Rachel Cruze – Liberty University Convocation
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Rachel Cruze – Liberty University Convocation

December 3, 2019

>>RACHEL CRUZE: Well, good morning Liberty. I’m excited to be here you guys. Dad spoke last week and he spoke highly of
all of you so I was excited to be back with you. A lot of people when I speak, if you guys
weren’t familiar with Dave and you’ve experienced him last week, God bless you all. People always wonder gosh what was it like
growing up in a house where Dave Ramsey’s your dad? Like what was it like growing up as Dave Ramsey’s
daughter? And people think, I think sometimes that,
you know, we like had budget meetings all the time and had like mutual fund parties
or things like that. And thankfully that was not the case. But mom and dad were obviously intentional
with teaching us how to handle money. And not only just how to handle money but
God’s ways of handling money. And so, you know, it was things, pretty common-sense. Thankfully the Bible when it talks about money
it’s a very common-sense way which we’re gonna talk about this morning. But it’s things like if you don’t have the
money, don’t buy it. Debt was never an option for us. You know, you always budgeted what you made. You were giving constantly. I mean it was just, that’s how we grew up. And so, you can kinda say I lived in a financial
bubble, if you will, right? Because that’s not how America really functions
today with their money. And when I went to college, I went to the
University of Tennessee, go Vols. Yes, oh my gosh, speaking to my heart right
now, OK. So, went to the University of Tennessee and
I was at freshman orientation, it was like my very first day, and I met this girl, you
know, from I don’t know another state, I don’t even remember where she was from. But we got done with the orientation and she
said “hey Rachel, do you want to go out to lunch with me?” And I was like “yeah, that’d be great, let’s
go.” So, we walk across the street, go into the
parking lot, and get into her brand-new BMW. Very nice car, yeah you get in and like the
leather like makes you high, right, I mean it’s just like an overwhelmingly really nice
car. And I told her, I said “wow, you have a really
great car.” And she said “thanks, I just got it for high
school graduation. It’s my first car loan and my mom even co-signed
the loan for me.” And I’m sitting in the passenger seat just
thinking “ugh, the average car payment in North America today is $482 but if you put
that in a good gross fund mutual fund from age 18 to age 65, you would have $5.2 million!” And of course, being 18 years old she like
looks at me she was like “what is a mutual fund?” Like you, crazy girl, that I’ve asked to go
to lunch with me, what? But that was the moment I feel like where
my little Ramsey bubble popped. And I always say it was kind of my lightbulb
moment where God really revealed to me as I’m sitting in this car, I’m looking at this
girl and, you guys, she’s not dumb, she’s not stupid, she’s a bright, great, young girl. But she just really truly doesn’t know mathematically
what car payments are costing her in the long run. And so, I look at her I’m like just gosh,
there was just such a lack of knowledge there. You know, she just truly didn’t know another
way to handle money. And so, I’m like that’s really my, my point
there in Knoxville, Tennessee where God said “Rachel, your generation needs this. They don’t know, they don’t know my ways of
handling money.” And yes, was I perfect growing up with money? Absolutely not. If you guys knew some of the stuff I did,
you know with just spending money like crazy I was such, such a spender. Learning to be responsible, be mature in this
area of life, but I was thankful because I was taught very young how this works. And so that’s what brings me here with you
guys. I’ve been traveling for about, I guess the
past three years fulltime. All over the place and so colleges, I will
be honest, are my favorite places to speak. So, don’t tell anyone else out there. But seriously, because you guys are at such
a pivotal point in your life when it comes to this subject. It’s crucial that you grasp this. So, we’re gonna walk through for you note-takers
just four different areas of money, of God’s ways of handling money that I really think
are gonna help you. So, let’s start with the first one. The first point of money that is so important
for you guys to know is how to do a budget. A budget. I know. We’re starting off with the low point OK,
’cause budgets are not sexy, they’re not exciting, they’re not fun. But — it’s true, they’re not exciting,
