265. “We spend 179% of what we make. Are we screwed?”

]]>

Ramit Sethi of I Will Teach You To Be Rich talks to Melissa and Taryn, a married couple in their 40s living in Los Angeles with five children. They have a net worth of over $700K, nearly half a million invested, and a successful business, but their finances are on the edge. After Taryn took a $75K pay cut, they continued building a $200K pool, took on a $100K family loan, and now face fixed costs of 179% since Taryn was recently laid off from Netflix. Ramit helps them confront the brutal math behind their situation, the emotional reasons they keep avoiding it, and the radical changes they may need to make before they run out of money.

 

In this episode we uncover:

• Why Melissa and Taryn built a $200K pool after a major pay cut
• How Taryn’s Netflix layoff changed everything
• Why their fixed costs hit a shocking 179%
• The real cost of their $100K family loan
• Why “everything goes on a credit card” became normal
• How they ended up with $1.2M in debt
• Why selling the house may not solve the problem
• The hidden danger of renting another expensive home
• Why Melissa’s successful business still may not be enough
• How grief and loss shaped their relationship with travel and money
• Why Taryn feels like she just “makes the money”
• The emotional power dynamic behind their spending decisions
• Why small cuts like subscriptions won’t fix a structural problem
• Ramit’s warning that they may be setting themselves up to struggle again
• The uncomfortable reality of moving out of Los Angeles
• Why their marriage needs a mission, not just a budget
• How their kids are already affected by their money choices
• Ramit’s advice for making radical change before the clock runs out

Chapters:

(00:00:00) “I just want the debt gone”
(00:01:23) Meet Melissa and Taryn
(00:02:40) Taryn’s Netflix layoff
(00:04:18) Buying the house after a $75K pay cut
(00:05:39) The real cost of the pool
(00:07:48) Taking a $100K family loan
(00:10:50) Why the debt cycle keeps repeating
(00:15:25) Taryn’s role as the “money maker”
(00:18:03) Their income no longer matches their life
(00:20:03) Ramit reveals their 179% fixed costs
(00:21:20) Why selling the house isn’t enough
(00:22:51) The rent math gets even worse
(00:26:46) The clock is ticking
(00:31:25) Could they move to South Carolina?
(00:41:24) The power dynamic in their marriage
(00:57:16) Defining their Rich Life
(01:02:18) What happens after selling the house?
(01:15:28) Ramit confronts the decision they’re avoiding
(01:28:48) Talking to their kids about money
(01:36:58) Final thoughts and next steps

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Transcript:

Taryn [00:00:00:01 – 00:00:04:12]

Don’t want a big house. Don’t want a fancy car. I just want the deck on.

 

Ramit [00:00:04:14 – 00:00:12:00]

You took a $75,000 pay cut. You bought this house, but then you still decided to build a pool. Yeah. How much do the pool cost?

 

Melissa [00:00:12:02 – 00:00:13:21]

Like I got 20,000.

 

Taryn [00:00:13:23 – 00:00:15:03]

That was just the pool.

 

Ramit [00:00:15:05 – 00:00:17:13]

Where does the money come from? For all of these things?

 

Melissa [00:00:17:13 – 00:00:18:21]

Everything goes on a credit card.

 

Ramit [00:00:18:22 – 00:00:24:06]

Did you run math? Wow. Got extremely silent in here. What is this number?

 

Melissa [00:00:24:06 – 00:00:25:20]

179%, which.

 

Ramit [00:00:25:20 – 00:00:28:08]

I believe may be the highest fixed cost number I’ve ever seen.

 

Melissa [00:00:28:11 – 00:00:29:05]

Oh, no.

 

Ramit [00:00:29:08 – 00:00:30:22]

You are drowning.

 

Melissa [00:00:30:24 – 00:00:35:04]

Yeah. I think in my head, if we don’t buy a house again, we won’t get into that situation.

 

Ramit [00:00:35:06 – 00:00:56:21]

But you will. It is a structural problem that requires radical change. I just feel like we failed. The question that should consume you is, how did we get here? And what’s going to stop us from getting right back in here? And I’m not hearing much of that. It is just a matter of time until you run out. The clock is ticking.

 

Ramit [00:00:56:23 – 00:01:23:14]

What happens when you build your entire life around an income that suddenly disappears? Today I’m speaking with Melissa and Taryn. They’re in their 40s. They live in Los Angeles with their five children. They have a net worth of over $700,000 and almost half $1 million invested. But today, their fixed costs are at 179%. That means they are spending more than they make every single month.

 

Ramit [00:01:23:16 – 00:01:54:08]

Let’s take a deeper look at the numbers in their conscious Spending plan, or KSP. And if you want my help to take control of your money, you can join my Money coaching program at Outcomes Money Coaching assets $1.4 million. Investments 495,000. Savings 50,000. Debt 1.2 million for a total net worth of 761,000. Their income wow is $11,900 per month.

 

Ramit [00:01:54:10 – 00:02:17:10]

That income is wildly out of pace with the rest of their major expenses. You know, at first when you meet this couple, you think it’s about a layoff and an unaffordable house and a $200,000 pool. But about halfway through our conversation, Melissa and Taryn share something I did not know coming in eight years ago. They lost a child.

 

Ramit [00:02:17:12 – 00:02:40:15]

And I want to mention that now because this conversation becomes quite serious. It touches on grief and loss of a child, and that may be difficult for some viewers to hear. When they told me their spending started to make a lot more sense, it helped me understand there was a lot more going on here besides eating out and credit cards and a few purchases they couldn’t afford.

 

Ramit [00:02:40:17 – 00:02:52:00]

So now let’s meet Melissa and Tara. Now, I understand that you recently experienced a major change in your finances. Yes. Can you walk me through what happened?

 

Taryn [00:02:52:06 – 00:03:20:11]

Yeah, I was, laid off from my job and so obviously a huge hit financially, but also emotionally. Netflix is an amazing company to work for. And so just just gutted to not be there anymore. But unfortunately, reorg happen. Things happen. But that definitely took a hit. I think we’ve always relied heavily on my, steady income, for the past 20 plus years.

 

Taryn [00:03:20:13 – 00:03:26:01]

Not not the whole 20 plus years, but I was being paid very well, so, definitely took a huge hit.

 

Ramit [00:03:26:06 – 00:03:27:09]

How much were you making.

 

Taryn [00:03:27:11 – 00:03:33:04]

When I started out? Well, towards the end, when I say I was making. Well, it’s probably a 350,000. Wow.

 

Ramit [00:03:33:06 – 00:03:33:22]

That’s a lot.

 

Taryn [00:03:34:02 – 00:03:51:00]

That’s the peak. I didn’t start at that, but I worked my way up to that over several years. Then there was, layoffs. That happened, about three years ago. I kind of knew things might be happening and my job may be impacted. So I started looking for other roles within the company. And fortunately for me, I was able to find another role.

 

Taryn [00:03:51:00 – 00:04:05:22]

However, it was a very different role. And so I took a $75,000 decrease in salary because I was no longer managing a team, that sort of thing. Still being paid very well. My salary was then 275. The last two three years have been to 75.

 

Ramit [00:04:05:24 – 00:04:17:05]

Can I ask a question? When you decided to switch roles internally and you took that $75,000 pay cut, did you adjust your household spending?

 

Taryn [00:04:17:07 – 00:04:24:19]

Probably not. I mean, I know well, I mean, I feel like when we bought the house, we did because we knew buying the house was like.

 

Melissa [00:04:24:20 – 00:04:25:23]

Okay, wait, no time out.

 

Taryn [00:04:25:23 – 00:04:26:23]

Okay?

 

Melissa [00:04:27:00 – 00:04:44:13]

We were renting at the time and we’re like, we’re in a weird spot with our where we, we’re renting because there was issues with the building. I had to move out all the stuff. So we were like, what do we do? Do we buy a house and build a pool so I can teach and build my business?

 

Ramit [00:04:44:19 – 00:04:45:20]

Your business being.

 

Melissa [00:04:45:24 – 00:05:01:23]

I teach survival some lessons to infants and children. Okay. So we’re like, let’s get a house and build a pool that I can teach because you couldn’t find a house with a pool. And that way I can bring in more money, because I can make really good money. And so that was our next plan of action when we bought the house.

 

Melissa [00:05:01:23 – 00:05:24:04]

It was based on her original salary before the reorg, and she took the decrease. So we went into it like, cool, we can pay, this mortgage will be good. And then the reorg happened. The decrease in her salary happened. And that’s when it started hitting us. Like when we got into the house, how much everything was really going to cost.

 

Ramit [00:05:24:06 – 00:05:28:05]

Had you bought the house before the reorg happened or after?

 

Taryn [00:05:28:05 – 00:05:29:08]

Didn’t we sign off?

 

Melissa [00:05:29:08 – 00:05:42:17]

We signed the papers the day before the Monday confirming her salary, and Thursday she got laid off when it closed. Yeah. So the timing was like, okay, make this all happen because we’re supposed like throw the pool on.

 

Taryn [00:05:42:19 – 00:05:47:14]

And do were like, let’s invest in her career. Like since mine is like, we don’t really kind of know what’s happening and get paid less.

 

Ramit [00:05:47:14 – 00:05:57:01]

But you took a $75,000 pay cut, you bought this house and now you’re moving into it based on the old salary. But then you still decided to build the pool.

 

Melissa [00:05:57:03 – 00:05:57:12]

Yeah.

 

Ramit [00:05:57:18 – 00:05:58:24]

How much did the pool cost?

 

Melissa [00:05:59:01 – 00:06:00:20]

Like 120,000.

 

Taryn [00:06:00:22 – 00:06:02:05]

That was just the pool.

 

Ramit [00:06:02:07 – 00:06:03:10]

What else is there?

 

Melissa [00:06:03:12 – 00:06:07:04]

Oh, concrete fencing that had to go around to build the pool.

 

Ramit [00:06:07:05 – 00:06:07:15]

How much.

 

Taryn [00:06:07:18 – 00:06:08:22]

Total panel?

 

Melissa [00:06:08:24 – 00:06:11:18]

Oh, we put in like 100. Another hundred.

 

Ramit [00:06:11:22 – 00:06:15:13]

And so 220. Should we just call it 250.

 

Taryn [00:06:15:13 – 00:06:16:03]

Yeah.

 

Ramit [00:06:16:05 – 00:06:18:01]

And this is after a $75,000 package.

 

Melissa [00:06:18:03 – 00:06:19:01]

Yeah. Yes.

 

Ramit [00:06:19:03 – 00:06:25:21]

Okay. When did it start hitting you that you were financially in over your heads?

 

Taryn [00:06:25:21 – 00:06:34:05]

I think immediately like we know. So we knew what the pool would cost to build. And I think we just weren’t thinking about all the other things that were going to be added on after that, like.

 

Melissa [00:06:34:05 – 00:06:48:16]

But then I also knew with my business that I’m like, oh, I can teach this many kids and make this much money. And she could be at home easily like and be home because I, I did like I was a stay at home mom. I can go out and teach. I can do it when the kids are napping.

 

Melissa [00:06:48:16 – 00:06:58:20]

Whatever. I can make it. Like in early in the mornings when she’s home, before she goes to work, in the evenings when she’s home from work. And so for that, I was like, I can make the money. Like, we’ll just pay this off.

 

Ramit [00:06:58:21 – 00:06:59:20]

Did it work?

 

Melissa [00:06:59:22 – 00:07:08:05]

It works. I built my business and it’s great and it’s booming. But then all these other things started happening with the house. It was like new AC.

 

Taryn [00:07:08:07 – 00:07:09:10]

Like termites.

 

Melissa [00:07:09:10 – 00:07:12:23]

Termites, lily, just little like all the little they.

 

Ramit [00:07:12:24 – 00:07:15:19]

Don’t skip over I love this. What else?

 

Taryn [00:07:15:21 – 00:07:27:08]

Our front gate. You know, one of those electric gates? You know, we put. But I don’t know, like 1500 bucks into that just recently because it broke, we had a leak. So we had to have mold remediation. We had to fix a leak. God. What else?

 

Melissa [00:07:27:09 – 00:07:31:14]

Yeah. Oh, the hedges. Yeah. These beautiful hedges that cost $60,000 a year to maintain.

 

Taryn [00:07:31:14 – 00:07:34:23]

There’s, like, a big hill in the back of our yard that has to be, you know, for fire purposes or the like.

 

Ramit [00:07:34:23 – 00:07:37:12]

Where does the money come from for all of these things?

 

Taryn [00:07:37:14 – 00:07:38:20]

Credit cards.

 

Ramit [00:07:38:22 – 00:07:39:07]

Really?

 

Taryn [00:07:39:12 – 00:07:40:20]

Yeah, a lot of it.

 

Ramit [00:07:40:22 – 00:07:48:07]

You mentioned that immediately after getting the house, you realize you were in over your financial head. And so what happened next?

 

Taryn [00:07:48:09 – 00:08:00:22]

We ended up taking a personal loan, from some family. Okay. To pay for all these extra things. The concrete, the fencing, the electrical panel, all the things that help that go to building the pool so that she could then start her business.

 

Ramit [00:08:00:22 – 00:08:03:00]

How much do they loan you?

 

Melissa [00:08:03:02 – 00:08:15:23]

It was 100,000. Okay. Yeah. And the deal was they wanted it paid off in five years. So our payments were like 2300 a month. So that on top of the mortgage, on top of everything else, it was just like.

 

Taryn [00:08:16:00 – 00:08:16:15]

So a lot.

 

Ramit [00:08:16:16 – 00:08:21:21]

Did you run math? Wow. Got extremely silent in here.

 

Taryn [00:08:21:23 – 00:08:23:00]

I don’t like that. I mean, what.

 

Melissa [00:08:23:01 – 00:08:25:05]

I mean, no, I mean, at what point.

 

Ramit [00:08:25:05 – 00:08:28:04]

Did you, did you run like 2300 plus the price of.

 

Melissa [00:08:28:04 – 00:08:29:00]

The. Oh my gosh.

 

Taryn [00:08:29:02 – 00:08:30:13]

Yeah. We put it in our, our.

 

Melissa [00:08:30:17 – 00:08:41:15]

Our budget okay. Yeah. And I knew I have to bring in this much okay. Just to make ends meet. Like my business has to bring in this much per month, which is 4000 a month to help us just meet our bare minimum.

 

Taryn [00:08:41:20 – 00:08:42:22]

But we’re not saving.

 

Melissa [00:08:42:22 – 00:08:43:23]

We’re not. We’re not saving.

 

Taryn [00:08:43:23 – 00:08:46:02]

There’s no saying there’s no emergency fund.

 

Ramit [00:08:46:02 – 00:08:52:16]

So was it feasible? Like you could do it feasibly without working like ten days a week?

 

Melissa [00:08:52:18 – 00:09:01:19]

Oh for sure. My like I teach March to November because that’s like the warmer non rainy kind of you know we have great weather here so I’m fortunate do that.

 

Ramit [00:09:01:19 – 00:09:11:22]

That’s what you did. You were working. You were also working with that 75 K pay cut but still making a very high salary. And how are things going at that point?

 

Taryn [00:09:12:02 – 00:09:27:02]

Okay. But we still we still know we have debt. Like I just hate that the weight of I mean who likes it honestly. But like I just know that I feel like we weren’t contributing to to any chipping away at any of the debt. Like we hate having to ask for money. Like, that was like the very last thing we want to do.

 

Taryn [00:09:27:02 – 00:09:39:21]

And like, I want to I want to get them paid off as soon as possible. I don’t want that. I don’t want to be indebted, in that way. So I think it’s always frustrating and and we can’t we have been able to like, travel, like we love to travel. We love to go out and have nice meals and like, we have been able to do.

 

Ramit [00:09:39:21 – 00:09:46:08]

Any of that inside your household. When you would talk about money at that point, what were the conversations like?

 

Melissa [00:09:46:13 – 00:09:53:22]

She was more stressed and I was like, listen, everyone has debt, so it’s not true. I grew up thinking it was true.

 

Ramit [00:09:54:03 – 00:09:55:07]

Okay.

 

Taryn [00:09:55:09 – 00:09:55:23]

I did not.

 

Melissa [00:09:55:23 – 00:10:12:18]

I think more people have debt than you really realize and no one talks about it. So I think it’s like a very shameful thing and I’m just very open. So I’m like, this is just what it is, you know? And I think her, she was like, but I want to pay it off. Like, I’m stressed and I don’t.

 

Melissa [00:10:12:18 – 00:10:25:03]

And I’m like, I get that, but we just built a pool. Like, that’s not going to get paid off in like a year. And we have other loans that we have to pay off first. So it was like stress. And then it was like it would dissipate and the competition would end.

 

Ramit [00:10:25:05 – 00:10:26:16]

How many kids and how old are they?

 

Melissa [00:10:26:22 – 00:10:31:10]

Five kids. 12 year old, almost six year old. Four year old and 20 year old.

 

Ramit [00:10:31:14 – 00:10:43:00]

Wow. Cool. Okay. That’s amazing. Were they experiencing any aspects of what you were going through with the financial stress? Did they pick up on it?

 

Melissa [00:10:43:05 – 00:10:44:21]

No. Probably not, I don’t think so.

 

Taryn [00:10:44:22 – 00:10:52:17]

Maybe our oldest occasionally, just because maybe we weren’t going out as much, but it’s not something like she’s ever said or expressed.

 

Ramit [00:10:52:19 – 00:10:54:06]

How long have you two been together?

