Last Updated on April 22, 2026 by Katie

Your paycheck hits, a few bills clear, and the balance drops faster than it should. That cycle usually comes from repeated choices, not one giant mistake.

Recent Bank of America data shows that about one in four US households live paycheck to paycheck in 2026, and a YouGov report on debt, savings, and investing found that many Americans feel they are merely keeping up or falling behind.

Money pressure also spills into the rest of life, because stress can hurt sleep, focus, and energy.

The good news is that bad money habits can change.

Below are 11 common habits that drain cash, raise anxiety, and make saving feel impossible, plus simple ways to break them.

Also, check out these simple ways to cut monthly expenses and save big.

 

 

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The Daily Bad Money Habits that Drain Your Paycheck First

Daily spending leaks are easy to brush off because each one seems small.

Over time, though, they can swallow raises, tax refunds, and any hope of getting ahead.

 

1. Spending more than you earn, even by a little

Overspending does not need to be huge to hurt you. Going over by $75 or $100 a month can push you toward credit cards, overdrafts, and late fees.

That gap also creates mental strain. When every dollar already has a job, even a minor surprise can trigger worry, shame, and lost sleep.

In 2026, with about one in four households living paycheck to paycheck, this habit is common and costly.

Quick steps to make a fix:

• Compare your take-home pay to all monthly spending.
• Cut one nonessential expense this week.
• Review your budget every payday, not once a month.

Further reading: How to stop living paycheck to paycheck.

 

2. Buying on impulse and telling yourself it was a good deal

Impulse spending usually feels smart in the moment.

The item is on sale, delivery is fast, and you promise yourself you “needed” it anyway. Later, the pattern shows up in your statements.

Many people do not realize how much they spend until they check receipts, credit card charges, and app purchases side by side.

A good pause button is this question: “How many hours did I work for this?”

Quick steps to make a fix:

• Wait 24 hours before buying nonessentials.
• Keep a wish list instead of buying on sight.
• Check your statements weekly for surprise spending.

Further reading: 13 things to stop buying to save thousands.

 

3. Ignoring the small stuff, like takeout, coffee, delivery fees, and app charges

A $6 coffee five times a week is more than $1,500 a year.

Add delivery fees, convenience store stops, and late-night takeout, and the number climbs fast.

These habits also hit your health when they lead to more fast food and less planning.

Research on wasteful spending, from DoorDash to dead subscriptions shows how often convenience spending slips under the radar.

Quick steps to make a fix:

• Meal prep two or three easy lunches.
• Bring coffee from home a few days a week.
• Set a monthly cap for fun food spending.

 

The Bad Money Habits that Make Your Bills Feel Heavier Every Month

Bigger money problems often come from weak systems, not weak character.

When you do not plan, track, or clean up recurring costs, every bill feels heavier.

 

4. Not having a budget because it feels too strict

A budget gives direction. Without one, money tends to drift toward whatever feels urgent or fun that day.

That makes it harder to cover needs, enjoy wants, pay down debt, and save at the same time.

A simple plan works better than guesswork, and these budgeting tips for beginners can help you start without making life miserable.

A budget gives your money a job before your habits spend it.

Quick steps to make a fix:

• Try the 50/30/20 method as a starting point.
• Check your spending once a week.
• Assign every dollar to a category or goal.

Further reading: Common budgeting mistakes that drain your finances.

 

5. Not tracking where your money actually goes

Most people can name rent, car insurance, and maybe groceries.

The rest often gets lumped into “miscellaneous,” which is where progress disappears.

Tracking shows the truth. Once you review statements, receipts, and app charges, you can spot patterns, cut waste, and stop surprise charges from hitting at the worst time.

It also lowers stress because fewer bills catch you off guard.

Quick steps to make a fix:

• Use one app, notebook, or spreadsheet only.
• Review the last 30 days of transactions.
• Flag anything you forgot you were paying for.

 

6. Letting subscriptions and auto-renewals pile up

Streaming services, premium apps, memberships, cloud storage, music plans, and trials can turn into a hidden monthly bill stack.

Many free trials are built to be forgotten.

One service may cost only a few dollars, but six or seven services can chew up real money every month.

If they add little value, they are not harmless.

Quick steps to make a fix:

• Audit the last two months of bank statements.
• Cancel anything you did not use last month.
• Share family plans where the service allows it.

 

The Debt and No Savings Habits that Keep You One Emergency Away from Broke

Debt and no savings make normal problems feel like disasters. Interest, fees, and panic can wipe out a lot of hard work.

 

7. Paying the minimum on credit cards and carrying the balance

Minimum payments keep debt around for years. Meanwhile, high credit card interest keeps pulling money away from your future.

That is why this habit is so damaging. Long-term investing may grow wealth over time, but credit card interest often runs much higher, so debt can outpace your progress fast.

A 2026 WalletHub credit card debt survey also shows how many people are still struggling to get balances under control.

Paying only the minimum gives interest first claim on your paycheck.

Quick steps to make a fix:

• Pay the full balance whenever you can.
• Use debit or cash for daily spending if cards tempt you.
• Call and ask for a lower rate or hardship option.

Further reading: 10 practical tips to help you pay off debt fast.

 

8. Having no emergency fund for the stuff life always throws at you

Car repairs, medical bills, job cuts, and last-minute travel are part of life.

Without cash set aside, many people reach for credit and make a bad month even worse.

A starter emergency fund can break that cycle. Start small, then build toward three to six months of basic expenses.

Even a few hundred dollars can lower fear and help you think clearly when something goes wrong.

Quick steps to make a fix:

• Save a small fixed amount from every paycheck.
• Keep the money in a separate savings account.
• Use tax refunds or bonus money to build it faster.

Further reading: How to build an emergency fund on a low income.

 

9. Using payday loans or other high-cost borrowing to fill gaps

Payday loans can look like a quick fix. In practice, high fees and short repayment windows often turn a small shortfall into a bigger mess.

That cycle is hard to escape because the next paycheck is already spoken for.

If you are stuck, focus on cheaper ways to buy time and protect cash flow first.

Quick steps to make a fix:

• Ask utility or medical providers for a payment plan.
• Check local credit unions for safer small loans.
• Build a $250 to $500 buffer as your first goal.

 

The Mindset Bad Money Habits that Stop You from Building Real Wealth

Staying broke is not always about income alone.

Habits, pressure, and short-term thinking can block progress even when you earn more.

 

10. Trying to keep up with other people’s lifestyle

Social pressure gets expensive fast.

Dinners, trips, clothes, cars, gifts, and upgrades can start to feel normal when everyone around you spends freely.

Social media makes it worse because you compare your full financial life to someone else’s highlight reel.

The cost is not only financial. It can also wear down your confidence and make you spend for approval instead of peace.

Quick steps to make a fix:

• Unfollow accounts that push you to overspend.
• Set a monthly social budget before invites arrive.
• Choose your goals over appearances.

Further reading: 10 smart habits of debt-free people.

 

Many people pay everyone else first and hope to save whatever is left. Usually, nothing is left.

That delay hurts in three ways. You miss the habit of paying yourself first, you miss years of compound growth, and you miss chances to raise income.

If your job offers a 401(k) match, that is money you should try hard not to leave on the table. Even a small Roth IRA or index fund contribution can build momentum.

If you need help changing your patterns, these easy ways to fix bad money habits are a strong next step.

Quick steps to make a fix:

• Automate savings on payday, even if it is small.
• Contribute enough to get the full employer match.
• Start investing with a low, steady monthly amount.
• Pick one realistic side hustle to boost cash flow.

 

Final Thoughts on Bad Money Habits

Your paycheck may feel like it disappears in seconds, but habits are often the real reason money never sticks.

That is hard to face, yet it is also good news, because habits can change.

You do not need to fix all 11 at once. Start with one or two bad money habits, build a simple system around them, and repeat it every payday.

Little by little, your money starts staying where it belongs, with you.

 

 

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Molly and Jason are 45 and 46, living together with a 2-year-old daughter. They earn $142,000 a year combined. They have $0 in savings, $46,000 in debt, and a net worth of just $4,842. They dream of buying a house, investing in real estate, and retiring early. But when Ramit opens their Conscious Spending Plan, the picture is stark. Fixed costs at 77%. No savings rate. $25,000 in credit card debt in Molly’s name that Jason can’t fully account for. And a financial system built entirely on Venmo transfers, separate accounts, and crossed fingers.

 

What Ramit finds underneath the numbers is a relationship where one person is managing everything alone, and the other has quietly checked out. Molly researches, opens accounts, tracks the bills, and covers the overdrafts. Jason works, pays rent, and sends Venmo transfers when asked. Neither of them planned financially before having a baby. Neither of them has seen what a real financial partnership looks like.

 

But something shifts. When Ramit shows them that working together they could reach $1.75 million by retirement, something clicks. They stop explaining why things are the way they are and start talking about what they are going to do.

In this episode we uncover:

• Why two people earning $142,000 a year can have $0 in savings and $46,000 in debt
• The Venmo money transfer system that has kept them financially disconnected for years
• What it looks like when one partner manages everything alone while the other disengages
• How $4,000 in annual subscriptions disappears when nobody is looking at the full picture
• Why dreaming about real estate investing is the wrong move when your own finances are on fire
• The moment Jason admits he feels resentful and apathetic about money
• The plan to sell the truck, wipe the credit card debt, and combine finances for the first time
• What Ramit means when he says the biggest savings anyone can make is on housing costs
• The follow-up update from Molly and Jason

Chapters:

(00:00:00) “We wanna be rich. We have $0 in savings”

(00:03:01) Meet Molly and Jason

(00:10:00) How often do you talk about money?

(00:14:00) Jason completely disengaged

(00:19:00) No decisions are ever made

(00:30:00) Dreamers who won’t save $250 a month

(00:34:11) Opening the Conscious Spending Plan

(00:40:15) Fixed costs at 77%

(00:46:50) Separate accounts, Venmo transfers, no shared vision

(00:59:20) “Resentful. And apathetic.”

(01:03:00) Money psychology and upbringings

(01:17:46) “You’re gonna sell a truck and pay off debt”

(01:41:13) Follow-ups

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If you or your partner get stressed spending $150 on dinner, or are covering up spending, I’d like to help. Apply to be coached for free on this podcast at iwt.com/apply

Transcript:

[00:00:00] Molly: I think we both wanna like really make some money. Like I will teach you to be rich. Like we wanna be rich, we wanna buy our first house.

[00:00:06] Ramit: I’d like to retire early. I know that sounds crazy. Once we look at our numbers, $0 in savings and do you have a daughter?

[00:00:13] Molly: We just spend money and then figure it out afterwards.

[00:00:16] Ramit: Do you ever actually go and look into your spending and find out what happened?

[00:00:20] Jason: Not very often.

[00:00:22] Molly: We should make enough money to not be in our position that we’re in, and that’s why it’s just a confusing web. I don’t even know how to like unravel it.

[00:00:30] Ramit: You spend over $4,000 a year on subscriptions alone.

[00:00:33] Ramit: Right.

[00:00:35] Molly: I just knew it was bad, but I did not know that much.

[00:00:38] Ramit: You feel very disconnected on money.

[00:00:41] Molly: We’ve been together for three years and it seems like we just never get ahead. We’re always kind of living paycheck to paycheck.

[00:00:47] Jason: I feel resentful on the fact that I feel like I’m working really hard all the time so that we have money.

[00:00:53] Molly: I sometimes look around, I’m like this is what I wanted. I got what I wanted and I’m still unhappy.

[00:01:00] Ramit: How many times have you talked to someone who has big dreams? They wanna retire at 45, they wanna buy a 20 acre property. They wanna travel all the time. But when you look at what they are actually doing to make that dream a reality, they haven’t taken any concrete steps.

[00:01:16] Ramit: We know people like this, they talk about all the things they wanna do, but often they don’t have any idea where last month’s paycheck went. It’s like people who talk about all these advanced weightlifting techniques, but they’re not even consistent about getting to the gym three times a week. Today’s guests, Molly and Jason, are 45 and 46 with a 2-year-old daughter, and they have big dreams.

[00:01:36] Ramit: They wanna buy a house, they want to invest in multifamily properties, and they want to retire early. But when you hear what they’re actually doing with their money, you’re gonna realize it doesn’t add up. I’m looking at their conscious spending plan. This shows me a very simple overview of all their numbers.

[00:01:53] Ramit: And if you want help with your own conscious spending plan, you can join my money coaching program at iwt.com/money Coaching. Here are their numbers. Household income, $142,000 a year savings, zero debt, 46,000 net worth 4,000. Lemme put it in another way. They make nearly $143,000 a year and they have $0 in savings.

[00:02:21] Ramit: They live together. They have a child together, but they keep completely separate finances. In fact, she asks for money, he decides and sends it to her. She manages everything alone while overdrafting to cover bills, and neither of them can explain where his paycheck actually goes each month. They’re stuck in the same cycle, month after month.

[00:02:41] Ramit: Wondering. Why Nothing ever changes. Now I have a quick favor to ask. Molly and Jason, were brave enough to come on money for couples and share their story with us. As you listen and you watch, I’m gonna ask that you keep your comments respectful and constructive. That is the type of community I want for my show.

[00:03:01] Ramit: Let’s get started now with Molly and Jason. Molly, you wrote to us in your application quote, we live paycheck to paycheck, have virtually no savings, and I’m trying very hard to get us out of this whole, what do you mean by that?

[00:03:17] Molly: Spend a lot of time researching like what we can do to what we need to do because after having a child in our forties and, and looking around reading the room, I was like, we are not doing well.

[00:03:30] Molly: And the price of daycare went up at the be in the fall and two out of the three months that we, it’s since it’s gone up, it overdraws my account.

[00:03:40] Jason: Why money’s still very tight, but we always paid every month. We’ve always been able to pay it,

[00:03:45] Molly: but then like it’s a little scary every month. It comes out on the first, so it’s like there’s just never enough and so the excess goes, comes from my credit card.

[00:03:55] Ramit: I got you. A couple of questions about just account structure. Do you two have combined finances or not?

[00:04:01] Jason: No. They’re not combined.

[00:04:03] Molly: You,

[00:04:03] Jason: I send her money multiple times a month.

[00:04:06] Ramit: What? What does that look on Molly’s face, Molly?

[00:04:09] Molly: It is combined, like we spend everything together. We’re a unit that spends money, but the fact that like most of the bills come out of my account, but the money goes into his account and then he sends me money.

[00:04:24] Ramit: Hold on. What in the hell? Try that again with me.

[00:04:27] Jason: Most of the utilities and other expenses like medical, are all in Molly’s name. Mm-hmm. They go through her account. I. Just send her money for most of it and I pay the rent myself.

[00:04:41] Ramit: Questions? How do you send the money?

[00:04:44] Jason: Venmo.

[00:04:45] Ramit: Okay. And you two are married, correct?

[00:04:47] Ramit: No,

[00:04:48] Jason: no, we’re not married.

[00:04:49] Ramit: Not married. You live together?

[00:04:50] Molly: Mm-hmm.

[00:04:51] Jason: Yes.

[00:04:51] Ramit: And kids. How many kids?

[00:04:53] Molly: One. She’s two.

[00:04:55] Ramit: Okay. When did money become a source of tension for the two of you?

[00:05:00] Molly: When I stopped working and had a baby.

[00:05:03] Ramit: And was that when your daughter was born or was it while you were pregnant?

[00:05:08] Molly: I basically worked up until she was born.

[00:05:11] Ramit: Okay, because of financial reasons or were you just enjoying work or were there other reasons?

[00:05:17] Molly: I enjoyed work. It was physically active, which I like, but also I was trying to build up an egg, a little nest egg. ’cause I didn’t, we didn’t really have a plan.

[00:05:28] Ramit: I see. Did you two talk about the financial part of having a baby?

[00:05:33] Molly: No.

[00:05:34] Ramit: No, I don’t think we

[00:05:35] Jason: really did.

[00:05:36] Ramit: Molly la Molly, why’d you laugh when I asked that question?

[00:05:38] Molly: Because do you think that would be like an important conversation we have with, you have nine months to have it, but we definitely did not.

[00:05:45] Ramit: Okay. How did you come up with the system that you have developed where you have separate accounts?

[00:05:52] Ramit: He transfers money to her. How’d that come about?

[00:05:56] Molly: I’m the responsible one and the couple that does the, you know, let’s open the energy account, let’s open the water bill. Let’s do all like, and I’m home, so it makes sense for me to do that too. The admin, if you will.

[00:06:10] Ramit: Got it. What’s the thing about her daycare that comes out of your account?

[00:06:16] Ramit: Explain that one to me

[00:06:17] Molly: again. This is all the things that I have set up. So I found the daycare, for instance, I am the one who’s communicated with them. I signed us up. Um, I’m the one who goes out and, you know, I got our health insurance signed up for that. I get all of her stuff. I pretty much take care of those things in our household.

[00:06:40] Molly: That’s all me.

[00:06:41] Ramit: How would you describe each of your roles with money?

[00:06:46] Molly: My role with the household money is trying to make it all work. It’s like almost flying by the seat of my pants.

[00:06:54] Jason: I guess. My role isn’t that large at this point. I go to work, I work full time and basically send as much money as I can above rent.

[00:07:03] Ramit: Are you the primary earner?

[00:07:05] Jason: Yes.

[00:07:06] Ramit: Okay. That’s your role then, right? I mean, if we’re gonna simplify it,

[00:07:10] Jason: yeah.

[00:07:10] Ramit: So you’re the primary earner, but it sounds like you do not track much of the money or organize or manage most of the money. Would that be fair to say?

[00:07:20] Jason: Yes.

[00:07:21] Ramit: Alright. So you make the bulk of the household income and then.

[00:07:25] Ramit: Do you send all of it to Molly or some of it

[00:07:29] Jason: Definitely don’t send all of it. I send what I think is, as much as I can afford to send.

[00:07:34] Ramit: Does it come up when Molly, you need Jason to transfer money over? And he says, I don’t know if I have that much.

[00:07:41] Molly: Couple times a month.

[00:07:42] Ramit: Okay.

[00:07:43] Molly: At least. Yeah.

[00:07:44] Jason: And then we’ll negotiate and maybe change the amount.

[00:07:48] Ramit: How do you decide that?

[00:07:49] Jason: Usually based on how much is in my bank account.

[00:07:52] Ramit: You’re checking, right?

[00:07:53] Jason: Knowing what I, yes.

[00:07:54] Ramit: Hold on, explain. So you get paid what? Like every two weeks or four weeks?

[00:07:58] Jason: I get paid every week.

[00:08:00] Ramit: Every every week. All right, so every week. What do you do like on Friday? Do you log into your checking account and then how does it work?

[00:08:07] Jason: Sure, yeah. I log into my checking account. I look at how much money I have. Yes, that’s true when I get paid. And at that point it’s always time to send money. There’s always a need for money.

[00:08:17] Molly: Often, he doesn’t just send me money, I have to ask, Hey, I need more money. We have all these bills coming out, beginning of the.

[00:08:23] Molly: It’s just kind of like literally counting days to being like, when can he get money that he can then send me money and it will take this much time because it’s Venmo. And then I have this many days before it’s absolutely late and we get a fi, like a, a, a fee. I guess that’s what I mean. It’s like very much living in this moment of scrambling.

[00:08:41] Ramit: You like it?

[00:08:42] Molly: No, and I don’t like try, I, I, I’ve tried to do budgeting software, but it’s too confusing. I just give up because I have no idea how much is coming. Money’s coming in. I just end up being really like, yeah. Confused.

[00:08:57] Ramit: Mm-hmm.

[00:08:58] Molly: It’s too hard to figure out by myself.

[00:09:00] Ramit: And when you ask Jason for help, or do you ask him for help?

[00:09:04] Molly: I have, yeah. I’ve asked him for help, but often when we. Talk about money or like even just getting into details. It never, it’s just not fruitful. It doesn’t ever flow well. I admittedly sometimes come in hot. Sometimes I’m already upset. Right. I’m not preemptively being like, Hey, we’re both in a chill mood.

[00:09:25] Molly: Let’s talk.

[00:09:26] Ramit: You don’t do that.

[00:09:28] Molly: No. We talked about trying to set that up, but it never happened.

[00:09:32] Ramit: How often do you talk about money?

[00:09:34] Molly: Once a week. But it’s not like a productive way of talking about money. We just spend money and then figure it out afterwards.

[00:09:44] Ramit: That’s fair. How much visibility do each of you have into each other’s spending and finances?

[00:09:51] Molly: I have limited into his, but more than he probably doesn’t to mine because I have accessed his account and like when I was trying to figure out different budgeting software I’ve used, I’ve gone into his account, but he is never looked at mine.

[00:10:05] Jason: Right.

[00:10:06] Ramit: Do you care to Jason?

[00:10:07] Jason: Honestly, I haven’t cared that much.

[00:10:09] Jason: No, haven’t.

[00:10:10] Ramit: Do you ask Molly questions about money

[00:10:13] Jason: as far as our day-to-day expenses and monthly, or just day-to-day life? No.

[00:10:19] Ramit: Do you ask Molly questions at all?

[00:10:21] Jason: Sometimes not a lot of questions,

[00:10:25] Ramit: Molly.

[00:10:27] Molly: I don’t know why that makes me emotional. Yeah. It’s a lot of me, I feel like trying to, I guess, be curious about this.

[00:10:40] Ramit: I suspect it’s not just this.

[00:10:42] Molly: Yeah. Like every, I mean like I’m in charge of all the things.

[00:10:47] Ramit: Mm-hmm.

[00:10:48] Molly: And he is like, trust me with that, but it’s, it’s like a lot to constantly figure out.

[00:10:53] Ramit: Mm-hmm.

[00:10:55] Molly: Like finding the pediatrician or like, even when she was born, like figuring out what she’s gonna sleep in or where she sleeps, or what she eats or what we do.

[00:11:02] Molly: Like, that’s all on me, for sure.

[00:11:03] Ramit: Mm-hmm.

[00:11:05] Molly: He works also a lot and he has since day one. So I was, he was home for one week when we had our daughter, and then I was in the middle of nowhere with a newborn. Mm-hmm. And then we moved into a new state and like some things would’ve been better with community, but then now he’s gone even longer.

[00:11:25] Molly: He’s gone like 60 hours a week. And I’ve just learned to like, deal with it. But it’s, it just feels like a lot of the responsibility of like our family is on me.

[00:11:39] Ramit: You all familiar with this phrase, uh, emotional labor? Have you heard of this?

[00:11:44] Molly: Mm-hmm.

[00:11:45] Ramit: A little

[00:11:46] Jason: bit.

[00:11:46] Ramit: When we think of work in America, a lot of times we think of like who’s going out to mow the lawn or, or go to work or things like that.

[00:11:54] Ramit: But there’s like a lot of emotional load that is often invisible. What do you notice about the emotional labor in this household, Jason?

[00:12:03] Jason: I think it definitely falls mostly on Molly.

[00:12:06] Ramit: Mm-hmm. Did the two of you agree on that?

[00:12:08] Molly: No.

[00:12:09] Jason: No. I don’t think we agreed on that.

[00:12:11] Ramit: It just usually falls to mom. That’s part of the reason that you’re crying, Molly, is that it doesn’t feel fair and it’s not fair.

[00:12:20] Jason: Uh, I know it’s a lot and I feel bad. I feel I know I can do better.

[00:12:24] Ramit: Why haven’t you?

[00:12:25] Jason: I have offered to, and I still would like to, and I haven’t done enough with that. I’d like to take over more of the bills, take care of that as well, but I haven’t done anything about that.

[00:12:35] Molly: Why?

[00:12:37] Jason: Because I’ve been, it’s not been a focus.

[00:12:40] Jason: I haven’t focused on it and I should.

[00:12:42] Ramit: Jason says he hasn’t focused on taking over the bills, but notice what just happened. Molly described their entire financial system, daycare overdrawing, her account Venmo transfers, negotiating amounts multiple times a month. She is tracking when bills are due. She’s tracking when his paycheck hits even how long Venmo takes to transfer.

[00:13:03] Ramit: And Jason’s response, I haven’t focused on it. That’s not very satisfying. In fact, that’s not acceptable. Here’s what I’m seeing that they can’t see yet. Jason completely disengaged and not just from the money, but from Molly and the family responsibilities, I think in some ways, even from himself.

[00:13:23] Ramit: Meanwhile, Molly has fallen into the trap that is so familiar to many of my guests, especially women, on this show of carrying the mental load of assuming the role of someone who has to ask permission of their partner and of being okay with a partner who doesn’t actually act like a partner. And I actually hate that.

[00:13:43] Ramit: I hate when people play small with their money, but especially women because I want all of us to be able to live a rich life. That is why I spend so much time talking about the taboo topics of money and gender and social class. On this show. I want you to know just because your parents didn’t teach you about money, you can still get very educated and live an amazing rich life.

[00:14:08] Ramit: You can redefine how traditional responsibilities and roles go in a family. Just because one person earns more doesn’t mean they have more power. You can decide what your rich life is, and that is what brings me back to this couple. Not only do we see this very common, and in my opinion, dysfunctional dynamic, but she’s not actually good at managing money either.

[00:14:32] Ramit: This is a very common toxic cycle. One person, the avoider, opts out, so the other person. Compensates by controlling everything. But actually most of the time, neither one of them is very competent at money. You cannot live a rich life in this dynamic. You can’t even manage a paycheck. So if you recognize yourself in this dynamic, whether you are the avoider or the one who’s trying to carry everything on your shoulders, please understand this.

[00:14:58] Ramit: An unequal partnership with money always reflects something much deeper. This is not just about money. This is about something way, way deeper. In fact, the money is simply a symptom of much deeper beliefs. And today we are gonna find out what those beliefs are. If you filed a tax extension this year, I am talking directly to you.

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[00:17:12] Ramit: They have over 150,000 doctors across all 50 states in 200 plus specialties, including mental health, dental, primary care, whatever you need, just filter for doctors based on insurance location ratings, even virtual care options, and zocdoc appointments happen fast. Usually within 24 to 72 hours. You can look through your options, book an appointment, and you are done.

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[00:18:11] Ramit: Or maybe you just have not even told your partner because you are embarrassed. If this is you, I want to talk, apply for free coaching with me by being on my podcast. Apply today at iwt.com/apply. That’s iwt.com/apply. Can we go back to the a, a recent time where you remember the last time that you were talking about money?

[00:18:36] Molly: It was. Basically in the kitchen and

[00:18:41] Ramit: do it as if I’m there. Just watching. Go ahead.

[00:18:44] Molly: Okay, so after we pay rent, then what’s left?

[00:18:49] Jason: I just paid the rent. I barely have enough money to get to Next’s paycheck. I’m not sure where it all went, but I felt like I was lucky to have rent this month, which is strange because we had an extra check this month.

[00:19:04] Jason: I

[00:19:04] Molly: dunno. Yeah, this was supposed to be a bigger month. Not only do we have an extra check, but we had an extra, we got our depo deposit back from our last rental, so this should have been a huge month. I thought in my mind, which is crazy, that I was like, oh, we could put a lot, you know, a certain amount of money towards some of our credit card debt.

[00:19:24] Molly: Like this would be the month.

[00:19:26] Jason: Yeah, I kind of did too. I don’t know what happened. I’m not sure.

[00:19:30] Molly: You just have no idea?

[00:19:31] Jason: Not really. I mean, the money just kind of went. I don’t know what happened to it.

[00:19:38] Molly: I mean, you can look at your account,

[00:19:40] Jason: right? Yeah.

[00:19:41] Molly: And see,

[00:19:42] Jason: I will look at it. I’ll check it out. I’ll see. I’m pretty sure it’s no different than any other month, which it doesn’t help, but I don’t know what happened to it.

[00:19:53] Ramit: Okay, so what happened in that conversation? If you both zoom up and you almost look at the two of you as players, how would you assess what just happened in that conversation? Molly?

[00:20:06] Molly: What happened and what happens a lot is I just, I get really mad. I kind of give up halfway through the conversation. ’cause I already know that it’s, I’m not gonna get any clarity and he just gets mad because I feel like he thinks I’m pestering him about something that.

[00:20:30] Molly: Is trivial. Somewhere in him. He knows it’s not trivial, but the fact like I’m questioning him and don’t, and that he knows I don’t trust him, he gets then defensive and mad. I go into like a fugue state almost, where I’m just like, this is pointless. Yeah. Like he can’t do what I need him to do.

[00:20:49] Ramit: All right.

[00:20:50] Ramit: Jason, what about you? If you zoom up, how would you assess that conversation? What happened?

[00:20:54] Jason: I think like many of these conversations, uh, just put me in a defensive state of mind. Mm-hmm. And I just kinda shut down. I’m like, well, it is what it is. The money’s there not there. I don’t know what else to say about it.

[00:21:06] Jason: It got spent on something and I think part of it is being caught off guard with something I wasn’t prepared for. I’m not always, I’ll admit, I’m not always in the mood just talking about money. So I think ’cause it never seems to go anywhere, that is a very typical cycle of how the conversation goes.

[00:21:24] Jason: Typical example.

[00:21:26] Ramit: She’ll bring it up, you’ll be defensive and then it will dwindle off. In other words, no decisions are made. Mm-hmm. You just spin and then it comes up 2, 3, 6 weeks later again.

[00:21:36] Jason: Right. That happens quite often.

[00:21:39] Ramit: Does that feel good? Seems frustrating.

[00:21:43] Molly: Yeah.

[00:21:43] Jason: Very frustrating.

[00:21:45] Molly: Yeah. I feel like it’s a big part of why, for whatever reason, our finances, like we should make enough money to not be in our position that we’re in and that’s why it’s just a confusing web.

[00:21:59] Molly: I don’t even know how to like unravel it.

[00:22:01] Ramit: Jason, do you ever actually go and look into your spending and find out what happened?

[00:22:06] Jason: Not very often. Downloaded rocket money. Mm-hmm. And added that to my account.

[00:22:11] Ramit: Account. And

[00:22:12] Jason: where

[00:22:12] Ramit: would this, where’d the money go?

[00:22:14] Jason: There’s still a lot of spending that’s unaccounted for, so I need to dig deeper.

[00:22:17] Jason: A lot of average daily spending. What?

[00:22:21] Ramit: Hold on. That doesn’t work on me. If you downloaded Rocket Money, which is a great tool. Then it shows you line by line where the money went. So where’d the money go?

[00:22:30] Jason: Daily spending, whether it was groceries, eating out, um, definitely subscriptions.

[00:22:36] Ramit: Can we just look at rocket money?

[00:22:37] Ramit: Do you have it?

[00:22:38] Jason: I have it on my phone. I could suppose I could,

[00:22:40] Ramit: yeah.

[00:22:41] Jason: Pull it up.

[00:22:42] Molly: He has, which he didn’t mention. He says a lot of it goes to subscriptions, but he has like double subscriptions.

[00:22:47] Ramit: All right. What do you got, Jason?

[00:22:48] Jason: I do.

[00:22:48] Molly: Okay.

[00:22:50] Jason: I do have some doubles. So for subscriptions, I have, let’s see, 1, 2, 3, 4, about 12, no 14 subscriptions.

[00:23:01] Jason: How much is the total? 43 68 per year for 18 subscriptions,

[00:23:07] Molly: 4,000,

[00:23:09] Jason: 4,368 per year for 18 subscriptions.

[00:23:14] Molly: I just knew it was bad, but I, I did not know it that much. Okay. Not even close.

[00:23:21] Ramit: Okay. And Jason, did you know?

[00:23:23] Jason: No. No, I did not.

[00:23:24] Ramit: So far, we know that you spend over $4,000 a year on subscriptions alone.

[00:23:29] Jason: Right?

[00:23:30] Ramit: What does that tell you?

[00:23:31] Jason: Seems like I could cut that amount, but I could, I would hope.

[00:23:36] Ramit: How would you describe your familiarity with your own spending, Jason?

[00:23:40] Jason: Not great. I think I could be a lot more familiar with it.

[00:23:43] Ramit: Alright. And Molly, how would you describe your familiarity with your own spending?

[00:23:48] Molly: I, I mean, I guess I, I know pretty much what I’m spending.

[00:23:53] Molly: Yes.

[00:23:53] Ramit: Okay.

[00:23:54] Molly: So good ground about concise answer for you.

[00:23:57] Ramit: You wrote something that caught my eye quote. I don’t fully trust him about how and where he’s spending money because he hasn’t been super forthcoming in the past about investing in the stock market. Can you tell me more about that?

[00:24:15] Molly: I knew he was.

[00:24:17] Molly: Using Robinhood and doing, you know, day trading or, um, options and things that I’m not super familiar with. To be honest, I didn’t know how much money he was funneling into that because that’s just not how our accounts work. How

[00:24:32] Ramit: much money are we talking about?

[00:24:33] Molly: I don’t know.

[00:24:33] Jason: It was a hundred times 200 a week.

[00:24:38] Ramit: 200 a week. So 800 a month.

[00:24:41] Jason: Yes, that’s right. I just wanted to make sure. Yeah,

[00:24:44] Molly: and I didn’t know that,

[00:24:45] Ramit: Jason, what was going on with these investments?

[00:24:49] Jason: So what Molly is referring to with the, um, automated withdrawals, that was just a long-term investment account. I wasn’t actually doing any of my own, like option trading or anything like that.

[00:25:02] Jason: It was just

[00:25:03] Ramit: what was the options trading about?

[00:25:05] Jason: So the options trading was on a different platform and uh, it had a friend. That was actually very successful last year. So I started getting some tips from him and I put a little money here and there. Um, I started with probably $500 and I think I only ended up adding another thousand on top of that.

[00:25:25] Ramit: Mm-hmm.

[00:25:25] Jason: Either way. Not as successful as him. Still had a lot to learn. So, kind of up and down.

[00:25:31] Ramit: What did you loop Molly into what you were doing

[00:25:34] Jason: as far as the options? I didn’t explain it a whole lot as far as the money I put in there. I probably wasn’t that specific.

[00:25:42] Ramit: Why

[00:25:42] Jason: not much? Um, I guess I probably thought I was going to do better than I did, and so I expected to have better news.

[00:25:52] Ramit: Can I ask you guys a question? No. Like just in, just speaking to you just for a little bit So far. Yeah. You feel very disconnected on money? Oh

[00:26:01] Molly: yeah. Like

[00:26:01] Ramit: extremely disconnected

[00:26:03] Molly: from each other or from money?

[00:26:05] Ramit: Uh, both.

[00:26:06] Molly: Yeah,

[00:26:07] Jason: we were having a conversation about this a little bit the other day, and we were talking about how we went from being two single people in our forties three years ago to basically married with children.

[00:26:20] Jason: Um, and both of us have traveled a lot when we were younger and just kind of lived a single life, and I feel like I’m still spending money that way, and I haven’t, you know, haven’t been able to switch gears in the way that I should, basically living as if we’re single. And I think that’s part of the problem.

[00:26:38] Molly: Yeah. I feel like in some ways, like the way I think about like our finances together is like, it just feels like a disaster. And I just, like, every time I like put a lot of energy into figuring it out or unraveling it, it just seems like it goes nowhere and I just like don’t, then I just kind of get, I just like tune it out or something.

[00:26:59] Molly: I don’t know.

[00:27:00] Ramit: That’s actually very common. That’s very common. All of us, me included, we like to pay attention to stuff where we feel competent, where we feel good. And so for some people that’s parenting or cooking or fitness or money or, or even cleaning the house. But conversely, we don’t like to spend time on stuff where we feel incompetent, where we feel out of control.

[00:27:31] Molly: Yeah.

[00:27:32] Ramit: Honestly, if there’s something in your life that you avoid, ’cause you’re just like, I don’t like this, and it’s like, uh, I don’t like using pledge on this wood table, who cares? Right? It’s not gonna hurt anybody to a large extent, but relationships and money and safety for the family, those are things that are actually important.

[00:27:52] Ramit: So avoiding them, it’s gonna get you one way or another, whether it’s today or tomorrow.

[00:27:58] Jason: Right.

[00:27:59] Ramit: Molly, you also wrote in your application quote, we have similar goals, but for some reason when we talk about our present money issues, there’s hurt and frustration. What are the similar goals that you both,

[00:28:13] Molly: we don’t wanna be poor.

[00:28:15] Ramit: Are you poor?

[00:28:17] Molly: No. No, but we are probably pretty low middle class.

[00:28:22] Jason: I feel Paycheck to paycheck is borderline.

[00:28:25] Molly: We’re probably pretty poor, I guess. Yeah. We don’t wanna just be like a little bit over living paycheck to paycheck. I think we both wanna like really make some money. Like I will teach you to be rich.

[00:28:37] Molly: Yes. Like we wanna be rich.

[00:28:38] Jason: Oh, absolutely. We like to be well off. I would like to be well off. Okay. I’d like to be successful. Okay. Like to actually retire early. I know that sounds crazy. Once we look at our numbers, at least to me it seems like a, you know, long hill to climb. But yeah, I would like to figure out ways to make good money.

[00:28:59] Jason: And, you know, just be a lot better off than we are now.

[00:29:03] Ramit: Okay. Molly, had you agree or see things

[00:29:05] Molly: differently?

[00:29:06] Ramit: I agree.

[00:29:06] Molly: Yeah. We want to travel, we want to spend time with our daughter and we want to, we have a similar goal and like how we wanna get there with real estate and stuff like that. Like we have a shared vision mm-hmm.

[00:29:25] Molly: On what that looks like, I guess. But not on how to get there.

[00:29:31] Ramit: Wait.

[00:29:31] Molly: We have a shared vision of like what would be great and I think on how we get there, there’s similarities, but like, it’s lit. Like, but the literal brass tacks of, of the daily work it takes to get to even next year is where we, like, maybe next year we have a similar goal.

[00:29:49] Molly: We wanna buy our first house, but to how to get that is where things I think. Different.

[00:29:56] Jason: Um, what we would wanna do first, we’d be looking at multifamily units that need to be remodeled, Uhhuh, some sort of state of disrepair that’s not too far gone where it would make sense to make improvements and eventually resell or rent.

[00:30:13] Ramit: Okay. And like, have you, where are you on this process? Have you run numbers? Have you purchased a property? Where are you on that?

[00:30:21] Molly: Um, basically we’re at the, like this, I, I mean, the kind of research stage. I, I have looked into different ways of like how we would get a loan, like FHA 2 0 3 K. I’m kind of like, that’s been my fun project to research.

[00:30:39] Ramit: Is that a goal or is that just something that one day you’d like to have? Sounds like a dream.

[00:30:44] Molly: I guess it hasn’t moved from, from dream to goal yet, to be honest.

[00:30:49] Jason: I, I kind of like the way you put that, Molly. That’s a good way to put it. We’ve talked about starting with some sort of real estate investment maybe next year, but as far as actually putting any kind of plan together, very little.