we’ll be honest. But, but they are crucial, crucial, crucial,
crucial when it comes to handling money. Because here’s the deal, when you’re doing
a budget, you are telling your money what to do. OK. And when you’re telling something to do something,
that is called being proactive. You’re happening to something. And when you guys graduate and you’re going
off in the real world, you’re going into the marketplace and you are, you’re getting a
job and you’re working, you’re gonna realize people that move up in life and that really
become successful, they happen to things. They don’t just let things happen to them
and sit there and just pray an opportunity comes, no. They turn and they happen to their lives. So, with your money, this is crucial, you
have to happen to your money. And God is very clear with budgets. There’s multiple Scriptures like know the
state of your fox and your herds. The one I love in Luke is — is it up? Slide, oh, well go back. Oh, it went, OK, OK, here, here. OK. So, in Luke, it says “for which one of you,
who wants to build a tower does not first sit down and calculate the cost to see if
he has enough to complete it?” Then the next verse talks about if he gets
halfway up and cannot, can’t finish all around him will begin to mock him. So, you have to know what you have before
you start spending your money. OK, so John Maxwell, I love his quotes. Love, love, love his quotes. That’s the next slide, I’m getting confused
so we’re gonna just keep going. Yes, perfect, OK, so a budget is simply telling
your money where to go instead of wondering where it went. Ah, very nice, right? Because how many of you guys have gotten a
paycheck in and you look up a week later and it’s just gone, right? I mean, you just have no clue where it’s gone,
right? Yes, that has happened to me plenty of times. So again, doing a budget is going to reverse
that. So quickly, again not exciting but you have
to, you have to know this. A budget — the best way to do a budget is
this, it’s what we call a zero-base budget. Very simple, OK, you’re gonna take out a sheet
of paper, your iPad, laptop, whatever it is. And you’re going to write at the top how much
money you’re gonna have coming in in the month. So, whether it’s through scholarships, your
parents give you money, if you have a job, whatever it is, you have money coming in. So, you need to figure out how much money
you have coming in in a month. And you’re gonna write that at the very top
of your paper. OK, and then you’re gonna list out all of
your expenses. Everything that you guys spend money on during
the month. So, everything from if you pay for your cell
phone bill, if you pay for — I guess you guys are mostly are in dorms — if there’s
rent, gas for your car, insurance for your car, whatever it is that you spend money on,
you list it out. Everything, clothes, food, everything. And the goal here is to take your income minus
your expenses should equal zero. So, every dollar has a name. So very simple, let’s say you make, for let’s
make up, $200 a month, OK. Just say you have $200 a month and you are
in charge of food, your clothes, your cell phone, and your gas. And let’s say that each of those magically
works out to be about $50 each, so you spend $50 each, on each of those items. So, 50 times four is — oh you all are so
smart, yes, 200. So, you have 200 coming in, you’re spending
200 on paper so that equals zero so every dollar has a name. Now with this when you’re starting out it’s
what November? We’re in November, yes, November. So, November — it’s, it’s towards beginning
so you could technically do a budget for November even though we’re a few days over. So, do it in November, now November if you
do it now it’s gonna be nuts. Your budget is gonna be crazy because you’re
like I don’t even know what I spend on food, I don’t even know what’s going on, I have
no clue where my money’s going, it’s gonna be hard. So, through the month of November you’re gonna
be seeing OK, so I spend more than $10 on food every month, so you know, I had that
budgeted but I’ll have to up that category and then lower other categories in the budget. So, November is gonna be kind of rough so
stick with it. So, November’s gonna be rough. December, it’s gonna be a little bit better. You’re gonna say “OK, I’m getting it, I’m
realizing now kind of what my average — you know, what I pay for gas, so on, so forth.” January it’s gonna be like “OK, this is good,
I’m, I’m, I’m catching onto this.” By February, after three months, after 90
days, your budget should start working. OK, so stick with it. It can get frustrating, it doesn’t — it’s