 

Taryn [00:10:54:08 – 00:11:00:00]

We met in high school, but we weren’t, like, together. Right away. So we’ve known each other for.

 

Melissa [00:11:00:02 – 00:11:00:17]

Summer 30.

 

Taryn [00:11:00:18 – 00:11:01:16]

1996.

 

Ramit [00:11:01:16 – 00:11:03:04]

Did you all grew up in the area?

 

Taryn [00:11:03:06 – 00:11:13:14]

No. Military brat. So she we went to high school together for two years, and then she moved her senior year, to California. Okay. And so then once I graduated college, I used her to have a place to live up.

 

Melissa [00:11:13:14 – 00:11:17:17]

Yeah. Got it. So she used me to get out here to get entertainment.

 

Ramit [00:11:17:19 – 00:11:18:21]

Okay.

 

Melissa [00:11:18:23 – 00:11:20:16]

But married. Married at 18 years.

 

Ramit [00:11:20:16 – 00:11:45:20]

Married 18 years. Okay. Got it. Okay, cool. I read your application, and there’s so many things that stood out to me. One of them. I’d like to read it back to you, Melissa. You wrote in the application. We are in major debt over $300,000 worth. In the past, when we’ve gotten out of debt, it feels great. But then we slowly get back into it.

 

Ramit [00:11:45:22 – 00:11:50:12]

Can you tell me about this cycle of debt that you get in and out of?

 

Melissa [00:11:50:14 – 00:12:09:14]

I don’t even know how it happened. I think even when she was making the most time, we were doing really well. It would like we would still have some credit card debt because like, we would like to travel or we’d like to like go out to eat. I was a big shopper and I was very tied to like emotionally shopping, like how some people emotionally eat, I emotionally shop.

 

Melissa [00:12:09:14 – 00:12:13:04]

So if I’m stressed out, I want to go and just spend more.

 

Ramit [00:12:13:04 – 00:12:16:03]

How many years have you been in and out of debt?

 

Melissa [00:12:16:05 – 00:12:21:09]

How long am I? 46 says since I was 18, I got my first credit card.

 

Ramit [00:12:21:09 – 00:12:22:10]

Yeah, okay.

 

Taryn [00:12:22:12 – 00:12:24:19]

I feel like ever since we’ve been together, it’s. There’s been.

 

Melissa [00:12:24:21 – 00:12:26:01]

She never came in with debt.

 

Taryn [00:12:26:01 – 00:12:44:20]

I never came in with that. So I had it’s always kind of been this, like, lingering thing that I just feel like won’t go away. It stresses me out. I just want to stop. Oh, let’s go away. I would love to not have. I would love to be putting those monthly credit card payments into our kids or investments or, you know, traveling and going out.

 

Taryn [00:12:44:22 – 00:12:53:07]

And so it’s just stressful because I just feel like we haven’t we’ve come close so many times. I feel like. And then, I don’t know, it just doesn’t it doesn’t happen for whatever reason.

 

Ramit [00:12:53:07 – 00:12:56:17]

And Melissa, how do you feel about the cycle of debt?

 

Melissa [00:12:56:19 – 00:13:04:04]

I hate it like I want to I want to stop it, which is I think part of the reason why I signed up for that is because I’m like, I want to like, stop the cycle. It’s like insanity.

 

Ramit [00:13:04:06 – 00:13:08:17]

What role do each of you play in the debt cycle, Melissa.

 

Melissa [00:13:08:19 – 00:13:27:17]

I mean, I think I do like I probably control it, I contribute to it. I’m the shopper and I make most decisions for the family and like what spent. So in that regard, like I’m the one in charge of it and then she just kind of goes along.

 

Taryn [00:13:27:19 – 00:13:34:01]

So I contribute by not contributing. Yeah. I guess I don’t say, you know, I don’t flag I think I just yeah.

 

Ramit [00:13:34:02 – 00:13:36:20]

You don’t say no. Why not? If you’re stressed out about money.

 

Melissa [00:13:36:20 – 00:13:40:11]

Yeah. Good question.

 

Taryn [00:13:40:13 – 00:13:58:08]

I trust her decisions when it comes to like, how much food we need for groceries. And, what supplies and things our kids need. The activities. I think I’ve always just been the one who’s like, I just make money. And then, I’m very easygoing. And it’s only when we have, like, big purchases that I, like, put my foot down.

 

Taryn [00:13:58:08 – 00:13:58:23]

Like, it.

 

Ramit [00:13:58:23 – 00:14:18:15]

Sounds very familiar when I talk to straight couples. Like, word for word, identical. I just earn money. That’s what men say. I just focus on earning more money. She’s really good at managing the household. That’s very common. And putting my foot down.

 

Ramit [00:14:18:17 – 00:14:23:16]

That’s very common for men to say. But most of the time, like, I trust her.

 

Taryn [00:14:23:18 – 00:14:24:23]

Yeah.

 

Ramit [00:14:25:00 – 00:14:27:17]

Have you heard that before? Have you ever heard men talk like that?

 

Taryn [00:14:27:19 – 00:14:29:03]

Yeah, I think I heard it on your podcast.

 

Ramit [00:14:29:04 – 00:14:45:21]

It’s uncanny. Right? It’s like I have two episodes are saying these same words. I’m just struck by this, I appreciate it. I want to understand more about what’s going on here. I want to take a look at the numbers. Taryn, can you read off the words in bold and the number next to it for this entire box, please?

 

Taryn [00:14:45:23 – 00:15:00:17]

Assets 1.4 million and some change. Investments 495,000 and some change. Savings 50,000, debt 1.2 mil and some change.

 

Ramit [00:15:00:19 – 00:15:01:14]

Total net worth.

 

Taryn [00:15:01:14 – 00:15:04:14]

Total net worth 761,000.

 

Ramit [00:15:04:16 – 00:15:07:23]

Okay. Ouch. Thank you. What do you think about those numbers?

 

Taryn [00:15:07:23 – 00:15:10:12]

I don’t like those numbers at all.

 

Ramit [00:15:10:14 – 00:15:13:00]

What do you feel when you read them out?

 

Taryn [00:15:13:02 – 00:15:21:07]

Anxiety and stress for my kids. And like if we were to get hit by a bus on the way home and what that looks like for them.

 

Ramit [00:15:21:12 – 00:15:24:09]

Yeah. Okay. Thank you. Melissa, what about you?

 

Melissa [00:15:24:15 – 00:15:27:11]

Like I’ve seen them so many times. Have I just, like, glaze over?

 

Ramit [00:15:27:13 – 00:15:39:04]

So they don’t really connect with you. And do you feel anything? Okay. And if I were to ask you, what do these numbers mean to you? What would you say?

 

Melissa [00:15:39:06 – 00:15:44:13]

Like, I don’t want to deal with any of it. It’s just like an annoyance. I just like there.

 

Ramit [00:15:44:16 – 00:16:05:07]

What I’m seeing is the person in charge of the money in the household doesn’t really want to deal with it. I’m, like, kind of annoyed by it. It’s like a nuisance to you. Yeah, but you are the one who the two of you have decided, consciously or unconsciously, that you, Melissa, are in charge of the money, right? Like, what if it was like child care, for example?

 

Ramit [00:16:05:09 – 00:16:19:06]

These little kids are kind of annoying, and, it’s like a nuisance to me. But anyway, I’m in charge of the child care. Like we all know it’s absurd, but with money, it’s actually surprisingly common.

 

Taryn [00:16:19:11 – 00:16:21:22]

You make it sound so simple and you say it that way.

 

Ramit [00:16:21:24 – 00:16:25:10]

It’s just. It’s hard to be good at something if you.

 

Melissa [00:16:25:11 – 00:16:26:00]

Don’t care.

 

Ramit [00:16:26:00 – 00:16:46:06]

If you don’t care. And sometimes the answer is that person maybe shouldn’t be in charge of it. Like for example, let’s say somebody doesn’t care about, cleaning the mirror in the bathroom. Okay, maybe they just don’t need to be in charge of that. And the other person can or you can hire somebody. Fine. But certain things like child care, like you actually just need to find a way to care.

 

Ramit [00:16:46:07 – 00:16:58:23]

That’s it. Or money. Both partners just need to find a way to care and to get good. Cause both. Both because this isn’t working. I mean, it’s not.

 

Melissa [00:16:58:23 – 00:17:01:17]

Like, can I just give it to her because she cares?

 

Ramit [00:17:01:19 – 00:17:06:04]

Well, okay, that’s an interesting question. You could. Why haven’t you?

 

Melissa [00:17:06:06 – 00:17:09:04]

Because she turns it around on me and she’s like, why do you care so much?

 

Taryn [00:17:09:05 – 00:17:12:16]

Like, no, because I feel like you don’t trust me with it.

 

Melissa [00:17:12:18 – 00:17:28:10]

I would trust you with it. I think now that we have these numbers and something she could work with, because she actually knows what they are now, like they’re in a place that’s very concrete before. It’s just kind of, like, very vague. But now she can see, like, this is specifically like our debt.

 

Ramit [00:17:28:12 – 00:17:42:08]

To be candid, these are one, two, three, four, five numbers. They take like ten minutes together. So considering that you’ve been in and out of debt for 25 years, I don’t think gathering five numbers is the problem.

 

Melissa [00:17:42:10 – 00:17:42:24]

I know.

 

Ramit [00:17:43:05 – 00:18:02:10]

It’s not. Part of what we’re going to do today is we’re going to like pull on some threads and try to get really honest. All right. There’s something else going on here. Let’s continue with the the KSP. Let’s talk, Melissa, about the combined gross monthly income. What’s that number.

 

Melissa [00:18:02:16 – 00:18:03:15]

11,900.

 

Ramit [00:18:03:17 – 00:18:10:00]

Okay. So you’re making let’s just call it 12 okay. It’s 140 4KA year. Why are there no taxes taken.

 

Melissa [00:18:10:00 – 00:18:16:11]

Up with her job and my business expenses? The way our taxes would come out is we’d end up getting money back.

 

Ramit [00:18:16:14 – 00:18:22:03]

Got it? We’re at 12,000 bucks a month, roughly from Melissa. And then $900 a month. Is that from you?

 

Taryn [00:18:22:05 – 00:18:25:12]

Yeah, that’s, for unemployment. So that’s just where where I’m at currently.

 

Ramit [00:18:25:13 – 00:18:35:02]

Got it. And and this is quite a striking difference because it used to be like 20,000 a month. Yeah. Let’s go on to the fixed costs number. Oh what is this number.

 

Melissa [00:18:35:02 – 00:18:38:13]

Police and number is terrible. I already know it’s supposed to be a.

 

Ramit [00:18:38:16 – 00:18:41:07]

Lot of explanation before hearing the number. Read the number.

 

Melissa [00:18:41:09 – 00:18:42:23]

179%.

 

Ramit [00:18:42:24 – 00:18:45:10]

All right, 179%. What does that tell you?

 

Taryn [00:18:45:12 – 00:18:46:02]

We’re bleeding.

 

Ramit [00:18:46:02 – 00:18:53:05]

Money. Yeah, just looking at this number. Can you cut expenses? So. No.

 

Melissa [00:18:53:07 – 00:18:54:19]

No, no, this.

 

Ramit [00:18:54:19 – 00:19:12:24]

Is not about. We spent too much at brunch, right? Or we bought too many toys. It is not that it is a structural problem that requires radical change right there. That tells you what this tells me is when I see a couple with this, which I believe may be the highest fixed cost number I’ve ever seen.

 

Melissa [00:19:13:01 – 00:19:14:18]

Oh, no.

 

Ramit [00:19:14:20 – 00:19:43:11]

And seven there is a structural change that probably happened because people don’t typically just overspend into 179%. That would be the job loss. It tells me that the person or couple that has this is really stressed out about money. Those three things check, check, check. All right, let’s continue. Oh, and one last thing. This it is just a matter of time until you run out of money like the clock is ticking.

 

Ramit [00:19:43:13 – 00:19:45:09]

Do you know how long until you’re out of money?

 

Melissa [00:19:45:11 – 00:19:48:13]

Well, this is the hard part. I mean, I take three months, Max.

 

Ramit [00:19:48:15 – 00:19:49:10]

Agreed.

 

Taryn [00:19:49:12 – 00:20:10:01]

We already have in my mind. Because. Really? Well, we don’t we? There’s money that we don’t that we. Oh, yeah, we’re getting by because we’re fortunate again to have been able to get a loan from some family. We have the credit cards, my severance, but it’s running out. So I guess technically without we have some money in our account, but I feel like it’s not ours because we owe it to other people.

 

Taryn [00:20:10:02 – 00:20:11:02]

We owe it to credit cards.

 

Ramit [00:20:11:04 – 00:20:22:21]

Three months until you run out of money with five kids is no joke. What has changed, if anything, in your household? As the clock has gotten closer to midnight?

 

Melissa [00:20:22:23 – 00:20:24:17]

Well, we just listed our house.

 

Ramit [00:20:24:19 – 00:20:25:12]

Oh.

 

Melissa [00:20:25:14 – 00:20:26:17]

And last week.

 

Ramit [00:20:26:17 – 00:20:27:09]

Last week. Okay.

 

Melissa [00:20:27:13 – 00:20:30:15]

Yeah, because I was like, we got to get out of this. Like, we can’t stay here.

 

Taryn [00:20:30:15 – 00:20:44:16]

To your earlier question, like, when did we start to feel it? When we started building the pool, even when I had a job and we were getting by, we still were feeling it because we still weren’t. We didn’t have that extra money for savings, that extra money to go out, all that. It just felt like we were in over our heads with that house.

 

Ramit [00:20:44:16 – 00:20:49:08]

But this isn’t we don’t have money for savings. This is we are literally running out of money.

 

Taryn [00:20:49:08 – 00:20:58:08]

So this was the push we needed. I think me losing my job was like, okay, that like, no brainer now. Like we were talking about it now it’s like we have to we have to do it like we obviously can’t afford this house.

 

Ramit [00:20:58:11 – 00:21:20:01]

Okay. All right. Let’s continue going on. Investments are at zero, savings are at zero. And then I’ve never seen this number for -79% is what’s left over or -$9,300 a month. You broke my KSP. So what do you think about the KSP looking at it now?

 

Melissa [00:21:20:01 – 00:21:36:04]

It’s crazy. Like we’re at a point where like we talk about selling our house, but also because she doesn’t have a job yet. We’re like, we’re going to have to rent, but what are we even looking at in terms of a budget?

 

Ramit [00:21:36:04 – 00:21:37:14]

What’s the answer to that question?

 

Melissa [00:21:37:16 – 00:21:48:08]

In my head, like, I know the fixed cost should be at 60%, housing should be like 20 to 30%, like 4040 500 a month. Like that’s what I’m finding like a three bedroom.

 

Ramit [00:21:48:08 – 00:21:50:04]

And do you think that you could afford that?

 

Melissa [00:21:50:06 – 00:21:58:11]

I think in my optimistic mind, yes. I think like she’s going to get a job and it’s going to be okay. That’s where my head goes.

 

Ramit [00:21:58:14 – 00:22:28:00]

That’s interesting. Like when I ask people in affordability question, they never use numbers in their answer. Never. Can you afford a $3,000 mattress? Well, that is the most important part of your body. I go, what the does that have to do with the word affordability? When I ask an affordability question, you should pull out a calculator, but we answer with almost anything other than math.

 

Ramit [00:22:28:02 – 00:22:32:10]

And affordability is purely about math. Can you afford.

 

Melissa [00:22:32:10 – 00:22:34:21]

It? Okay, the numbers in my head.

 

Ramit [00:22:34:23 – 00:22:50:08]

I’m not talking about your head. We have the numbers. Look at them, 11,900, and you’re going to pay taxes on that, by the way. So your net is, let’s just say 9000 to be generous. Watch this. What’s your fixed cost number? Just jump up to.

 

Melissa [00:22:50:10 – 00:22:51:04]

Like a hundred.

 

Ramit [00:22:51:06 – 00:22:53:04]

236%.

 

Melissa [00:22:53:06 – 00:22:53:19]

Yeah.

 

Ramit [00:22:53:21 – 00:23:17:02]

My KSP is about to explode right now. We never saw a number with the two in front of. Now I’ll ask you again. Can you afford a $4,000 a month apartment? No, no, there’s no way we could run the math and show you. But spending 45 or so percent of your money on it, on housing, with a family, when inevitably things will come up is impossible.

 

Ramit [00:23:17:04 – 00:23:23:12]

You can’t do it. I want to check in with you. When you look at the KSP, what do you make of it?

 

Taryn [00:23:23:14 – 00:23:30:03]

Major changes need to happen for us. You know, which again, I think we tried to start with that on our own.

 

Ramit [00:23:30:08 – 00:23:30:15]

Okay.

 

Taryn [00:23:30:15 – 00:23:43:09]

But we need someone like you to help us. But making the decision to, like, sell the house obviously needs to happen. Yeah, finding a job needs to happen. We’re also open to relocating outside of LA.

 

Ramit [00:23:43:14 – 00:23:45:17]

Oh, really? Where would you.

 

Taryn [00:23:45:17 – 00:24:05:14]

Go? I have family back east. I’m looking at jobs in North Carolina, Atlanta or you’re looking in Nevada. I mean I have big changes need to happen okay. It’s good to your question like looking at that sheet and how do I feel. You know, I was very fortunate for the 11 years that I had at Netflix, a company that treated me so well.

