:34.430
But the phone rang.

0:23:34.430,0:23:36.130
Are you awake?

0:23:36.130,0:23:40.110
Never again. Don't let
yourself ever be there again.

0:23:40.110,0:23:42.390
- Yeah, keep that that urgency

0:23:42.390,0:23:43.900
with you outside this pandemic.

0:23:43.900,0:23:46.440
Keep it going. Let that be
your motivation for sure.

0:23:46.440,0:23:47.660
Thanks for coming on.

0:23:47.660,0:23:48.493
- Honored to be here.
(upbeat music)

0:23:48.493,0:23:49.440
- Chatting emergency funds.

0:23:49.440,0:23:50.948
I love it.

0:23:50.948,0:23:53.310
Thanks to Jason and Alison
for sharing their story.

0:23:53.310,0:23:54.610
And I hope you guys download

0:23:54.610,0:23:56.240
the Baby Step 3 goal tracker

0:23:56.240,0:23:59.040
to highlight your progress as
you build up your emergency fund.

0:23:59.040,0:24:00.050
I want you guys to share

0:24:00.050,0:24:02.050
two takeaways from this episode

0:24:02.050,0:24:03.600
in my official Facebook group.

0:24:03.600,0:24:05.520
And make sure to subscribe
to my YouTube channel

0:24:05.520,0:24:08.060
and check out
The Rachel Cruze Show podcast.

0:24:08.060,0:24:08.893
And, as always,

0:24:08.893,0:24:10.650
make sure to take control of your money

0:24:10.650,0:24:12.677
and create a life you love.