not fun all the time, but it’s the best way to gain control because people who live on
a budget, those are the ones who win, you guys. They’re — people that live on budgets save
more money, they pay off more debt in a quicker period of time, versus you know, having their
money just happen to them their entire life and they wake up at 65 years old broke and
think “well I hope the government who’s well known for its ability to handle money’s gonna
take care of me.” Right, don’t be those people. So, by being proactive, doing the budget,
that’s gonna help so much. And you can even go a step further with the
budget and do what I do personally, which I love, ’cause I am a natural spender, is
to do what’s called the envelope system. Very old school, but it’s great. And this is what you do, you take out envelopes
and take categories in your budget that you tend to overspend on. So, for a lot of us it’s food, right? For girls, clothes, right? We like to go shopping. So, there’s places that you tend to overspend
on, so what you’re going to do is you’re going to take the amount of money that you have
allotted. So, let’s just say for food, I don’t know
how much it is, I just, I just like Uncle Benjamin so I have 100 OK. So, say you have $100 for food budgeted. You’re going to cash that out. And you are going to put it in your food envelope. And when you go out to eat with your friends,
you take your food envelope. When you go to the grocery store, if you buy
groceries for the week, you bring your food envelope. Don’t go to the mall with your food envelope. The gas station does not need your food envelope. This is for food. Food envelope is for food. When you pay for food you take it out of the
food envelope. OK. And then, here’s the advantage, here’s the
great thing about doing the envelope system. Here’s the great thing is this, number one,
statistically you spend less when you spend with cash. MIT published a study and they did an MRI
on the brain and they showed when someone pays with cash versus a credit card, versus
plastic, their brain registers pain. The brain cells on their brain literally light
up. Why? Because cash is emotional. I mean, you, when you have cash. You feel cash, right? I mean, gentleman if you’re on holiday, you
know Christmas break coming up and you take that lovely lady, possibly your future spouse,
you know out to dinner for a sweet Christmas outing and you go to that nice, nice restaurant,
and it’s nice and you get the bill and you’re like “oh wow. You know, it’s — this is a nice restaurant. She better understands that, right?” This is nice. And you take out one of these, and it’s Uncle
Benjamin, right? I mean we love Uncle Benjamin, part of the
family. And when that bill comes, that little black
tray, right, with the bill. AKA Uncle Benjamin’s coffin. You put Uncle Benjamin in there and he leaves,
and he’s never coming back. And it’s so sad.>>MALE AUDIENCE MEMBER: No!>>CRUZE: So, so the advantage of spending
with cash is you spend less. You spend less. Now, for some people. Some people are naturally either a saver or
a spender. Naturally, that’s how you’re wired. Usually you fall in one or those two places. I’m naturally a spender. I am great at spending money. Growing up, I was horrible at saving money. I just naturally am not good at it. I have had to work on that, I love spending
money. So, the great thing with the envelope system
what I think is OK, well I have an envelope, I have an envelope for clothes, ladies, and
in my budget every month I cash out money and so I have a whole envelope of money to
go spend on clothes. And it’s exciting. So, for me the envelope system is like permission
to spend. You have the ability to spend money. So, this is a great tool, pretty practical
for you guys to use just to keep your budget in line. So, the first big thing, remember don’t build
a tower without first counting the cost lest you get halfway up and are unable to finish
and all around you begin to mock you. So, don’t start your month without knowing
what you have. So, doing a budget is number one. Now the second big money aspect in life that’s
extremely important for us, especially I think our generation to grasp is this idea of debt. And debt — this is a, this is a big, a big
issue. And what’s interesting, when you look in Scripture,
when you look in the Bible, there is not one place where debt is applauded or where debt
is a good thing. It’s always in a very negative fashion. Now debt is not a sin, it’s not a salvation
issue, OK? I’m like “oh you have a credit card, well
you’re just gonna be going to Hell unless you repent this morning,” right? No, that is not the case at all. It is not a sin, it is not a salvation issue. But it’s just negative. Every time it’s brought up in Scripture, it’s