[00:31:04] Ramit: Mm-hmm. And what does that feel like?

[00:31:07] Jason: It feels like we’re not going anywhere. I mean, we’re just still stuck in the same place.

[00:31:14] Ramit: Mm-hmm.

[00:31:15] Molly: Yeah. I keep having this thought where it’s like free beer tomorrow. It’s just like always tomorrow. It’s always next year. Yeah. I, the, the goalpost is always moving, I guess if there ever was one.

[00:31:28] Ramit: This reminds me of an email I sent out to my readers years ago. It’s one of the favorite responses I’ve ever gotten. I asked the question to my email list, what is something you claim you want to do, but you actually don’t do it? And one woman wrote back saying, I claim I wanna run three times a week, but I don’t.

[00:31:45] Ramit: So I replied to her, I talked to a lot of people on my email newsletter and I said, why don’t you just go for a run once a week? And she wrote back basically incredulous. She’s like, why would I go for a run once a week that doesn’t do anything? And I thought, what a perfect example of human behavior. She would rather dream about running three times a week than actually go for a run once a week.

[00:32:07] Ramit: How many of us do the exact same thing in different parts of life? We would rather dream about living this multimillionaire life rather than actually read. I will teach you to be rich and money for couples and take control of our money. That’s Jason and Molly. They would rather dream about real estate investing rather than save $250 a month.

[00:32:30] Ramit: They’d rather talk about retiring early than figuring out where Jason’s last paycheck actually went last month. I like dreams. I encourage people to dream bigger. I want them to tell me what they really want. But I always go one step further. I want a plan to reach those dreams. Without a plan, you’re just fantasizing.

[00:32:50] Ramit: That’s not my job. This isn’t the Ramit Satis Fantasy show. My job is to help you engineer a rich life, and that’s what I’m doing with my own life. I’m here to engineer a rich life while I’m alive. If you wanna go to Japan, tell me when. Tell me where you’re gonna stay. Tell me what you’re gonna do, how much it’s gonna cost, and how you are gonna set that money aside.

[00:33:09] Ramit: Fantasy is something that feels good to think about, but a plan makes it a reality. Children fantasize adults plan. If you wanna learn the skill of turning your dream into a reality, you don’t have to do it alone. You can join my money coaching program. I’ll show you exactly how this is one of the most valuable skills you will ever develop.

[00:33:30] Ramit: Join at iwt.com/money coaching. Now let’s look at their numbers. Alright, let’s take a look at the numbers here. I’m gonna throw ’em up on screen. Let’s go with Molly first. Molly, can you read the word in bold and the number in full next to it for this entire box please?

[00:33:49] Molly: Sure. Assets, 28,000 investments, 23,482.

[00:33:55] Molly: Saving zero debt, 46,640. Total net worth 4,842.

[00:34:03] Ramit: What do you think about those numbers?

[00:34:05] Jason: I was mainly focused on that debt number. Mm-hmm. I don’t like that number.

[00:34:10] Ramit: You don’t like it? Okay.

[00:34:10] Jason: Way higher than I realized. And it seems like a lot.

[00:34:14] Ramit: What’d you think it was?

[00:34:15] Jason: I thought it was closer to roughly. And this is mostly guessing ’cause I haven’t really looked at the numbers about 18.

[00:34:22] Molly: I knew that you were gonna

[00:34:23] Jason: say

[00:34:24] Molly: that.

[00:34:24] Jason: 46

[00:34:25] Ramit: 18. So it’s more than double what you thought. Quite a

[00:34:29] Jason: bit higher. Yeah. I

[00:34:30] Molly: think we should mention here too, like. My problem is that like I had better credit and like the, so both of our vehicles ended up being in our name. In my name, like in my credit cards that we have, I use, that I’ve used for our family for big purchases or big things is all in my name.

[00:34:50] Molly: So like a lot of the big debt, it’s all in my name. So that’s why I’m, I’m aware of that.

[00:34:56] Ramit: You’re aware of that.

[00:34:58] Molly: That’s why I’m aware of the numbers more than he is

[00:35:01] Ramit: the

[00:35:01] Jason: amount of debt.

[00:35:02] Molly: The amount of debt we have.

[00:35:04] Ramit: It sounds like Jason has bad credit. So Molly took on all the debt and now the debt is in her name.

[00:35:11] Molly: Yeah.

[00:35:12] Ramit: And by the way, all the emotional labor and having to manage it is all in Molly’s name and Jason’s like, cool. I get a vehicle and I don’t really have to worry about it. I agree. I don’t think it’s fair.

[00:35:22] Molly: Yeah, it doesn’t feel fair and it’s probably why I am. Am angry.

[00:35:29] Ramit: Tell me more about that.

[00:35:30] Molly: Well, I just feel like I’ve had to process, I feel like a lot of my resentment and anger alone because I don’t wanna be that person and I don’t wanna be that for our daughter, but I am am.

[00:35:42] Molly: I’m just kind of mad. I’m just feel like it’d be great if like one of these big things was not on me, but I also don’t know if I can, it’s never, he’s never stepped up to like change it. I would have to be the one to get him to change. You know? Like, okay, now you’re gonna do this. Like, it’s still me guiding him through it.

[00:36:06] Molly: I guess. Maybe, maybe not.

[00:36:08] Ramit: Maybe not. Maybe there’s other ways

[00:36:10] Molly: maybe.

[00:36:12] Ramit: But I think we can all sense your resentment. Jason, I can sense your detachment from this. It’s kind of like I’m not connected to the money. I send over money once in a while. Can’t send over what she wants, so I negotiate, but like she deals with it and like, I should probably be better, but like, I’ll do better.

[00:36:33] Ramit: I’ll try to do better. That’s, that’s essentially the conversation so far. Would you both agree or disagree?

[00:36:40] Jason: No, I agree.

[00:36:41] Molly: Yeah. Yeah, I agree.

[00:36:42] Jason: Guess what it’s been. You think you want

[00:36:44] Ramit: a soft mattress? You think you wanna jump on your bed among 58 pillows in a Ralph Lauren catalog and sink into the mattress? No, you don’t.

[00:36:53] Ramit: I have slept in many different beds. Oh, some of them look so beautiful. Oh, I love the fringes on the pillow. But the minute you lie down in that soft ass bed, that’s why your back is hurting in the morning. And I know because I intentionally chose to buy a. Firm mattress from Lisa, which I sleep on every night.

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[00:39:19] Ramit: Apply today in just [email protected] slash ramit. That’s meat fabric.com/ramit. And use my link so they know I sent you MEET

[00:39:30] Molly: fabric.com/ramit.

[00:39:34] Ramit: Jason, can you read off the combined gross monthly income please?

[00:39:39] Jason: Gross monthly income combined is 11,900.

[00:39:45] Ramit: What do you both do for a living? Jason?

[00:39:47] Jason: I am, um, project manager slash site superintendent for a residential construction company.

[00:39:54] Ramit: Okay. And Molly?

[00:39:56] Molly: I work remotely doing HR and benefits and then I work for my friends deli on the weekends just, and then I stay home with our daughter.

[00:40:06] Ramit: Got it. The HR role, is that part-time?

[00:40:10] Molly: Yeah, it’s remote part-time.

[00:40:11] Ramit: Cool. Alright. Combined on an annual basis, the two of you as a household make $142,800.

[00:40:19] Ramit: What do y’all think about that household income?

[00:40:21] Jason: I think it, considering where we live, it’s average

[00:40:26] Ramit: considering what part of the country do you live in?

[00:40:28] Molly: We live in the like Tahoe area.

[00:40:31] Ramit: Yeah. Oh, alright.

[00:40:33] Molly: But not on the expensive side, but

[00:40:34] Jason: not up on the mountain. I mean it’s,

[00:40:36] Ramit: can I go out on a limb and just guess that you all make a lot more than the median salary in your area?

[00:40:43] Ramit: Would that be fair to say?

[00:40:44] Molly: I bet we do. Yeah,

[00:40:45] Jason: maybe we do.

[00:40:46] Ramit: Okay. Okay. Alright.

[00:40:47] Jason: Know for sure,

[00:40:48] Ramit: so you make 142,000. What do you think about that number, Molly?

[00:40:52] Molly: It it’s like a total that I had never thought I would make personally, like I didn’t think that would be attached to me.

[00:40:59] Ramit: Yeah. What’s further confusing is that the two of you don’t combine your money.

[00:41:03] Ramit: So we have Jason making 9,500 a month gross or roughly one 20 KA year, AP approximately. And then we have Molly making 2,400, which is considerably different. So the thing is every month you can see the dynamic that has been set. Molly has to go to Jason, please transfer this money. And then what is Jason’s role?

[00:41:27] Jason: Look at my account and send what I think I can send.

[00:41:32] Ramit: Like how do you know what you can send?

[00:41:35] Jason: Well, based on what I think I’m gonna spend the rest of the week, which is hard to say.

[00:41:39] Ramit: I can’t even get a straight answer myself. How do you think Molly feels?

[00:41:43] Jason: Oh, I know. I, I don’t like it either. I wish I need to change.

[00:41:48] Jason: We need to change our setup.

[00:41:49] Ramit: You do need to change your setup. But what is happening here is Jason, do you believe that you have control over your own behavior?

[00:41:58] Jason: Yes.

[00:41:59] Ramit: Oh, so then why do you say we need to change our setup versus, I had changed my own setup last week.

[00:42:06] Jason: That’s a good point. I feel like I could initiate way more than I do.

[00:42:12] Ramit: But you don’t. Why?

[00:42:13] Jason: Because I feel too tired at the end of the day. I don’t take enough time. Um, I could, I’m sure I have a lot of excuses I could say, but

[00:42:21] Ramit: yeah,

[00:42:21] Jason: bottom line is

[00:42:23] Ramit: I think you just don’t do it. ’cause you don’t have to.

[00:42:25] Jason: Maybe that’s it.

[00:42:26] Ramit: Molly’s just gonna come. Beeching. Oh, please, please, please. And then, so the role of the beggar.

[00:42:31] Ramit: Is the role that has been established. Please, please, please transfer over money for our household. And then Jason is the decider. He crosses his arms and he says, Hmm, I can do this much, but not this much. That’s the way it’s gonna be. That’s the roles you’ve established for yourselves. The rest of the CSP, I’m gonna move through it quickly here.

[00:42:48] Ramit: Your fixed costs are at 77%. Typically that number should be at 50 to 60%. At 77, you can immediately understand why you feel stressed out. Bottom line, which leaves less for the rest of your money. Let’s see where it’s going. Investments 3%. That explains why you have relatively low investments for your age at a total of $23,000 savings at 1% or $125.

[00:43:13] Ramit: Well, we know that’s not true. I bet you set that up in the last two weeks. True or false?

[00:43:16] Molly: Well, that’s what fun One is that that actually it’s a automatic transfer and they always end up spending it.

[00:43:24] Ramit: The reason that you don’t have any savings is that you don’t save money and you have a young. Daughter.

[00:43:31] Molly: Yeah.

[00:43:33] Ramit: Okay. And finally, let’s look at guilt-free spending 25% or $2,200 a month. Is this number accurate?

[00:43:39] Molly: I actually had to adjust it because I went back over everything the last three months. And like, we’ve had some big months for, because we moved and for a lot of reasons. But, um, it does change. But it was on average of the last three months probably at least that.

[00:43:57] Molly: Yeah.

[00:43:58] Ramit: You all find that when you talk about money, you don’t give each other a straight answer? I don’t think we know as much as we should. I think that’s part of the problem.

[00:44:06] Molly: I think we both operate in a similar way, which is not in like hard, like not in like specific details. It’s,

[00:44:14] Ramit: mm-hmm. Yeah. A lot of feeling.

[00:44:16] Molly: A lot of feeling, a lot of

[00:44:18] Ramit: guessing.

[00:44:19] Molly: Guessing.

[00:44:20] Jason: Mm-hmm.

[00:44:20] Ramit: I think I’m gonna spend this much next month. Yeah. I’m not sure where the money went. And on and on and on. You all know why you are able to do that, right? A couple that’s making a third of what you make. They don’t have the luxury in operating the way you are.

[00:44:35] Molly: Mm-hmm.

[00:44:36] Ramit: They track it.

[00:44:38] Molly: Right.

[00:44:38] Ramit: They have to know. They can’t be like, oh, I’m, I didn’t realize I’m spending $4,000 a year on subscriptions. That’s just not an option.

[00:44:45] Molly: Exactly. Yeah.

[00:44:46] Ramit: So your income in part has allowed for you to become sloppy with your financial setup. But that’s not all because y’all could make double or triple and it would still be the same dynamic here.

[00:44:59] Ramit: Mm-hmm. The two of you do not talk about money regularly. You certainly don’t do it proactively. It’s not positive. I wanna understand a little bit more about how you were raised, but I’m gonna guess that you did not have great financial role models for thinking ahead, planning long-term. Okay. Molly’s smile indicates that I was right about that, Jason.

[00:45:18] Jason: Definitely not.

[00:45:19] Ramit: There’s no worry about failure. I don’t think that basically, to put it bluntly, I don’t think you felt the pain of actual failure, like running out of money and not being able to feed your family.

[00:45:31] Molly: Yeah,

[00:45:32] Ramit: I don’t think that’s happened.

[00:45:33] Jason: No, no, you’re right.

[00:45:35] Ramit: I would like to just pause for a second.

[00:45:36] Ramit: What are you noticing already in this conversation?

[00:45:40] Jason: We’re not aligned in our finances in the way that we should and that we need to spend a lot more time working on them together. Okay. Molly?

[00:45:48] Molly: I don’t know. I, I, I in some ways feel like more hopeless right now than I did at the beginning.

[00:45:54] Ramit: Tell me

[00:45:54] Jason: more.

[00:45:55] Molly: I just, I guess I, I feel like, yeah, like I we’re just so not aligned.

[00:46:01] Molly: Um, and neither of us we’re both bad at the same things. Um, which

[00:46:08] Ramit: is,

[00:46:08] Molly: which is. Be being, I think, responsible in when it comes to our finances, um, being responsible when it comes to having boundaries and, and making sacrifices and, and like, just we, we could have gotten ourselves outta this situation much sooner.

[00:46:24] Molly: Mm-hmm. But neither of us did, and almost combined we’re like even worse

[00:46:30] Ramit: when Molly said she felt hopeless looking at their numbers. Notice what I did not do. I did not try to make her feel better. The truth is that they’ve dug themselves into a really serious financial situation, and I don’t think that either of them have truly suffered as a result of that.

[00:46:49] Ramit: Let’s take a look at the facts. Jason thought their debt was 18,000. It’s 34,000. He was off by basically half all of that debt sits in Molly’s name because he has poor credit. He’s spending $4,000 a year on subscriptions he didn’t know about. And he was secretly day trading hoping to surprise her with gains that never came.

[00:47:10] Ramit: This is not acceptable. They don’t need someone to tell them it’s gonna be okay. They actually need the gift of consequences. Remember, in life, suffering is not always something to be avoided. Any Asian or Indian person here is like, yeah, what are you talking about? Life is suffering. That’s why I suffered studying so hard in high school.

[00:47:30] Ramit: I was telling my nephews the other day, I took them on a college tour at Stanford and they are in the midst of SAT prep and we were talking about it, how’s it going? And you know, I asked them, and they have it tougher than I did because they have the allure of these addictive phones. I did not have that back then, but one thing I shared with them was I worked really hard on my SATs.

[00:47:53] Ramit: I took it multiple times. I took a class I really studied, and when I think back to all the work that I put in, it was hard. I don’t remember all those hours. What I do remember is getting a good score, getting into Stanford, meeting friends who have become lifelong friends, getting these amazing career opportunities and all of the things that came with working hard.

[00:48:22] Ramit: Did I suffer studying for the SAT? Yeah, it was hard. Did I suffer getting really good grades? Yeah, it was really hard. But sometimes suffering is not something to be avoided. It’s actually something to be embraced. Do you know why Molly and Jason have not embraced suffering? Do you know why they haven’t even faced consequences?

[00:48:42] Ramit: Because their income of $142,800 a year has actually enabled this dysfunction. They make enough that they’ve never really felt true financial pain, so they’ve never really been forced to change. As I always say, if you still have a roof over your head and internet and your phone, most people think it’s fine.

[00:49:02] Ramit: That’s why they operate in vague feelings. Like, I think I spent this much, I’m not sure where it went, because they can afford to stay sloppy. A couple making a third of what they make does not have that luxury. They have to track every dollar, but Molly and Jason do not. In fact, they’re living like two single people who happen to have a baby together.

[00:49:22] Ramit: Separate accounts, Venmo transfers, no shared vision. Deep down, I think they know this isn’t sustainable and that is why they dream rather than plan. Now we need to find out if they are willing to do something about it. I will say that the good news is any couple can change their dynamic. Any couple can.

[00:49:43] Ramit: I’ve seen it happen in a lot of places. Molly, I actually don’t mind that you feel even more hopeless now. I don’t mind it and that’s why I’m asking you to tell me a little bit more. I want to hear you understanding the, the depths of the challenge here. Like there’s no easy math fix where I go, Abra cadabra and everything goes to the way it should be.

[00:50:07] Ramit: Do you? Do you get that?

[00:50:08] Molly: Yeah. I think reality is, has been setting in.

[00:50:11] Ramit: Okay.

[00:50:12] Molly: There is no magic wand.

[00:50:13] Ramit: Good. That’s great. That’s actually the lesson, key lesson of life.

[00:50:17] Molly: Yeah.

[00:50:17] Ramit: There is no magic wand. It actually takes a lot of work and sustained consistency. Would you say that the two of you are good or bad at sustained consistency, realism, holding each other accountable.

[00:50:32] Ramit: Good or bad?

[00:50:33] Molly: Bad.

[00:50:34] Ramit: Bad. I can work with that.

[00:50:36] Molly: Okay.

[00:50:37] Ramit: I can work with a couple that is honest about their shortcomings and open to making radical change. Actually, one of my favorite things to do.

[00:50:45] Molly: Okay, good.

[00:50:46] Ramit: I looked at your housing costs, your mortgage 2000 bucks, utilities 4 25, which is a percentage of 20.2% of gross.

[00:50:57] Ramit: That’s not bad.

[00:50:59] Molly: That’s not bad. And we actually recently, we moved in September to a lower rent. It’s rent, it’s not mortgage. Um, we actually moved to lower our rent, so that was

[00:51:09] Ramit: great. Really?

[00:51:10] Molly: Yeah.

[00:51:10] Jason: Yes we

[00:51:11] Ramit: did. You specifically said, we gotta get a lower rent, so let’s move to a smaller or or less desirable place.

[00:51:16] Jason: And we were talking about that for several months before.

[00:51:19] Ramit: I’m pleasantly surprised. How did you decide to do that? Most couples don’t.

[00:51:24] Jason: I think it’s probably ’cause it’s the biggest glaring number.

[00:51:27] Ramit: Mm-hmm.

[00:51:28] Jason: That faces us for our expenses.

[00:51:30] Ramit: Truthfully, the biggest savings that anybody can have is reducing their housing costs.

[00:51:36] Ramit: That’s also the hardest one because moving, whether you’re renting or certainly owning is a big challenge. It’s uprooting everything. Sometimes there’s kids involved with school districts and on and on and on. Though almost nobody does it. So I’m pleasantly surprised because it tells me you can do hard things.

[00:51:53] Ramit: That’s actually giving me more confidence about your. Ability to change as a couple. Great. Alright. You have debt. I wanna understand this debt. You have $46,640 of debt. What kind of debt is that?

[00:52:08] Molly: Let’s see, 20. One of that is two vehicles.

[00:52:13] Ramit: What’s the interest rate?

[00:52:14] Molly: The interest rate on the truck and I don’t, oh, I think it’s like 4%.

[00:52:21] Molly: I actually don’t know that one.

[00:52:22] Ramit: Fine. And what’s the other?

[00:52:24] Molly: The, the van is like seven.

[00:52:26] Ramit: Okay. Alright. What else?

[00:52:28] Molly: The rest of it is credit card debt,

[00:52:30] Ramit: $25,000 of credit card debt. Why?

[00:52:33] Molly: Great question. Uh, first

[00:52:35] Jason: one was moving across the country.

[00:52:38] Molly: Yeah.

[00:52:39] Jason: Then we bought some furniture.

[00:52:42] Molly: I mean, we did have to re, I mean like when we moved we did have to buy some stuff because we got rid of so much and we didn’t wanna like move it across the country.

[00:52:50] Molly: So getting reestablished, I guess, cost money, but then a lot of it was like. Unexpected bills. Like we had to get a new transmission in our vehicle. We had to get tires. We’ve had dog teeth pulled. And then a lot of like, you know, I have spent money on my credit card to cover like daycare costs. Um, just

[00:53:16] Ramit: why, why?

[00:53:18] Molly: Because it wasn’t, because it’s like it would withdraw from my account and then it just goes to my credit card. If there wasn’t enough in there,

[00:53:25] Ramit: what the, why, why not? Yeah. Get Jason to transfer the $9,500 per month in gross income that he makes.

[00:53:33] Molly: Great question. It just doesn’t, I’ve, I’ve told him before we’ve had this conversation, Jason and I, where I’m like, just transfer the money to me regardless when you get it.

[00:53:44] Molly: I’ll pay the rent. I’ll do it all. And he’s like, we should do that. We should. And then that’s it.

[00:53:51] Jason: That is a great question. I want to be able to transfer more and I, I need to spend more time figuring where all the money is going. I know I can do better day-to-day spending, but the money is not always there.

[00:54:05] Jason: There’s a lot of food spending.

[00:54:07] Ramit: How much

[00:54:08] Jason: I might spend as much as 20, 25 per day.

[00:54:12] Ramit: Alright, so it’s a lot of money. It’s all, that’s where some of it’s going, not all of it. ’cause you make $6,950 a month net. Alright? Your debt payments are $1,375 a month. And did you tell me that’s a minimum?

[00:54:30] Molly: Probably should be.

[00:54:31] Molly: I think we should.

[00:54:33] Ramit: Why can’t I get a straight answer?

[00:54:35] Molly: Well, because I don’t know what he spends. What he spends.

[00:54:38] Ramit: Well then why then, Molly, why are you answering for him?

[00:54:40] Molly: I don’t know.

[00:54:41] Ramit: You’ve done this several times. This is debt

[00:54:42] Molly: payments.

[00:54:43] Ramit: Hold on. When I ask about the debt, you answer for him. When I ask about the vehicles, you answer for him.

[00:54:51] Ramit: Why is it that you feel that you are taking on so much emotional load? But when I ask questions, you are the first one to answer it.

[00:54:58] Molly: Because I feel like he doesn’t know.

[00:54:59] Ramit: Well, why don’t you let him try? Let him fail. What’s the worst that would happen?

[00:55:03] Molly: You’re right.

[00:55:04] Ramit: And in how many other places of your relationship have you stepped up to save the day?

[00:55:09] Ramit: Because you’re afraid he doesn’t know the answer.

[00:55:11] Molly: A lot.

[00:55:12] Ramit: Do you see that you are perpetuating the very dynamic that has caused you to be stuck? As we are talking, you guys know it’s okay to say, I don’t know.

[00:55:23] Molly: Maybe not.

[00:55:24] Jason: I guess not. I guess not.

[00:55:26] Ramit: Yeah, that’s an honest answer.

[00:55:28] Molly: Yeah.

[00:55:28] Ramit: I actually find that the smartest people I know are very comfortable saying, I don’t know.

[00:55:32] Ramit: Think about the dynamic that’s happening right now. Yeah. You guys came to me ’cause I’ve written books on money and I know this stuff. It’s okay that you don’t know this. It’s totally okay. That’s why you’re here. Do you see what I meant when I said that money is just a symptom of how you feel about yourselves and your relationship?

[00:55:51] Ramit: When Molly keeps answering questions for Jason, she’s actually not helping him. She’s protecting him from having to admit he doesn’t know, and Jason is letting her do it because as long as she’s the one managing everything, he can wash his hands, clean of responsibility. She manages the money, she answers questions for him.

[00:56:09] Ramit: It’s not the dollar amount here. That’s not the issue. It is their dynamic. Molly gets to feel competent and in control. In fact, she has this virtue of, I’m protecting Jason. Jason gets to stay disengaged. He gets to avoid discomfort. I don’t know. I haven’t thought about it. I don’t know. Do you know this dynamic?

[00:56:28] Ramit: Have you ever seen this dynamic? Are you in this dynamic? This is really common. Where do you think they learned it? We’re gonna find out in just a second or after this. You know, mother and Father’s days are coming up and I have a great gift idea for you to give to them. Give them a subscription to Masterclass.

[00:56:47] Ramit: This episode’s sponsor, they have tons of great classes your parents would love, like developing good, repeatable habits with Atomic Habits. Author James Clear, designing stunning floral arrangements with Maurice Harris or People Intelligence with Vanessa Van Edwards. We all love to see our parents.

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[00:57:56] Ramit: That’s 15% at masterclass.com/ramit. Head to masterclass.com/ramit to

[00:58:03] Molly: see the latest offer.

[00:58:05] Ramit: Going back to your childhood, what do you remember your family saying about money when you were young?

[00:58:10] Jason: Very little talk about money. I had kind of a unique upbringing. I grew up in essentially what you might call a cult, a community where a bunch of family lived together, shared, pooled all their money.

[00:58:23] Ramit: Wow.

[00:58:24] Jason: Uh, it was a whole farm, so had our own livestock. Massive gardens fed our own livestock from the farm as well. Some of the fathers worked in a town nearby.

[00:58:37] Molly: Mm-hmm.

[00:58:37] Jason: And basically pooled all their money together though, just about all of it. And, uh, never really a lot of talk about money. I was always outdoors on a farm.

[00:58:48] Jason: Never really had to think about it that much until I was about 15 and then moved away. I got my first job, uh, working for a contractor and started to realize what money was all about. That was the same year that my dad actually passed away.

[00:59:04] Ramit: At 15.

[00:59:05] Jason: At 15, yes. So I’ve never really got to see him in the real world.

[00:59:10] Jason: Never got any advice from him as far as how to, how to use my money, what to do with it. As far as I remember, I think he only ever saved money. I don’t think he ever invested it. He just had a savings account, saved whatever he could. I didn’t grow up with a lot, but I never felt like that.

[00:59:27] Ramit: Was this a, you called it a sort of cult, was it a religious cult?

[00:59:32] Jason: It was. You can look it up on Wikipedia.

[00:59:35] Ramit: What’s it called?

[00:59:36] Jason: It’s called the Move. The

[00:59:38] Ramit: Move.

[00:59:38] Jason: It’s all over the world.

[00:59:39] Ramit: It’s still in existence.

[00:59:41] Jason: The, I guess it is in small pockets. I don’t think it’s as big as it once was, but it definitely is around.

[00:59:45] Ramit: Was it normal for people who grew up in this cult to leave and to not go back?

[00:59:51] Jason: I think during my generation, ’cause it was multi-generational, it definitely became quite a norm.

[00:59:58] Ramit: Hmm.

[00:59:58] Jason: Many people my age left and never came back.

[01:00:01] Ramit: Did your mom stay in it?

[01:00:03] Jason: My mom stayed into in it, uh, in spirit. But once my dad passed away, she moved, she wanted to be close to her relatives, so we moved back to the Midwest from Canada.

[01:00:12] Ramit: Got it.

[01:00:13] Jason: Yeah. She still very much keeps in contact with many people from there.

[01:00:17] Ramit: Oh, for, okay. Alright.

[01:00:18] Jason: Yeah.

[01:00:19] Ramit: Understanding that money was not talked about when you were a kid. I get that. How much focus was there on like, thinking ahead, long-term planning?

[01:00:30] Jason: I have a very clear memory of this because I was very surprised when we moved down to the Midwest.

[01:00:36] Jason: I was my last year of high school and I was, went from a tiny little private school within our own community to a public school mm-hmm. With 460 fellow graduates, and I lived with my aunt and uncle because my mother and my two sisters only had enough room in their apartment for them. My aunt and uncle lived right down the road.

[01:00:55] Ramit: Mm-hmm.

[01:00:56] Jason: And the very first thing I started doing was, you need to go to college, you need to get all these. You’re very bright. You can get all these, you know, advanced education classes while you’re in high school, blah, blah, blah. Start applying. This is what you need to do, you’re gonna do it. And I got scholarships.

[01:01:13] Jason: I got a full ride I college that year, just from that last year of high school, which I don’t know how that happened, but,

[01:01:19] Ramit: wow. What do you take away from that? That’s pretty interesting. Pretty impressive too.

[01:01:24] Jason: I felt pretty good to get a scholarship full ride, just to college. I, I honestly, like I said, I felt pretty good.

[01:01:32] Jason: I wasn’t probably as excited as some people would be ’cause I just didn’t have that in my upbringing.

[01:01:37] Ramit: Do you get excited in general? Like excited, physically excited?

[01:01:41] Jason: Not often.

[01:01:42] Ramit: Yeah. Do you smile in pictures?

[01:01:44] Jason: I don’t smile often.

[01:01:45] Ramit: Molly, I noticed that you’re nodding and, um, you’re noticing this, right?

[01:01:50] Molly: Yeah.

[01:01:51] Molly: Yeah. What

[01:01:51] Ramit: are you taking away so far?

[01:01:53] Molly: He gets excited, but not like, yeah, like there’s maybe we, it would be hard pressed to know that he is.

[01:01:57] Ramit: Jason, why do you think I bring this up?

[01:02:00] Jason: I think, uh, a lot of this financial issues that Molly and I have had brings up talks that never end well. Yeah. And I think that by me not showing emotion, I often show that I don’t care.

[01:02:16] Ramit: Yes.

[01:02:16] Jason: And I think that has an emotional weight and effect on her.

[01:02:22] Ramit: I’m jumping in quickly because sometimes when couples are this disconnected, they need a visual tool to help them identify what they’re actually feeling. So I wanted to try something. I pulled up this beautiful visual called the Wheel of Emotions.

[01:02:36] Ramit: I learned about this in therapy. It’s a color coded chart that breaks down feelings into specific categories that go beyond happy, sad, or angry. There are hundreds of emotions on this wheel. You can find it. Just search for Wheel of Emotions. And I asked each of them to pick two or three words that describe how they feel about money in their relationship.

[01:02:57] Ramit: Let’s listen as they go through the exercise. It’s very illuminating. Can we just do a quick exercise right now? How do you both feel about money in your relationship? Be really honest. How do you feel about money? You could pick two or three. Feel free. Jason

[01:03:13] Jason: embarrassed.

[01:03:14] Ramit: Mm-hmm.

[01:03:15] Jason: Resentful

[01:03:16] Ramit: and apathetic.

[01:03:19] Ramit: Thank you, Molly.

[01:03:21] Molly: That’s interesting. That’s really interesting. I have two of the same of yours. Um, embarrassed, resentful, and then overwhelmed.

[01:03:33] Jason: Wow. I almost picked that one too.

[01:03:36] Ramit: Now I would love for the two of you to discuss what you just learned.

[01:03:40] Jason: I, I think the resentful one is interesting.

[01:03:42] Molly: Yeah.

[01:03:43] Jason: Between us.

[01:03:44] Molly: Why do you feel resentful?

[01:03:46] Jason: I think resentful in the fact that I feel like I’m working really hard all the time so that we have money, and I feel like I also want to improve in a lot of ways in our financial stability, in our financial life together. So I feel like I’m being attacked sometimes and I resent that.

[01:04:09] Ramit: Hold on. Now toss the ball. Back to Molly. Jason,

[01:04:13] Jason: what about you? Where does the resentful come from?

[01:04:17] Molly: I guess I feel resentful that there was never like a decision made that this is the, the role that we would play. It was just assumed that because you make more money, this is where you would be, and that I would be the stay at home mom and we’re two year, two plus years in that I would still just have to take the brunt of if there’s no school or if there’s she’s sick or like that This.

[01:04:44] Molly: That it would be just assumed this is where I would be.

[01:04:48] Jason: Okay.

[01:04:49] Ramit: Can I ask you guys, did you think you would end up in this dynamic with your money when you were younger?

[01:04:56] Molly: I don’t think so. No. And what’s weird is that like I am, I, and I, I guess it’s not weird ’cause it happens all the time, but I, I am like living my mother’s role.

[01:05:09] Molly: It’s just so bizarre.

[01:05:10] Ramit: You don’t say, tell me, let’s go back. What, what do you remember about your family? What’d they say about money when you were younger?

[01:05:18] Molly: I had no, I, I did not even really think about it until my parents got divorced. I knew we were not as well off as some of my friends ’cause we lived in the neighborhood next to the rich people.

[01:05:29] Molly: But when we moved out with, I moved in with just my mom and I, that’s when I knew we were struggling financially. And she had to pay how, because that’s why she had to work nights on top of her day job.

[01:05:43] Ramit: Ah. What did she say?

[01:05:45] Molly: She told me she didn’t wanna take any money from my dad for alimony, and that’s why she has to get a second job.

[01:05:51] Ramit: Why, why did she not wanna take alimony?

[01:05:54] Molly: Because she wanted to get divorced.

[01:05:55] Ramit: What do you make of that

[01:05:57] Molly: now? I think that was the first time that she could have control over something she didn’t have control of at all in their relationship. So her deciding not to take money from him was almost like, uh, taking her power back or something.

[01:06:12] Ramit: And when your parents were together when you were younger, was your dad the primary earner? And if so, what did your mom do? Did she work or not?

[01:06:21] Molly: He was a primary earner and she was at home with us, but I don’t, she went back to work when I was pretty young.

[01:06:28] Ramit: Okay.

[01:06:29] Molly: Then she remarried and I had to move, um, out of the state.

[01:06:35] Molly: Hmm. Yeah. She, she ended up marrying someone that. Is, you know, had a lot of money in a way of like land and he never spent very much. He’s very, uh, frugal.

[01:06:49] Ramit: What lessons do you take away from her relationship with money?

[01:06:53] Molly: She has a very weird relationship with money. Um, I don’t like it. She told me that with my father.

[01:07:01] Molly: She had no control and so she never, he said, don’t worry about it. While he was like racking up debt and kind of ruining his own financial picture and ours as a family, when she remarried, she kind of took this role on as like not wanting, she doesn’t wanna spend too much money. She hides like, she like squirrels away.

[01:07:27] Molly: Money that she can then like, give to us. Mm-hmm. She doesn’t wanna tell him, although I don’t think he would care, but that’s how she feels about it.

[01:07:35] Ramit: Why does she do that?

[01:07:37] Molly: She doesn’t want to appear to be like a gold digger, I guess, if you will. Yeah. Or that she’s after his money. He doesn’t wanna appear to be greedy.

[01:07:46] Ramit: Hmm. What image do you think you might be trying to uphold as it relates to money?

[01:07:52] Molly: I think for me, I try to uphold an image of like, we’re doing fine. We’re doing okay.

[01:07:57] Ramit: And then you mentioned to me that you said, it’s ironic that I’m living my mother’s life. What did you mean by that?

[01:08:04] Molly: I have somehow gotten myself like in this dynamic where I don’t know where money’s coming from and I don’t know what’s happening and I just have to be okay with it or be silently resentful of it.

[01:08:25] Ramit: Do you

[01:08:26] Molly: I probably am like, yeah, I’m, I’m, I’m maybe not as silent as, as she was, but, um, I am resentful of not having. Control of more of our finances.

[01:08:38] Ramit: Do you have a relationship with your dad?

[01:08:41] Molly: Oh yeah. No. He’s passed away three years ago, four years ago.

[01:08:44] Ramit: I see. Okay. Oh, sorry to hear that.

[01:08:46] Molly: He was in love with Disney World and we would go almost every other year.

[01:08:53] Ramit: Mm-hmm.

[01:08:54] Molly: And it was never with money that he had saved up. It was always on the credit card. And he would just go all out.

[01:09:01] Ramit: Oh,

[01:09:01] Molly: all out. He would just spend, he, he loved spending money that he didn’t necessarily have, although I didn’t know that at the time.

[01:09:09] Ramit: Mm. And then did he rack up credit card debt?

[01:09:11] Molly: Yes, a ton.

[01:09:13] Molly: And then his house had to, he kept borrowing against his home or my childhood home. And then that got foreclosed and then he had to file for bankruptcy on top of that. Luckily had a pension from, he worked for the government, so that was what kind of saved him in the end. But he went bankrupt and. Um, never really planned for the future.

[01:09:34] Molly: Lived with my brother for the last, like, eight, 10 years of his life, had dementia. Um, I see. Yeah. So when he died, I, we, I got like a, a small check from his life insurance and that was actually part of our moving costs, but that went into us moving.

[01:09:51] Ramit: When you look back at money, young childhood, until you graduated from college, what are the lessons that you take away from your experiences?

[01:10:00] Molly: I had a very, like, negative view of money. Like I said, my, the neighborhood I grew up in was a little bit more like lower class to like, the really expensive houses were very close to where we lived and that’s where all my friends lived. So I knew I was not there and I think I internalized that into to being like.

[01:10:24] Molly: I don’t care. I don’t care about money. Like I don’t want it. Mm-hmm. I know in my twenties that then translated to like living very much by the moment and living experiences and spending everything I had to go out of the country and then coming back broke and thinking that I was like winning because I was like, all these people are in the rat race and I’m like living these experiences, you know, I’m living life.

[01:10:52] Ramit: That’s very perceptive. Okay. And did that change at some point?

[01:10:57] Molly: It kind of changed in my mid thirties. Um, it was like kind of when I started to focus more on my career and kind of saw the writing on the wall. I wanted a family, I wanted to be more responsible and that’s when that kind of shifted and I was like, whew, maybe I should have invested a little more into, you know, not just living for the moment.

[01:11:19] Ramit: You ever go to therapy?

[01:11:21] Molly: I have, yeah.

[01:11:22] Ramit: Oh. Like, do you still go?

[01:11:26] Molly: I haven’t gone recently, no. Okay. And it was definitely when I was still single and we, I didn’t have any kids.

[01:11:34] Ramit: What’s occurring to you right now?

[01:11:37] Molly: Actually, I’m thinking about, I, I really wanted to have children and I didn’t see that happening ’cause I was in my late thirties and she, I remember my therapist being like, you know, be careful what you wish for.

[01:11:50] Molly: She’s like, this isn’t just getting a partner and a kid isn’t me mean, you’re like gonna suddenly be happy. It’s a lot of work and a lot of that sometimes makes people really unhappy. I sometimes look around, I’m like, this is what I wanted. I got what I wanted and I’m, and, and I am still unhappy.

[01:12:07] Ramit: That’s quite profound.