 

Taryn [00:24:05:15 – 00:24:22:15]

Amazing benefits, amazing pay. Sadly, I don’t know that I’ll I’ll necessarily land the same kind of a thing. I think, you know, the industry is not great right now. There’s tons of layoffs happening. I mean, thousand people were just laid off at Disney. Meta just did some layoffs. I mean, it’s just all over.

 

Ramit [00:24:22:17 – 00:24:38:16]

Let me stop you right there, because I know it’s tempting to go boo hoo. The people who used to make tons of money aren’t making quite as much money anymore. Join the club. And so I get the temptation to look at people. Used to have a ton of money. They don’t have it anymore. Go. You suck. So what?

 

Ramit [00:24:38:16 – 00:25:00:15]

We’ve been here the whole time. But I want you to know that at some point in your career, you or your partner will probably lose your job. How are you going to react when that happens? What if that entire industry is decimated and you can never make the amount of money you used to make? What if you built a plan for your life based on the amount you were making most people do?

 

Ramit [00:25:00:21 – 00:25:22:17]

What would you do if you were faced with the question of never earning that much money again? I think this is a crystal ball into what a lot of people are going to face in the next 24 to 36 months. We’ve heard about AI replacing jobs. It’s real. People are losing their jobs because of it. And the question that I want people to answer is, what do I do with the rest of my life?

 

Ramit [00:25:22:17 – 00:25:41:07]

If the amount of money I’m making now is the most I will ever make, you have to remember most people don’t plan their lives at all, much less plan for their lives to go down in income. But this is a reality for a lot of people, including today’s guests.

 

Ramit [00:25:41:09 – 00:25:47:09]

When there’s layoffs in the industry, what happens to you and to the people that were working there?

 

Taryn [00:25:47:11 – 00:26:04:22]

For me personally, like I’ve told Melissa, like I’m I’m open to not working in the industry anymore. I have an amazing broad set of skills that I’ve gained. And during my time at Netflix that could be applicable anywhere else. And so I’m expanding my search to jobs outside of entertainment. Do.

 

Ramit [00:26:04:22 – 00:26:07:15]

You think you can make the same amount you made there?

 

Taryn [00:26:07:17 – 00:26:23:17]

Honestly, I I’m doubtful of that. I’m not saying it’s impossible. I do think in general, there’s a lot of right sizing that’s happening in companies like Netflix. I know that I was being paid very well. I was there for a long time, but I know people coming in now are not making that same amount. I’m even in the jobs I’m looking at.

 

Taryn [00:26:23:17 – 00:26:26:13]

They’re very similar. Just don’t pay anywhere near what I was making.

 

Ramit [00:26:26:13 – 00:26:34:13]

And what would be an example, like if you were making 275 and you’re looking at comparable jobs, what are they paying?

 

Taryn [00:26:34:15 – 00:26:54:20]

I’m lucky if they’re paying like 200,000. I mean, I, I’ve had to expand my search now to even look below that because I just I’m not seeing the same. There are some tech companies, I think a lot of AI forward companies and stuff, that are paying on the higher side above 200,000. And so I’d be very fortunate to maybe learn something there.

 

Taryn [00:26:54:20 – 00:27:12:09]

But again, we’re still living in LA and it’s still not making what I was making before, obviously, like with big changes and, renting instead of owning and all those things, you know, hopefully I can make an amount that would allow us to potentially stay here. But she’s never been married to staying in LA. She we’ve always only stayed because of my work.

 

Ramit [00:27:12:09 – 00:27:32:16]

Okay. I’m glad that you put the house on the market. That’s a big change. Yeah. And I think that that needed to happen. So I’m really happy to hear you’re willing to make some big, bold changes. 100%. That’s what’s going to take. Yeah. Okay. What changes have you made in your spending after losing like more than half of your income?

 

Taryn [00:27:32:16 – 00:27:42:23]

I immediately called the internet company. Like, what’s the lowest we can go? Got a lower Netflix subscription. You know, we but I just feels like that’s just like pennies. I mean, it’s something, right? I mean.

 

Melissa [00:27:43:01 – 00:28:02:19]

We were trying to get, like, like a forbearance, like a temporary forbearance on the mortgage, but, like, she went through all these hoops, and they were like. It was like a whole thing. We haven’t been able to get it pushed through yet, so we’ve just been, like, paying it with the severance with them are, like, really more conscientious about grocery shopping and like what we’re spending to try to bring that number down.

 

Melissa [00:28:02:24 – 00:28:12:24]

We asked the family like, can we stop paying that monthly amount? Yeah, that actually that was a that was a big one. I mean, because like we think like when we sell the house, like we’ll pay them off.

 

Taryn [00:28:12:24 – 00:28:14:16]

That’s the goal. That’s the goal.

 

Ramit [00:28:14:17 – 00:28:21:13]

Yeah. Let’s talk about what levers do you have to stop the bleeding. Not the trickle but the bleeding.

 

Taryn [00:28:21:15 – 00:28:22:11]

Selling the house.

 

Melissa [00:28:22:11 – 00:28:22:24]

Like I said.

 

Taryn [00:28:23:01 – 00:28:25:19]

That’s the big one. Is it me getting a job or.

 

Melissa [00:28:25:19 – 00:28:28:19]

Getting a job? Yeah. And,

 

Ramit [00:28:28:21 – 00:28:30:13]

Where you live.

 

Melissa [00:28:30:15 – 00:28:36:22]

Yeah. Yeah, yeah. But the other thing with that is, like, I built my business off for four years, like, really built it up.

 

Ramit [00:28:36:24 – 00:28:37:15]

Melissa [00:28:37:17 – 00:28:49:00]

To a place where I’m making six figures and it’s like, what’s the cost of moving for a job that she could be making a saving more than I’m already making here.

 

Ramit [00:28:49:02 – 00:28:51:11]

Have you all discussed this and decided on what to do.

 

Melissa [00:28:51:13 – 00:29:03:23]

It’s a daily conversation. It’s like where are you applying. Where does it look like. Does it make sense to move if you get that for that amount? Based on what I have here, I’m willing to do it if it makes sense.

 

Taryn [00:29:04:00 – 00:29:24:13]

I am at least talking to one company. It would be likely relocation, but to New York. And so it’s like, I don’t know. And I feel more money. And so and then for her business, like, does that make sense. Like I don’t, you know, there’s a possibility that there could be potential for me to stay in L.A. with, with the role if I even get it.

 

Taryn [00:29:24:15 – 00:29:26:00]

That’s my pessimistically optimistic.

 

Ramit [00:29:26:00 – 00:29:38:16]

So how do you think about this? Like, if what you’re doing right now, you get the house on the market, you’re applying for jobs. What if this goes on for two months, three months, four months? What happens?

 

Melissa [00:29:38:18 – 00:29:52:23]

I mean, I’ve told her she should continue to work with the mortgage company to try a process like the forbearance. So we at least have that set up. It’s like after May, we still have the house and the mortgage is still there. We just still go through with it.

 

Taryn [00:29:53:01 – 00:30:00:04]

I guess worst case would be when we would foreclose on the house and then move in with family for temporary, I don’t know.

 

Melissa [00:30:00:06 – 00:30:00:20]

Yeah.

 

Taryn [00:30:00:23 – 00:30:01:11]

I mean.

 

Melissa [00:30:01:14 – 00:30:09:19]

But I mean, I’ll do that, I’ll do that. I’ll do that. Like I’ll do whatever I need to to like keep it going and keep us under the house while we need to.

 

Taryn [00:30:09:20 – 00:30:16:04]

She doesn’t like she’s definitely doesn’t like talking about it. Like she’s like, no, I don’t want to put that out there. That’s not an option. That’s not happening. We’re not doing that.

 

Melissa [00:30:16:05 – 00:30:23:00]

No. Like in my head, it’s very much going to be like sold under 60 days. Like that’s just what’s happening.

 

Ramit [00:30:23:02 – 00:30:45:11]

I like optimism. I like it about certain things. I’m optimistic. I don’t like delusion. And the stakes are too high to not have a plan B, because you really could be in a bad situation. Let’s just play it out for a second. I don’t I don’t believe in putting bad energy out. I believe in making a plan.

 

Ramit [00:30:45:13 – 00:30:50:24]

Let’s say the house doesn’t sell for at least three months. Let’s say the turn. You’re not able to find a job. What happens.

 

Melissa [00:30:51:01 – 00:30:59:15]

Then? I’m working more. I’m taking on private clients. I normally would in, lowering my rate to take on more students that each.

 

Ramit [00:30:59:17 – 00:31:00:23]

Still can’t cover.

 

Taryn [00:31:01:00 – 00:31:02:09]

Living with family.

 

Melissa [00:31:02:11 – 00:31:03:20]

Yeah, but then we sell the house.

 

Ramit [00:31:03:21 – 00:31:04:18]

I’m trying to get you to.

 

Melissa [00:31:04:20 – 00:31:18:05]

I know, because then I’m thinking, like, well, God, by then I’d hopefully sell it. The worst case scenario, I think in my head, if we lowered it, we’d pay off the house and the pull down, we would have like, nothing left. If that’s like if we’re talking, like, bare minimum. Okay.

 

Ramit [00:31:18:07 – 00:31:21:07]

And then what do you do? Where are you in that situation?

 

Melissa [00:31:21:09 – 00:31:24:10]

I think then we would.

 

Ramit [00:31:24:12 – 00:31:25:09]

Move.

 

Taryn [00:31:25:11 – 00:31:34:01]

If we had worst case scenario. I mean, we probably would maybe move to like South Carolina or something. Yeah, honestly, because it’s way cheaper to live there.

 

Ramit [00:31:34:02 – 00:31:35:01]

Okay. Yeah. Family there.

 

Taryn [00:31:35:04 – 00:31:35:17]

Yeah, yeah.

 

Ramit [00:31:35:22 – 00:31:36:15]

Then you move in.

 

Taryn [00:31:36:21 – 00:31:41:05]

My mom said you guys could move in. She’s like, we’ll move out, but you can wait.

 

Ramit [00:31:41:05 – 00:31:47:03]

That’s amazing. Yeah, 100%. Yeah. Did you seriously know that.

 

Taryn [00:31:47:05 – 00:31:47:24]

We would literally do.

 

Melissa [00:31:47:24 – 00:31:54:02]

That for you? Okay, so she hasn’t said this out loud to me because in her mind, she’s like, I’m never living in South Carolina. Am not.

 

Taryn [00:31:54:02 – 00:32:12:01]

By choice. Not because that’s not where I want to live. I love my family dearly. We’re super close. Like it’s not them, it’s South Carolina. I’m just not you not seen the humidity on my hair? I cannot live there. But I yeah. Worst case, if we absolutely had to of course move in with my parents. But you’re. But you’re also so positive.

 

Taryn [00:32:12:01 – 00:32:14:17]

I feel like she’s. I’m not allowed to like, say those things.

 

Melissa [00:32:14:18 – 00:32:18:21]

No, we can have a backup plan for sure. Like that’s. I think I don’t go to, like, the worst case.

 

Taryn [00:32:18:21 – 00:32:25:18]

I always go to the worst case scenario. She does not. She’s like, it’s very. But it’s not going to happen. I don’t want to put that out there. She says that to me all the time. Don’t even put that energy out there.

 

Melissa [00:32:25:20 – 00:32:26:10]

I don’t want the energy.

 

Taryn [00:32:26:10 – 00:32:28:24]

I don’t put that energy out there. But in my head, like, that’s what keeps me.

 

Ramit [00:32:28:24 – 00:32:45:09]

Up at night. Energy is valid for sure, but we always have to make a plan. What I want to understand here, it’s not just about the job loss, because that obviously is a huge driver of what’s going on here. But you all told me you’ve been dead for 20 years.

 

Taryn [00:32:45:11 – 00:32:46:03]

Yeah.

 

Ramit [00:32:46:05 – 00:33:06:02]

It is not about this job. And so the real question, the question that should consume you is how did we get here? And what’s going to stop us from getting right back in here? I mean, you told me that in your application. Yeah. We’ve been in debt before and we it feels good when we pay it off, and then we end right back up in it.

 

Ramit [00:33:06:06 – 00:33:33:21]

Yeah. And I’m not hearing much of that. The whole fact, Melissa, that you mentioned, I don’t want to talk about that potential negative stuff that puts bad energy. That’s actually one of the reasons that you’ve ended up in debt. So the simple stuff to do here is like, yeah, sell the house, pay off the debt. That’ll be nice, but you will end up right back in this in two and a half years if you don’t actually look at what’s truly going on here at the root cause level, which level do you want to go to?

 

Ramit [00:33:33:24 – 00:33:37:10]

We can stay at the sell the house level, or we can go to the I.

 

Melissa [00:33:37:10 – 00:33:38:10]

Want to stop the cycle.

 

Ramit [00:33:38:16 – 00:33:39:19]

Okay.

 

Melissa [00:33:39:21 – 00:33:40:18]

How do we do that?

 

Ramit [00:33:40:20 – 00:33:46:22]

Great. We can work with it. Tell me about the debt. What is the debt made up of?

 

Melissa [00:33:46:24 – 00:33:54:20]

It’s the fact that we couldn’t afford the house that we’re in, and everything else goes on a credit card. It’s the gas, groceries. Every other bill goes on the credit card.

 

Ramit [00:33:54:20 – 00:34:23:23]

Yes, I agree, everything flows over there. And it’s almost like the bucket of money for your housing is too small. And so that’s overflowing. And it’s overflowing into the next bucket, which is typically bills. And that’s overflowing now, and it’s crowding out any room for savings, investing, even guilt free shipping. But the thing is, you’re still spending it like rent, going out to eat when you have $50,000 of credit card debt.

 

Ramit [00:34:24:00 – 00:34:25:09]

Not in my world.

 

Taryn [00:34:25:11 – 00:34:26:10]

Yeah.

 

Ramit [00:34:26:12 – 00:34:33:21]

No way. Have you ever considered that, Melissa? Just saying. We’re not doing that. Yeah.

 

Melissa [00:34:33:23 – 00:34:34:09]

Yes.

 

Taryn [00:34:34:10 – 00:34:36:14]

It must be for you. Yes, yes.

 

Melissa [00:34:36:18 – 00:34:55:09]

And it’s because she doesn’t want to cook. So when I get tired of doing all the cooking and like, can we just, like, order something, make it easy. So it’s one of those things where it’s like taking off something from my plate to, like, just have, like, a piece on it.

 

Ramit [00:34:55:11 – 00:34:58:24]

Wow. Yeah. Was that supposed to work on me?

 

Melissa [00:34:59:01 – 00:35:00:04]

No no.

 

Taryn [00:35:00:09 – 00:35:01:02]

No no, that’s.

 

Ramit [00:35:01:02 – 00:35:19:00]

That’s I understand. But like a family that’s in $50,000 of credit card debt. This is a simple answer. They just don’t eat out. Done. Yeah, I don’t know. I’m just thinking about, like, how I grew up, and it’s just not even a question. We just don’t do it. What do you think about that?

 

Taryn [00:35:19:02 – 00:35:35:07]

Well, I agree with that. I’m because I think me growing up, my parents terrified me of credit cards. They’re like, you’re spending money you don’t have. You only have a credit card for emergency. It’s like your car breaks down at 500. You need to fix it, whatever. And then, you know, when I got together with Melissa, that it’s just very different.

 

Taryn [00:35:35:07 – 00:35:50:07]

You know, she had some debt and it was just like, you know, she’s a very hard worker, and it’s like she wants to enjoy life. You only live once and you want it. You want the things you want. You, you know, and and like I said, she runs the house. I need to step up more. I know that, it’s a lot they’re a lot on her shoulders.

 

Taryn [00:35:50:07 – 00:36:05:24]

And I think at the end of the day, it’s like she does some of these little things. So it just feels good. And it’s it’s she works hard. She deserves it too. But we’re now at a place where we have kids. It’s different. It’s exhausting having five kids. We love them to death. But I can’t stand cooking.

 

Taryn [00:36:05:24 – 00:36:18:09]

I that’s, like, the bane of my existence. And, like, I’m with the kids all day now, so not working. A lot of schlepping back and forth school things and this and that. And then, you know, the last thing I want to do is, is cook a meal. And the last thing she wants to do from working all day is cook a meal.

 

Taryn [00:36:18:09 – 00:36:27:18]

And we both give in. We know we shouldn’t, but we did because it was like we were exhausted and it was easy and but that adds up and we know it’s we know it’s wrong.

 

Ramit [00:36:27:20 – 00:36:34:05]

Yeah. Turn. What do you remember about your family saying around money when you were growing up?

 

Taryn [00:36:34:07 – 00:36:46:12]

I swear, I don’t feel like we talked about it a lot. We rarely went out to eat it, but it wasn’t because, like, we couldn’t afford it. It was just like, that was a special treat. But like when we went out, it was like for a birthday or or whatnot. So it always was exciting to go out to eat.

 

Taryn [00:36:46:14 – 00:37:03:20]

It’s partly why I love going out to eat now, because I didn’t go out a lot as a kid, so nothing ever negative or like I don’t remember them fighting about money. We didn’t really talk about it. We didn’t live lavishly. But we lived a good life. We took trips. We, got great gifts. They taught me hard work ethic.

 

Taryn [00:37:03:20 – 00:37:11:11]

My parents worked very hard. They earned their money. And, you know, they they spend it on experiences and family things and fun. They.