negative. And one of the big Scriptures that we, we
always go back to which is so true and so visual and great for us is in Proverbs where
it says “the borrower is slave to the lender.” So, when you borrow money, you are a slave,
financially speaking, to whoever lended that to you. Because when your income comes in and you
have debt, you don’t really have a choice what to do with that income. You have to pay it out. You have to pay the credit card, you have
to pay your car loan, you don’t have an option. There’s not freedom to take that money and
decide well I want to give it or I want to save it, I want to invest it. No, someone else is already telling you what
to do because someone else owns your paycheck. And so being able to be free from that is
so important and, and for us, I think as a generation, we are technically the most indebted
generation in history. And I think a lot of it is because we just
truly don’t have the patience to save up and pay for things. Because everything that we’ve grown up with
is so instant. Gosh I mean, you could like send a text message,
buy movie tickets, make dinner reservations all with sitting at the stoplight, right,
in your car. I mean it’s crazy how fast we can do things. And that really has integrated into our ability
of — when we’re buying stuff. You know, we see something we want and we’re
like “well I don’t have the money but I still want it, it’s OK, it’s not that big of a deal,
I’ll just charge it on the credit card.” Like it’s crazy where we’ve gone with this. So, for us to think about life without debt,
really requires us to have a complete paradigm shift. Because a lot of us can’t imagine living life
without debt. So, if you follow this one basic rule, this
one basic law if you will, then this is really gonna help you, are you ready for this? It’s a little confusing so stick with me. Here it is. If you don’t have the money, don’t buy it. Pretty simple, huh? Now our friends over at Saturday Night Live
have painted this really, really well for us.>>SEATED MAN IN VIDEO: We’ve even taken out
loans to help make payments.>>STANDING MAN IN VIDEO: Well you’re not
the only ones. Did you know millions of Americans live with
debt they cannot control? That’s why I developed this unique new program
for managing your debt. It’s called don’t buy stuff you cannot afford.>>WOMAN IN VIDEO: Wow, let me see that. If you don’t have any money, you should not
buy anything. Hmm, sounds interesting.>>SEATED MAN IN VIDEO: Sounds confusing.>>WOMAN IN VIDEO: I don’t know honey, this
makes a lot of sense. There’s a whole section here on how to buy
expensive things using money you save.>>SEATED MAN IN VIDEO: Give me that. And where would you get this saved money?>>STANDING MAN IN VIDEO: I tell you where
and how in chapter three.>>WOMAN IN VIDEO: OK, well what if I want
something but I don’t have any money?>>STANDING MAN IN VIDEO: You don’t buy it.>>SEATED MAN IN VIDEO: Well let’s say I don’t
have enough money to buy something, should I buy it anyway?>>STANDING MAN IN VIDEO: No.>>SEATED MAN IN VIDEO: Now I’m really confused.>>STANDING MAN IN VIDEO: It’s a little confusing
at first.>>WOMAN IN VIDEO: Well what if you have the
money, can you buy something?>>STANDING MAN IN VIDEO: Yes.>>WOMAN IN VIDEO: Now take the money away,
same story?>>STANDING MAN IN VIDEO: Nope. You shouldn’t buy stuff when you don’t have
the money.>>SEATED MAN IN VIDEO: I think I got it,
I buy something I want and then hope that I can pay for it, right?>>STANDING MAN IN VIDEO: No, you make sure
you have money, then you buy it.>>SEATED MAN IN VIDEO: Oh, then you buy it. But shouldn’t you buy it before you have the
money?>>STANDING MAN IN VIDEO: No.>>WOMAN IN VIDEO: Why not?>>STANDING MAN IN VIDEO: It’s in the book,
it’s only one page long. The advice is priceless and the book is free.>>WOMAN IN VIDEO: Well, I like the sound
of that.>>SEATED MAN IN VIDEO: Yeah, we can put it
on our credit card.>>VOICE (VIDEO): So, get out of debt now. Write for your free copy of don’t buy stuff
you cannot afford. And if you order now, you also receive seriously,
if you don’t have the money, don’t buy it. Along with a 12-month subscription to stop
buying stuff magazine. So, order today.>>CRUZE: So, OK so when it comes to borrowing
money for you guys, there’s three main areas that we’ll talk about really, really quickly. We’ll fly through them. The first area of buying stuff is via the
credit card, OK. So not getting into this because we don’t
have tons of time. Basically, just don’t have one. Just completely ignore credit cards for your