[01:12:10] Ramit: I’m appreciating you letting that moment sit here for just a second as we. Both of us, and I think Jason as well, all three of us just grapple with the enormity of what you just said. The idea that we can really set this big intention, we can even make it happen. And as the old saying goes, wherever you go, there you are.

[01:12:33] Molly: Yeah.

[01:12:34] Ramit: And it’s not about having a daughter, I’m sure she’s beautiful. It’s not about being in a relationship, but it’s about like, am I getting what I wanted and what I needed? And perhaps even more deeply do I even know what I want? Do I even know what makes me happy?

[01:12:55] Molly: I don’t think I know what would make me happy.

[01:12:57] Ramit: Mm-hmm.

[01:12:59] Molly: I don’t know when there’s like the moment when you’re like, and I, and I know this to be true, but like where I’ll feel like I can take a breath and just kind of like, okay,

[01:13:11] Ramit: it’s interesting. I notice you’re crying at that.

[01:13:14] Molly: Yeah.

[01:13:14] Ramit: Why?

[01:13:17] Molly: Because I feel like I’ve just been holding on really tightly for a while and I, I’m like waiting for the other shoe to drop.

[01:13:24] Ramit: Molly says she got everything she thought she wanted and she is still unhappy. I appreciate the honesty. Actually, I think that might be the subtitle for the American Dream.

[01:13:37] Ramit: I got everything I thought I wanted and I’m still unhappy. So I asked Molly after hearing that if she could tell Jason directly what she needs to him, listen to her response.

[01:13:50] Molly: To me it feels like you think I kind of spend money all willy-nilly and if I were to get all of the money saved, I was the one that was receiving all of the money that we spend throughout the month that I would just spend it all.

[01:14:02] Molly: But I don’t think you understand like how hard I try to stay within certain lines and like I think you actually spend. A lot of money without consequence. I think you spend a lot more money than you think you do without any thought. To like us as a whole, I need to have control of our finances. I need to be in charge of it.

[01:14:28] Ramit: It’s quite interesting, Molly, that you said, I feel like I’ve been holding on really tightly, but you also said, I want more control over the money. How do you reconcile that?

[01:14:40] Molly: I think I want to have more control because I don’t trust him to have some of that, you know it coming up right now, it’s like this and this happens a lot.

[01:14:51] Molly: I was like, I’m thinking, I think about my mom and the way she was with money and then my dad just gets a pass.

[01:14:57] Jason: Oh.

[01:14:58] Molly: When I think about that dynamic, a lot of my mom would get a lot of the brunt of like my bad feelings about that time and my dad would just get a pass because he wasn’t someone I actually looked at as being responsible.

[01:15:11] Ramit: Make the connection to this relationship. Molly, go ahead.

[01:15:14] Molly: God,

[01:15:14] Ramit: make it say it out loud.

[01:15:18] Molly: I’m trying to, it’s all coming to be right now. It’s all, um, yeah, I guess I don’t, I don’t expect my partner now to make responsible decisions. I can’t trust him to be responsible with our money because I, I’ve never seen that before.

[01:15:34] Molly: I guess it’s never been modeled and I don’t see it in him now.

[01:15:37] Ramit: Jason, what would you say to Molly if you knew that she would listen when it came to money?

[01:15:42] Jason: Molly, I think if I were to take over more of the bills, which we’ve talked about, which I’ve never done, I would like you to know that I would be willing to take that off your plate, reduce the amount of finances that you have to take control, and also share actual accounts where you have access to all the, all the income.

[01:16:05] Jason: I think that would be something that you could trust me with.

[01:16:09] Ramit: Okay. What do you both think of that, what you just heard from each other?

[01:16:13] Molly: I think it’s a little conflicting views on how to do the money management in our home like daily.

[01:16:21] Ramit: Mm-hmm.

[01:16:22] Jason: I just know in the beginning you said you have everything in your name, which is a lot of responsibility, so I feel like I could share that responsibility more.

[01:16:31] Ramit: What I’m hearing on a positive side is that you’re both willing to change the way you’ve set it up. That part is good. I think you perhaps are not thinking about the ramifications of some of these things. Like if one person is in charge of the money and then they get hit by a bus. Yeah. The other person has no idea what’s going on.

[01:16:47] Molly: True.

[01:16:49] Ramit: And do you have a daughter? So that’s not a good position to be in. You also have $0 in savings. So just to be very blunt, Molly, if you got hit by a bus tomorrow, what do you think would happen with Jason and your daughter?

[01:17:02] Molly: There’d be a lot of scrambling for him to figure out. A lot of passwords or how to, who to talk to about literally all of our debt.

[01:17:11] Molly: And so yeah, there needs, we’re, we’re playing, we’re each playing like, I feel like a really individual role like this is, that’s how, yeah, I’m realizing and it’s not like this group decision making or group dynamic when it comes to our finances. We’re both just doing our own thing.

[01:17:30] Ramit: Why are you not married?

[01:17:31] Ramit: Out of curiosity? No judgment. Just curious.

[01:17:33] Molly: For me it was financial to be

[01:17:35] Ramit: honest. Really?

[01:17:36] Molly: Yeah.

[01:17:37] Ramit: Tell me more.

[01:17:38] Molly: We had really bad credit and my credit was really good. And when we had talked about like combining, I was like, and I kind of told him at some point, maybe this was before we had the baby, but I was like, I don’t seem having like a contract together being the best decision for me.

[01:17:56] Molly: Like you’re not a good financially sta speaking, it would not make sense for me to do that.

[01:18:02] Ramit: Can I ask a personal question? Feel free to not answer this. How were you uncomfortable getting married for financial reasons, but you were willing to have a kid together?

[01:18:12] Molly: I think I didn’t think it was gonna happen.

[01:18:15] Molly: I didn’t think we were gonna get pregnant.

[01:18:17] Jason: I would be happy to get married. I just never thought of it as a huge priority. I didn’t think of anything in regard to financial. By the way, my credit has improved quite significantly since we met.

[01:18:28] Ramit: That’s good.

[01:18:29] Molly: That’s true.

[01:18:29] Jason: Um, on my own because we don’t have anything combined.

[01:18:33] Jason: But, um, I don’t have any other reason than just didn’t feel like it was one way or the other about it. I didn’t feel like we needed to.

[01:18:41] Ramit: Alright. So if this were to happen, if you were to be able to start to achieve some of these goals working hand in hand, it would feel great. What’s stopping you from doing that now?

[01:18:54] Molly: I just, I need his help. I just don’t wanna do it all on my own.

[01:18:58] Ramit: Okay. Jason, what’s stopping you from accomplishing what you want?

[01:19:03] Jason: Not taking the time to make a plan and actually sit down and do it. I’ve done some of the things, but I could do a lot more.

[01:19:10] Ramit: What if you don’t, Jason?

[01:19:12] Jason: What if I don’t? Then I feel like we’re just gonna keep going with the same cycle, uhhuh and being out, and then what will

[01:19:17] Ramit: happen?

[01:19:19] Jason: Then all of a sudden we’re 50 and then all retirement is looming around the corner. Our daughter’s gonna graduate and we’re gonna be stuck in the same situation, but much. And

[01:19:29] Ramit: then what?

[01:19:30] Jason: And now we’re looking forward to an uncomfortable later life. Could be any number of things. Not good,

[01:19:37] Ramit: like

[01:19:38] Jason: moving in with relatives, or not having money for their daughter to go to college, or having no retirement fund, not doing any of the other things we’d really like to do, like travel, and actually have.

[01:19:54] Jason: A rich life, you know, an enjoyable lifestyle.

[01:19:56] Ramit: What about for you, Molly? What if nothing really changes?

[01:20:00] Molly: To be honest, I just, I don’t see how we can, how we would be able to like, stay together. It’s super harsh to say that, and I don’t want that, but I, I wouldn’t be able to live like this forever.

[01:20:10] Ramit: How long could you go

[01:20:12] Molly: until it felt like there was like no hope left?

[01:20:17] Molly: That sounds terrible. No. Until, I guess I don’t know, until it really felt like there was this, is that the, the partnership is not partnering?

[01:20:27] Ramit: Well, it’s not today.

[01:20:28] Molly: No, it’s not today.

[01:20:29] Ramit: And you’ve tried many, many times to get him involved. So the partnership is not partnering. So what else?

[01:20:36] Molly: I don’t know. I don’t know when would be the point of no return.

[01:20:41] Ramit: Okay. I don’t expect an answer to that very difficult question, but I do think that it is valuable to ask. What if nothing changes? And I think that that is worth discussing probably more with the therapist. It’s not working. ’cause I can see your CSP, but more importantly, it’s not working Between the two of you, you’re totally disconnected about money.

[01:21:07] Ramit: Let’s talk about where you are today and where you want to go. When you think about your money situation as we’ve discussed it today, what part feels like the hardest part to face?

[01:21:17] Molly: The retirement and savings.

[01:21:21] Ramit: Okay.

[01:21:22] Molly: Like literally the, the, as far as like numbers go, we’re, we’re trying to pay off our debt.

[01:21:26] Molly: That’s our biggest first thing, which we do have a plan for just to sell our truck. Um, it’s almost paid off and I think we could get about 15,000 for it. And, and, and then put that all towards our credit card debt.

[01:21:41] Ramit: You’re gonna sell a truck and put it towards your high interest debt. This is the greatest day of my life.

[01:21:49] Ramit: I never hear this. Never. I can’t believe it.

[01:21:55] Molly: Hey,

[01:21:56] Ramit: well done. All right. Now, if the two of you can start to move forward in things like paying off your debt, what would that feel like to do it together?

[01:22:08] Molly: Incredible.

[01:22:09] Jason: I would feel, yeah, I, I would think that would be amazing.

[01:22:12] Molly: Such a, like, like the, I could just feel like the weight off my, I mean, it would just be really great.

[01:22:19] Molly: Great step.

[01:22:20] Jason: Well, we have talked about some of that in a way where we up our daughter’s daycare to full-time to where she could, to where Molly could possibly at least get a closer to full-time remote job perhaps.

[01:22:33] Ramit: Great. I think that’s an option. What about your work on the family finances, Jason?

[01:22:38] Jason: I think I would like to take over more of the bills.

[01:22:41] Jason: I think I could easily help with that. Put them in my name. So I’m the one that has to keep track of them. I

[01:22:46] Molly: mean, that would be huge.

[01:22:47] Ramit: Molly, what would it take for Jason to regain your trust?

[01:22:50] Molly: We, I, I think it starts with weekly meetings.

[01:22:54] Ramit: Mm-hmm.

[01:22:54] Molly: And showing up for that. Like picking, picking a day that works for him where he’s not too tired.

[01:23:01] Molly: ’cause it’s true, he does come home midweek and he is worked a long day and maybe not the best day to do that. So like, setting a schedule, sticking to it for the next six weeks would be huge.

[01:23:12] Ramit: And what happens in these meetings,

[01:23:14] Jason: we can see how we are on paying off our debt and we can discuss any number of changes we made, such as dropping subscriptions, what bills we have for that month, just basic things like that too even helps I think, just to know what we have months, a month.

[01:23:29] Jason: So we’re not always wondering like, I am what I have in my account and what I have to spend.

[01:23:35] Ramit: Can I, can I add something to it? We don’t operate on a weekly basis. That’s not how we think about money. That’s too short term. You’ll never actually achieve anything consequential if you’re thinking on a weekly basis.

[01:23:48] Ramit: Second, you don’t think about how much you can afford to send to your partner. The money goes there first, and then what’s left over after hitting all of these other goals is what you can afford to spend on things like eating out total recalibration of the way you think about money. Right now, lunches and all this other stuff is coming first.

[01:24:11] Ramit: It’s actually the opposite. How’s that strike you?

[01:24:14] Jason: No, I, I agree. I, I think that’s the way it needs to be.

[01:24:19] Ramit: Alright.

[01:24:19] Jason: I would love to set up a joint account.

[01:24:22] Ramit: Yeah.

[01:24:23] Jason: I think that would be the be the easiest way. I mean,

[01:24:25] Ramit: I agree. Uh, yes. How come it’s so easy all of a sudden? How come you haven’t already done this?

[01:24:30] Ramit: Tell me the answer to this question. ’cause that is the real thing going on here.

[01:24:34] Jason: I haven’t because I haven’t felt the urgency or I guess I haven’t realized that that’s probably the best way to avoid the constant issues that we have with money when we talk. In fact,

[01:24:44] Ramit: why is it that a guy like me has to come in and and tell you this for you to believe it?

[01:24:49] Jason: I’ve been used to running my own finances my whole life. I suppose that’s part of it. And I make money and I put it in my account and then I disperse it. And I think it’s just been a habit. And I guess adjusting to family life financially has not, I guess it hasn’t been as smooth the transition as I thought it would be.

[01:25:10] Jason: I’ve been apathetic, that’s why I picked that word. ’cause I know I have been and lazy in a lot of ways. I work hard at work, but I don’t take it home as much as I should.

[01:25:21] Ramit: I appreciate that. That is candid. That to me is the truth. And Molly, what role do you think you play in this dynamic?

[01:25:29] Molly: Oh, um,

[01:25:31] Ramit: hold on. Are you, are you still, before you answer my question, were you struck by his response?

[01:25:36] Molly: I, I, when he said lazy, I was actually surprised he said that. ’cause I’ve kind of thought that, I don’t know if I’ve ever said that. I definitely have never told him that.

[01:25:45] Ramit: Why?

[01:25:45] Molly: I, I think it’s scary for me to think that I am with someone that’s lazy.

[01:25:50] Ramit: Wow.

[01:25:51] Molly: Whoa. I

[01:25:54] Ramit: Y’all are really peeling it back today. This is honest.

[01:25:58] Ramit: Molly, talk more about that. It is scary for me to think that I’m with somebody who’s lazy.

[01:26:02] Molly: I think I am trying to like, hold together an image of where I want us to be or where I think we should be. And I am not facing the reality of like where we are and who we are showing up as. In this relationship?

[01:26:21] Ramit: Where was there? Where was it that I heard this word image before. Who else had an image?

[01:26:26] Molly: Oh, my mom. Yeah, totally. Totally. It’s like just ignore what’s happening if it appears to be fine to other people. Yeah.

[01:26:37] Ramit: I find this to be quite startling, quite honest, quite surprising that the two of you have never actually been this honest with each other before.

[01:26:45] Ramit: It’s almost like we can be delicate and polite ourselves right into total disconnection.

[01:26:51] Molly: Yeah.

[01:26:52] Ramit: I don’t wanna operate a relationship on the surface level. I don’t. Not with my wife or my partner. So I find all of these things to be happening here. But I see you both making progress, step by step, talking about it, using different words than you used at the beginning of our conversation.

[01:27:10] Ramit: That part I like.

[01:27:12] Molly: Yes? Yes.

[01:27:12] Ramit: Alright, I’m gonna put these numbers up, up on screen. Your debt payments, $1,375 are. Considerable. You also have $785 of car payments. It’s doable with your income, but it adds up. You have $1,100 of groceries. Again, it’s doable, but it adds up. What’s the vision here? What are you gonna try to accomplish?

[01:27:33] Jason: Can we reduce our fixed costs so we can get an emergency fund and some savings? I would love to do that for a start.

[01:27:41] Molly: Huge. Yeah.

[01:27:42] Jason: Love it. Pay off and pay off our credit card debt.

[01:27:44] Ramit: Fantastic. Molly, what do you say?

[01:27:47] Molly: Yeah, I think by the first step I want, I see. Like I really wanna sell the truck and get the credit card debt down.

[01:27:53] Ramit: Love it.

[01:27:53] Molly: If we sold the truck, then it would be $365 less a month for the car payment

[01:28:01] Jason: and less for the insurance.

[01:28:03] Molly: Yep.

[01:28:04] Ramit: You’re down now to 72%. Good progress.

[01:28:07] Jason: Well, definitely subscriptions. I have a couple of doubles that I just found when I looked at it. Plus we don’t need nearly that many.

[01:28:15] Ramit: Just tell me the number right now.

[01:28:16] Ramit: It’s $545 a month.

[01:28:18] Jason: Okay. I think we can, I think, go ahead.

[01:28:21] Ramit: No, Jason, stop answering for him. Molly. Maureen?

[01:28:25] Jason: I could drop it down to 180.

[01:28:27] Ramit: You can drop it to 180. Okay. And then what about Molly?

[01:28:31] Molly: 35.

[01:28:32] Ramit: 35 bucks?

[01:28:34] Molly: Yeah. Most of the stuff is in his name.

[01:28:35] Ramit: Two 15. Alright, we’re down to 68%. Not bad. Not bad.

[01:28:39] Molly: I do have to make an addendum.

[01:28:41] Molly: Our health insurance is going up, so the insurance line, it’s gonna be probably 365.

[01:28:47] Ramit: You’re back to 73%. Looks like we gotta take something else off. Groceries,

[01:28:52] Molly: we could go down to 900 for sure.

[01:28:54] Ramit: Alright, 900. We’re down to 70%.

[01:28:57] Molly: Still so much.

[01:28:58] Ramit: What are y’all thinking so far?

[01:29:00] Molly: The debt payments is a lot.

[01:29:02] Ramit: Yep. So let me give you some numbers on your debt payments.

[01:29:06] Ramit: I’m just talking about your credit card debt at $25,000. Okay? If you pay that off at a thousand dollars a month, it’s gonna take you 37 months, which is three years, and you’re gonna pay $12,000 in interest. Yeah. If, on the other hand, you pay off $2,000 a month, you’re gonna pay it off in 15 months with $4,700 in interest.

[01:29:31] Ramit: Okay. So you can see that the numbers become quite different. Mm-hmm. Now, if you put $15,000 of that truck sale towards the credit card debt, then $2,000 pays it off in five months with $730 of interest, what do you notice?

[01:29:48] Jason: Lot of less interest. A lot less interest,

[01:29:51] Ramit: and a lot faster. A

[01:29:52] Molly: lot faster, A lot faster.

[01:29:53] Molly: Yeah.

[01:29:54] Ramit: C, can I ask you something? You got anything else in that garage of yours that you can sell?

[01:29:58] Molly: Yeah, a couple things.

[01:30:00] Jason: Yeah. We have a full garage.

[01:30:02] Ramit: You know what? 70% of the American households I talked to have like a bunch of stuff in their garage that actually could sell for something meaningful. Yeah. Is that you?

[01:30:11] Jason: We do have some things that we’ve been meaning to sell. Yes.

[01:30:14] Ramit: This is the easiest thing you can do. Ever get rid of it. Okay, great. The more money you do now, the more you can pay that debt off quickly. Alright, we gotta go to the other stuff on this CSP because it’s driving me insane. Investments are at 3%.

[01:30:30] Ramit: Savings are at essentially zero. Meanwhile, your guilt-free spending is 25%. I suspect it’s actually higher than that. What does this tell you?

[01:30:40] Molly: This is clearly us living in the moment, again, like just how we have always lived.

[01:30:46] Ramit: Yep. Yeah. So what do you wanna do?

[01:30:48] Molly: I wanna make some sacrifices and. Really tighten our budget and I’m ready to like spend, you know, the next year or so, however long we need to, I guess, to really like get ourselves into a better spot.

[01:31:02] Jason: Let’s get specific, I need to, I’ll skip coffee every day and no lunch. How are you gonna eat?

[01:31:09] Molly: Yeah, I’d have to like, probably spend a little more on like, lunches stuff for him. If I, if we were to do that, yeah, there would be some change. I, we’d probably have to, I think a thousand dollars would be safer for groceries.

[01:31:21] Molly: Like more realistic.

[01:31:22] Ramit: Mm-hmm.

[01:31:23] Molly: Just being honest there. Yeah.

[01:31:25] Ramit: I appreciate the honesty. We need it. And then, you know, we said that you eat out 12 times a week, let’s just average that ’cause it was like, let’s say 20 bucks for lunch and then coffee is what, like eight bucks?

[01:31:37] Jason: Uh, the ones I get are five. Not more than

[01:31:38] Ramit: five.

[01:31:39] Ramit: Five. Alright, so we got like 20. So let’s just for easy math, can we just say an average of 10? I think that’s fair. Alright. And so that’s, uh, 120 a week. 480 a month. I don’t know. Are you going to zero? That feels a bit aggressive. I, I don’t think you’re gonna go to zero.

[01:31:58] Jason: I can definitely go to zero. I can definitely go to zero on lunches.

[01:32:01] Jason: I know I can. I’ve done that plenty before. I got new, I have it recently. I’m a hundred percent sure I can do that. Coffee. I feel like I’ll go out for coffee more occasion. You know, occasionally. Not all the time.

[01:32:13] Ramit: So $240 off your conscious spending plan. Let’s take a look. Oh, that’s not gonna cut it. Can I show you a different way to do this?

[01:32:21] Molly: Yeah.

[01:32:22] Ramit: What y’all need to do is literally pay yourselves first, which means put the amount that you want to save every month there. Start with that. Don’t start with like, oh, I gotta have coffee. Nah, if you have coffee, money left over, great. Otherwise you don’t get coffee.

[01:32:39] Jason: Yeah.

[01:32:40] Ramit: So how much goes into investments?

[01:32:42] Ramit: The number recommended is five to 10%. You’re in your forties and you have very little investments. You need more than 10%. I’m gonna offer the number 15%. It is. That’s what happens when you don’t pick a number. Ramit safety picture.

[01:32:53] Molly: Okay.

[01:32:54] Ramit: Okay. 1100 right on the money. Boom. There you go. How much you wanna do for savings?

[01:32:59] Ramit: Five to 10% is recommended. Y’all need more than that.

[01:33:02] Jason: 10%?

[01:33:03] Ramit: Nope. Go higher than that.

[01:33:05] Molly: 12%.

[01:33:05] Jason: I would need more than that. Okay. 15%.

[01:33:08] Ramit: Good. Great. Alright. Y’all have $135 a month to spend on everything Now. I don’t think that’s realistic, do you?

[01:33:16] Molly: No.

[01:33:17] Ramit: No.

[01:33:17] Jason: Uh, maybe not.

[01:33:19] Ramit: Actually until now, I don’t even still fully understand where your money is going on a monthly basis, do you?

[01:33:27] Jason: Not fully, no.

[01:33:29] Ramit: So then why not simply start over? Create a joint account where the bulk of the money, the ba, the gross income that comes in every month is $11,900. The net is 86 50. Why not literally take $8,000? Send it to the joint account. Each of you can have 300 bucks to do whatever you want with, go enjoy whatever you want, but your future is together.

[01:34:00] Ramit: $8,000 every month. Net comes into that joint account and that’s the money you use to decide where it goes.

[01:34:09] Molly: Mm-hmm.

[01:34:09] Ramit: When that money is in one joint account, suddenly it’s gonna be very clear where that money’s getting spent.

[01:34:15] Jason: I a hundred percent agree.

[01:34:16] Molly: I agree.

[01:34:17] Jason: I think that’s the best.

[01:34:18] Ramit: Alright.

[01:34:19] Molly: Okay.

[01:34:20] Ramit: That’s it.

[01:34:21] Ramit: That’s all we, that’s all we need to do. Just put it in a joint account and we’re golden.

[01:34:24] Molly: Yeah, that’s a great start.

[01:34:26] Ramit: What’s gonna happen then in,

[01:34:29] Jason: I hope? Well, yeah, thinking about it that way though, investment and savings first, uh, makes huge sense to me. And then what we have, whatever we have, we have.

[01:34:39] Ramit: I wanna add one more bit of good news for you.

[01:34:41] Ramit: Once you pay off that debt and you pay it off aggressively, if you take that $2,000 that you were putting towards debt. You invest all of it, you literally just flip a switch and you send it to your investment account Every single month, you will have not 1 million, but 1.75 million in 25 years. That actually starts to be really cool.

[01:35:08] Jason: Yeah.

[01:35:08] Molly: Okay.

[01:35:09] Ramit: That’s amazing difference. Remember that 1.75 million does not include any raises that you might get. It does not include your ability to pay off the debt faster by selling bikes, et cetera, et cetera. It doesn’t include any upside. It also doesn’t include any downside, like a layoff, which is why I want you to have a savings.

[01:35:28] Ramit: But do you start to see, it starts to become more comfortable, more achievable? If you can operate as a team.

[01:35:36] Jason: Yes. Yeah.

[01:35:36] Ramit: What do you think?

[01:35:37] Jason: I, I see that. Yes.

[01:35:38] Molly: I like that. Yeah.

[01:35:39] Jason: I’m looking forward to it.

[01:35:40] Ramit: Alright.

[01:35:41] Molly: I like, I like the reality I that you’re speaking here.

[01:35:44] Ramit: Yeah. So,

[01:35:46] Jason: yeah.

[01:35:46] Ramit: Can, let me tell you where there are some holes in your plan.

[01:35:49] Ramit: ’cause there are some holes.

[01:35:50] Molly: Yeah.

[01:35:50] Ramit: And you two are gonna need to figure it, ’em out together.

[01:35:53] Molly: Okay.

[01:35:54] Ramit: First of all, right now you still only have $135 a month on discretionary spending. That’s simply unsustainable. That is 2%. And from a couple that currently is probably spending more like 30%. That’s just impossible for you to achieve.

[01:36:13] Ramit: I think you too might be able to realistically achieve 10% if you were totally dialed in as a team. Yeah. Completely dialed in. That 10% is like, we eat out once a month and we basically never go out for coffee or random stuff. Everything. And maybe just maybe we take a very modest vacation once a year, but like 2% it’s not possible.

[01:36:34] Ramit: So you’re gonna have to make some adjustments in your CSP.

[01:36:37] Molly: Okay.

[01:36:38] Ramit: You may have to dial down your investment contributions, but like that’s money you’re not gonna have later.

[01:36:46] Molly: Yeah.

[01:36:47] Ramit: So that’s a tough one. You may have to dial down your savings. I really would not like to see that. But that might have to happen.

[01:36:53] Ramit: Or more likely, you probably have a bunch of money you’re just spending without even thinking about it.

[01:36:58] Molly: Yeah.

[01:36:58] Ramit: I bet you there’s at least two, 300 bucks a month of random that is just like absorbed into the ether. Find it, fix it, put it towards your discretionary spending.

[01:37:08] Molly: Okay.

[01:37:09] Ramit: Yep. Okay. Next up, just a couple things.

[01:37:11] Ramit: As far as it currently stands, you cannot buy a house no time soon. As far as real estate investing, I don’t know where you would get the money and taking out a loan. It’s all great if it works, but if it doesn’t, then you’re really, so would I do that? I know as a GC you have a lot of experience to be able to do that and save money.

[01:37:32] Ramit: Mm-hmm. I would be extremely cautious about doing that anytime in the near term future. I wouldn’t even think about it until I had a clear trajectory for my retirement to have enough until I had at least, at least 12 months of an emergency fund. I’m talking big. That’s a lot of money.

[01:37:51] Jason: Yeah,

[01:37:51] Ramit: and, and everything was dialed in with the two of you as it relates to money.

[01:37:55] Ramit: So basically I wouldn’t think about it for the next five years. Plus your daughter, you can’t afford to pay for her college, not now. And the money you are putting aside for her. Whatever that number is. I would rather have you put that money towards your debt. She has time. You two have far less. She has the opportunity to take out loans or go to a community college or get scholarships.

[01:38:18] Ramit: The two of you have none of those things later in life. It is possible if you all were to triple your household income, you could do those things. Yes. And you were to get totally dialed in on all the investing and saving and all that. Yes, you could do it, but you’re in your forties and until now, like you don’t even share accounts.

[01:38:38] Ramit: So I think it’s important to start being realistic with what is likely and what is not. Early retirement, probably not likely. Could you? Sure. If everything went right. But I don’t make a life plan based on every single thing going perfectly. Right.

[01:38:53] Jason: Mm-hmm.

[01:38:54] Ramit: Are you hearing the urgency of what I am sharing with you?

[01:38:58] Molly: Yes. Yeah. Yeah.

[01:38:59] Ramit: Molly, how are you feeling right now?

[01:39:01] Molly: Bummed.

[01:39:01] Ramit: Mm-hmm.

[01:39:03] Molly: It’s pretty bleak.

[01:39:06] Ramit: That’s an interesting word you chose? Bleak. Bleak. Because,

[01:39:11] Molly: because I guess I, you know, a lot of our plans to get ourselves in a better situation kind of feel like they’re not gonna be possible.

[01:39:24] Ramit: Oh, like, like the are you mean the real estate investing one?

[01:39:28] Molly: I kind of, I thought that would be a good leverage for us because of our, like, combined talents. I just worry now like that’s, and even if it’s like a dream we can do in like five years from now, that would be cool. I just see, I see it as a way to help get us farther along than we can with just, you know, like you said, if I just, if I made $50,000 more a year, that’s not, that’s not gonna change things.

[01:39:56] Ramit: Can I make an observation?

[01:39:58] Molly: Yeah.

[01:39:59] Ramit: So first of all, I don’t mind that you’re upset. I would be upset in your situation as. This is probably the first time you’re hearing somebody just give you some blunt feedback.

[01:40:10] Molly: Yeah.

[01:40:11] Ramit: First of all, I’m not the ultimate authority with money. Nobody is. You too will decide what is right for you.

[01:40:18] Ramit: And if after a few years you go, Hey, we actually want to do this real estate investment and we have the skills and we’ve carefully run the numbers, that’s totally up to you. But more importantly, I actually don’t consider this bleak. Bleak is if you don’t do anything for differently for five years, then your situation is bleak.

[01:40:40] Ramit: And I mean it. It gets really bad, really fast. You all still have time. Bleak means you can’t ever eat out. You can still eat out a little bit. You have to be way more thoughtful about it.

[01:40:56] Molly: Yeah.

[01:40:56] Ramit: My family growing up once every six weeks or so with a coupon, I wouldn’t call it bleak. It was a big deal for us to go out to pizza.

[01:41:04] Ramit: That’s not bleak. You two are gonna end up with at least $1.75 million if you are totally dialed in, possibly more. And one other thing, if you actually do increase your income by $50,000, Molly, after getting all of this stuff dialed in, that makes a massive difference to the overall financial picture, like gargantuan.

[01:41:29] Molly: Okay?

[01:41:30] Ramit: That could actually allow things like real estate investing, et cetera. So don’t discount that, but right now, if you were to do it today, it would be largely meaningless.

[01:41:41] Molly: Okay,

[01:41:41] Ramit: fix this. Fix what is happening. It’s almost like there’s a fire in your house. Yeah. And you two are focused on building a deck, the deck, put the fire out.

[01:41:51] Ramit: We’ll deal with that later. That is my approach.

[01:41:54] Molly: Okay.

[01:41:54] Ramit: Alright.

[01:41:55] Jason: Yes. Okay. Love that approach.

[01:41:57] Ramit: Jason, what about you? How are you feeling hearing this?

[01:41:59] Jason: I love the idea of combining our, getting a combined account and. Savings and investment first. I love that whole plan. I think it’s hugely helpful just to, my thought process.

[01:42:11] Molly: It’s kind of like a puzzle that we’re, we both like puzzles and we have to figure it out together.

[01:42:17] Ramit: Totally. We have, we have this much, we have, we know that we have to prioritize paying off the high interest debt ’cause it’s drowning us. So we already have this much taken away every single month for the next roughly six months.

[01:42:29] Ramit: What else can we do now? And then what can we change on month seven? It’s like a puzzle. It’s a three dimensional puzzle. I love the way you described that.

[01:42:38] Molly: Can I say one thing?

[01:42:39] Ramit: Yeah.

[01:42:40] Molly: I, I, that just thought about it was like, if we, like our powers combined, if we’re both motivated and working on this together, like that’s where I can just, it’s like the, I just know that we could get some momentum that would make us both feel really excited and want to like just to see the fruit of that labor.

[01:42:59] Molly: I know we would. Yeah, like our powers combined. That’s what I keep thinking, like we could make some real change and like real awesome things happen.

[01:43:08] Ramit: I agree. I agree. Do you agree, Jason? I agree.

[01:43:11] Jason: I definitely agree.

[01:43:12] Ramit: Amazing. The two of you working together?

[01:43:14] Molly: I, I would look.

[01:43:17] Ramit: I asked Molly how long she could keep living like this.

[01:43:20] Ramit: She couldn’t answer. She is finally seeing what we have been seeing this entire conversation. Jason’s disengagement goes beyond money. It’s about everything and her response, which is to take on the debt in her name to try more and more to stack on responsibilities on our shoulders and manage everything alone simply perpetuates this.

[01:43:45] Ramit: But I also noticed that Jason called himself lazy and that was quite interesting. On one hand, I appreciate the candor on another hand. People who are not behaving as good partners often employ this strategy of admitting something as a way to cleanse themselves of responsibility. If I can be really blunt, I’m not interested in you admitting you’re lazy.

[01:44:09] Ramit: I’m interested in what you do about it. Molly admits she doesn’t trust Jason to be responsible with money because she’s never seen it modeled not in her dad, not in her partners. That’s a brutal realization. Neither of them knows how to be responsible with money. They didn’t have role models who could teach them.

[01:44:25] Ramit: Okay, fine. I hear that. If you have never seen what it looks like to be a responsible, loving partner, then it’s unlikely you just trip and fall your way into it. But you’ve got to be able to learn. There is an infinite amount of cheap and free information online. There’s resources everywhere. They had a chance to talk to me.

[01:44:47] Ramit: Now it’s up to them. I will say they moved to a cheaper rent without me telling them to, they already have a plan to sell the truck and pay off debt. And when I showed them it’s possible to have $1.75 million if they work together. Maybe they saw the possibilities. Do you think they can do it? I actually have their follow-ups for you right now.

[01:45:08] Molly: Hi.

[01:45:09] Jason: Hi.

[01:45:11] Molly: Hope you’re all Well, I think we had a couple day emotional hangover after the

[01:45:17] Jason: Yeah, there was a little bit. It was good though.

[01:45:19] Molly: It was great. It was a lot.

[01:45:21] Jason: My biggest surprise from the conversation I think was how in depth we got about our personal relationship.

[01:45:29] Molly: Yeah.

[01:45:29] Jason: Versus um, just talking about money.

[01:45:33] Molly: Yeah.

[01:45:33] Jason: And I think that was really important and really eye-opening and very helpful in a lot of ways. Also brought up a lot of things that I wasn’t aware of, just

[01:45:46] Molly: mm-hmm.

[01:45:46] Jason: Not even money. Related. But

[01:45:48] Molly: yeah, I

[01:45:48] Jason: think it was good.

[01:45:49] Molly: That was probably my biggest surprise too, is like I didn’t expect us to be so vulnerable and honest about kind of bigger picture stuff that like money is a, um, a little bit of a, a reflection of things than our relationships.

[01:46:05] Molly: So yeah, I would agree. The biggest takeaways for me were, I guess just like how urgent it is to start saving. I mean, I knew, I know that I knew that, um, cerebrally, but I think just the talking about the conversation about our retirement and like, it just made things very real and having numbers of like, what if we wanna get to this certain target for retirement, like how much we need to save each month.

[01:46:35] Molly: I think that was a real big takeaway for me and like just made it very real,

[01:46:41] Jason: I guess also. The reality of the fact that we need to really stick to that for a while. Yeah. And not necessarily buy a house.

[01:46:52] Molly: Yeah.

[01:46:52] Jason: You know, and just really tighten our expenses. Stick to what we learned in the, you know, during the interview.

[01:47:01] Molly: Like I make sense now. I’ve been thinking about, it’s like we just have to get this right for a while and like automate the way our finances work and the way our savings and our bills and all that stuff. Like get that just so dialed that it will make sense. It’ll start, I feel like we’ll be able to come up for air and be like, oh, this is, this is what this feels like when you’re not just in like survival mode.

[01:47:27] Jason: Right. I think we definitely want to open a joint bank account. Yeah. And all, all our money through there first, so we can easily, you know.

[01:47:37] Molly: Yeah,

[01:47:37] Jason: see everything

[01:47:38] Molly: together.

[01:47:38] Jason: Have to elaborate too much on that.

[01:47:40] Molly: That and t Today is Sunday, so we’re doing our first meeting after this video. We’re gonna do our first, uh, financial meeting.

[01:47:46] Molly: We’re gonna do it on Sundays when our daughter is napping and talk about this stuff. And then moving forward into the week, you know, take what we’ve talked about into the week, which I think will be su super helpful. I wanted to give a little update since we recorded, uh, we’ve had some steps forward.

[01:48:07] Molly: We’ve had some setbacks, but overall, I feel we have a lot of forward momentum in our financial life together. The biggest change isn’t even really about the numbers, but how we talk about money and we can, we can have a talk about our finances without feeling judged or getting defensive. Or honestly just avoiding it all together.

[01:48:34] Molly: And that has been a huge shift for us and has changed our relationship completely. I did lose my job at the beginning of the year, which was a setback, but weirdly, it actually shook us out of a cycle that wasn’t working anyways. And I did find a new job recently where I’m making more money, so that has felt like a big win.

[01:48:56] Molly: We have been holding regular money meetings, not perfectly, but consistently enough to matter. We’re selling the truck soon, which is going to pay off a huge chunk of debt and credit card debt specifically. And then, um, with the goal of being completely out of credit card debt in by June, which. Is massive for us.

[01:49:20] Molly: I’ve also took all of my old retirement accounts from past employers and rolled it over into the new account. Um, so it’s not just sitting idly anymore. We’ve created new benchmarks for savings for retirement, which was a huge thing. So that has felt really incredibly relieving. But more than anything, most importantly, we have a plan now, and that alone has felt so huge and honestly, life changing.

[01:49:51] Molly: We are both just so incredibly grateful to Ramit, um, to this experience and to the team. We, I started the money coaching program, which has been incredible so far, and we’re still feeling the support and that’s just been super helpful for us in our journey. So yeah, we’re just so thankful and. Yeah. Thanks.

[01:50:14] Molly: Bye.

[01:50:16] Jason: Hi, Ramit. Uh, I wanted to share an update since our recording. Things have definitely improved for us. Um, we’re having financial meetings much more consistently now. Uh, they’re far more comfortable collaborative and a lot less tense. I genuinely

[01:50:33] Ramit: feel like we’re on the same team when we talk about money.

[01:50:36] Jason: I’ve taken on personally more responsibility with our household finances to help lessen burden on my partner. And that shift I think, has made a meaningful difference. I’ve been asking more questions, um, so I can be more informed and involved in our finances, and I think that’s helped me feel more engaged and accountable.

[01:50:59] Jason: And it’s helped us operate more like True partners rather than just avoiding tough conversations. I’ve increased my retirement contribution by a few percentage points and plan to continue raising it over the next couple months until I reach at least 15%. Also, I’ve been using Rocket Money a lot more intentionally, uh, which has really been helpful in tracking spending and staying proactive.