 

Ramit [00:37:11:11 – 00:37:13:22]

Teach you anything about money. Growing up.

 

Taryn [00:37:14:01 – 00:37:29:07]

I was fortunate they paid for my school, but they put it in my name and then paid off the loans right away so that I would be set off for success with good credit score and stuff like that. And so they talked about that. I will clarify, my parents were not all about us buying this house. They definitely said like, I don’t know if you should.

 

Ramit [00:37:29:09 – 00:37:30:06]

But you say I.

 

Taryn [00:37:30:06 – 00:37:45:10]

Was very hung up on like, I, I feel like we wanted to take this moment to invest in Melissa’s career and we need a pool to do it. We tried to find a place with a pool and we couldn’t, and we felt really confident that if we had a pool, we could really build her business, which we have.

 

Taryn [00:37:45:12 – 00:38:15:03]

It’s doing a kickass job with our business, has built a great clientele in our area. And, so that we got from it, obviously that’s not going to pay the bills right now. And in the beginning, I didn’t know all these extra costs. We lived in the city for years. Like the last thing I was thinking about is that it’s going to be a couple grand to, like, shave the head just so often and to clear the hill and, you know, termites and, you know, the AC like, things like that, that we didn’t really we don’t have to deal with that stuff.

 

Taryn [00:38:15:05 – 00:38:22:10]

In the city. So yeah. So I was like, you know, I hear you respectfully, but like, I think this is this is our best option.

 

Ramit [00:38:22:10 – 00:38:27:11]

How much will you make when you sell the house? Ballpark?

 

Melissa [00:38:27:13 – 00:38:37:20]

I every sell for the amount that we’re hoping to. Then I could go for, like, walking away. No, I think it was like 250,000 250,000. Yeah, that’s.

 

Ramit [00:38:37:20 – 00:38:46:02]

After all fees and everything, Okay, that’s a lot. And does your realtor or the person you’re using to sell the house, what do they think you’re going to get?

 

Taryn [00:38:46:06 – 00:38:55:14]

The strategy of this is to to come in at a price that people aren’t going to be like, but they’ll come in and they’ll look at it and they’ll be sold on the place. And get over asking is the goal?

 

Ramit [00:38:55:20 – 00:38:59:09]

Got it. Taryn, are your parents still alive or are they still together?

 

Taryn [00:38:59:10 – 00:39:00:12]

They’re still together. Still alive.

 

Ramit [00:39:00:17 – 00:39:09:00]

South Carolina and how are they doing financially? Great. Good. Yeah. Melissa, what do you remember your family saying about money when you were growing up?

 

Melissa [00:39:09:05 – 00:39:25:21]

Both my parents. I just remember feeling their stress because I remember hearing about their credit card debt, and they were both big spenders. And I remember when they divorced, like feeling awake for them because I knew they were gonna be able to sell this house that they had and like, pay off their debt.

 

Ramit [00:39:25:23 – 00:39:27:15]

Oh.

 

Melissa [00:39:27:17 – 00:39:28:19]

This they know.

 

Ramit [00:39:28:21 – 00:39:30:03]

This sound familiar?

 

Melissa [00:39:30:03 – 00:39:30:19]

That does help.

 

Ramit [00:39:30:21 – 00:39:33:19]

Fast forward. 30 or 40 years.

 

Melissa [00:39:33:21 – 00:39:57:13]

Okay. We had a very good, like, upbringing. Like we didn’t go out to eat a lot because that was always special if we did. But we didn’t lock for anything. Also, when you’re in the military, you have a lot of resources that are free. So it’s not like you’re paying a lot. So it’s a different lifestyle. I also came out of it with, grandparents who are entrepreneurs and built this multi-million dollar business.

 

Melissa [00:39:57:15 – 00:40:09:05]

I think my parents always had like support if they needed it. And so in my mind, I feel like we would have support if we needed it.

 

Ramit [00:40:09:07 – 00:40:10:13]

Are your parents?

 

Melissa [00:40:10:13 – 00:40:11:17]

My parents are divorced.

 

Ramit [00:40:11:17 – 00:40:13:02]

And how are they doing financially?

 

Melissa [00:40:13:05 – 00:40:18:21]

They’re good. But I feel like that’s always an option.

 

Ramit [00:40:18:21 – 00:40:25:01]

Where does this idea you have that they will always be there to help you? Like, what’s behind that?

 

Melissa [00:40:25:03 – 00:40:29:22]

Because my dad has said, like, if you like, I’m here. If you really need something.

 

Ramit [00:40:29:22 – 00:40:31:13]

Do you need help right now?

 

Melissa [00:40:31:15 – 00:40:44:00]

No, because I don’t want to, like, I’m like, I feel like that’s like the worst case scenario, like. And I don’t want it because I think in my mind, if I always think that, then it’s always there and then I’m not going to really change. My habit.

 

Ramit [00:40:44:01 – 00:40:45:04]

You’re not religious, right?

 

Melissa [00:40:45:06 – 00:40:47:12]

I am, yeah. You are. We’re Catholic. Yeah.

 

Ramit [00:40:47:14 – 00:40:49:06]

And you grew up religious.

 

Melissa [00:40:49:08 – 00:40:51:22]

If I grew up Catholic and God provides.

 

Ramit [00:40:51:24 – 00:41:03:00]

Yes. That is a very common phrase. How do you think that your Catholicism, especially growing up, changes your interpretation of money today?

 

Melissa [00:41:03:02 – 00:41:06:09]

I don’t even know. I mean, honestly, I haven’t even thought about it.

 

Ramit [00:41:06:09 – 00:41:11:11]

Let’s think about it. God provides. So finish the end of that sentence like something.

 

Melissa [00:41:11:11 – 00:41:12:15]

Always come along to help.

 

Ramit [00:41:12:18 – 00:41:14:08]

Okay? What else?

 

Taryn [00:41:14:10 – 00:41:23:14]

I’m a little bit different when it comes to I’m a I. Again, I’m more of the pessimistic like, you know like her family is very much like it’s kind of prey on it. God. It’s like, yeah, the praying. But I don’t think that’s going to.

 

Ramit [00:41:23:14 – 00:41:24:03]

Let’s pray.

 

Taryn [00:41:24:03 – 00:41:24:24]

On it. Pray on it.

 

Ramit [00:41:24:24 – 00:41:29:11]

So finish the end of the sentence. Let’s pray on it so that when everything.

 

Melissa [00:41:29:11 – 00:41:29:16]

Works.

 

Ramit [00:41:29:16 – 00:41:56:03]

Out. Got it? Probably I’m willing to bet you grew up with 10,000 examples like that. It will be okay. God will provide. Let’s pray on it. And that’s pervasive, right? It shapes your view of the way the world is. And it’s interesting that you also grew up Catholic and you’re like, God provides, but I don’t believe it.

 

Taryn [00:41:56:05 – 00:42:15:00]

Well, you got to still earn it. Like I don’t. I don’t think God’s is going to like, like to me, I was like, we were raised Catholic, but we’re not like crazy, like Bible thumpers and stuff. Like there’s just a lot of tradition and stuff that we love about it. But, my parents, it was very much more like, you work hard, you know, and it’s like, like even in this position now, my mom sent me listings to, like, work in the school district.

 

Taryn [00:42:15:00 – 00:42:21:18]

It’s like, hey, nobody ever thinks about that. You don’t just be a teacher. There’s other jobs in the school district. There’s great benefits, and there’s like hundreds on the site. Take a look.

 

Ramit [00:42:21:20 – 00:42:41:01]

I didn’t really predict that one, that they are both religious. I was starting to get curious. It’s why I asked Melissa. You’re not religious, are you? Because there was certain elements that were speaking to me. You know, this idea of like, the good things will come. And the minute she said, oh, yeah, I’m religious, I was like, really?

 

Ramit [00:42:41:04 – 00:43:01:03]

But what surprised me even more was tearing, going up religious. And to me, this actually is just a perfect example that people grow up with different belief systems. Sometimes they grow up poor, sometimes they grew up wealthy, and often they will go one direction or another. They will be hyper frugal or they’ll spend everything they make. But the key insight is you can never predict it.

 

Ramit [00:43:01:05 – 00:43:25:04]

So in this case, look at that. The two of them grew up religious. One of them goes, God will provide. The other one goes, I don’t really believe that. I’m just worried about money. But interestingly, when it comes down to their actual money behavior, both of them are pretty. It. How did the two of you reconcile this different way of looking at the world?

 

Taryn [00:43:25:06 – 00:43:29:11]

She’s also a hard worker. That was just I’m not saying she’s not just to clarify.

 

Melissa [00:43:29:13 – 00:43:48:01]

Well, I also think you leave out the part like her growing up with her family, they didn’t really teach her about money. Like they said, what you shouldn’t shouldn’t do. But like, I had a grandma who bought stock for me and she said, any amount you give me all match. And so I grew up knowing a little bit about investing.

 

Melissa [00:43:48:03 – 00:43:58:14]

And so I think like in our relationship, it’s fallen to me to like think about that kind of stuff and like invest because she’s always like, you know, a better like, you know, they.

 

Taryn [00:43:58:14 – 00:44:11:08]

Taught me about like savings and stuff. But I think when it comes when we talk about investments specifically and stock and I just don’t feel to me that feels like a foreign language, like I want to invest and do the things, and I just don’t even know where to to start to learn that.

 

Ramit [00:44:11:08 – 00:44:14:17]

And although you don’t know where to start learning about investing.

 

Taryn [00:44:14:19 – 00:44:15:21]

This is why we’re here.

 

Ramit [00:44:15:21 – 00:44:23:18]

Can we get in titles? Look at these two books. If only there were books that were available for free at every public library in America.

 

Melissa [00:44:23:19 – 00:44:24:09]

She doesn’t read.

 

Ramit [00:44:24:15 – 00:44:36:23]

Maybe. What is that, though? Because you’re obviously successful enough to have had a $300,000 a year job. So I don’t believe that. You just don’t get investing.

 

Taryn [00:44:37:00 – 00:44:50:12]

I don’t put the effort there. I put so much into the job that I have that when I come home, I like shut down in that way and I’m not as on top of it, which sucks for her because then she’s the one who has to be super on top of it at home. I why.

 

Ramit [00:44:50:12 – 00:44:51:09]

Haven’t you tried to change.

 

Taryn [00:44:51:09 – 00:44:53:07]

That? Probably because I know she’ll do it.

 

Ramit [00:44:53:12 – 00:44:54:03]

Yes.

 

Taryn [00:44:54:09 – 00:44:58:05]

And yeah, I think I’ve leaned heavily on her for that.

 

Ramit [00:44:58:07 – 00:45:21:22]

People often behave in really peculiar ways, and you kind of look at it, you go like, rationally, that doesn’t make sense. Logically, it doesn’t make sense. And you keep digging in and you discover often, not always, but often they’re subsidized in some way. There is somebody else there taking care of things. And it could be a wife. It could be parents who send money.

 

Ramit [00:45:21:24 – 00:45:38:10]

There’s something going on that allows people to often act in peculiar ways. Just to put a really fine point on it, night to be dark about this. But if you got hit by a bus, you would change very quickly. Yeah. Can we agree?

 

Taryn [00:45:38:10 – 00:45:39:16]

I think about that all the time.

 

Ramit [00:45:39:19 – 00:45:40:09]

And.

 

Taryn [00:45:40:11 – 00:45:43:11]

It stresses me out so hard.

 

Ramit [00:45:43:13 – 00:45:49:23]

Melissa, what happened as you got older, as you became a teenager with money in your family, anything changed then?

 

Melissa [00:45:50:00 – 00:46:00:17]

We had to put ourselves through college. So I was like, let me get to college, let me get this, do it fast. Because I was working like two serving jobs, put myself through and then I, like, got straight into the workforce.

 

Ramit [00:46:00:17 – 00:46:06:19]

Do your parents have any input on your finances or the both of your finances?

 

Melissa [00:46:06:21 – 00:46:13:20]

No, I mean, we talked to them about it. Like we’ll go to them for advice and stuff. But now what they say, I mean, when I’m, I’m saying.

 

Taryn [00:46:13:20 – 00:46:16:17]

Don’t use credit card, don’t eat out. I mean, all the obvious things.

 

Melissa [00:46:16:17 – 00:46:20:23]

All that, all that stuff. But she was also someone who was like, you got to, you should buy a house.

 

Ramit [00:46:21:00 – 00:46:22:18]

Do you tell her now? Like the situation?

 

Melissa [00:46:22:20 – 00:46:24:15]

Yeah. Now I’m like, yes, actually bought a house.

 

Ramit [00:46:24:17 – 00:46:25:17]

What did she say?

 

Melissa [00:46:25:19 – 00:46:32:10]

She’s like, well, I don’t know. Just, you know, it’s still good. Like there’s no money in it. I’m like, yeah, but we were already in over our heads.

 

Ramit [00:46:32:10 – 00:46:49:01]

It’s quite amazing that all the people who were so kind of like loud, vociferous about, you need to buy a house. Then the minute it doesn’t go right, they all kind of like vanish. They’re like, no. I mean, I guess it depends. Like what the. I bought this house because you told me.

 

Taryn [00:46:49:03 – 00:46:49:20]

Oh, this is all.

 

Melissa [00:46:49:20 – 00:46:50:17]

This is an old house.

 

Ramit [00:46:50:17 – 00:46:53:10]

Yeah, but also because you did not run the numbers as well.

 

Melissa [00:46:53:10 – 00:46:54:10]

Yes.

 

Ramit [00:46:54:12 – 00:47:04:15]

Okay. How do each of you think that you are bringing the money messages you grew up with to this relationship? Taryn?

 

Taryn [00:47:04:17 – 00:47:06:07]

Work hard, play hard.

 

Ramit [00:47:06:09 – 00:47:08:07]

Okay. Work hard. Yeah. What else?

 

Taryn [00:47:08:09 – 00:47:09:16]

And financially specific.

 

Ramit [00:47:09:21 – 00:47:13:21]

Yeah. Did your mom pay attention to money?

 

Taryn [00:47:13:23 – 00:47:16:16]

Yeah, I did, yeah. She, like, runs the house.

 

Ramit [00:47:16:18 – 00:47:20:07]

I think there’s anything there that you’re bringing here.

 

Taryn [00:47:20:09 – 00:47:25:22]

Maybe I leaned on their support. I knew things would get taken care of.

 

Ramit [00:47:25:23 – 00:47:28:00]

Did you get to pay attention to money?

 

Melissa [00:47:28:02 – 00:47:28:14]

I wouldn’t say that.

 

Taryn [00:47:28:14 – 00:47:32:22]

He doesn’t, but I think he. My mom handles, like, all the finances.

 

Ramit [00:47:32:22 – 00:47:37:09]

And is Melissa the equivalent of your mom when it comes to money?

 

Taryn [00:47:37:11 – 00:47:39:04]

In how she thinks of money.

 

Ramit [00:47:39:06 – 00:47:40:16]

She’s the one who manages it day to day.

 

Taryn [00:47:40:17 – 00:47:47:23]

Oh, yes. Like I would say, my mom is the one who decides, like, what they spend on, I see. I mean, she likes to. Nice. Sad about it, but. Yeah.

 

Ramit [00:47:48:00 – 00:47:55:19]

Yeah. And so what does that make you? My dad and your dad’s relationship with money was, what?

 

Taryn [00:47:55:21 – 00:48:01:11]

Very easy going like trust. It’s the same. The same thing. It’s just. I think that’s the same thing. Like.

 

Melissa [00:48:01:13 – 00:48:04:21]

She really, like, marry her mom.

 

Ramit [00:48:04:23 – 00:48:11:20]

So many of us co-create what we grew up with, and we don’t realize it. Did you realize that?

 

Taryn [00:48:11:22 – 00:48:13:04]

No.

 

Ramit [00:48:13:06 – 00:48:15:04]

Till now, I don’t know.

 

Taryn [00:48:15:06 – 00:48:16:11]

I not not like that.

 

Ramit [00:48:16:11 – 00:48:17:10]

Yeah. Think about it.

 

Taryn [00:48:17:10 – 00:48:22:15]

Yes. I more clearly now. Yeah. Some aspects. Yes.

 

Ramit [00:48:22:17 – 00:48:43:05]

I think that there’s probably more room for silence in your relationship. It’s crazy. I’m saying I don’t think I’ve ever said that to a couple in my life, but I think that sometimes you diffuse the potency of what you are discovering by talking. You just made a massive realization and your your first tendency was what.

 

Taryn [00:48:43:05 – 00:48:44:12]

To explain it, but to.

 

Ramit [00:48:44:12 – 00:49:05:11]

Explain it to it? Well, it’s actually about this, but it’s not about that. And into the. And now you’ll forget what just happened. The central point of what you just discovered is massive. I have co-created the relationship that my parents had in the financial area. We first of all, how did that happen? Second, well, what are the implications?

 

Ramit [00:49:05:13 – 00:49:30:16]

Because like, Melissa is not like my mom in this way, but in that way she is and in fact didn’t we once joke about this a couple of years ago? And so if that makes her the mom, then my dad was easygoing, which I love that about it. And I’m easygoing, but has my easygoing. This contributed to us being in $1.2 million of debt.

 

Ramit [00:49:30:18 – 00:49:48:09]

You cannot do that while talking. You can only do that in silence if both of you give it the space. Something I would encourage you to practice and work on. Okay. Melissa, what messages about money from your childhood do you bring to this relationship?