entire life. Literally, I have never had a credit card. I’ve never owned a credit card. I — when I travel, I have four — thank
you, I don’t get many applauses from college students at that so thank you — but seriously,
it is possible to live life without a credit card. I have a debit card that I use, yes — you
all are so funny — that’s attached to my bank account and that’s what it is, that’s
all I use. So, I don’t have a credit card. There’s no reason to borrow the bank’s or
MasterCard’s money. I don’t need, I don’t need that. I have my own money, thank you very much,
so I will just spend my own money. So, don’t have a credit card, avoid credit
cards. Number two is the car loan, getting a car
loan. OK if there was a dumbest type of debt, if
you will — if that’s even a word — it would be mathematically a car loan. Because you’re borrowing on something that’s
going down in value and then you’re paying interest, major interest, on top of that. So, it just makes no sense mathematically. It really doesn’t, so save up and pay for
your cars, OK? Save up and pay for cars. And then the big looming one which a lot of
you are probably wondering about is student loans. Student loans are a big deal today. So, here’s the deal you guys. Your number one goal is to stay in school. You are a college student, be a college student. But I want you to think a little differently
with this. I want you to think “OK, what if student loans
weren’t an option?” So, think like applying for more and more
scholarships, getting a job, shocking I know, because I would rather — instead of you
saying “well I just can’t afford the tuition, I’m just gonna take out a student loan for
those four years, and then I’ll just pay it back when I can.” Instead of having that mentality, and graduating
with this much student loan debt, have the mentality of I’m gonna do anything I can just
to pay down or to pay for next semester’s tuition. As much as I can. So, working, getting a job, applying for those
scholarships, applying for grants, doing what you can to make some money to go to next semester’s
tuition. So instead of graduating with this much student
loan debt you could graduate with this much student loan debt. By just changing your mindset, saying “I’m
gonna do what I can to pay it down.” Or pay for next semester. ‘Cause I promise you guys, when you do that
and you, and you graduate and you’re working and you’re 25 years old, the 25-year-old version
of you is going to love the 19-year-old version of you who did that. Because if you can, if you can graduate with
as much less, with as much small student loan debt as possible, that is gonna help you out
so, so much I promise you. But again, you’re a student so staying in
school is your priority but doing whatever you can to give as much cash to next semester
as possible. Now you may be thinking “well Rachel I have
student loan debt, I have credit cards, I took out a car loan, well what do I do? What do I do?” Well, once you graduate, once you graduate
and you’re working fulltime, then what you’re gonna do is what we call the debt snowball. And you’re gonna start paying down your debt. So, simply, what you do is you list out — you’re
gonna list out all of your debts, smallest to largest, regardless of the interest rate. And you’re goanna pay minimum payments on
everything and you’re gonna do whatever you can to attack that smallest debt. So even if it’s a $200 credit card bill, cut
up that credit card, pay off that bill. And then all the payments you were paying
on that second smallest — on that smallest debt, roll it over to the second smallest
debt. Pay that off, once that’s paid off, you take
the payments you were paying on the first and second, roll it over to the third debt
and pay that off. So, it’s just like a big snowball, your money
just starts happening. And it starts rolling and it gets bigger and
bigger and bigger. And what I love in this too is in Proverbs,
God talks about this. In Proverbs He says, when you have some surety,
my son, do this. Do this, “give no sleep to your eyes, no slumber
to your eyelids. Deliver yourself like a gazelle from the hand
of the hunter, or a bird from the hand of the fowler.” The first time I read that I was like “oh,
what a wonderful animal picture God,” birds and gazelles, right. Like what, what? Birds and gazelles. But when you think about it, I mean think
about the Discovery Channel. Right, and you see the gazelles and they’re
gazelling around. Right, through the fields. And the Discovery Channel’s not there unless
Mr. Cheetah, the hunter, is there, right? Because this is where the action’s gonna start