[01:51:28] Jason: I think overall we’re collaborating in a much healthier way, and there’s more openness, more teamwork, and it feels sustainable. And I think we’re really building, building momentum. So thank you again for this opportunity and thank you so much for spending your time with us. Um, appreciate it.

[01:51:48] Ramit: Listen up. If you want my help with your specific money questions, there are only two ways to get it.

[01:51:53] Ramit: First, you can apply to be on this podcast at iwt.com/apply. Or second, you can join my money coaching program instantly at iwt.com/money Coaching. In that program, you get access to live virtual events, monthly group coaching calls, live q and as, and an amazing, huge community of other people like you.

[01:52:17] Ramit: Check it out at iwt.com/money coaching.

 

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Ramit Sethi of I Will Teach You To Be Rich talks to Liza and Bradford, a couple with three kids living as expats in Colombia, South America. They earn $120,000 a year, have $273,000 in net worth, and by expat standards, they’re living well. But they have $1,500 in savings, zero savings rate, and they’ve been cycling in and out of debt for years. And Liza has been pushing to move back to Canada nearly every single day for five years.

When Ramit opens their Conscious Spending Plan, the problem isn’t the income. Investments are protected like a sacred object. Savings don’t exist. And a line of credit stands in as a de facto emergency fund. On paper, they look fine. In practice, one bad month away from going back into debt.
But the money is only part of the story.

What Ramit uncovers is a dynamic that has quietly been draining both of them. Bradford takes on every financial burden alone, working two, three, four jobs whenever money gets tight. And every time he does, Liza loses her sense of purpose and reason to contribute. Neither of them realised how much damage this pattern was doing. But after years of it, they’re both stuck.

In this episode we uncover:

● The expat “money hack” that became a trap, and why Liza feels stuck abroad
● Why moving back to Canada wouldn’t actually improve their finances
● Bradford’s taxi fleet business that lost between $60,000 and $100,000, and what it revealed about their patterns with money
● The debt cycle they keep celebrating as a win
● Why Bradford’s “efficiency” mindset is quietly disempowering Liza
● How Liza’s self-worth became tied to what employers will pay her
● What it looks like when a couple finally builds a shared financial vision
● The follow-up: what Liza and Bradford did differently after the episode

Chapters:

(00:00) Cold open: Can we afford to leave?
(01:08) Episode intro + financial breakdown
(02:31) Meet Liza and Bradford
(05:07) The “money hack” that became a trap
(09:30) Five years of the same argument
(25:00) The debt cycle begins
(32:30) Opening the Conscious Spending Plan
(38:00) How much can Liza actually earn?
(41:39) The line of credit problem
(45:52) Breaking down their system
(01:30:00) The pattern hurting both of them
(01:33:30) What do you each need?
(01:47:00) Follow-up

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Transcript:

[00:00:00] Liza: I’m Colombian, but I grew up in Canada. I wanted to come back and live here as an adult, as a fun experience for like a year or so. But we’ve been here almost seven now. I didn’t sign up to come here forever.

[00:00:10] Ramit: If you were to move back to Canada tomorrow, would you be able to afford it?

[00:00:13] Bradford: I mean, we could get there.

[00:00:15] Bradford: I don’t know if we’d survive a month without like the food bank.

[00:00:18] Liza: I feel like everything in North America has gotten more expensive. Thinking of going back suddenly. It feels like a big leap.

[00:00:23] Ramit: Why is this question about moving back to Canada coming up now?

[00:00:27] Liza: My financial situation kind of changed recently.

[00:00:30] Liza: Then I feel like this desperation of, oh, I need to go find something else.

[00:00:34] Ramit: I mean, I can understand it when things get hard sometimes you just wanna say like, I wanna go home.

[00:00:39] Liza: Yeah.

[00:00:39] Bradford: I don’t want my kids to have the same life that I had where, you know, like I did a few things, but. Later found out it was all my grandparents.

[00:00:47] Bradford: I don’t want to be 70 and and working.

[00:00:50] Ramit: As you sit here and think about the numbers, what does it feel like to you?

[00:00:53] Bradford: I mean, the first word that comes to mind is hopeless. If I’ve gotta put more than that away, I don’t know how to do that without basically just living for retirement [00:01:00] and forgetting how to live my life right now.

[00:01:03] Ramit: Bradford and Lisa moved to Columbia six years ago with three children, and they had a simple plan, try it for a year, have an adventure, but now they’ve been there almost seven years and they are stuck. When they look at their finances, they realize they might not actually be able to afford to leave.

[00:01:21] Ramit: That’s because for years they’ve been cycling through the same old pattern. Get into debt, pay it off, then get right back into debt. I’m looking at their conscious spending plan, which we call their csp. If you want my help with your own csp, you can join my money coaching program at iwt.com/money Coaching.

[00:01:40] Ramit: Let’s take a look. Assets $120,000. Investments, $153,000 savings, $1,500. Keep in mind, they are a family of five debt, $1,300, total net worth $273,000. Their [00:02:00] fixed costs are 68%. A little bit high, but not super crazy investments. 14% savings, 0% guilt-free spending 17%. Okay. I’m noticing 0% on savings, which is the problem.

[00:02:16] Ramit: No savings automatically limits your options like the option to move back to Canada. I’m curious for you, as you are hearing this, what is a time that you felt stuck because of money? Tell me in the comments and please know that I read every single one. And now let’s meet Bradford and Lisa, calling couples from la.

[00:02:38] Ramit: I want to talk to you on the upcoming season of Money for Couples. I am excited to be recording episodes in person live in studio. So if you are struggling with debt, retirement, supporting aging family members, overspending, or talking to your partner about money, apply to the podcast right now. I’ve done some podcast episodes in [00:03:00] person before.

[00:03:00] Ramit: Honestly, I love them. So if you are LA based and you essentially want a free three hour coaching session with me, you can apply right now at iwt.com/apply. Again to be on the podcast. It’s iwt.com/apply. In your application you wrote, we are looking to return to living in Canada, but we are afraid that we are stuck abroad in Columbia, south America because we have been priced out of life.

[00:03:30] Ramit: In North America with rising prices. Okay. If you were to move back to Canada tomorrow, would you be able to afford it?

[00:03:37] Bradford: I mean, we could get there. I, I don’t know if we’d survive a month without like the food bank or like something, I don’t know.

[00:03:45] Ramit: That sounds like No, to me,

[00:03:46] Liza: no, because we would have to find new jobs, so we would have to start over from scratch.

[00:03:51] Ramit: How did you decide to move to Columbia?

[00:03:53] Bradford: I got surplused in my job and we had always talked about it. Uh, I’m a teacher, and so we were [00:04:00] like, you know what, maybe this is the right time. At roughly the same time somebody from a school here contact me, said, I have a calculus position open. Do you want it? And we kind of went Okay.

[00:04:10] Bradford: And then we sold everything and moved in a month.

[00:04:13] Ramit: Cool. How long ago was that?

[00:04:14] Liza: It was almost six and a half years.

[00:04:16] Ramit: Wow.

[00:04:16] Liza: And by the way, I’m Colombian, but I grew up in Canada, so I wanted to go, come back and live here as an adult, as a, as a fun experience for like a year or two or so. But we’ve been here.

[00:04:26] Liza: Almost seven now.

[00:04:27] Ramit: Wow. So you plan to be there for like a year and it’s been now six and a half years.

[00:04:30] Liza: Yeah.

[00:04:30] Bradford: Yeah.

[00:04:31] Ramit: That’s pretty cool. What an adventure. What was the transition like moving from Canada to Columbia?

[00:04:36] Liza: I would say it was fast. Like we decided, sold everything car house furniture within six weeks and we were here.

[00:04:44] Ramit: Wow.

[00:04:44] Liza: Um, partly lack of planning, but we’re also very la like adventurous on. We don’t mind being spontaneous, but we don’t plan for big transitions like this one. Um, so it was quick.

[00:04:55] Ramit: Let’s talk about how much it cost in Columbia versus [00:05:00] Canada. Were you saving money when you moved to Columbia?

[00:05:03] Liza: Yes, if you’re comparing rent to rent or gas to gas or whatever, yes.

[00:05:08] Bradford: Mm-hmm.

[00:05:08] Liza: But the income here is less. So we’re about the same. I would say

[00:05:11] Bradford: part of what’s drawn us to stay is that the things that are cheaper are the fun things. So with a family of five, you know, we can go out for dinner or bowling or the movie and like, we don’t even think about it. It’s like, it’s so cheap.

[00:05:22] Bradford: It’s like, yeah, of course we’re gonna go do that.

[00:05:24] Ramit: Mm.

[00:05:24] Bradford: Whereas, you know, like our utilities are, you know, somewhat similar. Although they’re better now in, in Meine they were worse on the coast. So there’s certain things that are more expensive. Um,

[00:05:34] Ramit: uh, how old are your children?

[00:05:35] Bradford: Three, nine and 11.

[00:05:37] Ramit: Okay. Alright, great.

[00:05:39] Ramit: Um, Lisa, in your application you called your lifestyle, two things that I found very interesting. The first, you called it a money hack, but then you said it now feels like a trap.

[00:05:52] Liza: Yeah,

[00:05:52] Ramit: can you tell me about that?

[00:05:53] Liza: So, yeah, when we came, we thought many people here that are expats, they live here cheaply and they’re making dollars, and [00:06:00] so they can live really well here because it is cheaper to, to live that way.

[00:06:03] Liza: For me, it feels more like a trap because I haven’t been able to get traction here with any kind of jobs. Um, if I work virtually, which I have been doing, freelancing and all that, it’s, you know, I have to hustle to find contracts and all that. And the jobs here that I have applied for or tried to get, they just pace a little that it feels sad for me to be like, maybe here it’s a good salary for the average person, but for me, with a North American perspective.

[00:06:27] Liza: It’s s difficult to be like, oh, I’m gonna work 40 hours a week for so little money. It’s, it’s shocking. So

[00:06:33] Ramit: can you give an example, 40 hours a week for how much?

[00:06:35] Liza: For example, $1,200. So that seals to me like it’s a waste of my time. ’cause I’m like, oh, I’ll be making like in Canadian dollars, like I think I count like $7 an hour and I’m like, that seems sad because minimum wage in Canada is 15.

[00:06:48] Liza: So I could even just go work any minimum wage job and do. Okay. So

[00:06:51] Ramit: And what do you mean by the word trapped? Trapped abroad?

[00:06:55] Liza: Two reasons. One, I think Bradford is very happy here. Uh, he has found a good job [00:07:00] here that he enjoys. He goes out and does things and uh, and I think also he just content to live where we are.

[00:07:06] Liza: Um, I am not as happy here. And so in a sense I feel trapped because we are at odds. He, he’d be happy to stay here forever and I’m not.

[00:07:14] Ramit: Okay.

[00:07:15] Liza: Um, and then on the other side, I feel like everything in North America has gotten more expensive. Thinking of going back suddenly. It feels like a big leap to be like.

[00:07:23] Liza: Now we’re used to paying this much, and now we have to pay $2,000 more a month for rent, or we have to pay, you know, whatever, extra for food. And so I feel like I don’t even know how to make that that work. I guess.

[00:07:33] Ramit: Why is this question about moving back to Canada coming up now?

[00:07:37] Liza: For me it’s because I haven’t found anything here.

[00:07:40] Liza: Like for me, like financially, like in terms of work, it just seems really hard for me to find traction here.

[00:07:45] Ramit: Mm-hmm.

[00:07:46] Liza: But I feel like well at least there, if I go work minimum wage, I’ll make more. Now does it mean that I’ll, I’ll have more buying power? I don’t know, but it just feels really crappy for me to be here and be, you know, if I get offered $7 [00:08:00] an hour, I’m like, dear, see Lake.

[00:08:02] Liza: That seems really sad, so.

[00:08:03] Ramit: Mm. It’s interesting the words you used a lot of feels,

[00:08:08] Liza: yeah.

[00:08:08] Ramit: And seems, mm-hmm. It feels sad. I could be making more in Canada minimum wage. It seems like I should be making more. What do you make of that?

[00:08:18] Liza: Maybe there’s no numbers to back it up. I’m going by a feeling.

[00:08:23] Ramit: Do you do that a lot?

[00:08:24] Liza: Probably. He is the mask guy. He is the calculus teacher. I more go by how I feel.

[00:08:30] Ramit: And, um, what about for you, Bradford? Why now? Why is this discussion about going back to Canada, coming up?

[00:08:35] Bradford: It is a sad prospect to feel like she’s in her best money making years and she’s being offered jobs that pay very little.

[00:08:42] Bradford: It probably doesn’t help when, you know, like she, she sees like, like she said, I do well, I make a mix of pesos and US dollars. Um, I also get, uh, Canadian dollars. We run a company as well. Uh, and so we get Canadian from that. I think the other thing though, to add to it that wasn’t mentioned is just, uh, [00:09:00] probably our parents, uh, you know, like they are, our fathers are both 70.

[00:09:04] Bradford: Uh, my mother’s had some health issues last year and so what we’re trying to figure out is like. Do we need to go back to be closer so that we could see them more? And so I think like that’s, that’s sort of the debate that I think we often talk about as well.

[00:09:17] Ramit: Got it, got it, got it. Okay. When you talk about moving back, first of all, how often do you talk about it?

[00:09:24] Liza: For me? Daily.

[00:09:25] Bradford: I was gonna say,

[00:09:26] Ramit: so like how did the conversations go? Can you just walk me through one of, let’s do yesterday’s.

[00:09:30] Bradford: How about today? An hour ago

[00:09:32] Liza: I got called back for this job, the pay is $1,200. That’s why it was fresh in my mind and I said, I’m gonna have to go back and even if I have to leave you here, I will go.

[00:09:42] Liza: And then you can come later with the kids when the school year ends. So when you finish your contract or whatever, but I may just have to leave.

[00:09:48] Ramit: It sounds like it’s coming up very quickly. Am I reading that correctly?

[00:09:52] Liza: Yeah, for sure.

[00:09:53] Ramit: Bradford, what is your response to that?

[00:09:55] Bradford: Oh, my response, like today was literally, oh.

[00:09:59] Bradford: Can we just not [00:10:00] talk about that today? I think that was my exact words. Honestly, I’m scared about the idea of her leaving for a month, two months, three months, whatever it ends up being. Uh, taking probably our youngest. ’cause I can’t imagine that our three-year-old would do well just here with me and the older two.

[00:10:14] Bradford: I don’t do well away from Lisa. I like, I’m always like, oh, let’s go together. And she’s like, oh, just go on your own. So that really scares me, the idea of her needing to go back. But I, I also understand she’s, you know, she doesn’t feel like she’s contributing to her life, let alone our life, I think sometimes here.

[00:10:32] Bradford: And so I’m try, I, I’m sympathetic.

[00:10:34] Ramit: What is the role that each of you is playing in these conversations?

[00:10:37] Liza: I push and he retreats maybe?

[00:10:40] Bradford: Yeah.

[00:10:40] Ramit: Mm-hmm.

[00:10:41] Bradford: Yeah, I think she’s right. I am very happy here. Um, but I am not oblivious to the fact that she’s not as happy as I am here.

[00:10:48] Ramit: And is this how the conversations go each time?

[00:10:50] Liza: Most of the time.

[00:10:51] Ramit: And they’ve been going on for a long time.

[00:10:53] Liza: Probably five years least until I felt like it was no longer, oh, we’re here for fun.

[00:10:57] Bradford: I’m feeling a little bit like a jerk right now because I think, I think it [00:11:00] probably has usually been her saying, maybe we should go back. And I’m usually saying, maybe we should stay.

[00:11:04] Bradford: I don’t know if it’s ever been the other way around.

[00:11:06] Ramit: Each of you has your position in the boxing ring. You’re each at an opposite corner. You’re, it’s almost like, you know, maybe tug of war is a better metaphor. You’re each pulling, no one is giving anything, and over time it’s just become calcified. Each of you is in your position, you’ve dug your heels into the sand.

[00:11:24] Ramit: How have you approached it? ’cause as recently as this morning, Lisa, you said like, I’m going, maybe I need to go back. You can come back later. That’s one approach. How else have you approached navigating this huge life decision?

[00:11:38] Liza: So there’s the odd comments like this morning where I mentioned it in passing.

[00:11:40] Liza: Um, then there’s the times where I’m like, no, we need to make a decision. And so we set us up time. For example, we did that in July. I got my mom to stay with the kids. We went away overnight. Um, we sat down, we discussed it, and we made a plan sort of, and the plan was, yeah, we’ll stay here. For me it was one to three years for [00:12:00] Brads, two to three years is the reality that we decided as we transition out and then we will go back.

[00:12:04] Liza: That was the decision that we took the time to do. But then we came back here and immediately the breath’s always like, oh, maybe we could stay longer. Maybe we could take six months, maybe another year, maybe. You know? And so for me it just feels a little bit exhausting. ’cause even when we take the time to plan to like, yes, we’re gonna sit down and decide this, then there’s flip flopping back and forth.

[00:12:26] Ramit: I see. That’s interesting. Thank you for letting me know that. First of all, great work on. Taking time away and really giving yourself the time and space to make a big decision. That’s awesome. I’m a little confused. As it sounds like you both agreed it would be two to three years and then you would go back, right?

[00:12:43] Liza: I said one to two. He said two to three.

[00:12:45] Bradford: So we kind of settled on two.

[00:12:46] Ramit: You settled on two. Okay, great. So you come back and then what is this thing about an extra six months? What is that?

[00:12:52] Liza: It’s just that Bradford is Austin, uh, saying, well, we could stay forever. Well, we could buy an apartment here. Well, so it sealed like, even though we [00:13:00] set aside the time to make a decision and technically we decided.

[00:13:02] Ramit: Mm-hmm.

[00:13:03] Liza: Just like in the off commons when I’m always saying we should leave now, or you know, I’m gonna leave and you stay here. Um, in the same manner. He’s like putting in little comments of like, well, maybe we could stay longer or maybe we should buy an apartment here. Maybe.

[00:13:16] Ramit: Why do you do that, Bradford?

[00:13:17] Bradford: I don’t think I realized I did. Um, I actually feel kind of the exact opposite in the sense of like, I’ve already told my boss like I’m done in two years. So in my mind, like it is two years and, and as much as like. I think maybe I do make those comments. I think I’m also feeling them coming the other direction where it’s like, well, I’ll leave next month ’cause there might be a job.

[00:13:39] Bradford: And, and for me, like, I think that’s why then I retreat. Like I don’t, I don’t wanna entertain that. We said two years, let’s just do two years. Maybe. I didn’t realize that I was doing, making those comments that often.

[00:13:49] Ramit: Can I, can I interrupt? I feel like we’re all in a big rush to get to the end here. Does anybody else feel that energy, Lisa?

[00:13:57] Liza: No, I don’t. But I

[00:13:58] Ramit: You’re, you’re raising your [00:14:00] hand.

[00:14:00] Liza: Part of the reason I interject comments that are more rush is because my financial situation kind of changed recently. Like I had a lot, I had two diff two contracts that were big, that were recurring and they both dried up pretty permanently, let’s say for now than I feel like, kind of like this desperation of like, oh, I need to go find something else because we can’t afford to live without us both working, I think.

[00:14:24] Ramit: Is that true? No.

[00:14:26] Bradford: No, we, we, we have lived before with just me working. It’s certainly not as glamorous or, you know, I’m a lot more tired, but I’m very entrepreneurial. So even though I do have a teaching job, I have always had something else that I’m doing. And whenever we need money, for whatever reason, I find more money.

[00:14:43] Ramit: Mm-hmm.

[00:14:44] Bradford: But to, to answer the original question, we can live if just I’m working, but it’s, it’s certainly not as nice.

[00:14:50] Ramit: Do you agree with that, Lisa?

[00:14:51] Liza: No, I don’t think so. ’cause we wrote down the numbers, it comes out to a number and what you make is maybe two thirds, maybe half, depending on what it is. So it [00:15:00] means no going out, no investing.

[00:15:02] Liza: No. So that’s not really living, like we’re just existing and paying just our rent on our gas. Like

[00:15:07] Ramit: that’s a very interesting difference in the way that you both look at money.

[00:15:12] Liza: Yeah. And never would’ve that.

[00:15:15] Ramit: Can you think of a time in the last six months when you were not on the same page with money?

[00:15:20] Bradford: The money itself, I feel like were on the same page, but the stuff surrounding it, like.

[00:15:25] Bradford: Not always.

[00:15:26] Ramit: Well what is an example of this stuff? Surrounding it?

[00:15:29] Liza: Like the way to get somewhere for example?

[00:15:31] Bradford: Yeah.

[00:15:31] Liza: If we lose an income, I hunker down and survive. I cut things down and Bradford is like, no, I’ll go and I’ll work 10 more hours a week. And I’m like, you don’t have 10 hours a week. But I would agree with him like it’s not like we have money fights where we argue about it.

[00:15:44] Liza: Like the day-to-day spending and earning is similar and we’re very supportive in the way we do that. But I think the stuff surrounding is the way we would go about things. I feel like together as a team, we are lacking in financial things. I guess it’s not about Bradford [00:16:00] versus Lisa fighting, it’s more like how do we move forward together?

[00:16:03] Ramit: What do you think the answer is? How do you move forward together?

[00:16:06] Liza: I don’t know.

[00:16:07] Ramit: Well you said you’re not fighting right?

[00:16:09] Liza: Well and maybe we don’t fight ’cause we retreat or we agree or too agreeable and we don’t actually like have the deeper conversations.

[00:16:15] Ramit: When you think of the word fight, what’s the visual that comes to mind?

[00:16:19] Liza: A little bit of yelling, deliberate disagreement. Maybe some tears on my part. Frustration on his part.

[00:16:26] Ramit: In my head, I’m thinking people yelling, doors slamming. Mm-hmm. Somebody sleeping on the couch, like that’s the visual I have of a fight. But the fact is that is not always how fights happen. Fights can happen by simply avoiding the conversation.

[00:16:45] Ramit: Well, that’s true. Or by simply becoming stuck for five and a half years, we just might not use the word fight. We might use the word strong disagreement or wedge in the relationship, but we shouldn’t let the image of a drop down, [00:17:00] scream, fight stop us from articulating if we’re having years long disagreements.

[00:17:05] Ramit: What do you think, Lisa?

[00:17:06] Liza: That makes sense. And that’s why I think that perhaps we, our fights or our disagreements are based on avoidance a little bit maybe.

[00:17:13] Ramit: What do you think, Bradford?

[00:17:14] Bradford: I think we fight around money, but not necessarily about money.

[00:17:18] Ramit: What’s the difference?

[00:17:19] Bradford: We’re not fighting about like, we don’t have enough money, or how are we gonna do it?

[00:17:23] Bradford: Or, you lost your job, or I lost mine. Or the fight is more like, okay, well if we wanna do that, then what are we gonna do? And I just buckle down and do it. I just like go and find another job or another contract or something. And, and Lisa kind of is upset that I’m killing myself.

[00:17:42] Liza: Although it might be related to what you asked about me feeling like money will work out, because the reality is, were you married for a long time?

[00:17:49] Liza: And he does, he figures it out. So I, I don’t have to worry about it because in some way or another he does.

[00:17:54] Ramit: So can I just ask a provocative, obvious question? Mm-hmm. Like, why don’t you just [00:18:00] let it work out, Lisa, if you’re worried, why don’t you just let him work extra and then what’s the problem?

[00:18:06] Liza: I just feel bad.

[00:18:07] Liza: We’re very good at paying off debt. We’re very bad at saving. That’s actually something I say a lot. And so what that means is that we don’t have debt because that’s what we always put our time, effort, and everything into. But when there’s, in seasons like that, usually Bradford works way too much and he really does kill himself sometimes.

[00:18:27] Liza: He is like, had like so much stress that he has, like physical issues and all that. I don’t want him to live like that. And I, I also feel a little bit of pride, uh, like pride in like contributing. And as we said earlier, I disagree. I don’t think we can afford to live a good life if I’m not also working.

[00:18:44] Ramit: So far, we’ve been talking for a few minutes.

[00:18:46] Ramit: If you had to zoom out and assess what you have heard from yourself, what word or words would you use to describe [00:19:00] the way that you’ve communicated the situation?

[00:19:02] Bradford: Maybe in. Defensive like I’m feeling, I’m feeling defensive, at least like, like I need to defend what I’m saying or what is being said when you two are speaking or,

[00:19:13] Ramit: all right.

[00:19:13] Ramit: Defensive. Lisa,

[00:19:15] Liza: maybe. Erratic.

[00:19:16] Ramit: Erratic.

[00:19:17] Liza: That might be partly because like I have a DH, D, and so I’m all over the place a lot. I just feel like I’m always the one that’s kind of changing the plan and partly because perhaps the reason I think, oh, if I go to Canada is better ’cause I want to find the next shiny new thing that I can tap into or the new situation I can get into.

[00:19:35] Ramit: I do feel a bit of chaos. There’s a lot of things swirling around. I’ll give you a couple of examples. We don’t fight about money. We fight around money. Mm-hmm. Like what? I don’t quite understand that.

[00:19:51] Liza: Yeah.

[00:19:51] Ramit: But then in your application you wrote quote, we argue constantly about when to return and how we [00:20:00] keep delaying because we don’t know how to set up a plan to help us succeed.

[00:20:03] Ramit: Yeah. So

[00:20:04] Liza: yeah,

[00:20:05] Ramit: I’m kind of like what’s happening right now.

[00:20:08] Liza: I mean, I think that’s actually is very similar to what Bradford said because we’re not fighting about the actual money. It’s a situation like, it’s like what is the plan?

[00:20:17] Ramit: Then can I ask you like, why did you, why did you come to see me?

[00:20:20] Liza: Because I think you can help people go deeper in terms of the reason why they can’t plan around money.

[00:20:26] Liza: You always say it’s not necessarily about the money or the budget as much as the psychology or the the reason behind it. And so I feel like the deeper issue is not so much the budget, it’s how do we get to these decisions that we agree on

[00:20:41] Ramit: right away? Something is puzzling me about Lisa. Do you notice that she’s talking fast?

[00:20:47] Ramit: She’s got this frantic energy. There’s a lot of overexplaining and I picked up on something else just listening. This constant equivocation, a lot of, well, there’s this, but there’s [00:21:00] also that caveats everywhere. I ask a simple yes or no question, neither of them can answer it. If I am feeling this confused, just listening to them for a few minutes, imagine how hard it must be for them.

[00:21:15] Ramit: I feel a lot of compassion for them because when you are stuck in a situation that is complex, a lot of times we become so muddled that we can’t even see the situation clearly. All of us probably have a friend who’s been in a bad relationship and they just go back and forth and circle around, and to you it might be really obvious what to do, but to them, they are stuck.

[00:21:38] Ramit: Now, they told me they don’t fight about money, but they fight around money. Honestly, that’s not an acceptable answer. It’s too confusing. Someone who understands their money can give me clear, simple answers. Someone who doesn’t understand their money situation uses a lot of random words to dance around the topic.

[00:21:59] Ramit: Now the question is, [00:22:00] are they open to simplifying? And we’re gonna find out right after this, what’s the area of life that you want to spend more on this year? A lot of people will say, health. Relationships. Some people will say, travel. Let’s talk about food and health for just a second. For example, in my life, my wife and I both decided we’re gonna spend more on health, and that means having a personal trainer.

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[00:25:17] Ramit: All opinions are my own and not a guarantee of a similar outcome.

[00:25:21] Bradford: So when you disagree about or around money, it’s about

[00:25:25] Ramit: primarily going back to Canada, is that right?

[00:25:28] Liza: How to earn money and how to, like for example, if I can’t make money or if I’m offered very little money, Brad was like, oh, don’t worry about it.

[00:25:36] Liza: I will just work an extra three hours ’cause I get paid X amount. And so it would take you away longer to make it and I appreciate that, but I dunno, it’s not always like. Fair. I guess, in my opinion,

[00:25:47] Ramit: keep going.

[00:25:48] Liza: I just feel bad that it always has to happen that way, or it often does. So if I have potential to have a career somewhere else or to do better elsewhere, then does that matter?

[00:25:58] Liza: I don’t know, [00:26:00] because just because it can make more money doesn’t mean that what I want in my career or if I want a different job, that it doesn’t matter. You know what I mean? Sorry.

[00:26:12] Ramit: It’s okay. These are pretty big questions.

[00:26:15] Liza: Yeah.

[00:26:16] Ramit: You mentioned the word contributing earlier. I wanna feel like I’m contributing.

[00:26:20] Liza: Yeah.

[00:26:21] Ramit: How much does that play in here?

[00:26:22] Liza: A lot.

[00:26:24] Ramit: Hmm.

[00:26:24] Liza: Like for me, it’s not about percentage and I’m, I’m grateful that I’m not like other people that do 50 50 all the time because. He does one more than me. So I, I am grateful I don’t have that burden, but I also prefer contributing. I like to contribute because a lot of times I’m like, well, we don’t have the money, so I’ll, I won’t do X or Y or I won’t buy this, or, but if I’m contributing, I’m like, you know what?

[00:26:44] Liza: Whatever I worked, we don’t have any issues. I have extra income. I’ll go buy this thing where I’ll do this experience for myself, which when I’m not contributing, I don’t feel like I, I do it.

[00:26:55] Ramit: It’s kind of a tough box. You’ve put yourself into the idea that I, [00:27:00] Lisa, want to contribute financially. Not that I need to make 50 50, but I wanna contribute meaningfully.

[00:27:06] Ramit: When I tell Bradford I wanna do that, he tells me, yeah, you should do it or get a job, but you also don’t have to. I’ll work more, but I feel bad when he does that. So I want to contribute, so then I go and look for jobs, and when I get an offer, I feel bad because it’s not as much as I. Maybe could make in Canada.

[00:27:30] Ramit: So now I feel bad and now I’m contributing. Oh. And if I made my own money, then I would feel more comfortable spending it on myself. But because I don’t, I can’t. So I feel bad.

[00:27:43] Liza: Yeah.

[00:27:44] Ramit: What do you notice about that whole cycle?

[00:27:45] Liza: I put myself on the box and I create the issue.

[00:27:48] Ramit: You put yourself in a box and it’s almost like you, you’re like squeezing it shut with each way that you think about it.

[00:27:56] Ramit: It’s just like you’re tightening the knot. The knot is like [00:28:00] self-created. Mm-hmm. Like we could walk out of this jail cell of self-creation overnight, but you have created a way of thinking about it that each time you think about money and earning, it actually tightens the sell. How does that strike you?

[00:28:15] Liza: I kind of agree, and I kind of disagree

[00:28:20] Ramit: when I said it out loud. It sounded like every layer is designed to keep me, Lisa Small.

[00:28:30] Liza: Yeah.

[00:28:31] Ramit: And the more I went around it almost seemed like more and more panicked. What’s your take on that? Do you agree? Yeah. It’s okay if you disagree.

[00:28:38] Liza: I would not put that burden on myself as much if Bradford made way more money.

[00:28:42] Liza: And so that’s where that comes in, is more that I see the need and I wanna step in and help.

[00:28:48] Ramit: That’s fair. I hear you loud and clear on that. I, I appreciate you saying that. Uh, you also mentioned in your application, Lisa, that you and Bradford are quote, stuck in a [00:29:00] cycle of getting in and out of debt.

[00:29:03] Liza: Yeah.

[00:29:03] Ramit: Tell me a little bit about what kind of debt and why you found yourself in and out of it.

[00:29:08] Liza: So it started, same with student loans. We paid off 120,000 I think, in student loans with interest in five years.

[00:29:16] Ramit: Wow.

[00:29:16] Liza: Um, so it was like hunker down, pay everything, put everything into it, and we did it. That gave us the freedom to come to Columbia.

[00:29:23] Liza: ’cause before that we didn’t wanna come here and have a payment back home that we had to make. So that was that. And over the years, whenever there’s been need, instead of being like, well let’s have an emergency saving, as every money person talks about, we have open lines of credit in our mind. It makes more sense to invest the extra money we have lying around.

[00:29:46] Liza: And then if we run into a tight situation, we use a line of credit ’cause it’s got a low, like a 4% in like, um, interest or something. And then we pay it off. You know, there’s been times when it happened, like we moved with to a furnished place here when we [00:30:00] furnished our apartment from scratch and we bought a car at the same time.

[00:30:04] Liza: It was a big bunch of money that had to come out at once. We put in lines of credit and all that, and then we’re like swinging back to, okay, repayment mode. Do

[00:30:11] Ramit: you like being in debt?

[00:30:12] Liza: No. That’s why we run away from it and we try to pay it off as soon as we can.

[00:30:16] Ramit: How many lines of credit do you have today?

[00:30:18] Liza: We have two.

[00:30:19] Ramit: Okay. You wanna ask me how many lines of credit I have?

[00:30:22] Liza: How many lines of credit do you have for me?

[00:30:23] Ramit: Zero.

[00:30:25] Liza: Well,

[00:30:25] Ramit: why is it that somebody who has more money has zero lines of credit versus somebody who doesn’t and actually has struggled in and out of debt and says they don’t like debt? Has two lines of credit.

[00:30:37] Liza: You don’t see the need to go into debt because you have planned for it, though.

[00:30:42] Ramit: That is partially true in the same way that you don’t see the need to drink poison for an after dinner drink. It’s not that I don’t see the need to, I am actively against it.

[00:30:56] Liza: Yeah.

[00:30:57] Ramit: How do you feel about that?

[00:30:58] Liza: No, I agree with you.

[00:30:59] Liza: I think it’s [00:31:00] better not to get into debt. I really do. Huh. But when the need arises, I don’t know where it else to go. So we have it, but then we pay it off quick. So that’s, that’s where the, the mental gymnastics comes when it’s like, well, it’s fine because

[00:31:12] Ramit: yeah, I feel like I’m in like a gymnastics class right now.

[00:31:14] Ramit: We borrow

[00:31:14] Liza: debt. We,

[00:31:15] Ramit: I don’t want debt. We debt, I hate debt, but if it comes up, we have it, but then we pay it off quickly

[00:31:20] Liza: when you don’t have enough to invest for retirement and to all that, I would rather put any extra penny we have, which we do have sometimes into, uh, whatever index stocks or anything that’s gonna help us long term.

[00:31:33] Liza: Mm-hmm. Rather than have $20,000 in a bank account that just sits there with minimum pay savings in case we ever need it. In the past, it seems like we were taking it from the line of credit and then we would pay it off within a few months. And so it doesn’t seem like it’s necessary because we don’t have infinite amount of money.

[00:31:50] Liza: I dunno. Do you disagree, Brad? I don’t know. You’ve been quiet for a while, so

[00:31:53] Bradford: I dunno. As someone that understands math really well that like. You know, investing that money at [00:32:00] 10% in index stocks and then later if we need to like say buy a car getting dinged at 4% for three months while we pay off the car, that is ultimately better.

[00:32:12] Bradford: Or the other thing we’ve done sometimes is pull money out of those index stocks. Um, that’s probably more rare because we are, I don’t know, we’re, we’re, we are, like she said, we’re good at paying off debt. And so I think that, like, understanding those numbers, for me it makes sense to do it that way, you know, to guarantee that no matter what, we’re putting a thousand dollars a month into index stocks.

[00:32:34] Bradford: Um, and if that means that we don’t have quite enough to buy a car next month, then we’ll pay that off for two months at 4%.

[00:32:42] Ramit: Or for Lisa to feel like she’s in a prison of her own creation because she’s not contributing enough financially, therefore bringing her to tears. Is anybody missing this?

[00:32:58] Liza: No. I

[00:32:58] Bradford: see.

[00:32:58] Bradford: No, no. I’m, [00:33:00] I’m, I’m definitely not.

[00:33:01] Ramit: I mean, you’re talking to a guy who loves investing. I love it. I, I want automatic investing, but I don’t want to see somebody in a relationship cry and, and talk about money in a negative way every single day for five and a half years. There’s a mismatch that’s not a rich life, that’s just being blind and blindly putting your money into something without actually understanding why.

[00:33:23] Ramit: How’s that strike you, Lisa.

[00:33:25] Liza: I agree. And I think part of the reason we invest so much is because, literally, this is funny ’cause Brad Farley says, I don’t wanna work forever ’cause I work so hard. So we do have to make sure we put some money aside so for the future. Otherwise we’re literally not either never gonna retire or we’re not gonna be able to live.

[00:33:40] Liza: And it seems like the goal right now is at least investing because we’re running outta time.

[00:33:44] Ramit: Y’all have a very good reason for everything.

[00:33:47] Liza: Yeah.

[00:33:47] Ramit: But is it working? Yes or no? But

[00:33:49] Bradford: think for me it is working. If I isolate myself. If I, wait, wait,

[00:33:55] Ramit: hold on. If I isolate myself, not include my wife and my three [00:34:00] kids, it’s great.

[00:34:01] Ramit: Yes. I love it. There’s just, uh, 1, 2, 3, 4, uh, problems with that.

[00:34:09] Bradford: Yeah.

[00:34:09] Ramit: Okay.

[00:34:09] Bradford: No, I, I, I, I agree. I completely agree. And, and I think that’s the emotional side is not working. Obviously for Lisa, the numbers work, but that doesn’t mean the, maybe the emotional state is working.

[00:34:22] Ramit: I don’t, I don’t even know if the numbers work.

[00:34:24] Ramit: ’cause Lisa herself said, we don’t have enough to live the kind of life we want if just Bradford is earning. So it’s unclear to me if even the numbers work, Lisa, is it working?

[00:34:35] Liza: It feels like it’s just an income issue for us, I think. ’cause we’re, you

[00:34:37] Ramit: know, just make more and everything will be okay.

[00:34:39] Liza: That’s how I see it, I think.

[00:34:41] Ramit: Okay. You could be right. You could be right. Yeah. If that is the case, why not just take that job in Columbia, 1200 bucks a month. Problem solved.

[00:34:51] Liza: Yeah. Well. Yeah, that might be what we have to do.

[00:34:55] Ramit: Is that not it?

[00:34:56] Liza: Uh, probably not because there’s also the deeper issue. Like I [00:35:00] feel crappy as a, an adult making so little money considering what I know mm-hmm.

[00:35:06] Liza: That I could be making elsewhere.

[00:35:08] Ramit: It is interesting that, in asking both of you, is it working or not? I did not get a clear answer from either of you. To me, that speaks to how muddled all of this is. It’s actually not, like, think about it, it’s not clear if you’re gonna go back to Canada. It’s not clear when it’s not clear if you need to make more money or not.

[00:35:29] Ramit: None of this is clear. No wonder it’s so frustrating. I would probably be crying myself if I were in this situation. Yeah. What I would like to encourage you to do is to not accept this muddled way of thinking for your life. It’s actually not okay to go through life feeling super muddled and doing the thing where each.