 

Melissa [00:49:48:11 – 00:50:01:07]

Oh, that like that is okay. Everybody has debt and various debt. You’ll get out of it somehow like that. I als if you have to, which is crazy that that takes that to do that 40 years later.

 

Ramit [00:50:01:07 – 00:50:10:02]

Same thing. Yeah. When they sold their house they were able to pay off debt. Now you’re in the situation. You sell off house hopefully paid off. What else? Who will provide?

 

Melissa [00:50:10:07 – 00:50:11:01]

God will provide.

 

Ramit [00:50:11:01 – 00:50:34:21]

God will provide. So since God will provide and you get these one time episodic sources of income like selling a house, there’s no real need to manage money carefully. Day to day. In fact, I deserve to have a nice time and spend money. And what about the dynamic? The two of you? You’re the one who.

 

Melissa [00:50:34:21 – 00:50:35:13]

Manages it.

 

Ramit [00:50:35:13 – 00:50:37:11]

All. Manages so much at all.

 

Melissa [00:50:37:13 – 00:50:38:08]

Runs the household.

 

Ramit [00:50:38:08 – 00:50:39:12]

And your partner.

 

Taryn [00:50:39:14 – 00:50:43:23]

I used to make money, but now I know. Well, now. Now I’m the childcare.

 

Melissa [00:50:44:00 – 00:50:47:00]

Now she’s like the nanny. Now she’s like she’s a stay at home mom.

 

Ramit [00:50:47:01 – 00:51:02:15]

But both that’s true. Both of you have, oscillated between who makes more and not which is normal. That’s actually quite common. But in the dynamic, when the two of you talk about money and when you practice money, what is the role that each of you plays.

 

Melissa [00:51:02:17 – 00:51:03:24]

Like a controller?

 

Ramit [00:51:03:24 – 00:51:13:07]

And yes, good. That’s a good word. You are the controller of it. Do you control money effectively in your family? No. Agreed. And Taryn, you are the.

 

Melissa [00:51:13:09 – 00:51:17:07]

Bystander. I would say you agree.

 

Taryn [00:51:17:09 – 00:51:18:05]

Yes.

 

Ramit [00:51:18:07 – 00:51:39:17]

I think that’s true. I think those are actually very powerful words. The controller and the bystander. In a way, it’s no surprise that you have gotten into debt. You have somebody who loves to spend money. You have admitted that controlling the money, but you don’t really like looking at it. In fact, when I put those numbers up, you are visibly uncomfortable.

 

Ramit [00:51:39:17 – 00:51:50:18]

You’re like, I don’t want to look at this. And I wanted out of here. So that’s the controller. And then the bystander for a long time makes the money and then goes.

 

Taryn [00:51:50:20 – 00:51:51:19]

That’s my job.

 

Ramit [00:51:51:21 – 00:52:01:12]

That’s my job. I’m done. You take care of it. In fact, you’re so good at this, even though you both admit that you’re not that good at this. This is very classic. What do you make of this assessment?

 

Melissa [00:52:01:14 – 00:52:03:16]

That she needs to be the controller?

 

Ramit [00:52:03:18 – 00:52:19:03]

Maybe a different way to put it is I, Melissa, am not functioning effectively as a controller today. We don’t know what the solution is yet, but we certainly know this is not working. Would you agree? Yeah. Okay. What do you got, Aaron?

 

Taryn [00:52:19:05 – 00:52:23:17]

I think it needs to be more of a team effort. I need to step it up more. Have to be more vocal.

 

Ramit [00:52:23:19 – 00:52:25:21]

Where are you? By standing.

 

Taryn [00:52:25:23 – 00:52:26:21]

Easier.

 

Ramit [00:52:26:23 – 00:52:30:01]

Yeah, true. What else?

 

Taryn [00:52:30:03 – 00:52:42:15]

She runs the house. I feel like she has that authority to decide, like, how things should go. Like, I can give my opinion, but she may not like it. And then at the end of the day, it’s like, well, no, this is what we’re doing. And.

 

Ramit [00:52:42:17 – 00:52:44:15]

She’s the one who says this is what we’re doing.

 

Taryn [00:52:44:17 – 00:52:46:11]

With certain things. Yeah, I would say she.

 

Ramit [00:52:46:11 – 00:52:47:10]

Says it with money.

 

Taryn [00:52:47:12 – 00:52:51:01]

Probably where you, again, is only like big, big things.

 

Ramit [00:52:51:03 – 00:53:08:10]

I feel like if I’m, if I’m watching what’s happening right now, like I’m putting on my infrared goggles, what I see is this ball of responsible, like the leader of money. And I’m asking like, who leads with money? And each of you is kind of like, I don’t want that. You’re like trying to toss it invisibly back and forth.

 

Ramit [00:53:08:10 – 00:53:09:09]

Am I reading that correctly?

 

Melissa [00:53:09:09 – 00:53:31:09]

Yeah. The joke is people always think that I’m like the boss in a relationship, when really when it comes down to like the big purchases in life. Like she’s the one who makes the final say so all the day to day stuff is on me, and so I would be the one that does it all.

 

Ramit [00:53:31:11 – 00:53:38:08]

Do you know that she is not effectively controlling the money? Do you internalize that?

 

Taryn [00:53:38:10 – 00:53:39:06]

Do more.

 

Ramit [00:53:39:06 – 00:53:50:04]

Now, before you didn’t, no. I think you just hoped it was like working out and the roof was still over your head, and so was like, it must be fine. Yeah. I’m making a lot of money. We must be doing fine.

 

Taryn [00:53:50:08 – 00:53:54:16]

Once I was laid off, though, feeling more like. Yeah, no, this was. We made bad choices, but still.

 

Ramit [00:53:54:16 – 00:54:18:00]

But still not like, hey, we made bad choices. Let’s, like, decompose. What’s going on? Because that would raise a lot of uncomfortable questions, like, should Melissa be in charge or quote the controller? Do I need to step up or do I need to recalibrate this relationship? That’s all very uncomfortable. So, let’s just sell the house. Like, that’ll get us some cash.

 

Ramit [00:54:18:02 – 00:54:23:20]

We can, like, solve this problem for now and then, like, we’ll go, like, we’ll figure things out later.

 

Melissa [00:54:23:22 – 00:54:35:22]

And that’s a step we took. Yeah, yeah. So I think it’s easier because again, like, I think for her mental state and emotional state at the time she lost her job, I don’t think she’s in a place to have that conversation.

 

Ramit [00:54:35:22 – 00:54:36:13]

Yeah.

 

Melissa [00:54:36:15 – 00:54:41:13]

So I think we just like avoided it. Yeah. And she wasn’t going to take that on.

 

Ramit [00:54:41:15 – 00:55:06:21]

Keep in mind I agree it’s tough to lose a job, especially in an environment like this where like a lot of people have lost their job in that industry. But you haven’t had that conversation in 20 years. So it’s not only about the job. It is comfortable. You were in a comfortable situation. But the fact of the matter is when we’re looking at the objective numbers, you are drowning.

 

Ramit [00:55:06:23 – 00:55:15:05]

And my fear is that you will get right back into this scary situation. Yeah.

 

Melissa [00:55:15:07 – 00:55:19:15]

I think in my head I if we don’t buy a house again, we won’t get into that situation.

 

Ramit [00:55:19:21 – 00:55:42:09]

But you will. I just showed you if you rent for $4,000 a month, you will be in debt in less than a year. What’s happening here is this idea of like it will work itself out. God will provide. Which is a good phrase, but it is not tangible. It’s not. It’s showing up in peculiar ways. I’m not saying that belief is wrong.

 

Ramit [00:55:42:09 – 00:56:00:12]

I’m saying like, my mom has a sign that says, trust in God, but lock your car means make a plan. And so God may provide, but you need to create the outcome that you want and hope for some help. What do you think?

 

Taryn [00:56:00:14 – 00:56:01:14]

Yeah, I think that.

 

Ramit [00:56:01:20 – 00:56:12:22]

Cool. That means the two of you, you can sell the house. I think that’s great. But that’s, like, not going to change anything until the two of you change it. Are you willing to do that?

 

Melissa [00:56:13:00 – 00:56:13:18]

Yeah.

 

Ramit [00:56:13:20 – 00:56:15:11]

Great. Do you see a therapist?

 

Taryn [00:56:15:11 – 00:56:16:21]

Not. Not anymore.

 

Melissa [00:56:16:22 – 00:56:18:04]

We used to.

 

Ramit [00:56:18:06 – 00:56:37:17]

I would encourage you to see one. Because recalibrating relationships were the hardest things to do. It’s really hard, but it can be done 100%. I have confidence you could do it. You both are very conversant. You. I think you are starting to appreciate the severity of the situation, which is selling the house is not actually going to save us.

 

Ramit [00:56:37:23 – 00:56:48:24]

It’ll give us a stopgap, it’ll buy us some time, but we’re getting right back into it. Yeah. Whether we live here their rent buy doesn’t matter. It’s us. How do you feel about that.

 

Taryn [00:56:49:01 – 00:56:51:04]

Yeah I agree with that.

 

Ramit [00:56:51:06 – 00:57:16:07]

Uncomfortable. Good. I mean that’s so good. That’s the first uncomfortable part. It’s going to be many more. And actually I love that the the best growth comes from these uncomfortable feelings. Like think about someone learning a language. It’s so scary the first time you go order coffee, but you can’t you can’t actually get good unless you do it the first time you go to a gym, the first time you hold your baby, all of these things, it’s uncomfortable.

 

Ramit [00:57:16:09 – 00:57:25:11]

But like, we cannot get truly good unless we do that and we go right into it. What does your rich life look like in the future?

 

Melissa [00:57:25:16 – 00:57:27:15]

Just like traveling the world with our kids.

 

Ramit [00:57:27:17 – 00:57:28:17]

Melissa [00:57:28:19 – 00:57:40:22]

Like in my mind, I wanted to save up for a trip in 2028 that we could go visit my friend in Paris, go back to Spain, go to maybe Italy or back to Portugal.

 

Ramit [00:57:40:23 – 00:57:41:23]

How long would you go for?

 

Melissa [00:57:42:00 – 00:57:43:06]

Like three weeks.

 

Ramit [00:57:43:08 – 00:57:47:16]

Okay, cool. What else is in your rich life?

 

Melissa [00:57:47:18 – 00:57:49:03]

Not being in debt?

 

Ramit [00:57:49:05 – 00:57:51:11]

Okay. Being debt free, let’s call it being debt free.

 

Melissa [00:57:51:11 – 00:57:51:24]

Being debt free.

 

Ramit [00:57:51:24 – 00:57:53:14]

Good, good. What else?

 

Melissa [00:57:53:16 – 00:57:59:03]

And just like continuing quality time with like Taryn and our kids.

 

Ramit [00:57:59:05 – 00:58:05:20]

Nice. Okay. And you think about like food anything about like purchases you want to make.

 

Melissa [00:58:05:22 – 00:58:11:01]

Yes. I would love to like, be comfortable enough to like, eat out once a week.

 

Ramit [00:58:11:03 – 00:58:27:18]

Okay. Once a week with the family or the two of you either. Great. Before we continue, I want to let you know the next part of this conversation touches on child loss and grief. If this is a difficult topic for you to listen to, you may want to skip ahead by about three minutes. Taryn, what about you?

 

Taryn [00:58:27:20 – 00:58:31:24]

Very similar. Number one, debt free. I want that weight off my shoulders.

 

Ramit [00:58:32:00 – 00:58:32:13]

Okay.

 

Taryn [00:58:32:15 – 00:58:48:04]

Number one travel. Travel is very important to both of us. It was a grieving mechanism for us when we lost one of our children. And so travel is very important to us, and we haven’t been able to do that.

 

Ramit [00:58:48:06 – 00:58:49:09]

Take your time.

 

Taryn [00:58:49:11 – 00:59:11:21]

And then it’s like, yeah. Then beyond that, being a being able to just like, hey, let’s go on a date night or, go out to the kids, and just, just not feel guilty about it, you know, like ordering food and stuff. Don’t want a bigger house, don’t want a fancy car. Just want the debt gone.

 

Ramit [00:59:11:23 – 00:59:19:16]

Yeah, I like that way. It is, talking about this making you emotional. I think.

 

Taryn [00:59:19:18 – 00:59:23:13]

Obviously thinking about my daughter, I think a lot of our spending started after.

 

Ramit [00:59:23:13 – 00:59:26:23]

That, too. I didn’t know that. I’m so sorry.

 

Taryn [00:59:27:00 – 00:59:52:18]

Thank you. You know, we were in that place for, like, life became very, like, precious, obviously. Where putting stuff on a credit card didn’t feel as like, you know, it was our therapy, and it’s, part of what got us through that. And I think obviously that contributed to some of that again, before the House and all the other things that probably, you know, and just saying this now, I think probably contributed towards towards it.

 

Ramit [00:59:52:20 – 01:00:02:10]

Yeah. Do you ever make that realization like before. Now the connection between the loss of a child to spending?

 

Melissa [01:00:02:12 – 01:00:06:11]

I don’t I don’t know, maybe like kind of here and there like subconsciously.

 

Ramit [01:00:06:17 – 01:00:07:17]

Yeah.

 

Melissa [01:00:07:19 – 01:00:15:08]

I mean it was just easy to be like, who knows if it’ll be here tomorrow. Like we need to enjoy our lives, you know? Yeah. You know, in the van.

 

Taryn [01:00:15:12 – 01:00:19:03]

We definitely went through a period of that, I think. Yeah.

 

Ramit [01:00:19:05 – 01:00:21:19]

How long ago did you lose your daughter?

 

Melissa [01:00:21:21 – 01:00:24:22]

Almost eight years ago. Here’s a guy.

 

Ramit [01:00:24:24 – 01:00:30:04]

That’s, That’s probably the toughest thing anybody has to go through. I’m sorry.

 

Melissa [01:00:30:06 – 01:00:31:21]

Thank you, thank you.

 

Ramit [01:00:31:23 – 01:00:37:16]

Why don’t we take, five minutes? Let’s take a break and, we’ll come back and pick it up, okay?

 

Taryn [01:00:37:18 – 01:00:41:04]

I, I do my ugly Christmas.

 

Ramit [01:00:41:06 – 01:01:08:09]

I didn’t know that they had lost a child. And it came up quite late in our conversation. Once they told me that it actually started to make a lot more sense. I certainly cannot understand the grief of losing a child. But when Taryn explained that to me and teared up, it helped me to understand that there was so much more going on here than just eating out, than just spending a few dollars they couldn’t afford.

 

Ramit [01:01:08:11 – 01:01:29:02]

How would any of us react if we went through unimaginable grief? Losing a parent, losing a partner, losing a child? I don’t think their loss explains everything that’s going on here, but it certainly helps me get a little bit more color on who they are and what they’ve been through. I haven’t been through the type of grief that a lot of people in my community have been.

 

Ramit [01:01:29:02 – 01:02:02:10]

My parents are both still alive, I haven’t lost a sibling, and when people tell me what it felt like, you start to grasp this part of humanity that you simply have not experienced yet. But, you know, quite hauntingly, it is just a matter of time, this idea that things will never feel the same again. This idea that you simply wish you could go back and have one more day with the person that you love.

 

Ramit [01:02:02:12 – 01:02:28:09]

And of course, when it comes to your finances, that becomes the last thing on your mind. Health, death. When those things happen, they are all consuming, so I appreciate both of them sharing this with me. I appreciate everyone who comes on the show, especially those who share some of the grief that they have experienced. Some of us have not experienced it yet, but we will.

 

Ramit [01:02:28:11 – 01:02:56:01]

Some of you have, and I think for all of us, we can appreciate how difficult it must be or it has been, and it gives us a lot more compassion for every single person on this show. Welcome back. I was thinking about what you described as your rich life, so I want to read it back to you. You told me, Melissa, traveling with the whole family, being debt free and eating out, like, let’s say, once a week.

 

Ramit [01:02:56:01 – 01:03:06:14]

Taryn, you told me being debt free, traveling, eating out once in a while, and you made a point. Don’t need a big house. Don’t need a fancy car.

 

Melissa [01:03:06:16 – 01:03:10:05]

Can I had food delivery, meal planning for that to that. Much like.

 

Ramit [01:03:10:11 – 01:03:15:23]

How? Yeah, yeah. You can. It’s your rich life for sure. So food delivery. How often?

 

Melissa [01:03:16:00 – 01:03:17:02]

Like three times a week.

 

Ramit [01:03:17:03 – 01:03:20:18]

Okay. All right. What do you think is the path from here to there.

 

Taryn [01:03:20:20 – 01:03:39:15]

So for me the first step is we’re selling the house. We have to get out of the house. Okay? I have to get a job. Okay. Potentially work more potentially. We sit down and talk about. Does it make more sense to stay in L.A. or not? Like, honestly, we’ve been trying to stand out because of her clientele. Maybe it makes more sense that we move.

 

Taryn [01:03:39:17 – 01:03:48:12]

So I think how we get there is obviously change, which we’ve talked about. So aside from the obvious thing, sell the house, get jobs.

 

Ramit [01:03:48:15 – 01:03:55:09]

All these are important. I like where you’re going. Sell the house and then what? What do you do with the money?

 

Taryn [01:03:55:11 – 01:04:05:04]

We’ve talked about paying off debt. Okay, so paying off the money, we owe for the pool loan and for the money we borrowed, the fence, the.

 

Ramit [01:04:05:04 – 01:04:06:15]

Concrete and the mortgage.

