How to Make Your Money Work for You

50/30/20 Rule Critique

Rachel Cruze critiques the popular 50/30/20 budgeting rule, highlighting its limitations in personal finance management. She argues that the rule's simplicity can lead to stagnation, as it doesn't account for individual financial situations or goals. Cruze emphasizes the importance of setting financial priorities and goals, which the 50/30/20 rule lacks, to effectively build wealth and achieve financial success 1.

If you're really wanting to win with money, you should constantly be working towards some kind of goal.

--- Rachel Cruze

Additionally, she points out the rule's failure to incorporate generosity, which she believes is a crucial aspect of financial planning. Cruze suggests that focusing too heavily on non-essential spending can hinder progress towards important financial goals 2.

   

Effective Budgeting

To improve financial management, Rachel Cruze advocates for zero-based budgeting, which aligns spending with one's current financial situation and goals. This method ensures that every dollar is accounted for, including savings and giving, and adapts as one's financial circumstances change 3.

Do the zero-based budget. Again, where you are financially is what's important. You have a say over your money.

--- Rachel Cruze

Cruze also recommends using budgeting tools like the EveryDollar app to facilitate this process, making it easier to track expenses and adjust budgets as needed. She believes that taking control of one's finances through specific budgeting strategies is key to achieving long-term financial success 1.