happening. And you watch this play out, don’t you? Where the cheetah comes out and that gazelle
sees it and it stands up and it freaks out and it’s like “it’s a cheetah, go!” And this whole herd of gazelles goes crazy,
and they’re running and they’re darting and they’re going nuts. Because in that moment, that gazelle, it’s
life or death for that gazelle. Life or death. Or they’re gonna be lunch or they’re gonna
survive. And that’s what God says “you have to be like
a gazelle from the hands of the hunter.” You have to go crazy with paying off your
debt. And you’re gonna be weird, your friends, your
broke friends will probably make fun of you. But, this is the best way, because here’s
the key you guys. Your income is your largest wealth building
tool. But when your income comes in and it goes
straight back out to payments, it’s hard to give. It’s hard to build wealth, it’s hard to invest. Because you don’t have any money, so getting
out of debt is key. So being on a budget, getting out of debt,
quickly, the third is save. Save, save, save. You’re gonna save for three things. Number one, an emergency — oh, we’ll go
Proverbs, yeah why don’t we do that. “In the house of the wise, there are stores
of choice food and oil. A foolish man devours all he has.” And in that time it was a very agricultural
type culture, right, where they bartered a lot. So, wise people had storehouses of food and
oil, storehouses of money technically speaking. But a foolish man spends everything he has. And this is not a good fool, it’s not like
“what’s up fool, what’s up fool, you a fool,” yeah, no. Not a good fool. A biblical fool is not good, so saving money
is wise. Saving for an emergency fund. Number two, stuff you want. Save up for spring break, don’t put it on
a credit card. Save up for things you want. Save up and pay cash. And number three, which we can’t get into,
obviously, but investing. You’re saving up basically for retirement,
for later in life, which is important. Now, the fourth and final thing which is probably
the most important when it comes to money and I think you guys would agree, is this
idea of giving. Giving is key. And there is Scripture beyond Scripture in
the Bible, right? On giving and helping people. So, I want you guys, I want you to have a
heart and be givers, even now. Because your character is shaping right now
as we speak. I love what Rockefeller said, he said, “I
never would have been able to tithe the first million dollars I ever made if I did not tithe
my first salary, which was $1.50 a week.” So, no matter where you are, be giving. Your time, money, talents, whatever it is. ‘Cause your character, you guys, is shaping
right as we’re speaking. So, when you give some money later in life,
you have the heart who you are has already been shaped. You are a giver, ’cause that is, that is so,
so key. And you guys go to probably the greatest university,
let’s just be honest, in America, right? And Liberty has done this, they have given
you guys, given you guys the opportunity to go through our foundation’s course for free,
for free! The first 5,000 students that sign up get
it for free! So, go take advantage ’cause this was such
a high-level talk, I know it was so big and so overwhelming. But go and look in that, they mirrored exactly
what we’re talking about, going for free, or going to that course and doing that for
free. Now here’s our next steps, really quickly
before you leave. Here’s a breakdown of what you should be doing
as we speak. Number one, be doing a budget. Do that budget. Number two, save up your emergency fund, $500
in the bank. Number three, put as much cash as you can
toward next semester. Then once you graduate, get a job, start paying
down your debt. OK, I know it was so much, so, so much. But if you guys, if you go to rachelcruze.com
right now on your phones, rachelcruze.com and scroll down there’s a button for a newsletter. Click on that and I’ll have updates literally
every month that I’m sending you. Not crazy junk mail but that will send you
stuff. Again, this is a great place to go and get
resources and tools to really walk through and to understand how to be a good steward
of your money. OK, well we’ll wrap up really quick. I’ll pray and then you guys are dismissed. God, thank You so much for this opportunity
to speak to these students at Liberty. Thank You for giving us Your Word here that
we can use literally day by day and the instruction on all of our lives including money. Bless these students. I bless today God, let this be a wonderful
week for each of the students in here. In Jesus’ name, amen. Thank you, guys.

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