 

Taryn [01:04:06:17 – 01:04:07:17]

And the mortgage, obviously.

 

Ramit [01:04:07:17 – 01:04:21:12]

So. So theoretically, you could walk away being debt free. Depending on what you sell it for. Correct. Or you might have a little bit of debt left over some, some amount. Correct. Okay. Let’s say you have a little extra money from the house sale. What would you do with the money.

 

Taryn [01:04:21:14 – 01:04:36:19]

I think if I’m still unemployed, you know, we want to look to rent. We have to be able to show some sort of income and be able to say, hey, we have this. We can put it towards, you know, additional rent if we have to, because I don’t have an income, to actually get a place to live in.

 

Ramit [01:04:36:21 – 01:04:45:04]

Yeah. So you take that, maybe you said. Okay. And speaking of income sources, Melissa, what are you going to do since you won’t have a pool in your backyard?

 

Melissa [01:04:45:06 – 01:04:48:16]

So I already talked to other families, and I’ll let me teach over there. Pools.

 

Ramit [01:04:48:18 – 01:05:09:05]

Great. Yeah, actually extremely great. And if I can say one of the things that I probably would have done before I installed a $200,000 pool, like I would have asked, like, hey, is there any other way instead of us spending 200 grand? Because how much you charge people when they come over.

 

Melissa [01:05:09:07 – 01:05:10:23]

It’s like $2,000 per student.

 

Ramit [01:05:10:23 – 01:05:11:23]

For how long?

 

Melissa [01:05:12:00 – 01:05:12:20]

For seven weeks.

 

Ramit [01:05:13:01 – 01:05:34:10]

Yeah. So that takes a long time to recoup the profit on. Is there any other way it might actually be cheaper for me to get a freaking Uber to somebody’s pool every time than to install a 200, 150, $200,000 pool in my backyard. These are the kind of questions I want you to start thinking of. Okay, so take the money.

 

Ramit [01:05:34:12 – 01:05:46:13]

Any profit left over, use it to live while you find a job. Correct. You’re going to be teaching at other people’s pools, so you should be able to keep your clientele up for the most part, right? I’m with you so far. What’s next?

 

Taryn [01:05:46:15 – 01:06:07:05]

Childcare. So again, depending on if I have a full time job, we obviously need childcare for when the hours she’s working. Yes. If I don’t have a job, I would be that childcare. So I think that that’s obviously the biggest. Like there’s two paths, right? Like, do I have a job that what does that look like if I get a part time job, does what I’m making part time equate to what we would pay for childcare?

 

Taryn [01:06:07:07 – 01:06:10:11]

Maybe. Maybe not. So those are the questions I think we need to dive into now.

 

Ramit [01:06:10:11 – 01:06:21:01]

If you did all of these things and maybe you get childcare or you stay home or you get a part time job, what do you think? Just intuitively, what happens with your finances?

 

Melissa [01:06:21:03 – 01:06:30:09]

That’s what we’re kind of like stuck because we look at it and we’re like, whatever we make, whatever we have left over from the house will go towards paying rent somewhere.

 

Ramit [01:06:30:10 – 01:06:31:02]

Melissa [01:06:31:04 – 01:06:40:14]

And that’s see, realistically we’re like, we’re dropping everything. We’re moving to like, move in with your parents, which then I’m not working because then.

 

Ramit [01:06:40:14 – 01:07:00:16]

I’m stuck with the LA thing. Okay. Don’t get things confused. This is what happens. Okay? You I need you to stay with one idea and play it out. So you stay in LA, you rent, you’re renting for, let’s say, 4 or $5000 a month. Okay, maybe you get a job. Maybe not childcare, etc.. Whatever. What’s happening with your finances?

 

Taryn [01:07:00:18 – 01:07:06:00]

Well, this is what I would, I would like to do is figure out what should we be putting towards savings.

 

Ramit [01:07:06:00 – 01:07:06:16]

Taryn [01:07:06:18 – 01:07:07:20]

How can we invest.

 

Ramit [01:07:07:21 – 01:07:27:15]

Do you even have enough every month to make savings. No, no. You know at $5,000 a month for rent your business may stay the same. Maybe it goes down a little bit. We don’t know what’s going to happen with your job. Maybe it’s great. Maybe not just intuitively. You all are just setting yourself up to struggle again for the next five years.

 

Ramit [01:07:27:15 – 01:07:32:10]

Be right back into debt. Why are you not coming to that realization now?

 

Melissa [01:07:32:10 – 01:07:43:06]

I think because in my mind, she’s going to get a job and that’s going to help us have that money to make our fixed costs less.

 

Ramit [01:07:43:08 – 01:08:05:08]

If she gets a job. She said, it probably won’t be nearly as much as she was making. And you’re now going to have how many thousands of dollars a month in childcare? A lot. I think there’s some of this kind of prosperity gospel thing happening right now. It’s just like, let’s just like kind of work hard and like it will be provided for us.

 

Ramit [01:08:05:10 – 01:08:13:23]

But like we’re now talking about, do you all want to be in the same position, struggling with money for the next 40 years?

 

Melissa [01:08:13:24 – 01:08:14:17]

No.

 

Ramit [01:08:14:19 – 01:08:30:03]

And because the path you just told me does not lead you to travel, there’s no traveling in that path where you can barely scrape together the money per month. Right now, you don’t even have a savings habit. But how are you going to save when you have way less money?

 

Melissa [01:08:30:03 – 01:08:34:10]

I think I thought a portion of like the house would maybe go to investments.

 

Ramit [01:08:34:12 – 01:08:35:09]

Okay, I’m sure it.

 

Melissa [01:08:35:09 – 01:08:42:18]

Could or savings, but then it’s like how much is left over to help with rent because I have to live somewhere.

 

Taryn [01:08:42:20 – 01:08:56:03]

I mean, I think what we when we were talking about numbers, we thought, well, our mortgage won’t be $8,000 a month anymore. It would be hopefully five. We wouldn’t have the loan payments. That’s another 2300, whatever.

 

Melissa [01:08:56:04 – 01:08:57:11]

Like literally doing the numbers.

 

Taryn [01:08:57:11 – 01:08:58:21]

And we’re like, okay, like that.

 

Melissa [01:08:58:21 – 01:09:02:04]

Said, our monthly in half by selling our house.

 

Ramit [01:09:02:06 – 01:09:24:18]

Should we should we look at the KSP? Show me what you do. Let’s take a look. So right now you know your fixed costs are like 236%. Your current mortgage is 78, 99. Let’s take that down. What do you say? Conservatively, 5000. Yeah. All right. And your utilities, let’s call it 250. Okay. Fair. All right. Insurance.

 

Ramit [01:09:24:18 – 01:09:53:02]

Let’s keep it. Okay. Car payment. Let’s keep that debt payments. Let’s put it at 1000 just to be conservative okay okay. All right. Groceries. Let’s keep that close. Keep that phone. Kids activities subscriptions. We’re going to keep in miscellaneous. Keep. You’re at $15,000 per month. You’re still at 176%. Three times higher than you should be. What does that tell you?

 

Taryn [01:09:53:04 – 01:09:55:05]

And this. So this is based on if I don’t have a job, right.

 

Melissa [01:09:55:05 – 01:10:00:02]

Insurance will go down because our HOA is really high. Because I run a business out of our home.

 

Ramit [01:10:00:02 – 01:10:00:24]

All right, let’s drop it.

 

Melissa [01:10:00:24 – 01:10:05:23]

So that would get rid of probably like $1,000 at least.

 

Ramit [01:10:06:00 – 01:10:06:22]

Let’s drop it.

 

Melissa [01:10:06:24 – 01:10:09:08]

839 it might even be less than that.

 

Ramit [01:10:09:08 – 01:10:15:22]

Yeah, 165%. And let’s go ahead and add another, add your income. So how much you think you would net.

 

Taryn [01:10:15:24 – 01:10:16:15]

100,000.

 

Ramit [01:10:16:15 – 01:10:39:21]

100,000. So let’s say you would net just for easy math, 7000 a month. Let’s just say watch, okay. You’re down to 83%. Still way too high, but within striking distance. However we need to add childcare. Childcare is how much for five kids? I got in trouble one time because I was surprised childcare for like, one kid was, I don’t know, 2500.

 

Ramit [01:10:39:23 – 01:10:42:10]

And everybody came after me on the internet, which fair enough.

 

Melissa [01:10:42:14 – 01:10:44:22]

My bet 2500 a month. Yeah.

 

Ramit [01:10:45:02 – 01:10:46:24]

Okay. How much is it for five kids?

 

Melissa [01:10:47:00 – 01:10:51:12]

It’s $200 a day. So. And it’s four days a week. So it’s.

 

Ramit [01:10:51:14 – 01:10:52:18]

800.

 

Taryn [01:10:52:20 – 01:10:53:09]

Yeah.

 

Ramit [01:10:53:11 – 01:11:22:09]

16 times 30, 200, 200 a month. Yeah. That’s crazy for just how many hours. Let’s put it down 30, 200 I’m gonna put it here. We’re now 18,000 or 103%. That’s the ball game. Unsustainable. Do you see how just two minutes worth of planning shows you that you would spend the next ten years of your life anxious, guilty, stress and failing?

 

Ramit [01:11:22:10 – 01:11:32:05]

That’s all it took. Maybe were right or wrong by 10% or even 25%. But that’s it. It doesn’t matter. The game is over and you lost. So what does this tell you?

 

Melissa [01:11:32:05 – 01:11:34:16]

I don’t know some big change but I don’t know.

 

Ramit [01:11:34:18 – 01:11:35:15]

Yes.

 

Melissa [01:11:35:17 – 01:11:37:01]

What that is.

 

Ramit [01:11:37:03 – 01:11:54:14]

Good. I at least that that’s good I agree. It’s got to be something bigger than you working harder and ten. You getting a job? Maybe even get paid. An extra $3,000 wouldn’t really change anything, right? What’s the next biggest change that you have to make?

 

Taryn [01:11:54:16 – 01:11:56:03]

I think it’s where we live.

 

Ramit [01:11:56:05 – 01:11:56:23]

Tell me.

 

Taryn [01:11:57:00 – 01:12:00:16]

Because obviously LA is way expensive. Yes. As we’re seeing.

 

Ramit [01:12:00:16 – 01:12:01:24]

Yes.

 

Taryn [01:12:02:01 – 01:12:08:02]

So I think that’s probably the first big decision we need to discuss is.

 

Ramit [01:12:08:04 – 01:12:10:04]

Where do we live. No time like the present.

 

Melissa [01:12:10:06 – 01:12:31:16]

Yeah. Realistically this is a thought that goes through my head. What is the cost of my clientele here and the business that I have versus moving, not having that money, not necessarily having her having a job wherever we move and then we have no income coming in.

 

Ramit [01:12:31:18 – 01:13:09:08]

Here’s the reality. You’ve done a great job with your business. You’re making six figures. It’s very impressive. Unfortunately, even with your business at the level it is, you can’t survive here. It’s just impossible. Once that income went away and the fact that you have five children and all these other expenses that decision was made. And so it the hardest part of facing the numbers might be confronting the reality that the changes you have to make are bigger than you ever thought possible.

 

Ramit [01:13:09:10 – 01:13:34:06]

Because to me, the worst thing is you go the next five years of your life stressed, going right back into debt, and you took that one opportunity you had of selling a house and just squandered it because you didn’t have these tough conversations played out with me for a second. Let’s say that you accept the business provided for you, but that chapter is over.

 

Ramit [01:13:34:08 – 01:13:35:10]

What would you do?

 

Melissa [01:13:35:12 – 01:13:40:12]

Like how much of rent be somewhere else? Is that much cheaper?

 

Ramit [01:13:40:14 – 01:14:02:01]

Your mind is doing the thing where you’re trying to unconsciously argue against me. What your mind is trying to do is get you to just stay in comfort. I know la, I know we can make it work. We’ve done it before. No, you can’t. You have not made it work. You have over $1 million of debt. The voice in your head is not the voice that I want you to, trust.

 

Ramit [01:14:02:03 – 01:14:10:06]

And I hate to say that because I want you to trust yourself. I want you to trust the two of you. But you need to use numbers. Yeah. Go ahead. Taryn, I know you got something on your mind.

 

Taryn [01:14:10:08 – 01:14:27:12]

I feel like the first thing we would think about is, you know, we don’t want to stop her careers. What are some good locations where you could rebuild? Obviously wouldn’t pay the same. Let’s think about places that are more affordable. Can you actually build a business there? Yes or no? Great. Then we can think about the next steps from there.

 

Taryn [01:14:27:13 – 01:14:36:07]

Like what is the cost of living there? What do I need to make? And then what do you need to supplement for us to be able to get that number down, that percentage down?

 

Ramit [01:14:36:09 – 01:14:48:03]

I think that’s a good start. Can I make some observations? Let’s say you picked a mid cost of living area. Let’s say I don’t know. Austin, Texas I’m just picking random places out.

 

Melissa [01:14:48:04 – 01:14:51:05]

Well like Vegas would be a place that I know Vegas.

 

Ramit [01:14:51:05 – 01:14:51:20]

Great great.

 

Melissa [01:14:51:20 – 01:14:52:13]

Example.

 

Ramit [01:14:52:15 – 01:15:11:08]

So you could build a business. The weather is very favorable for your business. Cost of living would come way down. So in your situation, I would play that out. Yeah. Like, how much could you make. And the first year is going to be difficult. You got to build up that business. What kind of job could you get. Your rent would be way lower.

 

Ramit [01:15:11:08 – 01:15:28:12]

And can we even economize more and like really crunch it in for a while until we hit this much in savings and then get a bigger space and then play that out? Okay, so that’s one way to go. Yeah. Can I make the observation about something I feel is like, right on in the middle of us? You know what it is, right?

 

Melissa [01:15:28:14 – 01:15:29:07]

I have no idea.

 

Ramit [01:15:29:07 – 01:15:36:24]

Your family. Oh, yeah. I know you don’t want to go to South Carolina, but just play with play the idea for a second. If you went there, would they charge you rent?

 

Melissa [01:15:37:01 – 01:15:39:00]

No, no, no.

 

Ramit [01:15:39:02 – 01:15:42:08]

So keep going. Play that out for just a second.

 

Melissa [01:15:42:10 – 01:15:50:20]

So we move out there, we would be paying rent, so we have a bit more time to get up. They have a pool so I could teach. They wouldn’t.

 

Taryn [01:15:50:22 – 01:15:55:00]

My mom is very, very happy right now watching this. There that much? Yeah.

 

Ramit [01:15:55:02 – 01:15:56:14]

Keep going.

 

Melissa [01:15:56:16 – 01:16:00:00]

So we’d have more time to like for me to build my business there.

 

Taryn [01:16:00:00 – 01:16:30:09]

So here’s the only other. The other big thing about it, not just the humidity with my hair, our lifestyle, being a gay couple, I’m not saying that can’t exist in South Carolina, but where my parents live, that stuff, it’s still definitely like there’s a lot of segregation. I know that it’s come a long way, but we live in a bubble here, and we’re able to have these five kids and not be completely judged, and feel safe, with our kids and stuff.

 

Taryn [01:16:30:15 – 01:16:53:10]

So that is definitely something that’s not working in our favor. If we were to go to that small town that my parents live in, actually, for me, that’s been probably the bigger, factor for me not wanting to go back there. Yeah, for me, that would be the worst case scenario, which we’re clearly in. But, you know, and it would be temporary, but I wouldn’t want that to be our forever, you know, if we had to, we absolutely would.

 

Ramit [01:16:53:15 – 01:17:13:15]

I really appreciate you sharing that. And I hate that we are in a situation where this is even a consideration. Yeah. Like in in my wish. We don’t even. This would not be something we even talk about, or have to worry about, but I think it’s real. Have you ever talked about this together? Yeah. Okay. Yeah. Okay.

 

Taryn [01:17:13:20 – 01:17:29:17]

Because she again, I’ve been the one keeping us in LA when I’ve had my job. We’ve stayed here for my job. She’s been ready to like, go. She’s used to moving every five years being a military family. All that. My family would love it. Like, she’s like, well, let’s move to Charlotte, North Carolina. Like my family would love, love having me closer.

 

Taryn [01:17:29:17 – 01:17:37:23]

I’d love to be closer to my family. But that’s always been the thing. And my brother argues that Charlotte is way more progressive in that way. And. Yeah. And which I’m sure it is.

 

Ramit [01:17:38:00 – 01:17:59:22]

Can we look at the numbers? This is one of those things where I think we need to start with numbers and then weigh in all the very important non-financial considerations, which are sure, legit. So if we take a look, let’s try Nevada. Let’s just model it and play for a second okay. We’re going to find a three bedroom apartment or townhouse.

 

Ramit [01:17:59:22 – 01:18:11:03]

It’s 1500 or 3000. Since you have five kids, you want to try to get a bit of a place, it’s safe, etc. 3000 bucks. All right. Utilities are whatever. We’ll keep that. It’s going to be lower than that 150.

 

Melissa [01:18:11:05 – 01:18:12:11]

If that insurance has to be low.

 

Ramit [01:18:12:11 – 01:18:26:11]

In insurance. Yeah okay. Let’s bring it to 500 though. You do have five kids and you know etc. I don’t want to be too crazy here. Debt payments. Let’s keep it at a thousand just in case. The house groceries at 1600. Know.

 

Melissa [01:18:26:13 – 01:18:27:15]

Could you, pay sales taxes?