[00:35:52] Ramit: A big question in life is like, well, yeah, it’s actually good, but no, it’s actually not. And then like playing both sides of the equation. Like [00:36:00] you’re actually supposed to pick the thing that is best for you, and that might mean making the wrong decision. Sometimes. Who cares? That might mean closing certain doors.

[00:36:09] Ramit: Who cares? As long as you both make the decision that is right for the two of you, you can always correct it later down the line, but you have to be willing to actually call the ball, Hey, this is not working, or this is working. Actually we don’t make enough, or we do make enough. But it has to be crystal clear.

[00:36:26] Ramit: And if I were you, I would encourage you to get a little bit more impatient with the ambiguity of the whole situation.

[00:36:33] Liza: Yeah, that’s true.

[00:36:34] Ramit: In order for us to bring this down to being a little bit more concrete, I’d like to take a look at the numbers. So you both completed the conscious spending plan. What was that process like for both of you?

[00:36:47] Bradford: Emotional.

[00:36:48] Ramit: Oh. Emotional.

[00:36:50] Liza: I was frustrated.

[00:36:51] Ramit: Oh, tell me more.

[00:36:53] Liza: I was frustrated by Brad Bradford because he was getting stuck on some numbers and I was [00:37:00] trying to get the math right in certain ways.

[00:37:03] Bradford: Yeah, it was emotional because I guess, yeah, like there was some arguments there and, and frustrating because our income is so variable.

[00:37:11] Ramit: That’s kind of interesting, even putting down numbers, what should be black and white, both of you described it as emotional and like, if we can’t fill out a spreadsheet, how are we gonna decide if we’re gonna move back to Canada?

[00:37:26] Liza: No.

[00:37:27] Ramit: It reminds me of couples that are planning their wedding and, you know, planning a wedding is the first complex project that most couples go through.

[00:37:38] Ramit: And I remember when we got engaged, I went out and asked a lot of friends, married friends for their advice, and, uh, my brother-in-law, he said. This is gonna be the best year of your life. Like you’re gonna have an awesome time planning the wedding. You’re gonna get to know each other. You’re gonna just have an amazing time.

[00:37:56] Ramit: I loved my brother-in-law’s response because [00:38:00] we chose to make it an awesome year, and that microcosm of planning this complex part of life, it really shows how two people handle complexity and ambiguity and certain numbers. So the CSP to me is like, it’s like a diagnostic tool and I think it’s quite illustrative of how the two of you approached it.

[00:38:24] Ramit: Alright, let’s take a look at the numbers. Lisa, can you read off the word in bold and the number in full next to it for this entire box, please?

[00:38:32] Liza: Sure. Assets, $120,000. Investments 153,670. Savings 1500. Debt. 1300 total net worth. 273,870.

[00:38:48] Ramit: Alright. What do you think about those numbers?

[00:38:50] Liza: It’s higher than I anticipated they would be.

[00:38:53] Ramit: What’d you think it would be?

[00:38:54] Liza: I thought all we had to, our name was our $20,000 carve.

[00:38:57] Ramit: What the, you thought you, you’re, hold on.[00:39:00]

[00:39:02] Ramit: God, I love my job. What the, you thought your assets were $20,000 and it, and then you looked between the couch cushions and you discovered it’s actually $120,000. Is that what you’re telling me?

[00:39:15] Liza: I guess so, yeah.

[00:39:17] Ramit: Alright. That’s pretty cool. Oh, just a random question. Um, Lisa, when you discovered that your assets were 1, 2, 3, 4, 5, 6 times higher than you thought, did it make you feel any better about money?

[00:39:29] Ramit: Yes or no, please.

[00:39:30] Liza: Yes. Really? Yeah, it actually did because, because I felt less behind on, let’s say investing, for example.

[00:39:39] Ramit: Okay, let’s keep going on this then. So you felt better. Like, we don’t have to invest every last dollar. Okay, great. Did you stop the monthly investments that you’re making?

[00:39:47] Liza: No, I did.

[00:39:49] Ramit: Did you close the lines of credit that you have?

[00:39:51] Liza: No. No. It’s a backup plan. So,

[00:39:54] Ramit: uh, and then what about you, Bradford? What do you think about these numbers?

[00:39:57] Bradford: They’re about what I thought they would be, but I also felt like I [00:40:00] didn’t have a lot of faith in them.

[00:40:02] Ramit: Why?

[00:40:03] Bradford: Because so, so much of our money, whether it be the income or whether it be the investments, feels insecure.

[00:40:14] Ramit: Huh? What, what’s insecure about investments?

[00:40:18] Bradford: The ones that are in Canada? Um, I feel like those are fairly secure.

[00:40:24] Ramit: Okay.

[00:40:24] Bradford: And when it comes to my money that’s here in Columbia, um, I mean. I literally have friends, they can’t get their retirement ’cause the government has just seized it.

[00:40:33] Ramit: Really?

[00:40:33] Bradford: So real.

[00:40:35] Ramit: Whoa. Can you pull it out?

[00:40:36] Bradford: Not until I retire.

[00:40:38] Ramit: Oh, it’s locked up there. So, okay.

[00:40:39] Bradford: It’s locked until I retire.

[00:40:41] Ramit: Gotcha.

[00:40:41] Bradford: And then who knows if it’s there ’cause of the, the people in power right now.

[00:40:46] Ramit: Damn. Alright. That’s pretty interesting. I did not know that.

[00:40:49] Liza: Another reason to go back to Canada. No, I’m kidding.

[00:40:53] Ramit: No, I think that’s valid. If, if you feel insecure that the money you are putting in meticulously every single month is [00:41:00] like actually at risk, like a 50 50 shot, you can even actually ever get it, then that is a very valid part of your decision making to go back to Canada.

[00:41:10] Ramit: Okay, let’s keep going down these numbers. I would like to look at the income and this time I’d like to ask Bradford, your gross combined monthly income, what is that number?

[00:41:21] Bradford: Uh, 10,066.

[00:41:23] Ramit: That’s the two of you. So that means that collectively your household income is $120,792. By a show of hands, who here knew that number neither hand is going up.

[00:41:35] Ramit: Thank you very much.

[00:41:36] Bradford: No.

[00:41:37] Ramit: Keeping my average it’s at 50%, but I have had a couple of random couples recently who both of them knew it, so thank you. Now please tell us, just for fun, how did you not know your own household income?

[00:41:50] Bradford: My salary here in Columbia is literally different every single month. And when I try to ask the why try to pass the accountant, why none of them can tell me.

[00:41:59] Ramit: This [00:42:00] is like a classic like different country thing where you go to a different country and you’re just like, how can you not answer this simple question? And they just go like. They just don’t have an answer for you. Literally. I’ve had this stuff happen in India too.

[00:42:13] Bradford: That’s exactly what’s going on.

[00:42:15] Liza: And for me, it’d be easy if I could be like, okay, I make this much times 12, let’s, but I can’t, ’cause like I said, someone once I make a lot and some I, some once I don’t.

[00:42:23] Liza: So it was really hard to figure out.

[00:42:24] Ramit: But we’re in the ballpark. Would you agree?

[00:42:27] Bradford: Yeah. Like, like for instance, if we change the question, do we know that? Like that’s roughly what it is. I would say yes. Like I, I know that we roughly make 10 grand a month.

[00:42:35] Ramit: Did you know that Lisa?

[00:42:37] Liza: No. And for me that number’s hard.

[00:42:40] Liza: ’cause I can look back and see that, but like I said, two of my clients have dried up right now, so I don’t know what’s gonna happen. Like, can I say, okay for the future I’m gonna calculate this much a month. I don’t think I can because I don’t know.

[00:42:53] Ramit: So can I ask you your, what is your approach to that? If I were to say, Lisa, how much are you gonna make in the next 12 months?

[00:42:59] Ramit: What would your answer [00:43:00] be?

[00:43:01] Liza: I don’t know if I can make that same amount of money next year.

[00:43:04] Ramit: Maybe you can’t. Could you make a thousand dollars a month?

[00:43:08] Liza: If I take that $1,000 job, I could make a thousand dollars. So let’s say yes.

[00:43:12] Ramit: Great. Could you make $2,000 a month?

[00:43:15] Liza: Yes, I can probably on average make $2,000 a month.

[00:43:19] Liza: Yeah.

[00:43:19] Ramit: Great. Let’s keep going. Could you make $3,000 a month?

[00:43:23] Liza: I don’t feel secure in saying yes to that.

[00:43:26] Ramit: Okay, good. Fair enough. I appreciate the honesty. So 2000 a month, that’s the number?

[00:43:30] Liza: Sure. Yeah.

[00:43:31] Ramit: Okay. I’m gonna go out on a limb and guess you have never gone through the exercise we just did of how much can I safely, conservatively make for the next year.

[00:43:46] Ramit: True or false?

[00:43:47] Liza: I would say false. I did it once. After listening to you Uhhuh, we projected a budget and we decided that to live the kind of life that we wanted, I had to make $40,000 a year.

[00:43:58] Ramit: Okay.

[00:43:58] Liza: And so [00:44:00] that maybe gave me a little bit of a kick in the pants, be like, okay, I gotta make sure I meet that target.

[00:44:04] Liza: And I think I met it. I don’t know for sure if I did in the last year, but.

[00:44:08] Ramit: You beat it, you made 50,000.

[00:44:10] Liza: Okay, well there you go. But that’s about the only time I would say I’ve done that. ’cause I, I’m more reactive than, that’s why I need help with planning.

[00:44:18] Ramit: You talk to your therapist about this?

[00:44:20] Liza: No.

[00:44:21] Ramit: Why?

[00:44:22] Liza: Like, I don’t have, I don’t have a therapist that I meet with regularly right now.

[00:44:25] Liza: Once in a while they help me with executive functioning. Um, just like, you know, tips and things like that.

[00:44:30] Ramit: Can I suggest that you do?

[00:44:31] Liza: Sure.

[00:44:32] Ramit: I think it would be really good. Okay. I think that part of planning can be helped with techniques and strategies.

[00:44:40] Liza: Okay.

[00:44:41] Ramit: That therapists are really, really good at. So I want to definitely suggest that to you and potentially both of you could go, but certainly individually would be really good.

[00:44:49] Liza: Sure.

[00:44:50] Ramit: One thing that I am pleasantly surprised is that you actually did plan out a number. The two of you sat down and talked about how much you need to make. And guess what? You nailed it. [00:45:00] Not only did you make 40,000, you made like 48,000. Very impressive. Hearing the way you talk about money, I can understand a little bit more about why it feels overwhelming, why also you might like feel like I gotta get to Canada.

[00:45:15] Ramit: Like this doesn’t feel good. From my perspective, it seems frantic and frenetic, but when I’m hearing you explain a little bit more, I’m starting to understand more. Okay. Of why you are feeling that way. Most people are very hesitant to put a number in the ground and commit to making it in the next year, especially beginning.

[00:45:41] Ramit: Entrepreneurs, first of all, they often look at things month to month. Like they’re not thinking about a year down the road. I’m sure it’s much easier and much more common for you to think about what happened last month.

[00:45:53] Liza: Yeah.

[00:45:53] Ramit: Than what’s gonna happen next year. Right?

[00:45:55] Liza: Yeah.

[00:45:55] Ramit: Okay. That’s common. The next thing, beginning entrepreneurs, they don’t really [00:46:00] know how to project.

[00:46:02] Ramit: And so they shy away from it. The feeling is if I say I’m gonna make 4,000 a month and I don’t, then I am a

[00:46:09] Liza: failure.

[00:46:10] Ramit: Failure. So therefore I don’t even want to say any number at all. How much of this resonates with you?

[00:46:17] Liza: A hundred percent, yes. Yeah, that’s cool.

[00:46:19] Ramit: Yes. This is very common, but the ironic thing is that when you actually did pick a number, you crushed it.

[00:46:26] Liza: Yeah, that’s true.

[00:46:27] Ramit: What do you make of that?

[00:46:28] Liza: I guess I’m not as pathetic as I thought.

[00:46:32] Ramit: I don’t know. I don’t think you’re pathetic. Bradford. Do you think she’s pathetic?

[00:46:36] Bradford: No.

[00:46:37] Ramit: Okay. Lisa, do you think you’re pathetic?

[00:46:39] Liza: Sometimes.

[00:46:40] Ramit: Okay. Well, two and a half of us on this call do not think you’re pathetic. I would really like it for it to be three.

[00:46:45] Liza: Okay.

[00:46:47] Ramit: I think we’re gonna get there. I think that every beginning entrepreneur struggles with the same thing you do right now, which is putting a stake in the ground and committing.

[00:46:54] Liza: Yeah.

[00:46:55] Ramit: I don’t think you actually even need to commit to making 4,000 a month. If you don’t feel [00:47:00] comfortable, but you feel comfortable saying 2000 a month and you know that you can hit that number, then we’ll make a life around 2000 a month.

[00:47:07] Ramit: How about that?

[00:47:09] Liza: Okay.

[00:47:09] Ramit: That’s the way that we proceed. I love that Lisa was willing to go there with me to really look at her income goals and to map out what her next year could look like. She’s clearly in a tough spot. Her business is slowing down and she and Bradford don’t have any real savings to lean on.

[00:47:25] Ramit: So when something comes up, they use their line of credit. Now we need to talk about a line of credit because a lot of you are way too casual with a line of credit. A line of credit lets you borrow money when you need it. Okay, that sounds kind of responsible, right? It’s like just in case money. But what blows my mind is how many people treat their line of credit like a piggy bank.

[00:47:48] Ramit: Hey everybody, I’m gonna use my line of credit to renovate my kitchen. I’m gonna use my line of credit to take a trip. Some people on this podcast have used a line of credit to buy a freaking [00:48:00] mattress. Now, I gotta tell you, my mind cannot comprehend using sophisticated financial instruments to add backsplash tiles to your kitchen.

[00:48:09] Ramit: And when I tell people I would never take out debt to pay for a luxury, they look at me with complete bewilderment. Well then how would we ever pay for it? Oh, I don’t know. How about saving money for it? Like you think I’m taking out debt to go to Disneyland? Who told you this is okay? And you can tell this makes people really mad.

[00:48:30] Ramit: The idea that maybe they should not use a freaking line of credit to buy. Bagels, which is one reason that they justify things like home renovations or mattresses as investments. Those are almost never investments. And you know, just as I know that we should not be using debt to pay for luxuries. You don’t need another financial product.

[00:48:52] Ramit: You certainly do not need to leverage debt. You wanna leverage something, leverage reading my book, build up savings, and then you earn the right [00:49:00] to be able to buy nice things. Lisa has created a mental and financial prison self for herself, and with every decision she tightens the lock just a little bit more.

[00:49:11] Ramit: She wants to feel valued, but then she looks at a $1,200 job offer in Columbia and compares it to what she could make at minimum wage in Canada at $15 an hour. And she thinks I’d be worth more at Tim Horton’s. You’re letting Tim Horton’s decide how you feel about yourself if I let other people. Tell me how I should feel about myself then.

[00:49:33] Ramit: Peter 5, 5, 3, 9. Calling me a libtard would ruin my day every morning. Listen, Peter can barely wash his own ass much less make intellectual distinctions about political philosophy. I’m gonna let him decide how I feel about myself in what world. This is what happens when you shrink your field of vision down so small that the only thing you can see is what companies are [00:50:00] willing to pay.

[00:50:00] Ramit: You guys an income does not determine your value. A rich life is so much bigger than that. Ironically, she wants to be valued in her relationship, but she keeps allowing herself to be shrunk down, and Bradford also is playing his part, perpetuating this dynamic. The question I have is, are they actually willing to redefine this dynamic?

[00:50:23] Ramit: We’re gonna find out right after this, one of my life philosophies. Is to fight for simplicity, and the more successful I’ve become, the more I lean into this, I don’t have 12 different credit cards to optimize points. I don’t work with brands who have tons of complicated requirements, and even in my own business, we have streamlined our systems.

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[00:52:21] Ramit: It’s accurate, it’s fast, it’s all formatted. So you can get back to work. Here’s what my friend said about it. Whisper is amazing because it learns the way you speak. So you can send this rambling note as a text message and it kills all the filler words and it perfectly formats it for you. They said it’s much better than using the Apple voice to text feature.

[00:52:39] Ramit: The spelling is way better. If you wanna buy your time back and get back to what matters, check out Whisper Flow. Try it for [email protected] slash ramit. That’s whisper flow.ai/ramit, W-I-S-P-R flow.ai/ramit. Or click the link in the [00:53:00] description below. Okay, so $120,000. Isn’t that a lot of money in Columbia?

[00:53:06] Ramit: It’s a lot, right?

[00:53:08] Bradford: Uh, yeah it is.

[00:53:09] Ramit: What the hell? All right, let’s take a look at the rest of the numbers. ’cause now I’m very curious. Fixed costs are at 59%. I have no issue. I don’t even need to go through it. Investments are at 13%. I certainly appreciate that. I can tell that investing is very important to you.

[00:53:28] Ramit: 13% of net, that’s a solid number. Very nice. Savings are at zero. Okay. I can also tell the savings is not important to you. It’s very clearly revealed right there on screen. And then finally, guilt-free spending 28%, $1,963 a month on guilt-free spending. Is that number accurate?

[00:53:51] Liza: That’s probably accurate, but remember we have three kids.

[00:53:53] Ramit: You don’t need to justify it.

[00:53:54] Liza: No, but what I mean is that’s where it’s going.

[00:53:56] Ramit: Oh, it’s all to the kids, not to us, just to the kids.

[00:53:59] Bradford: So I want, I [00:54:00] wanna, I wanna comment on that. ’cause actually, I think that’s important.

[00:54:02] Ramit: Tell me,

[00:54:02] Bradford: um, it, I think she’s right in the sense it goes to the kids and me. Lisa does not have guilt-free spending no matter what she spends it on, she feels guilty.

[00:54:10] Bradford: Like, I mean, her mom literally sent her money to go and take a class, like a, I don’t even know, two months ago. And she still hasn’t taken the class because she can. She doesn’t, she doesn’t want to spend that money on herself. You know, like I, I feel like I have to tell her, Lisa, go do it, or she won’t, she won’t spend that money.

[00:54:30] Ramit: What’s the voice that goes through your head, Lisa?

[00:54:32] Liza: I don’t know. Maybe I need to give myself more credit and more I don’t. More enjoyment out of our money.

[00:54:39] Ramit: What is something that you have not spent on that you might like to, but Because it’s for the family, it’s for the kids. The money goes to them instead.

[00:54:48] Liza: Maybe that class. Mm-hmm. Uh, it’s just like a public speaking, like a, like a Toastmaster class. Just, I like to do that. Um, I wanna go paragliding.

[00:54:57] Ramit: That’s pretty cool. I really would love for you to be [00:55:00] able to do that, even if not today. I would love for you to be able to know exactly when you can.

[00:55:05] Liza: Yeah.

[00:55:06] Ramit: I think there’s something really powerful about the idea of, this is part of my rich life and maybe I can do it today.

[00:55:15] Ramit: And I didn’t realize it. Or maybe I can’t afford to do it, but we’re gonna set up a plan and I’m gonna know exactly what month and year I’m gonna be able to, which is in a way so anticipatory. So I would love to be able to do that with you today.

[00:55:31] Bradford: Okay. Okay.

[00:55:32] Ramit: So we got the, the key numbers, which are 59% on fixed costs, lower than 60.

[00:55:38] Ramit: That’s very nice. 13% on investments, which is typically higher than most would see, but I think it’s solid, especially for having a higher income in Columbia that allows you to invest a little bit more. We have savings is zero, which explains why you have no savings, but also your mindset of lines of credit really explains [00:56:00] it.

[00:56:00] Ramit: And then finally, we have guilt-free spending, which is high for, for a couple that has nothing in savings, and actually for a couple that has three kids and only has $1,500 in savings. I find that to be unacceptable. Hm. I’m seeing nods from both of you. Bradford, what do you think?

[00:56:20] Bradford: I guess like every time that I’ve had savings, it just feels like it’s doing nothing.

[00:56:24] Ramit: You are, and I hate to say this math brained, and I say that because on this show we have a extreme lack of math that happens. Too many people talking about their feelings, which while valid, they need to add some freaking rudimentary math. In your case, you’re looking at the world, those lenses you have, they’re not just prescription lenses, they’re lenses that talk about yield and return.

[00:56:53] Ramit: And I like return. I like it, but I don’t like fighting about money. [00:57:00]

[00:57:00] Bradford: Mm-hmm.

[00:57:01] Ramit: I don’t like talking about it every single freaking day, and I don’t like the risk of having three kids and a wife and $1,500 in savings. Which would last you one week.

[00:57:14] Liza: Yeah.

[00:57:15] Bradford: Yeah.

[00:57:16] Ramit: You see yourself as a rational person who walks around and you’re gonna optimize returns no matter what.

[00:57:24] Ramit: And yet you have put your family along with Lisa in a position where you have $1,500 in savings, meaning you are one step away from having to go back into debt. A place that you have been many times.

[00:57:37] Bradford: I do see what you’re saying. And remember I told you that in Columbia I have, there’s money in two different places.

[00:57:43] Bradford: So the money that is invested in in stocks here is quite easy to pull out. Like within a few days max. Sometimes I can pull it out immediately. So I do think of that as saving.

[00:57:53] Ramit: Hey, my freaking investment portfolio is liquid. That doesn’t mean it’s savings,

[00:57:58] Bradford: okay?

[00:57:58] Ramit: It’s meant to be [00:58:00] compartmentalized. The minute we start making these things fluid is the minute everything becomes sloppy.

[00:58:07] Bradford: I guess like the money that’s in that save that, that, um, investment account. Yeah, because it’s a different one than the rest.

[00:58:13] Ramit: Yeah,

[00:58:14] Bradford: I do think of it as separate.

[00:58:15] Ramit: Why don’t you just create a savings account?

[00:58:17] Bradford: Because it gets way less yield

[00:58:19] Ramit: savings is not supposed to get yield,

[00:58:22] Bradford: but if it can,

[00:58:24] Ramit: lemme put it this way, you guys can keep doing things the way you’ve been doing it.

[00:58:28] Ramit: When I asked you is it working, you actually couldn’t give me a response. In my opinion, having about a mo a week’s worth of savings for a family of five is not working. In my opinion. Having, um, one partner who can’t go paragliding or, or, or anything for years is not working. The fact that you cannot agree on even how to make a decision about whether to move to a different country or not is not working and the savings is just a small piece of this.

[00:58:57] Ramit: The ability to [00:59:00] transcend your current identities and turn the page to a new chapter, both of you. If you can’t do that, then you’re gonna remain stuck. And today both of you have shown an amazing ability to give me reason, after reason after reason for something, and yet not get the outcomes you actually want.

[00:59:18] Liza: Yeah.

[00:59:19] Ramit: So perhaps it’s time to put those reasons aside and maybe see how people who have more money and are a little bit savvier with money handle their finances. What do you say?

[00:59:31] Liza: Yeah, I think that’s a good idea and I’m open to it.

[00:59:34] Ramit: Okay. The good news about the CSP is that you have money, you have a high income $120,000 in Medellin.

[00:59:44] Ramit: In my opinion, if I’m looking at this as an outsider, I’m like, wow, you’re living life. Nice. I don’t think you feel that way. I actually think that the narrative you have created is that we’re like barely getting by Lisa. True or false?

[00:59:57] Liza: Ah, yeah. It’s true.

[00:59:58] Ramit: And, and the fact is, if you made an extra [01:00:00] $50,000, you’d still feel exactly the same way.

[01:00:01] Ramit: Now I know I don’t have to tell you guys about appreciating things. I’m not even gonna get into that. But I do think there’s a narrative that we sometimes concretize with our money and it’s like, ah, like we, we can’t actually live the way we want to. What if we’re actually living an amazing life and we just haven’t realized it?

[01:00:18] Ramit: Alright, lemme take a look at this CSP here.

[01:00:21] Liza: Can I just interject for a second? Because I think when I was making that amount of money, I felt more like we could live freely and we could spend freely. If we cut that down to like, the $2,000, let’s say. That’s my target.

[01:00:31] Ramit: You wanna do it right now?

[01:00:33] Liza: Sure.

[01:00:33] Ramit: Alright, let’s drop it down to 2000 and we’ll take your net down to what? 1500?

[01:00:39] Liza: Sure.

[01:00:39] Bradford: Um, mine, mine actually goes up too, ’cause I got a bonus. I’m getting bonuses this year that we didn’t put into this, so it should be at, it should be at least seven,

[01:00:48] Ramit: 7,000. Should we make this 5,000?

[01:00:50] Bradford: Yeah, probably.

[01:00:51] Ramit: Okay, watch.

[01:00:53] Ramit: Okay. Wow. Guys, what do you notice? Your fixed cost went from 59 to 64%. Hold on. [01:01:00] Just look at those beautiful faces on screen. What? What’s happening is they’re both laughing, kind of embarrassed. Can you describe what’s happening right now?

[01:01:09] Liza: I guess it’s not as big a deal as I thought. I don’t know.

[01:01:12] Bradford: You chose the right word.

[01:01:13] Bradford: Embarrassed. I was like, right.

[01:01:16] Liza: I didn’t know you were getting a bonus. That’s nice.

[01:01:19] Ramit: This, this drama that we love to put on in our lives, we love it. I don’t mind it. I love drama myself, but it is imperative that we actually look at the reality of the situation and all this circling, all this spinning, and it’s 5% more.

[01:01:40] Ramit: You have the money. To me it’s not, this money part is not that interesting. Moving up 5%, I really couldn’t care less. We could knock this out in five seconds. What to me is more interesting is what do you get out of the drama? Why is it that you did not communicate effectively on getting a bonus on how much you could conservatively [01:02:00] make?

[01:02:00] Ramit: And more importantly, what do you get out of each role that each of you has chosen to embrace? Lisa, what’s going on?

[01:02:10] Liza: I dunno, when we pay off debt is like, oh, control, like on down, like I say like. Spend less. And so I just feel like if we continue to do that, maybe that’s good. It has worked for a purpose in the past and so I guess I feel like maybe I would come on on top if I continue to do the same thing.

[01:02:27] Liza: Because you know, if we spend less and we don’t order our drinks and eventually it adds up to something maybe

[01:02:33] Ramit: Right,

[01:02:33] Liza: because it did in the past, right? When we were paying off debt quickly, it was like, oh yeah, we just spent very little and it, it worked in five years. We paid $120,000. So

[01:02:41] Ramit: Did you grow up in Canada?

[01:02:42] Liza: I moved to Canada when I was 13, but I, my childhood was in Columbia, so.

[01:02:46] Ramit: I see. And what do you remember your family saying about money when you were younger?

[01:02:51] Liza: I don’t remember ’em talking about money too much. Um. I don’t think that we had money conversations per se, but [01:03:00] um, I would say my life was very cyclical.

[01:03:02] Liza: Like there was times when we had very little money where my grandparents had to help pay for things. Um, at the same time my family in Columbia is a little bit prominent and so I had a weird dichotomy where I would go to a country club for a party, but we couldn’t pay rent.

[01:03:18] Ramit: What did you take away from that?

[01:03:20] Ramit: That’s quite a stark difference. Country club can’t pay rent.

[01:03:23] Liza: I don’t know. I feel like money comes and goes in a sense.

[01:03:26] Ramit: What does that mean?

[01:03:27] Liza: You can’t plan? ’cause situations, circumstances come, come at you and then things change.

[01:03:33] Ramit: Okay. And so therefore, what should you do?

[01:03:36] Liza: I don’t know. I guess not worry about it.

[01:03:39] Ramit: Hmm. But you worry about it a lot.

[01:03:42] Liza: Yeah, I guess it’s a small way to feel like I can control.

[01:03:45] Ramit: Ah, so growing up, it sounds like you felt, uh, I cannot control money. Yeah, one day we have it. One day we don’t. One day we’re at the country club. The next day we can’t pay rent. I can’t control it.

[01:03:58] Liza: Sometimes we were doing well and sometimes [01:04:00] we weren’t.

[01:04:00] Liza: Like for example, we were doing great upper middle class, then we moved to Canada and we’re living the immigrant like mm-hmm. So we started again from little and I feel like that was the cycle my whole life.

[01:04:10] Ramit: You mentioned that your family moved to Canada.

[01:04:13] Liza: Mm-hmm.

[01:04:13] Ramit: And it’s hard to move to another country and get traction in careers.

[01:04:16] Ramit: I understand that. Yeah. And yet here you are saying we’ve been in Columbia for 5, 6, 7 years and I wanna go back to Canada. Seems to me there’s a very strong parallel there. Why?

[01:04:31] Liza: So in Columbia, now that I’ve returned, I have access to different resources. My education, my post-secondary was in Canada and all that.

[01:04:38] Liza: And so I don’t know that I would come back to zero, but maybe I would because I’ve been gone a long time.

[01:04:43] Ramit: Weren’t you yourself saying minimum wage jobs in Canada?

[01:04:47] Liza: Well, I’m saying that I could at least make more in a minimum wage there. Job there, then I could then what they’re paying me here. So that feels like I’m being compensated better and I [01:05:00] don’t know worth more.

[01:05:01] Ramit: Stick with me on that phrase. Worth more. What does that mean?

[01:05:06] Liza: Just that I feel like companies that come here to hire, they come here because they get cheap labor. So if I’m here and I’m competing with those jobs, then that is the kind of thing that they expect is that you’re gonna get paid less. Less. But that’s not worth my time to work 40 hours a week for a month to make a thousand dollars let’s say, or 1500 or whatever.

[01:05:24] Liza: I’m like, that’s not worth it in my mind.

[01:05:27] Ramit: Is your mind giving you accurate information about the situation?

[01:05:32] Liza: We ran the numbers multiple times over the last five years and they seem similar, so, okay, so let’s say it’s about the same. Shouldn’t we go there then? And if I can make more, then maybe I’ll feel better about money.

[01:05:43] Liza: Maybe not. I don’t know.

[01:05:45] Ramit: Uh, I’m gonna tell you right now, you’re not gonna feel better.

[01:05:48] Liza: Fair

[01:05:48] Ramit: enough. I’m just gonna tell you directly. Your feelings are completely and totally uncorrelated with how much you are making.

[01:05:57] Liza: Fair enough.

[01:05:57] Ramit: What you said was extremely revealing when you [01:06:00] said worth it. The idea is that if a company pays me $15 an hour in Canada, then maybe I am worth more than a company that pays me the equivalent of $7.

[01:06:12] Ramit: Yeah. In Columbia, until you are able to find your own self-worth beyond what a company will pay you because of labor markets, then you are forever going to be chasing it. We cannot determine, in totality, our self-worth by what a company is willing to pay us. But aren’t there other things to consider? We have three kids.

[01:06:31] Ramit: They grew up here. What’s the quality of life? And on and on and on. I’m not saying don’t move back to Canada.

[01:06:35] Liza: No, no, I understand.

[01:06:37] Ramit: But we can’t make these life decisions because. I think I will make double the amount or maybe a little bit more. That’s not how we make these big major life decisions.

[01:06:46] Liza: I think it’s fine, but I don’t know how to do them then because that’s the conversation.

[01:06:50] Ramit: Okay, we’ll, we’ll get there.

[01:06:52] Liza: Okay.

[01:06:53] Ramit: I’m not here to make couples feel bad. That is not the point of this show, but sometimes things get so [01:07:00] tangled that people cannot see what is happening. They spin, they rationalize, they analyze every option to death. A lot of couples are frankly, too smart for their own good.

[01:07:10] Ramit: They spend their time seeing every single angle, but they don’t realize they’re actually just stuck in place. And you’ll notice they keep trying To help me understand, Ramit, you need to understand why we do this. Let me explain our thinking. I don’t need to understand. They need to change. You see, at a certain point, I don’t actually care why they are doing something.

[01:07:31] Ramit: I care that it’s not working and I care about their plan. Sometimes we need to spend less time making other people understand and more time changing ourselves. And to their credit, they listen. They really listen, which is rare. If you want this kind of help with your own finances, if you want someone to cut through the confusion and help you stop spinning so you can actually make major changes fast, [01:08:00] join my money coaching program at

[01:08:01] Bradford: iwt.com/money coaching.

[01:08:04] Bradford: You do not have to do this alone. Now, let’s see if they are willing to make real changes right now.

[01:08:12] Ramit: Am I gonna see your kids on this podcast in 30 years?

[01:08:16] Liza: Hopefully not. If you do your job right, you won’t.

[01:08:19] Ramit: If I do my job right?

[01:08:21] Liza: Yes. You know, we can, you can

[01:08:22] Ramit: do that. Ah, that’s quite interesting. Can I ask you a, a pointed question?

[01:08:27] Ramit: Mm-hmm.

[01:08:28] Liza: What

[01:08:28] Ramit: if. You do your job, right?

[01:08:31] Liza: Yeah, exactly. If I can do better and and be willing to change, which I am, that’s why I’m here, then I think hopefully we can do better. And the reality is like I always pause,

[01:08:41] Ramit: I already pause. Pause

[01:08:42] Liza: what

[01:08:43] Ramit: we’re talking about, something really important right now. I don’t want you running off into the next topic.

[01:08:47] Liza: Okay.

[01:08:48] Ramit: We’re talking about your kids reproducing the same messages that you yourself are reproducing, that you learned from your parents.

[01:08:57] Liza: Yeah.

[01:08:58] Ramit: How does that strike you? [01:09:00]

[01:09:00] Liza: I don’t know. It’s sad. I guess I’m at least trying to teach them, for example, something as simple as investing.

[01:09:05] Ramit: You teach them about savings,

[01:09:07] Liza: not as importantly as investments.

[01:09:09] Ramit: How would you feel if your kids turn 25 and they have two lines of credit?

[01:09:13] Liza: I don’t think I would mind if they’re empty. Like if they pay off their debt. I don’t want them to be like living on credit.

[01:09:19] Ramit: Why is it that I, the non-parent am like so. Unwelcoming of a 25-year-old kid having two lines of credit, but you’re like, yeah, whatever.

[01:09:30] Ramit: As long as it’s empty. Why is that?

[01:09:32] Liza: Until this conversation that we’re having right now, I didn’t really see the issues with it in that sense because to be honest, we keep the line of credit low. But what I mean is like they keep offering us money. ’cause we get into debt and we pay it off so quickly that banks are like, take another 10,000.

[01:09:48] Liza: And we’re always like, no, take it down. And so the reason I don’t see the issues with my kids doing that is that if, let’s say the pattern repeated itself and you ended up in the same way, I would hope that at the very least they’re not living [01:10:00] on credit forever. It’s like a good backup plan when you don’t have the day-to-day like solvency.

[01:10:04] Liza: It’s

[01:10:04] Ramit: not a good plan.

[01:10:06] Liza: No.

[01:10:06] Ramit: I don’t know how many times I can tell you this. You yourself have been stuck in debt for how many years?

[01:10:12] Liza: I dunno. Comes and goes, but I like, if you wanna just say like, how many months have we had a balance? What, like two, three years, Brad?

[01:10:19] Bradford: Way less. I would say no, the, the line of credit is almost always empty.

[01:10:23] Bradford: It’s almost always at zero.

[01:10:25] Ramit: Okay.

[01:10:25] Bradford: It’s very rarely got any balance on it. So it may maybe like 15% of the time it has a balance.

[01:10:32] Ramit: And, um, Bradford, what about you? What do you remember about your family as it came to money when you were growing up? What did they say?

[01:10:40] Bradford: It was never a conversation, never a topic.

[01:10:42] Bradford: Nothing.

[01:10:43] Ramit: Two people whose families never really talked about money. Hmm. What happened as you got older? Bradford?

[01:10:51] Bradford: As I got older, I started to realize like a lot of the opportunities I did have were because my grandparents paid for it. Mm-hmm. And not that I’m [01:11:00] necessarily saying there’s something wrong with that.

[01:11:01] Bradford: I think my parents did what they could. My dad was, you know, the only one working for the most part. And there was four of us, you know. Um, but I do know that I didn’t, I didn’t want to be that way. I mean, my dad’s 70 and he’s still working and he says he, he really enjoys it. And I do believe he does. But I also, I I don’t actually know if he could retire.

[01:11:19] Ramit: Mm.

[01:11:20] Bradford: And I don’t, I don’t wanna be that, I don’t want to be 70 and, and working. So I started to just sort of learn on my own. I mean, I try to do this for most of my life. Not just money, but just when I know better, I’ll do better, which has gotten me into trouble. I’ve definitely, why? Well, you know, like sometimes I’ve done something that I thought I knew about and I didn’t, and then we’ve lost stuff.

[01:11:39] Bradford: Um, uh, buying some taxis in, in Columbia, we owned a small fleet of taxis, and for a while we made a ton of money on them, and then it went downhill fast, probably because we didn’t understand what owning a fleet of taxis meant.

[01:11:55] Ramit: Yeah. Okay.

[01:11:56] Bradford: And so when it did go south, I couldn’t exit fast enough [01:12:00] to recuperate the money.

[01:12:01] Bradford: So, you know, we lost between 60 and a hundred thousand probably on that. Wow.

[01:12:05] Ramit: What lessons do you bring from your upbringing to this relationship?

[01:12:10] Bradford: One of them would be that if, if we did need something, it’s okay to ask. Another one would be to budget. My parents never budgeted. They still don’t really,

[01:12:21] Ramit: and you don’t keep a budget either.

[01:12:23] Bradford: No, we do.

[01:12:23] Ramit: You do?

[01:12:24] Bradford: Yeah, we do.

[01:12:25] Ramit: Okay. So the 28% for guilt-free spending, you’re tracking some of that?

[01:12:32] Bradford: Yes.

[01:12:32] Ramit: Okay. Alright.

[01:12:34] Liza: We used to do it more regularly, so lately we’ve been busier, so we do it every few months, but not as often as we could.

[01:12:39] Bradford: Yeah, it was, it was monthly for years.

[01:12:41] Ramit: This cycles of debt question is really on my mind.

[01:12:45] Bradford: Mm-hmm.

[01:12:46] Ramit: Because it hasn’t just been once or twice, it’s been for years. Do you consider the cycles of debt a problem?

[01:12:52] Bradford: So my, my answer before this conversation would’ve been no, because the end sort of justified the means now, [01:13:00] I would say yes.

[01:13:01] Ramit: Why?

[01:13:02] Bradford: I mean, if I’m being brutally honest, because you have told me that maybe it’s not a good idea and clearly, you know more than I do if I’m being really, like, I don’t know if I have more of an answer than that.

[01:13:14] Ramit: That’s actually, that’s actually a pretty honest answer, not the answer. I eventually want, but what I appreciate about that is that you, you are open to like, Hey, maybe this guy knows something. I don’t know. I don’t understand why, but like he keeps saying this. This is from your application, Lisa, you wrote biggest challenge and one of the things you wrote under biggest challenge was being stuck in a cycle of getting in and out of debt.

