Do This EVERY Time You Get Paid (Paycheck Routine)

Rachel Cruze’s Paycheck Budgeting Routine

Rachel Cruze outlines a monthly budgeting routine for households, including those paid twice a month. The approach is to enter all income into a budget, cover essential expenses, and assign the remaining money to goals and discretionary spending. Priorities depend on the household’s stage in Ramsey’s “Baby Steps.”

Budgeting framework

Start with total monthly income, including both spouses’ paychecks, side-hustle earnings, and other income. Then cover the “four walls”: food, shelter, utilities, and transportation.

If paying off debt (Baby Step 2):

• Keep the previously saved $1,000 starter emergency fund.
• Budget minimum payments on every debt to avoid missed payments.
• List debts from smallest balance to largest and put extra money toward the smallest balance first, regardless of interest rate or minimum payment. This is the debt-snowball approach.
• After essentials and minimum payments, prioritize other needs before discretionary spending.

If debt-free and building savings (Baby Step 3): Put available money toward an emergency fund covering 3–6 months of expenses.

If renting and saving for a home (Baby Step 3B): Put available money toward a house down payment.

For retirement and later goals (Baby Steps 4–6):

• Aim to invest 15% of income for retirement, using a 401(k) or Roth IRA.
• Contributions can be made per paycheck, monthly, as a lump sum, or several times during the year; the key is to fund retirement consistently.
• Then consider children’s college savings through an ESA or 529, other planned expenses, and extra payments toward the home.

Her household’s routine (Baby Step 7): Cruze says her household prioritizes giving, savings and investing, bills, major upcoming expenses, and then smaller discretionary spending such as eating out, clothing, and fun money.

Key cautions and figures

• Cruze recommends starting a budget even when income or circumstances are not ideal, rather than waiting for a “perfect” time.
• She recommends keeping a miscellaneous budget category as a cushion for unplanned expenses, so they do not automatically require dipping into savings.
• No specific stocks, ETFs, bonds, commodities, crypto assets, or tickers are mentioned.
• No explicit “not financial advice” disclaimer is stated.

Sponsor mention

The video includes a promotion for Christian Healthcare Ministries (CHM). Cruze describes it as a health cost-sharing ministry, not health insurance, and says it has helped families meet nearly $10 billion in healthcare costs. This is a promotional claim in the video.

Presenter/source: Rachel Cruze, discussing Ramsey’s Baby Steps and budgeting approach.