 

Ramit [01:18:27:15 – 01:18:29:16]

Are there? No, I’m just saying y’all can’t spend that much. Yeah.

 

Melissa [01:18:29:16 – 01:18:33:21]

No, no, we’ve been all right. Well, I have hundreds even closer.

 

Ramit [01:18:33:21 – 01:18:36:18]

To 1200 clothes. 300.

 

Melissa [01:18:36:20 – 01:18:39:02]

I think I should put that in there just as a buffer, but. Okay.

 

Ramit [01:18:39:02 – 01:18:44:14]

100. You do have kids phone, fine. Kids activities?

 

Melissa [01:18:44:16 – 01:18:44:22]

Yeah.

 

Ramit [01:18:44:22 – 01:18:48:03]

So that’s $4,700 a month. No.

 

Taryn [01:18:48:05 – 01:18:50:05]

Oh, that’s medical too. Oh, that’s a.

 

Ramit [01:18:50:05 – 01:18:54:00]

Big. This is your child care and kids activities.

 

Melissa [01:18:54:04 – 01:18:57:18]

Well, kids activities would probably go away because they wouldn’t you wouldn’t be here and.

 

Ramit [01:18:57:18 – 01:19:02:12]

Doing this walk in the desert. Goodbye. What is it? So how much are we putting? 200 bucks a month?

 

Melissa [01:19:02:16 – 01:19:03:09]

Yeah.

 

Ramit [01:19:03:11 – 01:19:08:24]

That’s not a lot. It is what it is. And then, what’s this, 3200? That’s child.

 

Melissa [01:19:08:24 – 01:19:10:00]

Care. Child care?

 

Ramit [01:19:10:02 – 01:19:11:03]

You’re going to have to have it, right?

 

Melissa [01:19:11:09 – 01:19:12:04]

Yeah.

 

Ramit [01:19:12:06 – 01:19:32:10]

Let’s keep it the same. Maybe it’s a bit cheaper, but let’s keep it. Subscriptions at $1,130. Yeah. Right. Yeah, $50 a month. All right. And then, miscellaneous at 2000 bucks. Yeah. Right. You’ll have $350 to figure out your miscellaneous, which is things that come up, tires, etc.. So you need to plan for that. It’s going to be hard.

 

Ramit [01:19:32:11 – 01:19:44:23]

That’s actually challenging. But this is what it needs to be. Oh, I just got news. This actually is at $2,000 a month for your rent is bigger than your current house.

 

Melissa [01:19:45:00 – 01:19:46:03]

But that’s crazy.

 

Ramit [01:19:46:04 – 01:20:05:19]

You’re currently at 9923 it. Wow. Look at that fixed cost number 55%. Well, that’s actually pretty cool. I did not expect that. Now I want to point something out. Let’s say your debt does get paid off. Okay. Like you either through the house or eventually you pay it off. Watch what happens. This number. I’m gonna take it to zero.

 

Ramit [01:20:05:21 – 01:20:20:02]

You’re not paying $1,000 a month anymore. Whoa! Your fixed costs are up to 50%. That’s actually amazing. Like incredible. Which means you have nine. This can’t be right. $9,000 a month to play with?

 

Melissa [01:20:20:03 – 01:20:24:10]

No, because that’s based on an income that we’re not making any more, though. Oh, yeah.

 

Ramit [01:20:24:12 – 01:20:30:00]

Let’s fix it. How much would you make? Boy, it’s got to come way down. Right down, like 2000.

 

Melissa [01:20:30:00 – 01:20:32:06]

3000, I’d say maybe 3000.

 

Ramit [01:20:32:06 – 01:20:41:16]

Okay. Maybe less. 2500. Let’s be conservative. Okay. And then, Taryn, maybe it’s got to be less 80,000.

 

Taryn [01:20:41:16 – 01:20:42:14]

80,000? I have no.

 

Ramit [01:20:42:14 – 01:20:51:00]

Idea. 80,000 is a $5. Let’s say 5000. I think you could find something there for sure. Oh! Whoa!

 

Melissa [01:20:51:01 – 01:20:52:03]

Oh, my gosh, that’s crazy.

 

Ramit [01:20:52:03 – 01:20:54:12]

Back up to 119% on this.

 

Melissa [01:20:54:12 – 01:20:55:10]

House across all the.

 

Ramit [01:20:55:10 – 01:21:04:15]

Way. Yeah. And, I want to add your debt payments back and watch this. You’re now at 132%.

 

Ramit [01:21:04:17 – 01:21:06:18]

What does it tell you?

 

Melissa [01:21:06:20 – 01:21:07:21]

They can’t afford rent.

 

Ramit [01:21:07:23 – 01:21:22:18]

Yeah, you can’t afford this very quick back of the napkin that I did. Even if you cut it by 30% 40, you cannot afford that. Tell me what’s going through your head right now.

 

Melissa [01:21:22:20 – 01:21:25:08]

Am I going live in South Carolina?

 

Ramit [01:21:25:10 – 01:21:41:22]

Shall we play that out for a second? Because remember what we’re doing here. We are starting with the financial numbers. And we got to nail those first. And then we go to the non-financial consumer. Like you might be like it’s too hot or too humid or it’s I don’t know if it feels safe, but like, first let’s get the numbers.

 

Ramit [01:21:42:00 – 01:21:49:00]

Sure. Okay. Let’s try that. So rent in South Carolina be zero. You mentioned you want to pay a little.

 

Taryn [01:21:49:02 – 01:21:49:22]

I’d want to contribute.

 

Ramit [01:21:49:22 – 01:21:57:22]

Let’s pay 500 a month. All right. I don’t know your family dynamic, but let’s just do, utilities. What?

 

Melissa [01:21:57:24 – 01:21:59:05]

Zero zero.

 

Ramit [01:21:59:11 – 01:22:05:23]

All right. Insurance. Let’s keep it. Car payment. Gas. Can you all get rid of one car?

 

Melissa [01:22:06:00 – 01:22:08:20]

We made it for there, I guess. Yeah.

 

Ramit [01:22:08:22 – 01:22:13:10]

All right, let’s drop this to. Let’s just say 700 conservatively. Okay.

 

Melissa [01:22:13:12 – 01:22:14:21]

Then.

 

Ramit [01:22:14:23 – 01:22:18:00]

Debt payments will keep that groceries at 1200.

 

Melissa [01:22:18:02 – 01:22:22:06]

And then they’d be way less there. Yeah, I know, because then her parents would, like, be cooking and stuff.

 

Ramit [01:22:22:06 – 01:22:36:12]

I love it. 300 still contributing something like, yeah, we’re less clothes at 100. Are you cool with that fine phone? Fine kids activities, etc.? Child care.

 

Melissa [01:22:36:14 – 01:22:39:20]

Now safe? Yeah. We wouldn’t need to stick it to zero.

 

Ramit [01:22:39:22 – 01:22:45:07]

Well kids activities. Let’s give them. They get they get. You know what? Nice 250.

 

Taryn [01:22:45:09 – 01:22:47:13]

I mean, I wouldn’t want to fully rely on them watching the kids. So that’s.

 

Ramit [01:22:47:13 – 01:22:49:19]

All. Let’s add some. Yeah. Let’s say you’re right.

 

Taryn [01:22:50:00 – 01:22:52:06]

Let’s let’s be fair to them.

 

Ramit [01:22:52:08 – 01:22:53:08]

I’m going to put a thousand.

 

Melissa [01:22:53:09 – 01:22:54:12]

I know it could be more.

 

Ramit [01:22:54:18 – 01:23:09:12]

You’re right. It’s not fair. We should be considerate. Okay. Subscriptions at 50, miscellaneous at 350. Holy. Look at this number. It’s $4,600 a month. That’s crazy. It’s striking. Right. Let’s scroll up. You’re at 62%.

 

Melissa [01:23:09:14 – 01:23:12:15]

Baby, I change. Well, I don’t know that income.

 

Taryn [01:23:12:17 – 01:23:14:19]

Yeah, I don’t know.

 

Ramit [01:23:14:21 – 01:23:16:12]

We have you making.

 

Melissa [01:23:16:14 – 01:23:20:01]

Like, 80,000. I don’t even know. Now, what would you do in South Carolina?

 

Taryn [01:23:20:07 – 01:23:23:17]

I probably work for school district or something because my mom has connections there.

 

Melissa [01:23:23:17 – 01:23:25:05]

Yeah, it’s really my pay.

 

Taryn [01:23:25:05 – 01:23:29:02]

Pretty well for South Carolina, I would think like 65,000.

 

Melissa [01:23:29:08 – 01:23:31:00]

Anything to be 80,000, maybe.

 

Ramit [01:23:31:04 – 01:23:48:02]

Could be a pension, might not pay 80 off the top, but it could be a pension which would reduce the amount you need to invest. Worth finding out. Part of this CSP process and projection is you actually don’t need to know everything. Yeah, it’s like be comfortable that we’re sketching on the back of a napkin, but like it will.

 

Ramit [01:23:48:03 – 01:24:18:10]

If you’re at 132%, it’s over. You can’t do there’s no fixing that. At 62%, you could probably wiggle around. You could ask your parents, hey, can we pay a little bit less right now or you can pay them more? There’s so many different ways. At 62%. At 130, it’s over. I want to point out that in this scenario, you have $2,854 a month left over, which what would you do with that money if you had it?

 

Melissa [01:24:18:12 – 01:24:19:10]

And that’s.

 

Ramit [01:24:19:12 – 01:24:20:16]

Yeah, invest and save and.

 

Melissa [01:24:20:16 – 01:24:21:02]

Save right.

 

Ramit [01:24:21:02 – 01:24:42:02]

Now. That’s what I would I would take a little bit, you know, and spend it maybe 5 to 7% low. And the rest of my take home pay would go to building up a savings and building up investing, which will allow you to not have to live in South Carolina forever. It will allow you to eventually have enough to be able to move somewhere else.

 

Ramit [01:24:42:06 – 01:25:04:17]

You can take your time finding a job because you’re in the comfort of home. Also, it allow you to eventually get towards that rich life of being able to eat out. You can’t do it right now, but you could if you start building up savings and investments. What are you taking away? I’m not pushing for any one thing, but I am showing you how to project.

 

Ramit [01:25:04:17 – 01:25:09:02]

Yeah, the possibilities. What is your reaction to this turn?

 

Taryn [01:25:09:04 – 01:25:26:01]

I mean, my initial reaction is obviously I just feel like we’ve failed, which is really disappointing. Yeah. And obviously nothing against my family. Just, like, it’s just a real bummer that we’re in this situation. So, it makes sense, and we got to do it.

 

Ramit [01:25:26:03 – 01:25:28:01]

Well. So what’s your reaction to this?

 

Melissa [01:25:28:03 – 01:25:33:24]

I’m trying to, like, actually picture as, like, living with her parents and, like, what would that do to our marriage?

 

Taryn [01:25:34:01 – 01:25:36:05]

Well, I like I said, I think they would move out, but.

 

Melissa [01:25:36:07 – 01:25:49:00]

Never would they really move out or would they go. That’s unrealistic. I think they say that that would not happen. And I’m assuming in like how many months with this being, you know, like how short term, long term would it be if we get to a point where we save enough?

 

Ramit [01:25:49:05 – 01:25:50:14]

Melissa [01:25:50:16 – 01:26:07:13]

Where would we go next? Like, what would we even be saving for? Like if we’re not paying a rent, then we get used to not paying a rent, you know what I mean? So then it’s like, how do we reenter society? So those are like all the thoughts that come to my mind.

 

Ramit [01:26:07:14 – 01:26:43:22]

I like these questions. A couple things that occurred to me. One, I think you raise a really good question of like what would our what happened to our marriage. And I think in your scenario your marriage needs a mission. And so I would actually flip it from like, oh, this could be like uncomfortable to like, wow, what a blessing that we have a family that can offer a space, cut our rent to almost nothing and help with the kids, and most importantly, give us a mission.

 

Ramit [01:26:43:24 – 01:27:23:00]

That mission being, we are going to build the skills of managing our money. We have proven unable to do that until now. And right now we’re living in LA, which is basically the Olympics of money. LA and New York is where it is incredibly expensive and the world is against you. Unless you’re making a ton of money. We’re going to get our bearings with the blessing of our family, to be able to allow us to stay, or a super low cost of living city where we make enough, etc. and we’re going to learn month after month how to save, how to invest, how to not spend the way we used to.

 

Ramit [01:27:23:05 – 01:27:49:16]

And once we hit these milestones, we can talk about the next step. But this is how much we need to have in our savings. This is how much we need to have invested. This is how many months we need to have done it consecutively for. That’s how I would think about it. I can’t tell you to do it, but if we’re talking about a reset, which in my opinion is what is needed, so you never get back into this situation.

 

Ramit [01:27:49:18 – 01:28:12:02]

Yeah. You can’t reset while still living, you know, next to every freaking LA restaurant and basically doing the same thing that you’ve been doing just with wiping off the debt. You’ll be right back into it. Yeah, it’s kind of striking to see the difference between, like, Vegas and living at home. What do you think?

 

Melissa [01:28:12:04 – 01:28:21:00]

I think if you move to Vegas, what money are we going with? And I have no client base. You don’t even have a job.

 

Taryn [01:28:21:02 – 01:28:22:00]

Well, yeah.

 

Melissa [01:28:22:02 – 01:28:25:23]

So it’s like, starting from, like, really scratch, starting.

 

Ramit [01:28:25:23 – 01:28:43:00]

From scratch and maybe even starting in debt, because where’s all that moving money going to come from? Like, hopefully you sell the house for a bunch of money, but even that takes a while. So now you’re back on the credit card? Yeah. I don’t want that. I don’t want one more day of paying on a credit card. Same.

 

Ramit [01:28:43:02 – 01:28:46:01]

Taryn, realistically, when do you think that you could start working again?

 

Taryn [01:28:46:05 – 01:28:59:20]

I mean, I’m ready now. I just I just cannot, like, I said, I have the one role that I’ve been. I’m on the fourth round. But again, it’s like I, it’s it would be in L.A. or New York, so. Okay, even now that’s just feeling like,

 

Ramit [01:28:59:22 – 01:29:20:13]

Like that would probably be pretty hard. Yeah. I think in another place in time and a place that you could get to. Just not today. Yeah, yeah. You would have enough buffer, enough savings and have healthy habits to be able to go like, okay, LA is or New York. Yeah. But today it’s like really challenging. Yeah. Yeah.

 

Ramit [01:29:20:15 – 01:29:25:11]

What about your kids. If you change nothing you kind of kept on this path where you think they would notice today.

 

Taryn [01:29:25:12 – 01:29:33:00]

Nothing’s really really a change for them. Again the 12 year old knows because like their house up for sale and it’s like y you know like yeah, we’re having some of those conversations.

 

Ramit [01:29:33:00 – 01:29:42:22]

Yeah. What about as their parents got more and more into debt and older and older less able to recover. I think they would notice the parents getting stressed.

 

Melissa [01:29:43:01 – 01:29:46:02]

Oh yeah. Oh yeah. Yeah.

 

Ramit [01:29:46:04 – 01:29:51:15]

Yeah. And then as they turn 18 and 20 and 24 and 20, what do you think they would.

 

Melissa [01:29:51:15 – 01:29:59:12]

Take the same things we took from it. Like the same thing that I did, which was like that is okay. You’ll come out of it.

 

Ramit [01:29:59:13 – 01:30:00:16]

Everybody has debt.

 

Melissa [01:30:00:17 – 01:30:01:11]

Yeah.

 

Ramit [01:30:01:13 – 01:30:09:12]

It’s fine. And just just try your best and things will be okay. Yeah. And then repeats.

 

Melissa [01:30:09:15 – 01:30:12:17]

Which is what I’m like, literally teaching them the opposite of.

 

Ramit [01:30:12:19 – 01:30:14:08]

Oh you’re teaching them that.

 

Melissa [01:30:14:10 – 01:30:17:13]

Like we’re teaching like words. Two words.

 

Ramit [01:30:17:13 – 01:30:21:04]

Of course. Yeah. Yeah. And how about through actions.

 

Melissa [01:30:21:06 – 01:30:26:07]

No. Because you have no money that you say that I’m not I like you guys. Saved your money. That’s great.

 

Ramit [01:30:26:07 – 01:30:36:23]

Yeah I heard that kids love when parents tell them something but do the opposite. I love that learning stuff. It works. Okay. Yeah. We’re.

 

Ramit [01:30:37:00 – 01:31:00:04]

That’s why. I mean, that having a mission is actually really powerful. Like, incredibly more than you may even internalize the idea of, like, making a massive change can can be scary, no doubt about it. But actually bringing the family along and teaching them like this is something that we have to do. Here’s why. And at age appropriate levels, a 12 year old should know basically everything.

 

Ramit [01:31:00:07 – 01:31:18:17]

Like maybe not exact numbers, but like this is what we did. For the last 20 years, we’ve been in and out of debt. And it started off because we were making a lot of money and we would spend and that’s fine. Like it’s nice to be able to do that, but we didn’t pay attention. And actually we we didn’t communicate.

 

Ramit [01:31:18:18 – 01:31:37:13]

We don’t sit down and talk about money. We do it this way. We do it that way. And we’ve realized that’s a mistake. And we got into a lot of debt. And that’s why now we are selling our house and we need your help to start over. Here’s what we are doing. We are reading. I will teach you to be rich together.