[01:13:41] Liza: Yeah.

[01:13:42] Ramit: You wrote that in your application, but then just a few seconds ago you said, no, it’s not a problem.

[01:13:46] Liza: I just dunno if there’s enough to go around to not like to save and do that. It’s not like we have extra to be like, oh, we’re gonna invest 2000 this month ’cause we have extra. Like

[01:13:55] Ramit: why are you jumping ahead?

[01:13:56] Ramit: You don’t even know your numbers.

[01:13:58] Liza: I don’t know.

[01:13:59] Ramit: I think [01:14:00] really what’s happening right now is you don’t want to save and so you are now creating reasons why it would be hard to save. I think that the model you have seen is that it’s okay to go up and to go down. And going down a little bit hasn’t really costed you anything.

[01:14:18] Ramit: You paid it off in a few months. The way that the two of you describe paying off your debt, it’s like a reward. It’s like an achievement every time. Have you noticed that

[01:14:25] Liza: pride? Yeah, for sure.

[01:14:26] Ramit: It’s like, oh, let’s give ourselves a round of applause. We paid off our debt.

[01:14:29] Liza: Yeah.

[01:14:30] Ramit: And with only a couple of months and, and meanwhile like Bradford’s, like we got extra yield, like round of applause.

[01:14:37] Ramit: We did a great job. So the way you have interpreted using debt is like we’re winning. When I look at it, I’m like, you guys are losing. You may feel like you have won in the short term, but being in debt for years, like what has it cost you? You don’t have anything really in savings beyond 1500 bucks.

[01:14:55] Ramit: You’ve only been lucky that a market in the last 5, 6, 7 years [01:15:00] has only gone up.

[01:15:01] Liza: Yeah, that’s true.

[01:15:02] Ramit: You’ve basically ridden a wave that has propelled every single decision anyone has made to be good.

[01:15:07] Liza: Yeah,

[01:15:07] Ramit: and it doesn’t last. You could keep doing this for a while. You can keep doing it till it wipes you. In your family, you have recreated some of the ups and downs, Lisa, that you saw.

[01:15:18] Ramit: You have the taxi business, which went up, went down. Mm-hmm. You have the debt going up, going down. A lot of people who grew up in chaotic environments reproduce that environment because that is what they know when they hear like calm,

[01:15:33] Liza: boring.

[01:15:34] Ramit: Exactly. And to a lot of people who are overs sensitized, they’re looking for control, but they are creating and responding to and influenced by chaotic environments.

[01:15:45] Ramit: Boring is death to them.

[01:15:47] Liza: Yeah.

[01:15:48] Ramit: What do you think

[01:15:49] Bradford: I want, I wanna respond to something you said ’cause I, I, I don’t know. I wanna make sure that it’s clear. Postpay off student loans. We have definitely been out of debt way more than in debt. [01:16:00]

[01:16:00] Ramit: Okay. What’s the point of this?

[01:16:01] Bradford: We’ve gone into debt twice since, since then In nine years.

[01:16:05] Bradford: It was for very small amounts. For very short times. I’m not saying that necessarily makes it perfect or not.

[01:16:12] Liza: Brad, I Seever meets point in the sense that, for example, we bought all the furniture and we had a lot, thousands and thousands of dollars in debt. And so reactionary you had to go and get another job as you’re working.

[01:16:24] Liza: Yeah. 14 hours a a day or more just to pay that off quickly. But the point is that the cycle is still going up and down instead of just being like, okay, let’s plan for it and let’s buy it that way. And if we had savings, perhaps we could have used those savings to furnish the apartment and buy the car and not have to actually be like, okay, well now we have $30,000 in debt so we better like go and work extra for six months or whatever.

[01:16:46] Liza: And I think that’s the, probably the takeaway from that. And I don’t know, I think it, it does make sense.

[01:16:53] Bradford: I, I guess my question then, to you Ramit is like, is all debt always bad or is there any form of it that is not bad [01:17:00] because maybe that’s my misunderstanding.

[01:17:02] Ramit: In general, it’s bad.

[01:17:05] Bradford: Okay.

[01:17:06] Ramit: There are exceptions.

[01:17:07] Ramit: There are, and I’ll clarify those for you, but in general. For a family that makes $120,000 in Columbia, or for our family who lives in New York and la we have a no debt policy. Why would we go into debt when we don’t need to? If we can’t afford something, then we will save for it, but we are not going to go into debt because we don’t need to.

[01:17:35] Ramit: And it actually makes our decisions so much easier. It makes it crystal clear as to what is inbounds and what is out of bounds. Never a question, never a discussion.

[01:17:45] Liza: Mm-hmm.

[01:17:45] Ramit: So the exceptions are, you know, if for example, you needed to take a mortgage, that’s pretty expensive. Most people will take a mortgage if you need to take a car loan.

[01:17:54] Ramit: That’s pretty expensive. People sometimes often take a car loan student loans. Okay. [01:18:00] Yeah. You know, you wanna be conscious of that.

[01:18:02] Bradford: Yeah.

[01:18:02] Ramit: Business loan, I really steer away from it. I don’t, I don’t take debt. I would rather just. But I’ll tell you like things like, um, going on vacation or furnishing a place, I would never, ever in a million years take debt for that.

[01:18:18] Ramit: Number one, it introduces risk because it’s just one more thing I have to think about and track. And I know these companies are expert at extracting money from me, so I’m not even gonna play the game. Second,

[01:18:29] Bradford: okay,

[01:18:29] Ramit: how much could I expect to reasonably arbitrage? What could I make an extra 500 bucks, even 5,000?

[01:18:36] Ramit: It doesn’t move the needle for either of us. So why would I take on that kind of risk to only make a tiny amount of money? What do you think?

[01:18:44] Bradford: I think I like it. I think it makes me feel a little bit better in the sense that I think the debt that I’m most upset about was probably the taxis, which is business.

[01:18:56] Bradford: So I think that’s good confirmation that that was a bad [01:19:00] decision.

[01:19:00] Ramit: Yeah.

[01:19:00] Bradford: Um, and the, you know, the other would be the furnishing. So furnishing obviously. I like that because that makes that clear. No, we shouldn’t have done that.

[01:19:09] Ramit: Good take. I love this postmortem you’re doing here. I think there’s probably more for you both to look back and be like, let’s take a look at our biggest decisions through our marriage, moving kids, furnishing, taxis, all that, and let’s just like, what did we do at the time?

[01:19:25] Ramit: No judgment, but let’s just honestly write down what we did at the time and then like what went right and what went wrong and what will we do differently?

[01:19:33] Liza: Yeah.

[01:19:33] Ramit: Enormously valuable.

[01:19:35] Liza: Yeah, that’s true. Cool.

[01:19:36] Ramit: Okay. Now if we talk about going back to Canada, so there’s this open question about should you move back to Canada or not?

[01:19:42] Ramit: And Lisa, just so I understand, the, is the main reason that you could earn double or more in Canada?

[01:19:51] Liza: Um, practically, yes.

[01:19:53] Ramit: We need to ground some of these decisions in actual numbers. If you were. To look at these numbers, which I have now [01:20:00] adjusted for you to cut your income by half.

[01:20:03] Liza: Mm-hmm.

[01:20:03] Ramit: So your gross is 2000.

[01:20:05] Ramit: Your net’s gonna be 1500 a month. Let’s say you doubled it. Would the numbers measurably improve?

[01:20:12] Liza: Probably not

[01:20:13] Ramit: correct. In fact, what expenses do you have to account for if you were to move to Canada?

[01:20:20] Liza: More childcare. The biggest issue would be we have less help. ’cause here we have a full-time maid, so I’d have to be working full-time probably outta the house if I wanna get the jobs that I talk about.

[01:20:30] Liza: And then on top of that. I would have no help.

[01:20:33] Ramit: Yep. ‘

[01:20:34] Liza: cause it cleans and takes care of our daughter and all that.

[01:20:36] Ramit: What’s gonna be in your house or apartment in Canada?

[01:20:38] Liza: Furniture. And how are you gonna get that? The, I guess now we have to plan and save. So I guess we can’t leave until that’s been saved up for it.

[01:20:46] Ramit: That’s correct.

[01:20:46] Liza: Because I know what we sell here won’t be enough.

[01:20:48] Ramit: Exactly. I know what you were about to do. About to hop on that plane and freaking take out a line of credit and then buy all this furnishing. We’re not doing that anymore. Okay. And speaking of that, how much is a plane ticket, by the way?

[01:20:59] Liza: A thousand to [01:21:00] $1,200 a person.

[01:21:00] Ramit: That’s more than you have in savings. How are you gonna pay for that?

[01:21:03] Bradford: So that’s why my thing is always about waiting at the end of every year. My school pays for all of us to fly home.

[01:21:09] Ramit: Really?

[01:21:10] Bradford: Yeah. Including if I’ve done the contract, I would. We would all get to fly home one last time.

[01:21:15] Ramit: Wow.

[01:21:16] Bradford: Yeah. So that, that’s why for me it’s always about like in a cycle of like, let’s finish the school year and then we could go back.

[01:21:21] Bradford: But I didn’t want to go back in the middle.

[01:21:23] Ramit: Alright. That sort of up my example, but that’s pretty cool. Oh,

[01:21:26] Bradford: sorry.

[01:21:26] Ramit: Sorry. No, no, no. I appreciate it. We need the honest truth. Okay. So the flights may or may not cost money depending on when you go, but basically if you had to pay, you can’t afford it.

[01:21:37] Liza: Yeah, you’re right.

[01:21:37] Ramit: Okay. Furnishing, you can’t afford that. I don’t know what it’s like in Canada to rent a place, but at least in New York they, you left and right. You gotta put one month down, then last month and 15% for some stupid broker, blah, blah, blah. So there’s gonna be some amount there.

[01:21:52] Bradford: Yeah.

[01:21:53] Ramit: And all of this to make what you made last year.

[01:21:56] Ramit: So what do you think as we’re talking out loud?

[01:21:58] Liza: I don’t know, I just feel like [01:22:00] the job market is bad and things dried up. And honestly like most of what I’ve gotten has been through networking and I’m like, oh, what network do I have here?

[01:22:07] Ramit: It sounds like you’re trying to run away from a difficult time right now.

[01:22:11] Liza: Maybe,

[01:22:11] Ramit: I mean, I can understand it when things get hard. I understand. Sometimes you just wanna say like, I wanna go home.

[01:22:17] Liza: Yeah.

[01:22:18] Ramit: What I’m trying to do is to show you that going home is not escaping your problems. Yeah. You’ll have a whole set of very real problems there, and we can reasonably predict it. Just two minutes ago you said, I don’t know, I, I have no idea.

[01:22:34] Ramit: And then you did an outstanding job of going through all the different expenses that you would encounter. Now I’m asking, you sum it all up for me. If you were to get on a plane, either solo and leave, part of your family or husband comes along, let’s say you were to double your income maybe even a little bit more, would it m materially change your [01:23:00] financial position?

[01:23:01] Liza: Probably not.

[01:23:03] Ramit: I agree. Would it make it better or worse?

[01:23:07] Liza: Probably worse because like I said, here we live like expats compared to the average person around, we can afford a lot more things than the average person. Whereas in Canada, we probably wouldn’t be able to.

[01:23:18] Ramit: So we have less money because moving to Canada has massive transaction costs, startup costs of flying there, furnishing all of that stuff.

[01:23:28] Ramit: We have uncertainty. It’s not even clear what kind of job you could get, what’s really going on here. When you talk about going to Canada,

[01:23:35] Liza: perhaps part of it is that maybe I didn’t sign up to come here forever and I don’t know, I just, I don’t know if I can come to like a full circle decision to be like, yep, because financially it makes more sense to stay here, therefore we should stay here.

[01:23:52] Liza: Because I guess that’s not what I set out to do, but I don’t know, like most of the time I’m reactionaries. It’s not like suddenly I’m like, that’s not my plan. So I, I broke the plan. [01:24:00] That’s why I feel a little bit trapped here. ’cause I don’t know if I could stay here forever. I don’t,

[01:24:04] Ramit: who’s talking about forever?

[01:24:05] Ramit: I’m not.

[01:24:06] Liza: Like, okay, fair enough. So we can make a plan and we can save, so we can furnish our place or whatever. But

[01:24:12] Ramit: I think that you all might end up back in Canada or not. I don’t know. I don’t, I actually don’t think you know either. But my take is moving back right now is reactionary and it is an escape from something that just doesn’t feel good.

[01:24:29] Ramit: And when it doesn’t feel good, I think at least in this case, your tendency is Get away.

[01:24:34] Liza: Yeah, yeah, yeah, absolutely.

[01:24:36] Ramit: If you want to have the option of eventually moving back to Canada, which I think would be great, I think the two of you didn’t move there to be there forever, so you should probably give yourself the option of going back.

[01:24:47] Ramit: Then. I think that the two of you should probably calculate how much you would realistically need to live back in Canada. That includes moving costs, furnishing, all of that stuff. But in addition, [01:25:00] how much would you need to earn to live a reasonable type of lifestyle? It’s not gonna be the same lifestyle as where you live.

[01:25:08] Ramit: It’s probably gonna be worse.

[01:25:10] Liza: Yeah,

[01:25:10] Ramit: that’s okay. But you could start putting money aside in a separate Canada break in. In case of emergency savings fund, let me just give you a simple example. Let’s say you put a couple hundred bucks a month into that thing, okay? That’s not a lot of money. It would take years for you to have enough, but at least you would know the exact month and year.

[01:25:33] Ramit: Okay? If you decided, hey, we don’t wanna wait nine years to be able to move back to Canada, then we need to cut our costs elsewhere and earn more and put more money in that savings account. That’s how we do it. And you could lower that down to maybe four years or three years. Once you get to that point where you have the money necessary, then you too can start discussing whether it makes sense or not.

[01:25:56] Ramit: But until then, I would agree on a plan. I would check in [01:26:00] every December, Hey, are we still on track? Are we still thinking four years from now, we’ll take a look at it and decide if we wanna go back or not. ’cause that’s when we’ll have enough money. Until then, I just wouldn’t think about it because you’re just driving yourself nuts.

[01:26:11] Ramit: Now. I will give you one other option. If you really wanted to move there. Not everything is only about money. And if you’re just like, we’re done here. Okay, you could do it, but you would need to really think about how you were going to do it. In my opinion, I just can’t see a way that you would do it going into debt.

[01:26:29] Ramit: I think that would be pretty risky. So what are the other ways? What could you sell? What kind of cheap place could you live in, et cetera, et cetera, et cetera. I, I simply would not go into debt. That’s out of the question.

[01:26:39] Liza: Yeah.

[01:26:40] Ramit: That strike you. Which of those approaches would you take?

[01:26:44] Liza: I mean, obviously saving and preparing for it is better and it makes sense to me.

[01:26:48] Liza: Uh, I definitely think I would end up in a bad situation if we didn’t do that.

[01:26:52] Ramit: Yep.

[01:26:53] Liza: The question is when do you pull the trigger? For example, my financial situation changed recently. If [01:27:00] I don’t have any income or as much income as we budgeted for, for three months, six months, eight months, 10 months, what does that mean?

[01:27:08] Liza: Like when do I decide, okay, well maybe I’ll start applying to jobs in person. Or maybe Bradford needs to get a fourth job or however many jobs he has. Like

[01:27:15] Ramit: excellent question. If you had savings right now, you would be able to tap it.

[01:27:20] Liza: Mm-hmm.

[01:27:21] Ramit: Okay. But you don’t, and so you have to make other arrangements and I’d like to show you what you can do.

[01:27:27] Ramit: Okay, so I’m gonna put this CSP back up on screen and I would like you to tell me what do you want to do? Because right now you have a problem. You have $0 coming in from Lisa, which means your fixed costs are at 83%, which means that you are spending more than you make every single month. What do you wanna do?

[01:27:46] Liza: We could cut clothing.

[01:27:48] Ramit: Clothing is $150 a month. Okay. Goodbye.

[01:27:51] Liza: I don’t know

[01:27:52] Ramit: groceries.

[01:27:54] Liza: Uh, yeah, we could it cheaper.

[01:27:56] Ramit: Just so everybody knows groceries are $1,400 per [01:28:00] month.

[01:28:00] Liza: Uh, maybe a thousand dollars.

[01:28:02] Ramit: Okay.

[01:28:02] Liza: What else? Brad, what do you think?

[01:28:04] Ramit: Can I point something out? Yeah. How come nobody’s talking about cutting your investments?

[01:28:08] Liza: Because Brad wants to retire at some point.

[01:28:10] Ramit: Your investments are like the most sacred thing to you of all. Yeah. Have you noticed that?

[01:28:15] Bradford: Yeah.

[01:28:16] Ramit: Like it’s like the sacred thing that no one is willing to even talk about. Yeah. No savings. Can’t talk about it. Wife can’t spend money on whatever you want for five years.

[01:28:26] Ramit: Can’t talk about it. I don’t mind investing aggressively. I love it, but the minute you say this is a requirement and everything has to work around it, then you need to get really creative. You cannot be spending $1,400 or probably even a thousand dollars on groceries. You can’t be eating out not even $500 a month.

[01:28:44] Ramit: Like if you wanna do it, fine, but you probably need to both be earning way more money. And you need to not be going out as much. You can’t have it all, not on your income.

[01:28:52] Liza: So I would say two things. One, after reading your book many years ago, I finally automated the 800. So it’s easy to not think about [01:29:00] it.

[01:29:00] Liza: I just always make sure the $800 are in the account by the date.

[01:29:03] Ramit: Okay?

[01:29:03] Liza: And I didn’t do that till five years after I read your book.

[01:29:06] Ramit: Hold on, hold on, hold on. Let me just simmer in the beautiful irony of this, it’s like I have a love-hate relationship, not with you, with myself. Like first of all, the fact that you actually read my book is so amazing.

[01:29:19] Ramit: I would say 90% of the people on this Godforsaken show don’t even read my own book, even though it’s free at every public library in the country. Second, when they read it, do they do it? Nah. They love my jokes from meet sat so funny. Ha ha. I’m not gonna do anything he says. But then I discover an amazing example here.

[01:29:41] Ramit: We have Lisa who read the book many years ago, didn’t do anything in it, but then. Left turn. Did it five years later. Yes. And goes, Hey, it was so easy. I automated it and now the money just rolls in there. I don’t even notice it, but thank you for the example. That was [01:30:00] phenomenal. Carry on.

[01:30:01] Liza: So it seems like changing it now would be hard because it’s automated and we figured it out.

[01:30:06] Liza: And the other thing is, maybe you can help us with this is do we have enough to retire at some point in our lives based on the $800 that we’re putting away? Because if it’s enough, I’m willing to cut it.

[01:30:15] Ramit: Okay. You’re willing to cut it. Are you willing to earn two to $4,000 a month?

[01:30:19] Liza: Yes. If I can find a way here.

[01:30:21] Ramit: Well, you told me that you haven’t even really applied for jobs, you’ve just

[01:30:24] Liza: No, no. Oh, sorry. I meant for the clients that I got that made me good money. Of course, I’m gonna try to my best to keep freelancing and to continue to get contracts and I’m actually like building a portfolio to offer better service.

[01:30:36] Liza: Like I, I am doing all those things. It’s just that I have no confidence right now that I can pull those kind of numbers again. Okay.

[01:30:45] Ramit: Um, Bradford, what do you say? ’cause I know early retirement or retirement is important to you, and you’ve been very disciplined about investing regularly. What do you, what’s your take on this?

[01:30:56] Bradford: That I would rather find a way to make more money or cut [01:31:00] other things than cut that retirement.

[01:31:02] Ramit: Okay.

[01:31:03] Bradford: Do I necessarily need to retire at a specific age of whatever, 55, 60, whatever it is? No, but I want to be able to have the option where I’m working maybe less.

[01:31:15] Ramit: Okay.

[01:31:15] Bradford: And so cutting it down makes me nervous,

[01:31:18] Ramit: depending on a variety of things.

[01:31:20] Ramit: The way we calculate it is you’ll have about $1.6 million when you are 65. Canada has its own unique circumstances, situations. I’ll just tell you what we would calculate in the us.

[01:31:32] Bradford: Sure.

[01:31:33] Ramit: If we were to calculate a 4% rule for safe withdrawal, this is just the back of the napkin guideline, that would mean you’d be able to withdraw about $65,000 per year in retirement.

[01:31:44] Ramit: Yeah. What do you think about that?

[01:31:46] Bradford: I think if it’s just the two of us, that’s probably enough. ’cause I, I don’t, I don’t, I don’t need to be crazy wealthy. I just need to be able to, you know,

[01:31:54] Ramit: I think 60 5K is tough. Uh, yeah. Not owning a house, which I don’t [01:32:00] think we have allotted for in this.

[01:32:02] Bradford: Right.

[01:32:02] Ramit: 60 5K is not enough.

[01:32:04] Bradford: Okay.

[01:32:05] Ramit: Not 20 years from now.

[01:32:08] Liza: Yeah,

[01:32:08] Bradford: yeah. Yeah.

[01:32:09] Ramit: So it’s not enough. And there is some, um, Canada pension plan. I don’t know if you’d be eligible for that or not. Do you know?

[01:32:16] Bradford: I would be, yeah,

[01:32:17] Ramit: you would be. So that’s like 10 K per person. Okay. So like either 75 or 85 KA year, that becomes better.

[01:32:25] Bradford: Okay.

[01:32:26] Ramit: That’s better.

[01:32:27] Ramit: But I guess what, what occurs to me is that for a couple that has like talked about money every day for years, and that is making these big life decisions and sees it differently, you actually should know these numbers. Do you see that you have been focused on one area of your numbers, but not focused on the major key numbers that matter?

[01:32:55] Liza: Yeah.

[01:32:56] Ramit: Why have you been focused on, I wanna go back to Canada, [01:33:00] or I don’t wanna save more money, use the line of credit. Why have both of you been focused on those things instead of retirement numbers? Which it seems is quite important to you

[01:33:11] Liza: because it feels more immediate.

[01:33:12] Ramit: Yes.

[01:33:13] Liza: And to be honest, if I wasn’t married to Bradford, I may not have been saving for retirement.

[01:33:18] Liza: Not because I don’t care about, because I wouldn’t have thought that way. And for him, because he works so hard and he’s always like, oh no, it’s fine. I’ll work more, I’ll work more, then of course he is like, at some point I would like to stop working so damn hard. So that makes sense to me that it would be so important to him.

[01:33:31] Liza: Whereas for me, that I’m kind of work optional in a sense, because he pulls through every time. And I think if I was single on my own, I don’t think I’d be investing in retirement that much. Probably.

[01:33:42] Ramit: That’s pretty honest. Okay. And Bradford, what about you?

[01:33:45] Bradford: I, I gotta be honest, I’m, I’m really stuck and deflated by the fact that 800 or plus a month is not enough.

[01:33:52] Bradford: ’cause I don’t know how I’m going to try and do more than that. So I’m having a hard time even answering your question. ’cause I’m really hung up on that.

[01:33:58] Ramit: Okay, let’s talk about [01:34:00] it then.

[01:34:00] Bradford: That freaks me out a lot.

[01:34:01] Ramit: Tell me why.

[01:34:02] Bradford: Because I don’t even wanna have to work full-time to 65, let alone having to work past that.

[01:34:08] Bradford: And if 800, which I felt like was sufficient, is not gonna be enough, then that means that I’ve gotta either earn more or cut back other places to put more than a thousand. Yeah. I don’t know. I don’t know, man. That really deflates me, really deflates me.

[01:34:24] Ramit: Can I, can I walk you through it?

[01:34:26] Bradford: Yeah.

[01:34:27] Ramit: Okay. First off, I totally understand feeling deflated because you have obviously worked hard and you’ve both talked about money a lot and you’ve put time into automating this, all of that.

[01:34:39] Ramit: Very important. Very notable. My first question is. Why do you think you never calculated how much this would turn into?

[01:34:48] Bradford: I did. I think, I didn’t realize that that wasn’t gonna be enough.

[01:34:52] Ramit: So as you sit here and think about the numbers, what does it feel like to you?

[01:34:57] Bradford: I mean, the first word that comes to mind is hopeless.

[01:34:59] Bradford: Um, but [01:35:00] hopeless. Yeah.

[01:35:01] Ramit: Why?

[01:35:02] Bradford: Because if I’ve gotta put more than that away, I don’t know how to do that without, without basically just living for retirement and forgetting how to live my life right now. I don’t want my kids to have the same life that I had where, you know, like I did a few things, but later found out it was all my grandparents and didn’t have anything else, and I don’t want them to have to not have help for university.

[01:35:24] Ramit: Can I point out something that I’ve noticed you’ve said several times just now?

[01:35:28] Bradford: Sure.

[01:35:29] Ramit: I,

[01:35:30] Bradford: okay.

[01:35:30] Ramit: Why is it all Bradford?

[01:35:33] Bradford: That’s the way it was for my family growing up. My mom contributed very little. Financially when I left home, ’cause I left home at 17, I think she contributed more, but before that she was just watching the kids.

[01:35:46] Bradford: Uh, so it was my dad. And I think that when it comes to Lisa, there’s been sort of two stages. One has been where she didn’t value herself very much back when we were in Canada. And so she didn’t, uh, didn’t, [01:36:00] didn’t feel she was worth more like she or she could make more or she would, she would always like under quote things, in my opinion.

[01:36:07] Bradford: Um, and then more recently it’s just been that she’s had a hard time finding work. And so then, uh, that means that it is zombie to do that, to make sure that I provide enough.

[01:36:19] Ramit: And when money topics come up, your natural instinctive response is to say,

[01:36:25] Bradford: I don’t know. I’ll find more work.

[01:36:27] Ramit: Right? Yes. I’ll find more work.

[01:36:30] Ramit: I’ll take this burden, I’ll take care of it. And what does that do to Lisa?

[01:36:36] Bradford: It belittles her, I guess. I mean, I certainly don’t think that I go there first. I try to, I also feel like I’m very supportive in trying to help her find something. I also think that I’m very driven by efficiency, and so ultimately, eventually it gets to a point where it’s more efficient for me to go and find work or more work I should say, so that I do that.

[01:36:57] Ramit: It’s very insightful, driven [01:37:00] by efficiency. Hold onto that for a second. We’re gonna come back to that. That is the key to some of your own behavior. Lisa, what are you hearing when you hear Bradford talk about how he uses the word I And he takes this earning stuff on himself, and he’s pretty dejected about the numbers.

[01:37:21] Liza: I mean, I feel bad for him, but he does take the burden on by himself, uh, a lot of times, and I feel bad that he feels bad about it. Here’s the thing, I feel like. I am very externally motivated. And for example, when we made the budget and we decided we had to make $40,000, I did it. If not much is required of me, then I probably won’t put that much effort to go do.

[01:37:46] Liza: Not that I won’t put any effort, but I won’t be as desperate to be like, I’m gonna go and make X amount of money that I need.

[01:37:54] Ramit: Okay. That’s quite interesting. Most of the time, is there an expectation? [01:38:00]

[01:38:00] Liza: Probably not, because Bradford can come in and get another job.

[01:38:04] Ramit: And then what happens when Bradford saves the day?

[01:38:06] Ramit: First of all, what happens to Bradford over time as he’s saving the day, working three jobs, what happens?

[01:38:11] Liza: She’s getting exhausted.

[01:38:14] Ramit: Yeah. Burned out physical impairment. Yes. And then what happens to Lisa as Bradford comes in and saves the day yet again,

[01:38:21] Liza: I have no purpose.

[01:38:23] Ramit: Yes

[01:38:23] Liza: or no reason to contribute.

[01:38:25] Ramit: Yes.

[01:38:26] Ramit: Disempowered feeling like it’s not working and wanting to say.

[01:38:31] Liza: Canada,

[01:38:32] Ramit: let’s go to Canada. Bradford, what are you thinking right now? I see you thinking

[01:38:37] Bradford: I’m trying not to, I’m, I was trying not to be emotional.

[01:38:41] Ramit: Why?

[01:38:42] Bradford: I don’t know. I don’t like that I made my wife feel that way.

[01:38:44] Ramit: It’s okay to tell her that.

[01:38:46] Bradford: I’m really sorry, Lisa, if I made you feel disempowered or dejected or removed.

[01:38:52] Liza: Thank you.

[01:38:54] Bradford: I am trying to figure out how to live life, but still be able to [01:39:00] retire, which means that then I’m gonna have to put more than what’s what I’m doing or what we’re doing.

[01:39:05] Ramit: Why is it important to you?

[01:39:07] Bradford: I’ve already had some pretty, uh, big changes to my physical ability, let’s say. Uh, and so I already can’t learn the way that I could even three years ago, and so I don’t want to, you know, be able to finally have time to do those things in 20 years.

[01:39:28] Bradford: Or 25 years. And I want, I don’t want my kids, I want my kids to be able to as well, you know, I don’t want them to have, to not be able to do things because we need to put away more money for retirement. ’cause I already feel like I do say no quite a bit.

[01:39:40] Ramit: Lisa, what role do you need to play in the family?

[01:39:44] Ramit: Finances.

[01:39:45] Liza: Maybe more of qual partner.

[01:39:47] Ramit: What do you hear your husband saying?

[01:39:49] Liza: That he doesn’t wanna work forever. Okay. And so maybe he just needs more support from me to carry more of the, the weight of the, the finances, I guess, which I would like to [01:40:00] do. ’cause I also get gratification. It’s not like I wanna sit on my ass and do nothing so

[01:40:05] Ramit: Great.

[01:40:05] Ramit: Can we play a game called I Need? So the game is you just, you have 15, 30 seconds and you can feel free to say everything you need as it relates to money. What do you need from your partner? This is a chance for you to say what you need, like you’ve never said it before.

[01:40:30] Bradford: I need you to earn enough for us to put into retirement so that we can retire at some point.

[01:40:38] Bradford: And I need you to acknowledge when I am working, not just when I am taking on extra jobs. I find you’re very, you’re very good, Lisa, about telling me or acknowledging what I’ve taken on like a third job or when I’ve taken on, like the extra teaching jobs at night. Um, but I need you to do that even when I’m [01:41:00] pulled back from that and maybe taking a little more care of myself.

[01:41:04] Ramit: Great. Thank you. That was awesome. Lisa, do you wanna react to that?

[01:41:09] Liza: I’m actually, I was actually surprised when he said that he wants me to, to make enough to put away for retirement. ’cause that doesn’t seem like it requires a lot of me. Even if we double the amount, that’s not that much. I can see how maybe I am way more appreciative and like outwardly verbally appreciative of rec and recognize him when he’s working extra and not working the normal job and taking care of himself and having more work-life balance.

[01:41:38] Ramit: Cool. Okay. And what do you need?

[01:41:40] Liza: I, well, I need you, Brian, to keep believing in me and encouraging me to know my worth, I guess in a sense, because that is valuable to me. I think when you say it matters to me, um, and then I also need you to, I don’t know, to not always [01:42:00] come and save me because it’s okay to require things of me, like I appreciate it.

[01:42:04] Liza: It’s not that I don’t, but sometimes I feel like I, I feel less than because. It doesn’t matter if I require anything of me or not, you know, because ultimately you’re gonna figure it anyway. So what is my value and my contribution? I don’t know.

[01:42:21] Ramit: Thank you, Lisa. Bradford, your reaction,

[01:42:24] Bradford: I’m surprised that that means something to you because I honestly, I feel like I’m annoying you when I tell you that you are more knowledgeable and more capable than so many of these people that you’ll compare yourself to.

[01:42:37] Bradford: But I can definitely continue and do it more because I, I do think that you have more knowledge and capabilities than you give yourself credit. Slower.

[01:42:48] Ramit: What about the second thing that she said,

[01:42:50] Bradford: I can definitely, I can try to back off and not try to save you and instead make it more of a team effort on how are we going [01:43:00] to do whatever the goal is.

[01:43:03] Bradford: Instead of getting frustrated and working all out of my efficiency to be like, well, this is the fastest, best way to do it, so let’s just do it.

[01:43:10] Liza: No, I appreciate that because I actually think that’s part of the pattern is that, sure, I don’t value myself enough and so you tell me that I should because of all these talents I have, and at the same time you’re like, oh no, don’t go do that for that money.

[01:43:23] Liza: Let me work an hour ’cause I make triple what you make or whatever. And so then it just kind of makes messages and it doesn’t make me believe that I capable or worth it.

[01:43:33] Bradford: I never thought about the double message.

[01:43:35] Ramit: Extremely insightful. Both of you. I really appreciate how both of you really brought total energy to that.

[01:43:43] Ramit: That’s a really hard exercise. What do I need? I myself struggle asking for what I need and I noticed just so many things that were so beautiful about that. Lisa, I really loved how you said sometimes I need you to tell me like [01:44:00] and don’t save. That was powerful. And Bradford, I really wanted to make sure you heard that.

[01:44:08] Ramit: And that is one of the keys here, which is Lisa. Lisa working on your own self-worth with the help of a therapist. Absolutely critical. Nothing moves forward from your end without that. So it’s gotta happen. Okay? In addition, this idea, Bradford, that you love efficiency. Efficiency is actually not the most important thing in your relationship and that is really important to understand.

[01:44:35] Ramit: There are times and places to be efficient, but this is actually not one of them. In fact, efficiency is poisoning what’s going on. Much better for both of you to add something to this relationship that is totally absent and that is a shared vision of what you were both going for. Right now, there is no shared vision around money.

[01:44:53] Ramit: You know what it is? It’s, Lisa wants to basically like, ah, like let’s do this, let’s do that. It’s [01:45:00] fine. It’ll, things will work itself out. Bradford is like, well, we gotta save for retirement. And so I’ll work two jobs, three jobs, four jobs. And what inevitably has happened is neither of you actually have connected at all.

[01:45:12] Ramit: It’s just the two of you kind of working in parallel, but at odds with each other. Mm-hmm. And so both of you’re like, this sucks. I, Bradford am tiring myself out. I’m getting sick. And then I just found out I, we actually don’t have enough money. This sucks. And then Lisa’s over here like, I wanna work ’cause it adds value and it contributes, but then I’m not getting paid enough so I’m not valued.

[01:45:33] Ramit: So no one is actually really connecting with each other. Do you see that?

[01:45:37] Liza: Yeah, for sure.

[01:45:38] Bradford: Yeah.

[01:45:38] Liza: Now that you say it like that. Yeah.

[01:45:39] Ramit: Okay. So what needs to happen, in my opinion, is a shared vision. You actually cannot get to where you want the way that you’ve been doing it. You have to both be active Bradford, you have to be clear about what needs to happen, as do you, Lisa, what do you both need?[01:46:00]

[01:46:00] Ramit: And then. What you’re hearing Lisa say is like, Hey, I actually want to be held to a higher standard. I don’t wanna be saved. I wanna be a part of this. And then Lisa, it’s important for you to be able to work on yourself and say like, I’m not gonna try to jump to the next shiny thing as you described it, but rather we have a vision.

[01:46:21] Ramit: I’m going to kill it. I’m gonna knock it out just like I did last time. And I know I may not have the clients today, but I know I can get ’em or I can get another job. That’s how we do it as a team. So what is the shared vision?

[01:46:34] Bradford: I think it would be to retire and have the option of moving back to Canada.

[01:46:42] Ramit: Okay. How much do you need?

[01:46:45] Bradford: We said it was 1.6, right? So I mean, I’m guessing then let’s go to like 2 million.

[01:46:50] Ramit: That’s a fair, that’s a fair assessment. So without getting into all of the calculations right now, let’s assume that you need to. Double your [01:47:00] contributions.

[01:47:01] Bradford: Okay.

[01:47:01] Ramit: Let’s just assume that I’m gonna put the CSP up and I wanna see how you’re going to double your contributions to your investments.

[01:47:10] Ramit: Alright? You currently have fixed costs of 72%. You have investments of 18%, which is $920 a month, and then savings are at zero and guilt-free spending is at 9%. Alright. What’s your plan of attack?

[01:47:24] Liza: I mean, I can make more money.

[01:47:26] Ramit: Great. How much?

[01:47:27] Liza: A thousand more.

[01:47:29] Ramit: Okay. So you wanna go instead of 2000, you wanna put 3000, right?

[01:47:32] Liza: Sure.

[01:47:33] Ramit: And how much is the net on that ballpark?

[01:47:35] Liza: Uh, 2,700. I don’t pay a lot in taxes because of my business. Yeah.

[01:47:39] Ramit: Alright. Wow. Holy, your fixed cost just dropped down to 47%. That’s ama. Oh my God. Did we just solve the whole problem in two seconds? Look at this. See, this is how it works. The money flows down, it flows to the bottom like a bucket, and you now have 41% in guilt-free spending, or $3,000 per month.

[01:47:59] Ramit: Now [01:48:00] that’s insane. Y’all do not need to be spending $3,000 if you wanna retire early. So what do you wanna do with the money?

[01:48:05] Bradford: I mean, the stock should probably go to 1.6.

[01:48:08] Ramit: Okay. Alright, so you’re now at 22%.

[01:48:11] Bradford: And then savings, I guess we need to be putting it in there as well.

[01:48:15] Ramit: Yep. Typically, people recommend three to six months.

[01:48:17] Ramit: I recommend six to 12 months.

[01:48:19] Liza: Well, it’s a lot.

[01:48:20] Ramit: It’s a lot of money. So y’all can choose. But like six month is your baseline. So that would be six months times your fixed costs, which is $21,000. You currently have 1500 bucks. So let’s pump that freaking savings account number up. What do you wanna put here?

[01:48:37] Bradford: Probably like a thousand until it’s there.

[01:48:39] Ramit: All right. Not bad. Not bad. A thousand bucks. This is gonna take you about little under two years. That’s not bad to fill up an emergency fund. That’s not bad. Yeah. Guys, this is pretty good. Look at this. So 47% fixed costs. That’s low, lower than most ’cause it’s usually 50, 60%.

[01:48:58] Ramit: And notice that we cut your [01:49:00] groceries, so that needs to change. Next up, investments are at 22% quite aggressive, which is perfect for a couple that wants to retire early and is somewhat starting in their late thirties and forties. Great, I love it. Savings are at 13%. Good. Good. It’s, in my opinion, a little low, but it’s not so bad.

[01:49:19] Ramit: I don’t mind it. It’s fine. You’re gonna get where you need to go in like less than two years. That’s totally fine. Guilt free spending at 18%. Now there is a key to this. It only works if Lisa’s earning $3,000 a month.

[01:49:35] Liza: That’s what I asked for. I am scared of it now, but yes. I asked to require more of me, so I guess I’m in for it now.