 

Ramit [01:31:37:15 – 01:31:55:23]

We are joining roommates, money coaching program, whatever. We need you to come with us and we need you to help us come up with a plan and stick with it. We’re going to hang it on the fridge or we’re going to talk about it once a month. But we need you because we need all of us to do it as a family.

 

Ramit [01:31:56:00 – 01:31:58:05]

How do you think your kids would react to that?

 

Melissa [01:31:58:07 – 01:32:00:04]

Yeah, I think they’d be excited to do it.

 

Taryn [01:32:00:06 – 01:32:04:22]

Yeah, the 12 year old would be. Yeah. The other ones I don’t fully understand yet, but we’ll get them there.

 

Ramit [01:32:04:22 – 01:32:26:17]

Yeah. The younger ones is obviously different. Not everything has to be a lecture for sure. Right. But just like kind of like telling the 12 year old like, you know, instead of a dollar, like I made $1,000 and this is what I did with it. Kids love hearing their parents mistakes. They love it. And it actually is a way to bond closer when it comes to money.

 

Ramit [01:32:26:17 – 01:32:47:13]

And the thing is like, no parents do this because they don’t even have the confidence or competence in their own financial knowledge. How are they going to share mistakes? They don’t even realize the mistakes they are making. But you do. So this is why I say marriage. Having a mission is really powerful. You all have some work to do.

 

Ramit [01:32:47:15 – 01:33:06:24]

You have some numbers to crunch. I think it’s worth looking into jobs, talking to your mom. How much do these jobs pay and getting really curious about what it would look like. Okay, I would love it if you could do it with an open mind. I actually think both of you are quite adaptable in the way you think.

 

Ramit [01:33:06:24 – 01:33:14:21]

I’ve seen that today. So if that voice comes up in the back of your head, name it, you know, like, stationery.

 

Melissa [01:33:14:21 – 01:33:16:20]

Melissa some someone they’re Michelle.

 

Ramit [01:33:16:23 – 01:33:37:20]

Michelle. Michelle. Yes. And, Michelle, like, wants you to just stay put and keep doing the same thing. And we don’t want that because we know that no matter what, you’ve got to make a huge change. Yeah, it has to happen. Okay, Karen, you’re looking for a job. I’m going to gift you a copy of my dream job program so you can look for a job.

 

Ramit [01:33:38:01 – 01:33:55:19]

Much of this will be familiar to you because you’ve worked in top tier jobs. Some of it will be new to you. I think you can use it to get a high paying job even now, potentially remotely, which would make things quite amazing for the two of you. Yeah. Okay, so we’ll send you a copy of that. You can use it.

 

Ramit [01:33:55:19 – 01:34:20:00]

Let us know if you have any questions. And then I want you to become decisive. Like the House is on the market. You’ve proven you can be decisive. That’s amazing. Yeah, I modeled out if you make 150 K, that’s still great. Anything above that is like gravy. Like you could fill up a savings account. You could start to simulate getting a steady income, which I think is critical.

 

Ramit [01:34:20:01 – 01:34:45:01]

Yeah. You have flexibility with your family. They’re so generous in terms of allowing you to pause that loan. But if you have the money, you may want to consider paying some of it, if not all of it depends on how much you make. Any questions on any of that? A I don’t think so. I think the big theme is, be decisive, move fast, and it’s got to be different.

 

Ramit [01:34:45:03 – 01:34:51:13]

That is how I would think about it. Okay. Melissa, what surprised you most about today’s conversation?

 

Melissa [01:34:51:15 – 01:35:11:20]

Possibly moving to South Carolina. Seeing the numbers like worked out and the fact that in my mind, like I thought I was at the house or I could do this with all like work out and it might not work out that way. Yeah. In some way the most surprising.

 

Taryn [01:35:11:20 – 01:35:30:10]

Yeah, I see in the numbers for sure, because I think I was of the mindset to like selling the house will be huge. Me getting another job will be huge, and then it’s like renting. But yeah, it’s like we’re still to your point, we’re just going to end up back in the same place. I think I thought we won’t be paying eight grand a month or living, you know, five.

 

Taryn [01:35:30:12 – 01:35:39:18]

I won’t be paying the loan. That’s another like it feels like a lot of money when you just say it like that. I think that was probably most surprising for me is like. Oh, well, yeah, we really can’t make this work.

 

Ramit [01:35:39:19 – 01:35:49:13]

That’s really awesome. Sometimes just knowing like that doesn’t work is actually the most helpful thing at all. Yeah. You know, like, we didn’t even include moving fees into this.

 

Taryn [01:35:49:15 – 01:35:52:18]

That was going in my head. Dude, that’s a lot. That’s like even shipping a car out there.

 

Melissa [01:35:52:18 – 01:35:54:07]

Yeah, that’s a lot. No, maybe, just.

 

Taryn [01:35:54:08 – 01:35:55:14]

Maybe we can drive it, but yeah.

 

Melissa [01:35:55:16 – 01:35:56:12]

All the stuff.

 

Ramit [01:35:56:12 – 01:36:17:17]

Is like it needs to be modeled in and it’s five, ten, $15,000 when you add all this stuff for a deposit, like, it’s a lot of money. Yeah. So what I want and I’m so glad you you were surprised by that is the importance of running the numbers. And and you’ll notice every time I had a choice to make, I added more money because I want to be conservative.

 

Ramit [01:36:17:19 – 01:36:21:03]

Yeah, I never want to be surprised with an unexpected cost.

 

Taryn [01:36:21:06 – 01:36:21:19]

Yeah.

 

Ramit [01:36:21:21 – 01:36:44:24]

If anything, I’m going to be surprised by having extra money at the end of the year. But I. I am the opposite of delusional. I try to be realistic and a little conservative. I believe in myself. I believe that I can work and get amazing things, land a dream job, start another business no matter where. I believe that, and I’m going to model out that maybe it’s going to take me four times as long.

 

Ramit [01:36:45:01 – 01:36:49:04]

Okay. How do you feel now versus when you walked in here?

 

Taryn [01:36:49:04 – 01:37:13:10]

Taryn a little more stressed out, just because I really didn’t think not living in LA wasn’t going to even be an option. I just felt like I just need to get a job again and like, sell the house and like, so I feel a little more stress just in that we have a lot of work to do, and we’re going to be making some very big, different decisions that we haven’t.

 

Taryn [01:37:13:12 – 01:37:24:07]

Like we joked about, like going to South Carolina. We’re going again. We know of Dire Straits. Yeah, absolutely. I don’t think I realized we were like, oh, we were that. We are dire straits. Yeah. Or like right there.

 

Ramit [01:37:24:09 – 01:37:24:23]

Yeah.

 

Taryn [01:37:25:00 – 01:37:30:22]

But also I feel good and like, okay, we have an answer. It feels more clear.

 

Ramit [01:37:30:24 – 01:37:57:00]

The overreliance on feelings in money is really common. And in my opinion, is like a major problem. Many people just talk about how they feel about money and and ironically, I’m the one trying to encourage us to like, lean into our feelings. Feelings are real. It’s not just math, but we always have to start with the numbers, because too often, too many of us are only talking about our feelings.

 

Ramit [01:37:57:02 – 01:38:18:10]

And that’s how you get into tens of thousands, hundreds of thousands, even $1 million of debt and not really understand how. So I actually am really happy to hear you say you’re feeling like, wow, maybe a little stressed, but that’s okay. I never shy away from stress. We can handle it. And wow, a realization. We have some big decisions to make.

 

Ramit [01:38:18:10 – 01:38:24:07]

That’s amazing. How about you Melissa? How are you feeling now versus when you walked in? Oh.

 

Melissa [01:38:24:09 – 01:38:31:08]

Definitely stressed. Kind of more confused. It’s a lot. And like, processing.

 

Ramit [01:38:31:08 – 01:38:31:20]

It’s a lot.

 

Melissa [01:38:32:00 – 01:38:40:00]

And I, I’m actually thinking, like, numbers and processing, like the move and like living there and yeah.

 

Ramit [01:38:40:02 – 01:39:09:11]

Here’s how I would approach it. In your situation, it’s very difficult to do these numbers in your head. And you saw that right? You talked about you sell this and we go to 5000 a month. It just kind of like seem fine. That’s because you are really doing the numbers. So the way I would approach it, if I’m in your situation and I’m like, well, this is a lot, I would say to myself, first of all, one big takeaway that I’ve gotten from this and from our meet is we need to do the numbers much more carefully.

 

Ramit [01:39:09:13 – 01:39:27:22]

We both need to do them independently and then bring them to each other and compare notes like, we need to take this seriously. Number two, I don’t have to do this right now. Like, right, I, I trust that when I’m at home and I can look at Zillow and I can plug in some numbers, I will come up with those, but I don’t need to do it in my head.

 

Ramit [01:39:27:22 – 01:39:51:13]

And actually, I don’t trust my own math in my head. So numbers need to be done at a computer. The bigger question is, am I willing to make a major change in where we live, how we live, and our relationship around money that that the two of you have work to do on what is our dynamic controller bystander.

 

Ramit [01:39:51:15 – 01:40:13:10]

How do we change that? Because just fixing the math, even moving to a place where we pay no rent, is not going to change a thing until the two of us are partners. What does partnership look like? Are there other episodes of this podcast we should go listen to because we need to recalibrate therapists, etc., etc. that is where I think you could spend time as well as the numbers.

 

Ramit [01:40:13:12 – 01:40:41:23]

Thank you so much for coming in. Thank you, thank you. I don’t take any pleasure in showing them that their life is about to change. It’s not fun, actually. I would rather have somebody who I tweak a couple numbers and help show them they’re going to have $16 million. But the fact of the matter is that they are in a major crisis, and they need a bit of shaking to realize how bad it really is.

 

Ramit [01:40:42:00 – 01:41:02:15]

This would be bad if it was just the two of them. With five children. It is catastrophic and they need to take action now. One of the things that I feel fortunate about is that when you go to somebody who is a third party, that person can cut right through all of the other issues that may have bogged you down in the weeds and just tell you exactly what is at stake here.

 

Ramit [01:41:02:19 – 01:41:30:05]

And the fact is they’ve got to move. They cannot stay in the same place. They cannot even cut their rent by 30%. Nope. They have to make massive, gargantuan life changes. Deep down, they’ve been counting on selling the house to patch up this problem thinking once we get through that, we’ll go back to the way we were. You could even see it when I asked them what their rich life is, and they were talking about ordering food.

 

Ramit [01:41:30:05 – 01:41:37:10]

In this future, if they follow my suggestions and carefully run the numbers, that simply will not exist. And that’s actually.

 

Melissa [01:41:37:10 – 01:41:38:23]

An extremely.

 

Ramit [01:41:38:23 – 01:42:08:09]

Hard transition to make. Can you imagine as a household making what, 350, $450,000 a year and two years later, you’re not able to order delivery? I don’t think many people can actually understand the enormity, the severity of that change, but that is exactly what I am asking them to do. They don’t have to do it. They can sell their house, pay off a little bit of debt, stay in LA, try to get a better job, try, try, try.

 

Ramit [01:42:08:11 – 01:42:30:13]

And I guarantee you in five years they will be back in debt. It is a horrible life to go through, struggling over and over again because when you don’t get out of a bad place, you start to think that it’s not just the world, it’s you. You start to be demoralized. You start to basically give up. I won’t allow that.

 

Ramit [01:42:30:15 – 01:42:49:08]

That’s not why people come on this show. They want the truth. They want me to tell it to them. They want me to give it to them compassionately. Notice that I didn’t rip them apart. It would have been easy. I certainly would have got better views on my YouTube shorts. But that’s not what this show is. I’m not here to humiliate people for making poor decisions, which they have.

 

Ramit [01:42:49:14 – 01:43:09:19]

I slowed it down. I asked them lots of questions. Sometimes when they went down the wrong path, I let them and then I tried to bring them back. I need them to get to the point where they realize buying that pool was a big mistake. Not talking about money as partners was a big mistake. Not cutting their expenses immediately.

 

Ramit [01:43:09:19 – 01:43:31:14]

When Taryn lost her job was a big mistake. I think they can get there. The fastest way is complete radical changes in the way that they treat money. Don’t look back. Don’t try to bring part of LA with you. That chapter is over. We appreciate it. It’s been great. Now we are moving on to a new chapter of our life.

 

Ramit [01:43:31:14 – 01:43:36:15]

And I’m really eager to see what they decide to do. Let’s check out their follow ups.

 

Melissa [01:43:36:17 – 01:44:05:10]

So after our meeting with Remy, I think the biggest surprise for me were the beliefs that I held from growing up in my childhood into adulthood about finances and money and the biggest surprise was how it’s going to be such a big overhaul for our lives that we need to do in order to be where we want to be financially.

 

Melissa [01:44:05:12 – 01:44:42:07]

So much so that I processed it really hard that night and really wasn’t expecting that. So we are we’re kind of exp. We are figuring out, are we moving out of California? Are we going to stay depending on what job she might get. But short term is obviously sell the house and move in with family for 3 or 4 months to get our bearings and figure out what the next big step is, whether it’s moving out of state or staying in California.

 

Taryn [01:44:42:09 – 01:45:23:24]

So I think the biggest takeaway for me after meeting was for me, was just how severe our situation is. I know it was bad. But hearing that we need a full reset of thinking of way of living, that was probably the biggest surprise for me. I don’t think I realized just how severe it was. We have to make huge life changes right now if we want things to get better, if we want to be able to, you know, have financial freedom, enjoy traveling, eating our fun things, not having debt.

 

Taryn [01:45:24:01 – 01:45:56:12]

Really big changes need to happen for us. So that’s the biggest takeaway is that we just, you know, no more talking about it. No more. Let’s sit down and put down a budget together and stick to it and then forget about it two days later. Like, we actually need to make huge life changes to make this work. As far as what changes were actually making now it’s selling the house, couples therapy, really evaluating other areas where we could live, whether it be with my family in South Carolina, whether it be with Melissa’s family here in Torrance, temporarily.

 

Taryn [01:45:56:14 – 01:46:14:17]

You know, we’re figuring that all out to see what we can do. So those are our first immediate steps. But there’s going to be a lot of other bigger steps. You know, obviously, that are going to come through with couples counseling and, figuring out, you know, what changes we need to make. And, and that sort of thing.

 

Melissa [01:46:14:19 – 01:46:43:02]

Hi. So it’s been six weeks since we sat down with Remy, and, there’s been some significant changes. Our house is on the market to sell. That’ll take a huge chunk of money from our fixed costs, so we can rent something way lower to try to keep it in that 60% range. We have gone over all of our numbers in depth and cut everything we needed to.

 

Melissa [01:46:43:02 – 01:47:09:20]

We brought, a credit card. We transferred to 0%. So we’re not paying just minimum payment on that. We’re able to put more towards debt in general. One of the bigger things is that we started a couples therapy, which I think has helped us get through some tough times since meeting with Remy, because we really went through a big mindset shift after, and it both kind of rattled us both.

 

Melissa [01:47:09:20 – 01:47:20:05]

And I think now being in therapy, it’s really helped us get a grasp of financially where we are and our mindset around that.

 

Taryn [01:47:20:11 – 01:47:40:00]

And I’m going to be stepping in more, not sitting on the sidelines as much, when it comes to finances. So we’re going to have a weekly meeting to talk about upcoming expenses for the month. I’m going to manage the budget, for what we, what we have to spend for the month on groceries and, and school staff and all that sort of thing.

 

Taryn [01:47:40:02 – 01:48:06:05]

So we’re definitely going to be tighter aligned on that. Less all on Melissa for that. I also so I was looking for work, but I did land a, contract position, which I’m excited about. So it’s good to be back working again. I at least have guaranteed work for about 6 to 11 months. So that is definitely a burden off the shoulders, but still looking for something more full time.

 

Melissa [01:48:06:07 – 01:48:32:06]

And then in addition to my assigned business, I’m going to be looking into, like a remote assisting job. So whether it’s helping other moms with, like, stuff that they can’t do themselves, like scheduling appointments, everything, or working for an executive and just being a virtual assistant. I’m going to look into that, just like I have a side hustle to bring in more money to help towards the debt and investments in savings.

 

Melissa [01:48:32:10 – 01:48:57:14]

Some it’s looking better, obviously, to sell this house and oh, the other thing is potentially moving in a family for a few months just to have some money that we can put into savings. That’s another option we will be doing as well as potentially renting near family who have offered to do childcare for a year, which would be a huge savings.

 

Melissa [01:48:57:14 – 01:49:08:00]

So all of that is going to be contributing to helping us save more and hopefully investing and saving spending less of investing and saving money.

 

Taryn [01:49:08:02 – 01:49:20:00]

Yeah, but the meeting with Remy, it was a huge wake up call to both of us. So we definitely have a mindset change. Lots, lots more to do. Still feel like we’re just scratching the surface. But, you know, I think we’re we’re on the right track.

 

Melissa [01:49:20:05 – 01:49:22:20]

Yeah. Thank you. Thank you.

 

Ramit [01:49:22:22 – 01:49:51:15]

Listen up. If you want my help with your specific money questions, there are only two ways to get it. First, you can apply to be on this podcast at dot com slash apply. Or second you can join my money coaching program instantly at Bootcamp Money Coaching. In that program you get access to live virtual events, monthly group coaching calls, live Q&A, and an amazing huge community of other people like you.

 

Ramit [01:49:51:15 – 01:49:55:02]

Check it out at Comma Money Coaching.