[01:49:41] Ramit: Yeah, you just, you were making 4,000 until recently. Mm-hmm. So I know you can make 3000 and I actually think the win comes when you start to beat that number. I’m not gonna hold you to it today. Nobody’s gonna hold you down. You just gotta hit this number. But in my opinion, you’ve probably seen this with your kids, people don’t really respond to [01:50:00] lower expectations.

[01:50:02] Ramit: They actually respond to higher expectations. People as part of a unit want to have a role. Everybody wants a role, kids, adults, everybody. And so to have that role and to say, look, our success is dependent on you doing your part, me doing my part, and us revisiting it. Because our, our relationship is not just about money.

[01:50:23] Ramit: It’s about our kids, it’s about our family, it’s about love, it’s about all that. But we each have a role to play. This is a business, the business of running a household. People love it. They might resist at first, but we all want meaning in life. What I would like for you to do is tighten up these calculations.

[01:50:42] Ramit: Okay? Yeah. Because there are certain things in here that are not properly accounted for that you that are really meaningful. For example, when you hit your savings number, which will happen in like a couple of years, that is a thousand [01:51:00] dollars a month that you can then start investing guys. That’s a lot of extra money.

[01:51:07] Bradford: Mm-hmm.

[01:51:08] Ramit: So you can accelerate your investments, but it is important in my opinion, that you have the savings. Why? Because the path that you have taken until now is this, look at my hand. It’s going up and down. Kind of like a stock chart up and down.

[01:51:22] Bradford: Yeah.

[01:51:22] Ramit: We don’t want that anymore. You paid off your debt.

[01:51:24] Ramit: That up and down is behind you. Never again. The new chapter of your life is like this. Look, look at my finger. It’s like a slow, steady chart. It’s going up. We are not going up and down and up and down and up and down again. Okay? Sure. There might be setbacks. Lisa, you might lose a client for a couple of months.

[01:51:40] Ramit: Okay, fine. Uh, Bradford, you might take on an extra job or lose an extra job. Okay, fine. You might have some emergency. You have to fly back to Canada for fine. But in general, we are doing this. This is the kind of life we are. Engineering means no more lines of credit. We’re not using that anymore. We are building up savings.

[01:51:59] Ramit: The savings [01:52:00] is specifically meant for emergencies. What is an emergency? Buying a new tv. That’s not a emergency. Taking a trip to go to another part of Columbia on vacation, that’s not an emergency. Somebody gets sick and you have to fly back to Canada on the next available flight. That is an emergency.

[01:52:14] Bradford: They are.

[01:52:16] Ramit: It’s going to cost you a little bit. Yeah. That 30,000 bucks could be sitting in the market earning you more, and yet you’re gonna leave it in savings because one day you’re gonna have to tap it and you’re gonna be so thankful that you don’t have to go back into this to get there.

[01:52:31] Liza: Makes sense?

[01:52:32] Bradford: Yeah.

[01:52:33] Ramit: I wanna give Bradford credit, when he saw those retirement numbers, he said out loud, I’m so dejected, I can’t even keep up with this right now. And frankly, I think that’s very powerful to admit. It’s not easy right now. The fact is they don’t have a shared vision. Look at how they operate. Bradford hunches over working multiple jobs, just saying, I’ll handle it.

[01:52:55] Ramit: Lisa’s over here thinking this sucks. I’m moving to Canada without you. And as an [01:53:00] outside observer, what I see is they are very good at coming up with reasons for why things are the way they are. But those reasons are not getting them the outcome they want. Frankly, you don’t need to be right. You need results.

[01:53:14] Ramit: And sometimes that means letting go of explaining and looking backwards and instead reorienting yourself to look forward. What do I want? What do we want? Okay, now that we’ve gotten that out, how are we gonna get there? The good news is they took the first step, they ran the numbers together, they each said what they need from each other, and they really listened.

[01:53:36] Ramit: Now they have a plan. Lisa knows her target $3,000 a month. Bradford knows he doesn’t have to carry it all alone. And they both know exactly what they have to do to make moving back to Canada a real option if that’s what they decide. Now let’s check out their follow ups.

[01:53:54] Liza: Hi Ramit. So it’s been a few days since we last chatted and I wanted to send a little follow up.

[01:53:58] Liza: So I would say that during [01:54:00] the call, my biggest surprise was the fact that our net worth is not zero. Like I really thought we had nothing to our name. So seeing those numbers on paper was really good for me to feel like, okay, our efforts are working and we are building something over time. Um, I would say my biggest takeaway is divided in two things.

[01:54:17] Liza: Number one, um, on the relationship side, as much as I really appreciate the Bradfords willing to step up and support us and meet our needs, um, whenever I’m not contributing as much as he is, I didn’t realize how much that was invalidating, um, my efforts I guess. Um, and so that was a really key moment for us.

[01:54:37] Liza: Um, and I feel like now I understand that my efforts are necessary and they are valued and that gives me a little bit of motivation to continue to work hard and, and contribute. ’cause it does bring me joy to contribute to our finances as well. So, and then on the other side, on the more practical side, I would say that, um, I realized during our call that importance of having an emergency [01:55:00] fund of some sorts.

[01:55:01] Liza: Um, because I realized when we were chatting that perhaps. If the emergency is not external, but if it’s something that happens to Bradford or I, then we could really get into trouble by using our lines of credit as a way to, um, as an emergency fund, I guess. So, um, what we decided to do for that is because our portfolio has grown a lot in the last few years and we have a good percentage of, uh, growth, we decided to sell some of our stock and we’re gonna use that to kickstart our emergency fund.

[01:55:30] Liza: I don’t know if we’re gonna have like a full six months of expensive sitting in our account, but definitely five to 10 grand we’re gonna have just sitting there in case when you jump on. So that’s about it.

[01:55:41] Bradford: Uh, so my biggest surprise, well, I think was definitely that we’re not putting enough away for retirement to, to live as well as I’d like to.

[01:55:48] Bradford: No, it just kinda shocked me. And then I think that the, the thing that surprised me the most was actually just how my efficiency was not always the best answer. Uh, you know, [01:56:00] meaning that like. Whether it meant that my efficiency was actually, and the kind of like rescuing my wife, uh, when we needed that extra little bit of money was actually like detrimental to her.

[01:56:11] Bradford: Or whether it was that, my efficiency in trying to make sure that we didn’t bother with the savings in order to make sure that that money was invested and would get more return, even if it was loosely invested and easy to pull out. And then the, the last one, the thing that we’re gonna try is actually to do that savings, to actually try having it.

[01:56:29] Bradford: Um, and so to put away, you know, 20 grand and, and then just see if that, how that changes things, uh, because. Well, we haven’t done that for a very long time, so to try it and see if that helps.

[01:56:43] Ramit: 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 iwt.com/apply.

[01:56:53] Ramit: Or second, you can join my money coaching program instantly at iwt.com/money [01:57:00] Coaching. In that program, you get access to live virtual events, monthly group coaching calls, live q and as, and an amazing, huge community of other people like you. Check it out at iwt.com/money coaching.

Last Updated on April 13, 2026 by Katie

Debt can make life feel small. It can keep you up at night, steal your focus at work, and make every paycheck feel gone before it lands.

If you’re tired of living that way, this is a practical guide, not a guilt trip. Paying off debt takes clear priorities, a change in how you handle money, and steady action.

The good news is that small moves can speed things up fast, especially when you can see the full picture and start copying the habits of debt-free people.

Read on to get my top practical tips to help you pay off debt fast.

 

 

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10 Practical Tips to Help You Pay Off Debt Fast

You don’t need a perfect income to make progress.

You do need a plan, and these tips to help you pay off debt fast can also help you stop living paycheck to paycheck.

 

1. Get clear on why you want to be debt-free

A strong reason gives you something to hold onto when the process gets dull or hard.

“I want less stress” is fine, but “I want to stop fighting about money” or “I want to sleep through the night” is better.

Your spending tells the truth about your priorities. If debt payoff matters right now, your time and money need to show it.

Write your reason down and keep it where you’ll see it, like your wallet, fridge, or phone lock screen.

If your money keeps drifting, your goal probably isn’t clear enough yet.

 

2. Write down every debt so nothing stays hidden

Debt grows in the dark. Put every balance on one page, including the lender, total owed, interest rate, minimum payment, and due date.

This step feels scary for about ten minutes.

After that, it feels like control. When you can see the numbers in one place, the mess becomes a problem you can solve, not a fog that follows you around.

 

3. Build a zero-based budget that puts every dollar to work

A zero-based budget means your income minus your planned spending equals zero.

Bills, food, gas, and savings come first. Then any money left goes to debt.

The point is simple: there shouldn’t be mystery money at the end of the month. If $80 always disappears, give that $80 a job before the month starts.

That’s how a budget stops being a wish and starts becoming a tool.

 

4. Save a small emergency fund before you attack the balance

Start with at least $1,000, or a starter cushion that fits your household. That money stands between you and the next car repair, vet bill, or bad week at work.

Without a buffer, every surprise goes back on a card. That’s how people pay off debt for three months and then slide backwards in one weekend.

A separate savings account helps, and this guide on how to build an emergency fund can help you get there faster.

 

5. Pick a payoff method you will actually stick with

The debt snowball targets the smallest balance first.

The debt avalanche targets the highest-interest-rate debt first. One builds momentum faster, the other saves more money on paper.

Behaviour matters more than theory. Many people stay with the snowball longer because quick wins keep them going.

That’s a big deal when card rates are still painfully high in 2026, with many offers and balances sitting around 20% to 24%, according to current credit card APR data.

If you want help tracking either method, these free budgeting apps can make the process easier.

 

6. Pay more than the minimum whenever you can

Minimum payments keep debt alive. Even a small extra payment can cut months off your timeline.

Say you send an extra $50 a month to a card balance. That may not sound dramatic, but over time it can save real interest and move your debt-free date closer than you expect.

The same mindset behind frugal living tips that free up extra cash works here: small moves, done often, change the whole outcome.

 

7. Cut spending hard for a short season

This doesn’t have to be forever. Think of it like sprinting, not punishment without end.

For a few months, cut takeout, pause subscriptions, avoid impulse buys, and trim convenience spending.

If you need ideas, start with common things to stop buying and try a no-spend week or pantry challenge. Short-term sacrifice often beats long-term dragging.

 

8. Sell things you no longer need and throw the cash at debt

Clutter costs more than space. It can also carry stress, guilt, and monthly payments you no longer want.

Start small with clothes, electronics, and kitchen gadgets.

Then look bigger. If a car, boat, or other expensive toy pushes your payoff date far past 18 to 24 months, it may be time to sell.

Marketplace apps, local groups, and yard sales can turn dust into debt payments faster than most people think.

Further reading:

 

Cutting expenses helps, but income speed matters too. A few hundred extra dollars a month can change the math fast.

Look for overtime, weekend shifts, freelance work, delivery apps, tutoring, childcare, or simple neighbourhood jobs.

Even one temporary side job can create a snowball effect. If your debt payoff feels stuck, extra income is often the wrench that finally loosens the bolt.

Further reading:

 

10. Track your progress so you stay motivated

Debt payoff is a long road, and long roads need mile markers. Use a chart, a checklist, a colouring tracker, or a simple spreadsheet.

The key is seeing movement. A visual tracker turns “I’m trying” into “I paid off $620.”

You can also use a free snowball vs avalanche calculator to test how one change, like packing lunch or cutting a grocery bill, shifts your date.

For more everyday savings, these ways to save money on groceries can free up money quickly.

 

Should I Pay Off Debt or Invest First?

In most cases, high-interest debt comes first.

If your credit cards are charging 6% to 7% or far more, and many are much higher right now, paying them down usually gives you a better return than what you can count on from investing.

There is one common exception. If your employer offers a 401(k) match, try to capture that match if you can.

That’s part of your pay. After that, focus hard on debt if you can finish within about two years.

Low-interest debt changes the picture a bit. In that case, a split approach may work.

Still, only pause investing if that money is truly going to debt and not quietly slipping into daily spending.

If money stress keeps tripping you up, work on the basics of your mindset and habits first.

 

What Is the Best Debt Payoff Calculator to Use?

The best calculator is the one you’ll open every month.

Look for one that compares snowball and avalanche, lets you test extra payments, and shows your payoff date and total interest saved.

Good free options in 2026 include tools from Zogby, Calculatorica, Bankrate, and newer web tools that model both methods.

A simple option like Calculatorica’s debt payoff calculator works well if you want quick scenario testing without a lot of setup.

 

How Can You Pay Off Debt On a Low Income?

It may take longer, but it can still be done.

Start with housing, food, utilities, transportation, and minimum payments. Then cut what you can and raise what you can.

That might mean selling items, asking for lower rates, grabbing gig work, or using the snowball to grab quick wins.

Change often starts small. If nothing changes, nothing changes. A short burst of money-saving challenges can help reset your habits and free up cash.

 

Should I Consolidate My Debt?

Sometimes. Consolidation can help if it lowers your rate, cuts the number of payments, and you stop using the old credit lines.

If it only moves debt around while your habits stay the same, it usually backfires.

Fees, credit requirements, and new spending can leave you worse off.

 

Is it Worth it to File for Bankruptcy?

For most people, bankruptcy isn’t the first move.

It can damage your credit for years, and it doesn’t fix the spending habits or income gaps that caused the problem.

That said, there are cases where it may be the right legal step, especially when repayment is no longer realistic.

Before deciding, talk with a qualified nonprofit credit counsellor or bankruptcy attorney. Get advice based on your full situation, not panic.

 

Should I Take Out a Loan to Pay Off Debt?

Maybe, but only if the new loan lowers your rate, keeps fees reasonable, and you won’t run the cards back up. Otherwise, it’s often just a shell game.

Be especially careful with 401(k) loans and retirement withdrawals. Taxes, penalties, job loss risk, and lost compound growth can make that “quick fix” painfully expensive.

Borrowing more without changing behaviour is not real debt payoff.

 

Final Thoughts on My Tips to Help You Pay Off Debt Fast

Debt feels heavy because it steals tomorrow before tomorrow gets here.

The way out is rarely one giant move. It’s usually a stack of small, honest decisions made over and over.

Start with three actions today: list every debt, make a zero-based budget, and sell one item this week.

If you need a simple push, try one of these money-saving challenges to build momentum.

Using these tips to help you pay off debt fast is hard, but it’s temporary. And every payment buys back a little more peace, choice, and breathing room.

 

 

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Ramit Sethi of I Will Teach You To Be Rich talks to Gabriella, 36, and Chris, 40, a married couple from Pennsylvania with four kids and over a decade of financial struggle behind them. They both work multiple jobs. Chris travels all week as an electrician and picks up brewery shifts on weekends. Gabriella manages three income streams while running the household alone. And yet they have zero savings, $32,000 in credit card debt, and fixed costs sitting at 109% of their income.

But the numbers are only part of the story. What Ramit uncovers is a marriage where 95% of their relationship with money has never been spoken about out loud. Gabriella has been managing everything alone for years, silently building budgets Chris never looks at, covering purchases she didn’t agree to, and slowly losing hope. Chris has been avoiding the conversation entirely. And underneath all of it is a secret neither of them mentioned in the application: they’ve been here before. They filed for bankruptcy. And now, with four kids, they’re on the exact same trajectory again.

In this episode we uncover:

• The shocking CSP breakdown: 155% fixed costs on a $228K income
• The parent-child dynamic in their marriage and how it formed
• Why Mike admits he “coaxes” Tania into big purchases including a $23,000 tractor
• The moment Tania realises she’s been a money transcriptionist, not a money manager
• Why earning more money has never solved their problem and never will
• The role of Mike’s upbringing in his total avoidance of money conversations
• Ramit’s concept of “dreamer thinking” and how it’s kept them stuck for 20 years
• The follow-up: how things changed after the episode

Chapters:

(00:00:00) “I’ve never not worried about money in our marriage”
(00:07:10) Do you have trust issues around money?
(00:15:18) “What if you just stopped doing it all?”
(00:17:32) “95% of our relationship with money is in the shadows”
(00:22:17) Ramit reads the separation ultimatum from her application
(00:34:00) The power dynamic: who earns more, who leads?
(00:46:05) “So you all are broke”
(00:52:27) The bankruptcy reveal
(01:00:36) The Florida plan and why it won’t fix anything
(01:03:31) Gabriella’s new income changes everything
(01:05:57) “I’m too tired of being alone”
(01:58:09) Follow-ups

This episode is brought to you by:

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Facet | As of the date of this recording, Facet is waiving the enrollment fee for new annual members, and for my audience, Facet is offering $300 into your brokerage account if you invest and maintain $5,000 within your first 90 days. Head to facet.com/ramit to learn more about which membership option is best for you. Offer has been extended to 12/31/2026. #FacetAd

If you or your partner get stressed spending $150 on dinner, or are covering up spending, I’d like to help. Apply to be coached for free on this podcast at iwt.com/apply

Calling LA couples: Apply to be coached for free on this podcast at https://iwt.com/apply

 

Transcript:

[00:00:00] Ramit: Gabriela, why’d you come on here?

[00:00:01] Gabriella: To save our marriage, I need him to make more money. I need him to really have a fire under his ass about what his career plans are.

[00:00:09] Chris: I’m a traveling electrician

[00:00:11] Ramit: and you have a side job as well.

[00:00:13] Chris: I’ll pick up at a local brewery to make extra income.

[00:00:16] Gabriella: I begged him like, please do not pick up shifts in the weekends because you’re not home all week.

[00:00:21] Ramit: You spend more than you make every single month. Your debt is growing faster than you can pay it off. This is how a lot of people go homeless.

[00:00:29] Gabriella: That fear is always with me.

[00:00:31] Ramit: Have a plan for us to save, manage our money.

[00:00:34] Gabriella: I feel like you gaslight me. You tell me it’s gonna happen and tell me it’s gonna be done and it doesn’t happen.

[00:00:40] Ramit: This is not working for me. This whole dynamic.

[00:00:44] Gabriella: I’m too tired of being alone.

[00:00:48] Ramit: What if you and your spouse both worked multiple jobs, yet you still had zero savings and you were on the brink of financial ruin? That’s what today’s couple is facing. Chris is [00:01:00] 40 years old. Gabriela is 36. They’ve been married for 12 years and they have four children now.

[00:01:05] Ramit: They both work multiple jobs, yet they are drowning financially in their application. Gabriela wrote, we aren’t able to make big life decisions because he’s so focused on making quick money by working as a server on weekends on top of a high demand traveling job that I did not agree. He takes. He works 40 to 60 hours a week and is rarely home.

[00:01:30] Ramit: It drives me crazy because it keeps us in this cycle and he doesn’t see the long game. I’m looking at their conscious spending plan, which we call the csp. If you want my help with your own csp, you can join my money coaching program at iwt.com/money. Coaching assets, $796,000. Investments, 99,000 savings, zero debt, $493,000 net [00:02:00] worth.

[00:02:00] Ramit: 402,000. Fixed costs, 109%. Investments, zero savings, zero guilt-free spending negative 9%. What do you notice? I mean, they’re spending 109% of what they make every single month. That’s it. That’s the ball game. No amount of cutting back on laundry detergent can change this structural deficiency. Before we get into this, I wanna say something.

[00:02:31] Ramit: It takes a lot of courage to come on this show and share your financial struggles publicly. Chris and Gabrielle are putting themselves out there because they want help and they want to change. So when you leave comments about this couple, I want you to remember that my community roots for our guests, we don’t tear them down.

[00:02:48] Ramit: We want them to succeed. So please share your thoughts, your own experiences, even your advice, but do it with respect. That is what makes my community different. Now let’s get started with [00:03:00] Chris and Gabriela calling couples from la. I want to talk to you on the upcoming season of Money for Couples. I am excited to be recording episodes in person live in studio.

[00:03:13] Ramit: So if you are struggling with debt, retirement, supporting aging family members overspending, or talking to your partner about money, apply to the podcast right now. I’ve done some podcast episodes in person before. Honestly, I love them. So if you are LA based and you essentially want a free three hour coaching session with me, you can apply right now at iwt.com/apply.

[00:03:38] Ramit: Again to be on the podcast. It’s iwt.com/apply. Gabriela, you mentioned you’ve been stuck in a financial rut for the last 12 years and in your application you said, I want to not worry about money all the time. We have four children and every decision we [00:04:00] make is restricted because we are always short on funds.

[00:04:04] Ramit: My husband keeps doing his own way and doesn’t want to work as a team. Can you gimme a little bit more color when you say your husband does not seem to wanna work as a team?

[00:04:16] Gabriella: I try to share like all the budgets and. Give like some transparency into what’s going in, what’s going out, how much funds we have, and he is not actively working on those spreadsheets or using those, um, apps.

[00:04:35] Gabriella: It’s, I feel like I’m always the one that’s it, like doing the work when it comes to like, managing our finances. And then he’ll make purchases that I’m not aware of. They’ll make large purchases and that we didn’t discuss. And then I feel like I have to, can now kind kind of scramble and pick up like, how are we going to fix this or make up the difference.

[00:04:57] Gabriella: And in his mind, he’ll go and pick up [00:05:00] shifts at his second job, which, uh, and to make up for the whatever he spent money on.

[00:05:07] Chris: What’s one of those large purchases that you made that she referred to? Probably front, front and center of mind is gonna be a, uh, treadmill. Um, even though we have a treadmill, but this all came to a head.

[00:05:17] Chris: Um, we went on our made makeup anniversary getaway. We hadn’t been on a vacation in like 10 years, so

[00:05:24] Gabriella: that’s our honeymoon.

[00:05:26] Chris: Our Yeah, exactly. So that’s when I, I dropped the bomb on her and when I did it was, that was just kind of like the, you know, the, the last shoe to fall and she was, she was pretty upset and understandably so.

[00:05:37] Ramit: How much did the treadmill cost?

[00:05:39] Chris: Uh, just a little under two grand.

[00:05:42] Ramit: A little under. Can you just tell me the number? Um,

[00:05:46] Chris: all in it was like 1800.

[00:05:48] Ramit: Okay. Ga, Gabriela has been itching to talk You Go ahead Gabriela. What’s your reaction to this?

[00:05:54] Gabriella: Um, it was a shock for me because I, we had a, a wonderful time [00:06:00] at our, uh, anniversary, uh, trip.

[00:06:02] Gabriella: So we were talking about our plans when we get home from our, um, Bailey Strip and we’re sitting in the airport and he tells me, um, about this purchase that he made without telling me she, I was just devastated.

[00:06:19] Ramit: Gabriela. Do you think that there are trust issues between the two of you when it comes to money?

[00:06:25] Gabriella: Yes.

[00:06:25] Ramit: What kind?

[00:06:26] Gabriella: Not knowing what is being spent. Um, not knowing the debt that he is accumulating, because when we did the conscious spending plan together and we were looking at our debt that we had and our credit card balances, I did not know that he was using the credit cards again. So that was a surprise to me.

[00:06:47] Gabriella: I think those are like some of trust issues I have, but I think one of the other things of trust is every time I wanted to go out to eat with the kids mm-hmm. Or spend any money to do anything like activities, I [00:07:00] couldn’t because there was no money in the account. Um, and just all our bills going out. And so I just wondered like, what, why would we be so short on money?

[00:07:10] Gabriella: When

[00:07:11] Ramit: can I ask you why didn’t you ask him?

[00:07:13] Gabriella: I did a couple times and, um, it’s always like, I call it his, um, iPhone calculations. He’ll just like be like this, this is where the money went. And just, uh, and then gives me like, he pulled out his calculator and he’ll give me like these like ballpark estimates of where the money went.

[00:07:34] Gabriella: Um,

[00:07:35] Ramit: and what do you feel when you get those explanations?

[00:07:37] Gabriella: I feel like let down, because I’m a, I don’t feel like that’s a responsible way to manage money and why he can’t just use our budgeting or our shared platform like Rocket Money, which we have that account to really show me like that he is handling the finances.

[00:07:56] Gabriella: I did take a big step back when I got [00:08:00] laid off from my job in 2023 and because I was bringing in most of the income, I was kind of on top of everything doing our taxes, our budgeting investments, our retirement. And it was exhausting ’cause I just really wanted to be a mom and be present for the kids.

[00:08:18] Gabriella: And I’ve been working full time, um, for my previous employer for almost eight years. And I was like, I just want you to take a control of it. And so I stopped.

[00:08:29] Ramit: When you stepped back after being laid off from managing the family finances, did you have a conversation with Chris about who was gonna take control of the money?

[00:08:38] Gabriella: Yeah,

[00:08:39] Ramit: what happened?

[00:08:40] Gabriella: I basically said, you know, handle the taxes. You are my brother is our CPA, you can handle the retirement, uh, aspect of things. And then, um, we sat down and on Rocket Money, we went through our whole budgeting, we came up budget, and I was like, it’s, it’s an app. It’s on your, under your name [00:09:00] and everything.

[00:09:00] Gabriella: You can go and handle it. Um, and then nothing really panned out.

[00:09:05] Ramit: Chris, would you agree that you have not taken to the tool that Gabriela is using?

[00:09:13] Chris: I’d say that’s a fair, fair assessment.

[00:09:15] Ramit: Okay. And do you spend money that she doesn’t know about?

[00:09:18] Chris: I think for a long time that was the case. I think recently, um, I’ve been a little bit more conscientious, but

[00:09:24] Ramit: like recently, like how recently?

[00:09:25] Ramit: Like two weeks.

[00:09:26] Chris: I’d say for a good bit of this year I’ve been a little

[00:09:29] Ramit: Other than $2,000 treadmill.

[00:09:31] Chris: Correct.

[00:09:33] Gabriella: There’s other, other purchases that he makes though?

[00:09:36] Chris: No, I’m, I’m not disagreeing with you at all. I’m just saying, um, for the majority of the marriage that that was the case,

[00:09:43] Ramit: why not just say yes? Yes, I do spend money without her knowing.

[00:09:46] Ramit: Yeah. It’s gonna be very difficult for either of you to make changes if you’re not honest with me. And more importantly, honest with yourselves about what’s going on. Like, I find it frequently, it’s like, you know, it’s the equivalent of somebody hiring somebody to come clean their house. They clean [00:10:00] beforehand and they’re like, ah, we’re actually do a pretty good job.

[00:10:02] Ramit: It’s like, why are you doing that?

[00:10:03] Gabriella: Yes,

[00:10:04] Ramit: you’re actually deceiving yourself. Just be honest. I’m not gonna judge you. If you’re doing that, we’ll work with it, but we gotta be honest about the state of the situation.

[00:10:12] Chris: Okay.

[00:10:13] Ramit: Okay. So how often do you actually talk about money?

[00:10:17] Chris: I think once a month, maybe, if we’re lucky.

[00:10:20] Chris: Twice a month.

[00:10:20] Ramit: Okay. And gimme an example of the last time you talked about money, Chris, where you were not on the same page.

[00:10:27] Chris: I think when we put together the conscious spending plan, we were like, okay, we have an idea, you know, let’s get after it. Let’s, let’s be cognizant of what’s going on, and then we never check back in.

[00:10:38] Ramit: Okay. Is, is that a common sentiment where you’ll kind of make some sort of discussion or resolution but then not really make it happen?

[00:10:47] Chris: Yes, a hundred percent.

[00:10:48] Ramit: Okay. Hearing yeses from both of you. Okay. Alright. That’s interesting. Hey, why do you think that happens?

[00:10:53] Chris: It’s easier to assume someone else has control or someone else is in the driver’s seat, when really we’re just kind of [00:11:00] ignoring the obvious, where it’s just like we’re in a situation, we don’t know how to get ourselves out.

[00:11:04] Chris: So it’s easier to just kind of like, that’s the coping mechanism, you know, let’s, let’s just deal with it tomorrow and then tomorrow never comes.

[00:11:11] Ramit: Now I understand that Gabriela for a while took control of the finances, kind of paid things. Has there been a period, Chris, where you were in charge of the finances

[00:11:21] Chris: to the degree that she she has been in the past?

[00:11:24] Chris: No. And you know, I, I don’t have a clear cut answer as to why could I have assumed that role that, you know, where Gabby was taking care of, you know, making sure the taxes were filed, making sure, you know, the tuition’s paid for the kids, X, y, Z. Um, sure, I think I could have stepped up, but, um, you know, ultimately that, that never really, um, that never really happened.

[00:11:46] Ramit: Why

[00:11:47] Chris: for the longest I’ve kind of, um, inundated myself with work, whether, you know, this current role that I have where I travel a lot, uh, if I work on the weekends and then, you know, I end up coming home tired, then I don’t wanna [00:12:00] deal with the minutia of, you know, finances or sitting down or budgeting or, I think that’s probably one of the obvious answers that I just, you know, it seems like I don’t have the bandwidth or that’s something that we can kind of figure out later on.

[00:12:13] Chris: That’s probably the best answer I can give you. I think the second runner up would be, um, just because we are, we’ve been so used to, um, not being on the same page, so it’s just kind of like waiting for somebody to take the lead or waiting for somebody to have a clear cut, um, plan of attack, you know, for Gabby to, you know, maybe me thinking Gabby’s gonna say, Hey, you know, this is how we’re gonna handle this.

[00:12:36] Chris: You know, this is, this is our current financial. Um, position that we’re in. This is the plan that I’ve concocted.

[00:12:42] Ramit: As you hear yourself saying these two reasons, what occurs to you?

[00:12:45] Chris: I think I could have done better to maybe done something about it. You know, maybe not wait for Gabby, maybe been a little bit more responsible with the finances.

[00:12:54] Ramit: Gabriela, what do you think

[00:12:55] Gabriella: Chris is avoiding talking about finances. Um, [00:13:00] and I feel like it’s always an, there’s always an excuse, whether it’s because he is been traveling or he’s working on the weekends, so he never has a time to sit down. Um, and then he does promise. Okay, yes, we will sit down and talk about it, or we’ll, we’ll do something about it.

[00:13:18] Gabriella: But then when it comes to that moment, it’s, he’s too tired for the last, like, few years, I mean, maybe more than that. I had put in the schedule at the end of the month, we would meet and do a monthly like, um, finance committee, but, and has he but ever been able to like, be proactive in being like, Hey, I saw that you have the committee scheduled.

[00:13:43] Gabriella: I’m ready, I’m prepared. I’m coming with my, you know, eager to look at what we can do and how this, you know, coming month we can do better. It’s always me having to like, pull him in and be like, Hey, you know, and it’s just food’s super frustrating. It is exhausting that I feel like I’m the [00:14:00] only one taking initiative.

[00:14:01] Ramit: Can I ask you a question, Gabrielle? What if you just didn’t?

[00:14:04] Gabriella: That’s what I did and I just stopped doing it.

[00:14:07] Ramit: And what happened?

[00:14:08] Gabriella: Nothing was picked up on, like no initiation, no budget. We didn’t submit our taxes. We haven’t paid our taxes.

[00:14:16] Ramit: Mm-hmm.

[00:14:17] Gabriella: I have no idea what hole we’re in.

[00:14:20] Ramit: Okay. So you stopped driving the family finances in terms of setting up meetings for taxes.

[00:14:28] Ramit: What else did you stop doing?

[00:14:29] Gabriella: The budget. Rocket money asking for us to meet monthly. Having these conversations, I’ve been avoiding looking at our bank account. Sometimes I just don’t even bother tracking expenses.

[00:14:43] Ramit: And did you tell him you were gonna stop doing this or did you just stop?

[00:14:46] Gabriella: Yeah, I told him, I said, I don’t have time to do this because I’ve also started my own business.

[00:14:52] Chris: And what was his response?

[00:14:54] Gabriella: He said he would do it.

[00:14:55] Chris: Did he?

[00:14:56] Gabriella: No.

[00:14:56] Ramit: Chris, what did he say?

[00:14:57] Chris: Uh, I don’t think that’s entirely true. I mean, [00:15:00] I will agree for the most part, but for example, in terms of the taxes, I found somebody, a local CPA, we didn’t feel comfortable moving forward. So we just walked away. It didn’t get filed.

[00:15:10] Chris: We missed the date. Um, we then turned to, you know, the accountant that we typically use, um, you know, that kind of got delayed, delayed, delayed up until like, I guess it’s

[00:15:20] Ramit: not acceptable,

[00:15:21] Chris: right?

[00:15:22] Ramit: I mean, if somebody owns a number or they own a decision, life is gonna throw curve balls your way. So what, it’s that person’s job to drive it to a close and make sure it gets done.

[00:15:35] Ramit: Just saying like, oh, I didn’t know this, or that person didn’t do it the right way. Okay. That’s life. That’s what happens. The person who owns it has to see it to completion. What’s your take on that, Chris?

[00:15:46] Chris: I’d say I probably dropped the ball on that. You know, I, I didn’t adjust, I didn’t pivot. Um, in terms of, you know, if, if that person didn’t get it done, I should have been as, um, eager to find someone else that could get it done.

[00:15:59] Ramit: Have you [00:16:00] guys had this conversation before Chris where you said, Hey, I dropped the ball out. I take responsibility for that?

[00:16:04] Chris: I don’t think I told her to her face or I, I didn’t, I don’t think I kind of owned up to it the way I’m doing now.

[00:16:11] Ramit: Have you owned up to it to yourself? ’cause I don’t think you did as of 60 seconds ago.

[00:16:16] Ramit: Probably not. How much of your relationship with money do you feel is in the shadows? In the shadows means somebody might be thinking one thing, but the other person is thinking something different. You never really talked about it. Maybe one person’s never even thought about it themselves.

[00:16:32] Chris: I would say, if not all of it, like 95% of it in the shadows.

[00:16:38] Chris: Okay. Gabriela?

[00:16:40] Gabriella: Yeah, I was gonna say 90% of it in the shadows. Mm-hmm.

[00:16:45] Ramit: When I first looked at Chris and Gabriela’s situation, I thought it was gonna be pretty straightforward. One person ignores the money, the other person manages everything and they’re exhausted. Classic, dynamic, but it’s not that simple.

[00:16:57] Ramit: Chris just said that [00:17:00] 95% of their relationship with money is quote in the shadows. Then Gabriela agreed. Think about what that means. They’ve been married for 12 years, four kids, and almost everything about their money, where it goes, how much they have, what they owe exists in the dark. It’s been 15 minutes.

[00:17:19] Ramit: I’ve been asking Chris basic questions and I’m not getting straight answers. Where did the money go? What did you spend it on? It’s just deflections and vague responses. Meanwhile, Gabriela is building spreadsheets and budgets, but Chris won’t look at them. So she’s trying to manage their money while being completely in the dark about what he’s actually spending.

[00:17:40] Ramit: Yeah, they’re working hard, but they’re actually working in opposite directions in the dark. No visibility into what the other person is doing. My job is to help them shine a light on what they are both doing, which I’m gonna get to right after this. Some of the best people I know with [00:18:00] money can naturally swing between.

[00:18:03] Ramit: What if things go right and what if things go wrong? Like if you only focus on things going right, you become delusional. You’re a dreamer. If you focus on all the things that can go wrong, then you’re just, uh, kind of a downer. Maybe you’re a lawyer. Imagine you got hit by a bus tomorrow. Would your family be okay?

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[00:20:27] Ramit: That’s join delete me.com/ramit code ramit for 20% off. Y’all want me to just make it easy for you? You know those really bright lights, people buy those flashlights that are like 10 lumen or whatever, it just shines a light on the whole neighborhood. Can we just do a little exercise for 60 seconds? What if I pulled out one of those flashlights and just shined the light on money in your relationship?

[00:20:52] Ramit: What would each of you say if there was a light shined on all the money issues in your relationship, what would you say? [00:21:00] What would you want your partner to hear? If you could just put everything out on the table,

[00:21:04] Gabriella: I really would love to just be. On the same page. We have the same ideas, we have the same goals.

[00:21:11] Gabriella: We, we have an amazing marriage and I don’t see why we can’t have amazing control in our finances. I don’t feel like all the work that we’ve done together is where we should be at in our lives.

[00:21:27] Chris: Chris, what would you wanna say? Yeah, I mean, if there was a light shone and I had to put all the chips on the table, I think I can do better.

[00:21:36] Chris: I can do better in terms of being a little bit more mature in terms of how I handle, um, the money that we both share. What specifically could you be better about instead of having these emo emotional purchases? I think it’s a matter of thinking long term, and I think I’ve suffered, or we’ve, she’s suffered probably more than I have in terms of thinking long term of, [00:22:00] well, you know, this money could be going to our retirement, or this money could be going to, you know, a 5, 2, 9 for the kids.

[00:22:06] Chris: Or this money could be something, you know, a trip that we can all enjoy. I think I’ve been a little bit selfish in terms of some of the purchases I’ve made without her, uh, knowledge or without her consent.

[00:22:17] Ramit: Gabriela, your response was a bit defensive and it was like, I would love for us to be on the same page.

[00:22:23] Ramit: We have a great marriage, but I’d love for us to be, it’s very like nice.

[00:22:26] Gabriella: Yeah.

[00:22:27] Ramit: Can I read from your application.

[00:22:30] Gabriella: For sure. I was rarely desperate in that application.

[00:22:34] Ramit: Has your financial situation dramatically improved since your application?

[00:22:38] Gabriella: Um, yes.

[00:22:39] Ramit: Tell me.

[00:22:40] Gabriella: I got a job with my brother for his, with his company and that’s a full-time position, um, with a decent salary.

[00:22:49] Ramit: So let’s update the CSP when we get to the numbers.

[00:22:51] Gabriella: Okay. Okay.

[00:22:52] Ramit: We’ll do that.

[00:22:53] Gabriella: Yeah.

[00:22:53] Ramit: You wrote in your application, our eldest daughter is starting middle school and it makes me sad that we don’t have a college fund or [00:23:00] savings to help pay for whatever she wants to pursue after high school. If things don’t change before she enters high school in three years, I would want to separate.

[00:23:10] Ramit: Have you guys talked about this before?

[00:23:12] Gabriella: No.

[00:23:13] Ramit: Is it true?

[00:23:15] Gabriella: I wanted to, I was in Florida with my family and the kids and I was really frustrated about our financial situation and I just felt like if he didn’t get like a wake up call about what to do with our finances, that would be an indicator of him like realizing what’s at stake.

[00:23:38] Ramit: Chris, what’s your

[00:23:39] Chris: take on this? Um, yeah, I mean, I’m looking forward to this being that wake up call that we can finally work towards something and might take full accountability in my habits and correcting my behavior. Um, so she doesn’t have to feel that way anymore.

[00:23:55] Ramit: Okay. That’s cool. I appreciate that, Gabriela.

[00:23:58] Ramit: I’m. Um, [00:24:00] struck by your language, the contrast between, I would love for us to get on the same page. That’s like me telling my wife, I would love for us to eat a burrito on Saturday versus what’s in the application.

[00:24:14] Gabriella: Yeah.

[00:24:14] Ramit: That’s as serious as it gets.

[00:24:16] Gabriella: Yeah.

[00:24:18] Ramit: What I would expect to hear is something like, this is what I need in order for us to be a successful partnership.

[00:24:24] Ramit: This is what I expect. Have you ever said something like that before?

[00:24:28] Gabriella: I’ve definitely said I need this from him. I needed him to lead our family. I did not want to be the working time while our children were young.

[00:24:40] Chris: Mm-hmm.

[00:24:40] Gabriella: I needed him to be in control of our finances. Um, and I would be absolutely the one to help and to do and to do it together, but I wanted and needed him to lead.

[00:24:53] Gabriella: So I expressed that. But I don’t know if I’ve done a good job of reiterating that my [00:25:00] whole dream was to be a mom and, um, be home with the kids. I never expected to have to work this much during these prime years.

[00:25:11] Ramit: When, when you had these discussions about you primarily staying home with children, Chris, did you agree?

[00:25:19] Chris: I think in good faith, um, I said yes. You know, I, I, I would do my damnedest to make that happen. But after career change, after pandemic, after getting laid off, after a move from a different state, you know, all these things that kind of came along the way. I’m making what I’m making and whether or not that is sufficient to provide, to be, you know, pay for private school tuition, times for to pay for the house, pay for X, Y, ZI can only do so much with, with where I’m, where, where I am and what I’m making.

[00:25:53] Ramit: Do you ever tell her that?

[00:25:54] Chris: Uh, I’m, I’m sure I’ve told her a couple times, but it’s just kind of like a moot point because it’s like, well, [00:26:00] I understand where your heart is at and I want to give that to you. Um, but I just can’t

[00:26:05] Ramit: y’all ever look at any numbers when you were having these discussions?

[00:26:08] Chris: Probably right around the time we did our conscious spending plan.

[00:26:11] Chris: You know, just kinda like, this is what

[00:26:12] Ramit: we’re, wait a minute, that’s 10 years into your marriage.

[00:26:15] Chris: Yeah.

[00:26:16] Ramit: Four kids later in 10 years. Hey, maybe we should look at a couple of numbers.

[00:26:20] Chris: Yeah.

[00:26:21] Ramit: It’s no surprise that you’re not on the same page. There is no page.

[00:26:24] Chris: Yeah.

[00:26:25] Ramit: It’s just whatever’s in your head, whatever you feel, whatever he or she feels, everybody’s operating on their own independent view on money.

[00:26:33] Ramit: And the fact that, like, Gabriela, you’re like, I don’t wanna work full time. I want to stay at home. But no one has ever actually calculated how much money you need to be able to do that.

[00:26:44] Gabriella: No, I mean, I have definitely calculated how much we need.

[00:26:49] Ramit: Okay. And then what happened?

[00:26:51] Gabriella: He’ll just go default in saying like, he cannot make that much.

[00:26:55] Gabriella: And I, and or sometimes he’ll say, it’s not enough. Like, it’s not enough for [00:27:00] you. And I think he ha has the potential to make so much more. And, um, I think where he’s at right now, it’s a, it’s a shame. I feel like he could make a lot more than what he does.

[00:27:11] Ramit: Let me understand quickly what each of you does for a living.

[00:27:14] Ramit: Chris, what do you do?

[00:27:16] Chris: I’m a traveling electrician.

[00:27:17] Ramit: Cool. And you have a side job as well?

[00:27:19] Chris: Yeah, if I’m, if I’m home or if, you know, time allows it, I’ll pick up at a local brewery and, you know, work there for a couple hours, um, to make extra income.

[00:27:29] Ramit: How many hours a week do you work at the brewery

[00:27:31] Chris: or a week maximum?

[00:27:32] Chris: I’d say about 10 hours. Additionally.

[00:27:34] Ramit: Okay. Gabrielle, why are you shaking your head?

[00:27:36] Gabriella: You, that’s just recent, like the past couple weeks after I got this job and I begged him like, please do not pick up shifts in the weekends because you’re not home all week. So I need him home during the weekends. But he was typically working a double shift on both Saturday and Sunday.

[00:27:53] Gabriella: So he would be gone from 10 and won’t be back until 10 30.

[00:27:57] Ramit: So that’s

[00:27:58] Chris: 24 [00:28:00] hours on the weekend versus 10. What? Mm-hmm. He just said Chris.

[00:28:06] Gabriella: Yeah,

[00:28:07] Chris: I think initially when I started working there I was probably working heavier hours, but I think as of late I’ve kind of toned down my hours since school started.

[00:28:16] Ramit: This is not working for me. This whole dynamic. And I suspect this is what’s been going on for a long time, Chris. I feel like I’m trying to pull teeth to get the truth out of you. I just feel like you’re not being honest with me. I’m looking for what got you into this situation where your wife applied and said, if things don’t change, we’re gonna separate.

[00:28:32] Ramit: That’s what I’m looking for. I’m not looking for you to present yourself in the best possible light that doesn’t actually do anything for anyone. If that’s what you want, then you two should wrap up this call and go back to the way you were doing things.

[00:28:42] Chris: Yeah.

[00:28:43] Ramit: What are we doing here right now?

[00:28:44] Chris: I don’t know, maybe ju just defaulting to how it’s been maybe a defense mechanism.

[00:28:48] Chris: I don’t know.

[00:28:49] Ramit: Yes. Why?

[00:28:51] Chris: Because for the first time I’m hearing myself kind of hear myself talk and it’s, I’m, maybe I’m not liking the truth.

[00:28:57] Ramit: I don’t like the truth.

[00:28:59] Chris: Yeah. [00:29:00]

[00:29:00] Ramit: I’m about this close to ending our conversation right now and I don’t want to do that. You all went through a lot to get to talk to me. I want to help you.

[00:29:07] Chris: Yeah.

[00:29:07] Ramit: I can only imagine how frustrated Gabriela is if she ask these questions and gets the kind of answers you’re giving me.

[00:29:13] Chris: Yeah.

[00:29:15] Ramit: Can we recenter here? I wanna stay. Yeah. I want to talk to you. Sure. Why did each of you come on this call?

[00:29:20] Chris: To have a plan for us to save, manage our money, um, get on a page, work with each other and be fully transparent.

[00:29:28] Ramit: Okay. I appreciate that. Gabriella, why’d you come on here

[00:29:32] Gabriella: to save our marriage? Because I was really getting at a frustrated point. I want us to be able to en enjoy our children, our family, each other, and not let money be the thing that. Breaks us

[00:29:49] Ramit: two different answers. Chris, you’ve heard of a lot of guys who one day they get divorced and they’re like, I never saw this coming.

[00:29:56] Ramit: Why didn’t you talk to me? You’ve heard that stuff, right?

[00:29:58] Chris: Yeah.

[00:29:58] Ramit: Every guy’s heard that stuff. Sure. [00:30:00] This is it. She’s screaming it, even though she’s not physically screaming, she’s screaming it to you. Listen, tell the truth even if it doesn’t make you look great, because there’s no way out of this unless you go through the fire and take responsibility by being honest right now, you haven’t done that.

[00:30:19] Chris: Okay.

[00:30:20] Ramit: Kind of getting frustrated with Chris, when I ask a straightforward question and I get a response that circles and circles without ever landing, we can’t make progress. If you can’t talk plainly about what’s happening, then you don’t understand it, and if you don’t understand it, you can’t change it.

[00:30:41] Ramit: Gabriela said, she often asks a simple question and walks away more confused than before. When that happens repeatedly, year after year, it takes a real toll. You start to doubt your own perspective. Most people just stop asking questions because experience has taught them it’s not gonna lead [00:31:00] anywhere, and I can feel that dynamic playing out between them after years of indirect answers and unresolved conversations.

[00:31:09] Ramit: Gabrielle is not even sure what to say. She hasn’t developed the tools to speak clearly and to advocate for herself, and as long as that dynamic stays in place with Gabriela and Chris, both of them are gonna remain stuck no matter how many hours they work. My wish, one of my core wishes on this podcast for you is that you learn how to communicate directly, how to answer questions candidly, and most of all, how to simply state what you want,

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[00:34:33] Ramit: All opinions are my own and not a guarantee of a similar outcome. Gabriela, what is your new full-time job?

[00:34:38] Gabriella: Director of Business Development and Operations.

[00:34:41] Ramit: And what kind of firm is this?

[00:34:42] Gabriella: It’s an accounting firm.

[00:34:44] Ramit: Cool. Alright. When you got this new job, did it substantially raise your income?

[00:34:51] Gabriella: Yes.

[00:34:51] Ramit: What were you making before and what are you making now?

[00:34:53] Ramit: Gross income.

[00:34:54] Gabriella: So my gross income was around. Like monthly was [00:35:00] around 2000.

[00:35:01] Ramit: Mm-hmm. And now

[00:35:02] Gabriella: I haven’t got paid yet, but the salary is 70,000 a year.

[00:35:07] Ramit: Okay. Yeah. That’s a big jump.

[00:35:09] Gabriella: Yeah.

[00:35:09] Ramit: Wow. Okay, great. How would you each describe your relationship with money? Terrible, non-existent. Okay. And Gabriela,

[00:35:18] Gabriella: like, I’ll avoid it when it’s not going my way, but if I was, you know, con in control of it, I feel ambitious with it.

[00:35:28] Ramit: Wait, how can you be ambitious and avoidant with money?

[00:35:31] Gabriella: I guess when I was working full time, my salary was a six figure salary when I left. Um, so I had money, I had my 401k, I had investment, and then I got my payout. So I felt like I wanted to be more in control, um, because we, we had enough income. Um, and so I’m, I was doing investments and those things, but when we don’t have as much money and it seems we’re [00:36:00] stretched thin, then I avoid it.

[00:36:02] Ramit: You have an interesting interplay of the word I versus we, so it’s like when I hear success, you’re talking about, I, when I hear struggle with money, you’re talking about we, what do you make of that?

[00:36:16] Gabriella: I do see myself as successful and maybe I, I feel like maybe that’s been intimidating in the past.

[00:36:25] Ramit: Do you know if that’s true or not?

[00:36:26] Ramit: Ask him.

[00:36:27] Gabriella: Chris, does that make you feel intimidated?

[00:36:29] Ramit: Maybe subconsciously, yeah. First time y’all ever had this conversation

[00:36:33] Chris: in front of a third party. Yeah.

[00:36:35] Gabriella: Yeah.

[00:36:35] Ramit: Oh, that’s okay. Well most people don’t talk about anything in front of a third party, so how about between the two of you?

[00:36:41] Gabriella: Yeah, I don’t really think we’ve ever talked about how he must have felt when I was, you know, working full time in the past and making what I was making.

[00:36:50] Gabriella: And then I was always very concerned. I did vocalize it. I was like, I don’t want you to feel like I am overpowering or not [00:37:00] allowing him to be able to take the lead. I want our children to see him as successful and, um, I don’t want him to feel less than just because I was making more money when I make the money and my success, I always say that it’s our success, it’s our money.

[00:37:19] Gabriella: I’ve never put out any of that money into a separate account and nine times outta 10, I never spent that money on myself. It always was for the family or paying off debts.

[00:37:30] Ramit: Chris, what do you make of, this seems like a pretty, pretty big topic. Gender and relationships and power and identity.

[00:37:39] Chris: For almost a decade she was the primary breadwinner.

[00:37:44] Chris: Um, and maybe in the back of my mind that was kind of one of the reasons where I wouldn’t behave the way that I was with money. You know, kind of the. Make myself feel better as opposed to trying to hit it, hit it head on, and have that conversation with her and say, Hey, like, [00:38:00] I understand your wants, your needs, your desires to be a stay-at-home mom, but you know, with your trajectory and with my trajectory, you know, I, I don’t know, we can switch roles.

[00:38:10] Chris: Maybe that wasn’t a reality. I was willing, willing to accept or at least own up to.

[00:38:15] Ramit: I didn’t even hear you accept it there.

[00:38:16] Chris: Now I’m comfortable. I can, I can, I can own up and then say, Hey look, this is where I’m at. What we need to do, I feel is if we can get ahold of our finances and change my behavior, maybe I can give you that and work with what we have as opposed to just

[00:38:30] Ramit: you think that you, your income alone can provide for her to stay home with four children.

[00:38:37] Ramit: Is that what you’re telling me?

[00:38:38] Chris: She’s also a, a burst of doula where she can make her own schedule. So if with that income and with what I have, um, and if we make it to Florida with the proceeds of the house and have a fairly small mortgage, I feel if we work together, I, I can give her that where she doesn’t have to work full time.

[00:38:56] Ramit: Okay. I’ll tell you what, we’re gonna look at the numbers and we’ll see [00:39:00] how we can map it out. Now you mentioned moving to Florida. Uh, tell me a little bit about what this plan is. I believe this is in the next 12 months. Mm-hmm. Can you describe The plan

[00:39:12] Gabriella: is to list the house in March, um, and then hope to finish the kids out of school and move by June.

[00:39:20] Ramit: So you’re gonna sell the house, you’re gonna move to Florida, and then what are you gonna do about housing in Florida?

[00:39:24] Gabriella: We are gonna stay with family until we find a home.

[00:39:27] Ramit: Mm-hmm. Buy or rent,

[00:39:29] Gabriella: we want to purchase a, a next home.

[00:39:31] Ramit: Okay, got it. And how committed are you to this plan, like on a scale of one to 10?

[00:39:36] Gabriella: 10,

[00:39:37] Ramit: 11. Wow. So it’s, it’s going to happen.

[00:39:40] Chris: Yes. Yeah.

[00:39:41] Ramit: Okay, good. That’s very helpful to know. And where are you with this plan to move to Florida?

[00:39:47] Chris: Gabby’s, you know, working with her brother, so he works out of St. Pete. Um, so she’s already secured employment. If we need to get a VOE, um, in order to secure a mortgage, we have that kind of wind up.

[00:39:58] Ramit: Okay.

[00:39:59] Chris: Um, my [00:40:00] job, as long as I’m close to an airport, I have a job. So. Great. That kind of ticks

[00:40:05] Ramit: two boxes. Okay. Right there. Have you calculated your numbers for how much you will make and how much you’ll be able to buy when you go to Florida? I

[00:40:13] Gabriella: have, um, but I haven’t incorporated the new salary.

[00:40:17] Ramit: Alright, cool.

[00:40:18] Ramit: We’re gonna take a look at your conscious spending plan. Gabriela, can you read off the word in bold and the number in full next to it? For this entire box please?

[00:40:26] Gabriella: Assets 796,000 in $836. Investments $99,227 savings, zero debt 493,953

[00:40:43] Ramit: Total net worth

[00:40:44] Gabriella: 402,000 And, uh, $110.

[00:40:48] Ramit: Alright. What do you both think of those numbers?

[00:40:50] Gabriella: It’s great. I just don’t like that we have such a no savings.

[00:40:55] Ramit: Mm-hmm. Okay. Chris, what do you think about the numbers?

[00:40:59] Chris: The money that [00:41:00] we do owe? I, it’d be nice if it was a little, a little bit smaller than the number on the screen there. I feel like if that money can be applied the right way into the next house, I, I, I see a glimmer of hope.

[00:41:13] Chris: Light, light at the end of the tunnel. When I look at that, what do these numbers mean to you?

[00:41:17] Gabriella: Um, I see like a mountain to climb to pay off the debt.

[00:41:22] Chris: Okay.

[00:41:23] Gabriella: And I have a little fear if something bad were to happen or we don’t have an emergency fund. Okay. So it makes me nervous.

[00:41:31] Chris: I look at what Gabriela was able to do with her previous employer and she was able to squirrel away, you know, almost a hundred thousand dollars in her 401k.

[00:41:41] Chris: And I look at the, our net worth and I, again, I see promise and I feel like if there’s a plan in place moving forward, then I think we’ll be okay.

[00:41:50] Ramit: You know what I hear when the two of you describe what these numbers mean to you? A lot of words, but there’s no numerical rigor. There were almost no [00:42:00] numbers when you talked about it.

[00:42:02] Ramit: It was like a lot of just arbitrary feelings. Mm-hmm.

[00:42:05] Gabriella: Yeah.

[00:42:05] Ramit: I’m fixated on this. I can’t believe that number’s so low. I don’t wanna dwell in the past, but there’s hope at the end of the tunnel. It’s like we’re describing prose. Are we talking about Shakespeare right now or are we talking about five numbers?

[00:42:17] Gabriella: Yeah.

[00:42:18] Ramit: What do you make of that?

[00:42:19] Gabriella: I guess looking at it is like 60% of it is debt to our assets. And that’s scary.

[00:42:26] Ramit: That was a very good analysis. Chris, what do you make of these numbers? I’ll put ’em back up on screen for you.

[00:42:32] Chris: Our debt is higher than our net worth and it didn’t need to be that way.

[00:42:36] Ramit: Okay. That’s a good assessment.

[00:42:39] Ramit: A anybody asking questions like, we’re 40 years old, roughly 40. Do we have enough for retirement?

[00:42:46] Gabriella: Nobody’s asking those questions. And I’ve always been like, we need to start thinking about our retirement. Or why am I the only one thinking about our retirement?

[00:42:55] Ramit: Gabrielle, I I agree. You have, until now been the only one thinking.

[00:42:58] Ramit: But my question is [00:43:00] are, are you actually thinking about it? ’cause how come you didn’t bring up anything about retirement?

[00:43:04] Gabriella: I think I look at that number and be like, that’s okay for someone or for us at our age.

[00:43:10] Ramit: How do you know?

[00:43:11] Gabriella: Um, just based off of some of like, uh, what I’ve read, um, from, from your newsletters and your, your book.

[00:43:21] Ramit: My newsletter said $99,000 at age 40 is okay.

[00:43:27] Gabriella: No, didn’t, it didn’t say. Okay. But compared to the other people that you worked with, why? Um,

[00:43:35] Ramit: why would I compare myself to somebody else? There’s no numerical rigor here.

[00:43:40] Gabriella: Yeah.

[00:43:41] Ramit: The thing about operating purely on feelings is that. It presents an argument that is unassailable, that nobody can argue with the way you feel, even though you might be completely wrong, be like, I feel this way.

[00:43:53] Ramit: That is why we have to do two things to live a rich life. Number one, we gotta know our numbers. Right [00:44:00] Now I can tell that the two of you don’t even know your numbers. You don’t know what these numbers mean at all. They’re just numbers. And what you’re doing is you’re making up meaning. It’s like I went into the Museum of Modern Art and I don’t know what the hell I’m looking at.

[00:44:11] Ramit: And I’m like, this represents a fresh perspective on uh uh, cleanliness. That’s why they only have three dots. And this like art docent, it’s like, shut the fuck up. What are you talking about? You never studied any of this. Okay, now it’s different. I don’t need to be an art expert, but you actually need to be really good at your household finances.

[00:44:29] Ramit: You don’t know your numbers. Second, you gotta master your money. Psychology. Yeah. To actually be able to understand why you behave the way you do with your money, why you feel the way you do. And I suspect that’s not happening. We’re gonna get to both of those things today. But right now, I just wanna point out to you that it’s no surprise that you have not been on the same page with money.

[00:44:49] Ramit: ’cause you’re not actually talking about numbers at all. It’s just feelings which build up to resentment. And ultimately you’re talking about something completely abstracted from these numbers. Okay, let’s keep going. This [00:45:00] time I’m gonna ask Chris to read off the combined gross monthly income, Chris Gross Monthly Income.

[00:45:08] Ramit: $8,277. Great. That means that this is all prior to Gabriela getting her new job. But let’s just stick with this for a second. That means that the two of you made a household income of $99,327. Who knew that

[00:45:24] Chris: prior to the CSP? Not me.

[00:45:26] Ramit: Gabriela knew it. Chris did not. Okay. Not bad. 50% right on target with my statistic.

[00:45:31] Ramit: Alright. And Chris, you didn’t know, what, did you think you made

[00:45:34] Chris: 7,700 prior to doing the CSP

[00:45:38] Ramit: 7,700 a month? Correct. Which is 92,400, not far off. 7,000 bucks off. Alright. Alright. That’s fine.

[00:45:48] Chris: I, I think that just goes back to the fact that you brought up that we weren’t talking numbers and I don’t think we ever speak, sit down and speak numbers and as straightforward as possible.

[00:45:59] Chris: At least I didn’t. [00:46:00]

[00:46:00] Ramit: Why don’t you do that?

[00:46:01] Chris: Uh, I think just avoiding,

[00:46:02] Ramit: yeah. Why? ‘

[00:46:04] Chris: cause then you have to kind of take accountability responsibility for your actions.

[00:46:09] Ramit: Mm-hmm. Yeah. And how does it feel when you have to do that?

[00:46:12] Chris: It kind of sucks if you don’t have a good enough ex excuse or response.

[00:46:15] Ramit: It’s a very interesting comment.

[00:46:18] Ramit: In my mind, taking responsibility is not about having excuses. Right. Actually, the excuse just doesn’t matter.

[00:46:25] Chris: Yeah.

[00:46:25] Ramit: Somebody shows up a week in a row late while the train was late today and, and my hairdryer blew out yesterday and I’m just like, I don’t care. It doesn’t matter to me. You show up on time or you don’t have a job.

[00:46:37] Ramit: It’s simple as that.

[00:46:38] Gabriella: Yeah, no, that’s, that’s true. I agree. I actually just said this to my brother that the way I treat my work is completely different than my, my personal life or her life.

[00:46:52] Ramit: Why?

[00:46:53] Gabriella: I feel like maybe I feel in, in some type of control, there’s like a framework, whereas in [00:47:00] my personal life, it’s just chaos.

[00:47:03] Ramit: Very insightful,

[00:47:05] Gabriella: and so I shut down when there’s chaos,

[00:47:08] Ramit: you know, at work it’s, it’s, it’s a little bit more straightforward. First of all, there’s levels of hierarchy. It’s very clear who’s in charge. There’s accountability and accountability’s not about excuses. It’s about like, if this person’s had to do it, they’re fired.

[00:47:21] Ramit: They’re gonna be fired. Yeah. That’s not usually the same thing that happens in a relationship. Right,

[00:47:28] Chris: right.

[00:47:28] Ramit: I mean, there is that possibility if things go very, very wrong, but that’s not usually the first, second, third thing that gets discussed. What I see is that some people, when there’s no strict rules, they fall apart.

[00:47:43] Ramit: They need those strict rules. Chris, would you say that’s true for you? Yes. And Gabriela, what about for you? I’m not so sure. What’s your answer?

[00:47:52] Gabriella: Yes,

[00:47:53] Ramit: both.

[00:47:54] Gabriella: I, I thrive in structure.

[00:47:56] Ramit: Wow, okay. That’s interesting. And [00:48:00] the two of you have no structure when it comes to your money.

[00:48:02] Gabriella: Right.

[00:48:03] Ramit: Well, no surprise, it’s not particularly going well.

[00:48:06] Ramit: Let’s keep going down the numbers. Alright, this is interesting. We’re learning something here. The rest of the CSP at $99,000 a year, your fixed costs are Gabriela. What’s that number?

[00:48:17] Gabriella: 109%.

[00:48:18] Ramit: Okay, so 109%. So y’all are broke?

[00:48:23] Gabriella: Mm-hmm.

[00:48:24] Ramit: You’re spending more than you make every single month?

[00:48:26] Gabriella: Yep.

[00:48:27] Ramit: Where’s the money coming from?

[00:48:28] Ramit: You put it on credit cards?

[00:48:29] Gabriella: Yes.

[00:48:30] Ramit: Oh, we’re in trouble.

[00:48:32] Gabriella: Yeah.

[00:48:32] Ramit: Big trouble. It’s sort of irrelevant to go down the rest of the CSP because we’re gonna see investments are at zero. Savings are at zero. Guilt free spending is at negative 9%. So the rest of the CSP is is basically like inaccurate. You basically do whatever you want and then try to figure it out later.

[00:48:49] Ramit: You have debt of $493,000. Can you explain the debt?

[00:48:53] Gabriella: That is our, our mortgage. And then I have, uh, one student loan that’s been outstanding.

[00:48:59] Ramit: Hold on. [00:49:00] How much is the mortgage for?

[00:49:01] Gabriella: 433,000.

[00:49:03] Ramit: Okay, great. And how about your student loan?

[00:49:05] Gabriella: The student loan is 26,000.

[00:49:08] Ramit: What else?

[00:49:08] Gabriella: I have two credit cards. The balance is 11,500.

[00:49:13] Ramit: Total.

[00:49:14] Gabriella: Total between the two.

[00:49:15] Ramit: Okay. What else?

[00:49:16] Gabriella: Chris took out a personal loan.

[00:49:19] Chris: Mm-hmm.

[00:49:19] Gabriella: One yearned and I think the balance is 13,247.

[00:49:24] Chris: Alright, what else?

[00:49:25] Gabriella: And then Chris’, credit cards.

[00:49:28] Chris: Um, so the two credit cards that I use for travel, um, are, uh, 5,500. Um, that’s at 29%.

[00:49:34] Ramit: Okay.

[00:49:35] Chris: And then smaller cards that I have, um, about four of them for a total of, uh, 2350

[00:49:42] Ramit: 2,350 bucks?

[00:49:44] Chris: Correct.

[00:49:45] Ramit: Okay. So I have questions. The credit card debt, what are y’all spending on that to get to that amount of debt?

[00:49:54] Gabriella: That is mostly like paying our bills, um, paying, [00:50:00] um, going out to eat, uh, paying for the Amtrak when we went to Florida. Some of the costs of when we went to be lease. So it’s like some of those bigger spendings.

[00:50:11] Gabriella: When we don’t have the enough in our budget, then we will put it on the credit card and say, we’ll, we’ll make more money or we’ll pick up a shift and then we’ll pay it off.

[00:50:21] Ramit: When you tell me what those things are for, what you spent on those credit cards and you hear yourself saying it out loud, Amtrak beliefs, et cetera, what do you make of that?

[00:50:31] Gabriella: That we shouldn’t be spending money when we don’t have it?

[00:50:36] Ramit: Yeah,

[00:50:37] Gabriella: I think it’s, we want to go on vacations, we want to do nice things for the kids and the family. But we really don’t, didn’t have the money to do it.

[00:50:48] Ramit: So how did you decide to do it? What did you tell yourselves at the time?

[00:50:52] Gabriella: We will figure out a way to make more money or find another way of income for my [00:51:00] business.

[00:51:00] Gabriella: I was like, my business is gonna take off, or I’ll be able to find more income or more business, um, and growing my business.

[00:51:08] Ramit: Does it work?

[00:51:09] Gabriella: No, it doesn’t work because we can never anticipate when something else comes up, like an emergency situation. And then mm-hmm. We have to use our money towards that.

[00:51:19] Ramit: Why do you do it?

[00:51:20] Gabriella: I think it’s to make me, uh, make us, I don’t know, um, feel better about our situation, like masking the reality that what I would love for our lifestyle as a family is not happening. So I mask it with the, with spending it on these credit cards.

[00:51:41] Ramit: I appreciate the honesty. Chris, what about you? What do you tell yourself when you make these purchases and they go on credit cards knowing that you have over $30,000 of credit card debt?

[00:51:56] Chris: I think I tell myself that, you know, I work hard enough, I deserve it, [00:52:00] or, you know, just this last time and after that we’ll fix it. Um, but I think at the moment it’s just kind of like, like Gabriela said, you know, because in reality we can’t afford it. Um, so we just put it on, on credit cards and kind of get a fix outta that.

[00:52:19] Chris: What does that mean? Fix, you know, kind of convince yourself or I convinced myself that I’m rewarding myself for working so hard. Um, and you know, tomorrow will come and I’ll figure, I’ll figure out a way to eliminate the debt and tomorrow just doesn’t happen for me.

[00:52:34] Ramit: Mm-hmm. So what happens, like, let’s just say, pretend we ended the call right now.

[00:52:40] Ramit: You all c carry on the way you’ve been doing. And fast forward for me what happens.

[00:52:46] Gabriella: What happens is sometimes, you know, the thought of withdrawing from my IRA

[00:52:55] Ramit: mm-hmm.

[00:52:55] Gabriella: To cup, to pay off the debts is always an option.

[00:52:59] Ramit: Let’s say you did that, [00:53:00] you have $99,000 in there. So

[00:53:03] Gabriella: it was 160,000. We’ve withdrawn from it

[00:53:07] Ramit: what

[00:53:07] Gabriella: to pay for this.

[00:53:09] Gabriella: The credit cards

[00:53:10] Ramit: you’ve already taken out $60,000 to pay credit cards down

[00:53:14] Gabriella: 80,000.

[00:53:15] Ramit: Okay. So what happens if you keep this up?

[00:53:18] Gabriella: It just, we keep killing our, our retirement. We run outta money.

[00:53:24] Ramit: And then what?

[00:53:25] Gabriella: Then there’s a lot at stake. I mean, our house would be like foreclosed.

[00:53:29] Ramit: Mm-hmm.

[00:53:29] Gabriella: Yeah. And we don’t have a roof over our head.

[00:53:32] Gabriella: And

[00:53:32] Ramit: then what happens?

[00:53:33] Gabriella: I think we have to pull the kids out of tuition, out of private school, which is not something I wanna do.

[00:53:40] Ramit: How many of them?

[00:53:40] Gabriella: Four.

[00:53:41] Ramit: You have four kids in private school right now?

[00:53:44] Gabriella: Yeah.

[00:53:44] Ramit: Alright, so let’s say that you might lose the house. Maybe they wouldn’t be able to go to private school anymore and then what?

[00:53:50] Chris: I mean they’d go to public school and you know, there’s a possibility the Florida move doesn’t happen. House gets foreclosed on. And [00:54:00] then just the way that the market is right now, some rentals are even more expensive than owning your own house.

[00:54:05] Ramit: Y’all realize how close you are to being homeless.

[00:54:07] Gabriella: No,

[00:54:08] Ramit: I don’t think it’s entered the possibility for you.

[00:54:10] Ramit: Right. I know you have some family support, which is really helpful, but if we just take that away for a second. You spend more than you make every single month. Your debt is growing faster than you can pay it off, and you’re not really paying much of it off anyway.

[00:54:27] Gabriella: Yeah.

[00:54:28] Ramit: You’re, you’re basically just decimating whatever future retirement you have and it’s just going towards debt, which is growing anyway.

[00:54:34] Ramit: I mean, where does it end? This is how a lot of people go homeless.

[00:54:38] Gabriella: I mean, that fear is always with me because we’ve been in this situation in the past.

[00:54:45] Ramit: What do you mean?

[00:54:46] Gabriella: In our previous home, we ended up having to go through foreclosure.

[00:54:51] Ramit: What?

[00:54:52] Gabriella: Mm-hmm.

[00:54:53] Ramit: When was that? I didn’t know that.

[00:54:55] Gabriella: Um, but we avoided it by, um, filing for [00:55:00] bankruptcy.

[00:55:00] Ramit: What you filed for bankruptcy. You just heard them reveal that they filed for bankruptcy years ago, and now they are right back on the same trajectory except this time with four kids. So what’s really going on here? Well, have you noticed that Chris and Gabriela don’t look at numbers? They talk about money entirely in feelings.

[00:55:22] Ramit: It’s like they’re rowing a boat in the middle of the ocean, and they’re arguing about how they feel they should go left or right without actually stopping to look where they are. They don’t review their spending. They don’t track where the money goes, not even in a few key categories. A lot of this is just reaction, feeling stressed, feeling overwhelmed, feeling like they can’t get ahead, and then making decisions based on those feelings instead of incorporating numbers as well.

[00:55:48] Ramit: Now, by only talking about feelings, that’s why Gabriela and Chris take trips they can’t afford. That’s why they put ’em on credit cards. That’s why they’re not prioritizing debt pay down or building any savings because [00:56:00] without knowing their numbers, they have no financial structure. So everything just becomes reactive.

[00:56:04] Ramit: Money comes in, money goes out. They’re just arguing about their feelings that are totally disconnected from their finances, and this is a real problem. They have zero savings. Their debt is growing. They’re basically one unexpected expense away from being in a serious crisis, and they have children. This is a red alert.

[00:56:23] Ramit: The stakes are high, so I’m gonna push them to make some hard changes. Now, if you recognize yourself in this pattern. If you want help building financial structure, then you can join my money coaching program at iwt.com/money coaching. You do not have to do this alone. Once you filed for bankruptcy, what did you tell yourselves?

[00:56:45] Gabriella: We would never be in this situation again.

[00:56:48] Ramit: You know, not that many people find themselves in dire situations over and over six years apart, especially having a six figure job in between. What do you think is really going on here?

[00:56:59] Chris: I [00:57:00] think for me it’s um, not getting a handle on my finances and kind of telling myself that it’s gonna get better and it’s gonna get better.

[00:57:07] Chris: And not changing behavior.

[00:57:08] Ramit: It’s not gonna get better. It’s gonna get worse.

[00:57:11] Chris: Yeah.

[00:57:11] Ramit: It’s actually getting worse every single day. Yeah, I think that’s probably a pretty honest answer though. Chris, uh, and Gabriela, what about you?

[00:57:18] Gabriella: I can’t figure it out. At the end of 2023 when I was getting laid off, we sat down and had a conversation and what’s the best thing to do?

[00:57:28] Gabriella: The conclusion was he was gonna go back to school while working full time and I was gonna take the payout and start my business. I didn’t go back to school and get my certifications to become a birth doula.

[00:57:41] Ramit: Great. Like you made a lot of plans, you executed on them.

[00:57:45] Gabriella: Yeah.

[00:57:45] Ramit: What went wrong?

[00:57:46] Gabriella: I don’t think the job that Chris ended up getting was the job that met what we were anticipating or our goals.

[00:57:54] Ramit: What was the number you expected Chris to make?

[00:57:56] Gabriella: I said. 80,000.

[00:57:59] Ramit: And then what [00:58:00] happened? What was the actual number in the job? Gross is 74 comes out to like 30, $31 an hour. You know, it’s interesting ’cause you said the job that you took paid you 70 4K, but Gabriela, your plan was for him to make 80 k. That’s not that far off.

[00:58:17] Gabriella: The problem is his overtime. Mm-hmm. He, it’s not like he’s making that just doing 40 hours a week. And so I can’t do my business effectively when he’s not home.

[00:58:30] Ramit: Yeah.

[00:58:30] Gabriella: Uh, who’s gonna watch the kids? And so I’ve never been able to do that very well. So that’s what makes it a little frustrating for me is, is that is the time he spends away, he’s gone every week, almost sometimes five days out of the week.

[00:58:44] Ramit: That’s tough. Especially with four kids.

[00:58:46] Gabriella: It’s, it’s incredibly tough.

[00:58:49] Ramit: Yep.

[00:58:49] Gabriella: And it wasn’t what we had planned for. Um, we had a discussion and I told him, I don’t agree with him taking on a traveling [00:59:00] job. And I said, if he does it, I can only handle it for a year. It’s now been over a year.

[00:59:06] Ramit: What’s the plan, Chris?

[00:59:08] Chris: I think that’s kind of where Florida comes into play in terms of moving closer to family. You know, we have family that can kind of help out. Um, obviously it’s, it’s a little bit selfish to count on them to help us out week in, week out. That’s not the idea. But I

[00:59:23] Ramit: think it, well, hold on. What, what is the idea, first of all, have you spoken to the family?

[00:59:26] Ramit: Are they willing to watch the kids?

[00:59:28] Gabriella: Yeah.

[00:59:28] Ramit: Okay, good.

[00:59:29] Gabriella: My parents are very aware of our situation. I’m, I’m very close with them.

[00:59:35] Ramit: Mm-hmm.

[00:59:36] Gabriella: Um, and they do think that is the best thing for us to move down to Florida. They see me struggling, they see my frustration, um, and they would love to help and, and they can help if we’re closer.

[00:59:50] Ramit: Let’s say that you moved to Florida, and let’s say that family is super helpful with the kids. Chris, you still have your same job at that time. You’re gonna be traveling. Sure. [01:00:00] Right. What does this move to Florida do for your finances?

[01:00:04] Chris: We’d take the equity, get the house that’s secured. I’m personally looking to have as small of a mortgage payment as possible.

[01:00:11] Chris: We’ve already looked at schools down there. We’d be able to get a $8,000 per kid credit so they can continue to do their Catholic studies. If we can operate in a way that Gabby can be close to the kids, do her doula business, I’m making what I’m making, and we eliminate the debt that we can, then everything is now in our favor.

[01:00:34] Chris: That’s what I’m, I’m hoping

[01:00:36] Ramit: that’s not a plan, Chris, you’re just, you’re just saying words. What is different about being in Florida? Your mortgage is already $1,898. That’s pretty low. Are you gonna get a lower mortgage in Florida? No. No. So what are we talking about here? I’m not hearing an actual plan. How does moving to Florida change your finances for the better?

[01:00:58] Gabriella: A lot of our move to [01:01:00] Florida is not really a financial move. It’s more of a emotional move, I feel. Um, because we are in a really sweet spot. We have a 4,000 square foot home. It’s beautiful. It’s a five bedroom home. It’s in Pennsylvania.

[01:01:17] Ramit: You have a 4,000 square foot home?

[01:01:20] Gabriella: Yes.

[01:01:20] Ramit: Does it feel a little weird to have a 4,000 square foot house and be in $32,500 of credit card debt?

[01:01:27] Gabriella: Yes.

[01:01:27] Ramit: And have $0 in savings with four children? Yes. Yes. Does that not seem a little like outlandish? Yes,

[01:01:35] Gabriella: it is, but we would never be able to have this house if it wasn’t for my parents helping us with mortgaging.

[01:01:42] Ramit: I mean, just to ask the obvious question, why don’t your parents just pay off the credit card debt?

[01:01:46] Ramit: Whoa. Look at Chris’s. Look at Chris shaking his head. No, he came real quick with that. Chris, go ahead.

[01:01:52] Chris: Yeah, I think it’s important for me to take full responsibility and move forward [01:02:00] with an understanding of our finances.

[01:02:02] Ramit: So is the answer the in-laws, is that really what we needed to get to Chris? You don’t want to be embarrassed about what the in-laws think about needing to go ask for help.

[01:02:10] Ramit: Is that it?

[01:02:10] Chris: It’s not a matter of being embarrassed, I think it’s a matter of I made my bed and you know, we, we have to deal with this problem and if I’m not willing to change the, my behavior the way that I operate, then you know what’s to say. This doesn’t happen down the road.

[01:02:24] Ramit: Okay. I I like that. I appreciate that attitude.

[01:02:25] Ramit: That is actually really cool of you to say. I agree with that.

[01:02:28] Chris: Yeah.

[01:02:28] Ramit: Can I just point something out? Y’all are just gonna be in this exact same situation in Florida.

[01:02:33] Gabriella: Oh yeah. This is why I replied for this.

[01:02:36] Ramit: Oh.

[01:02:37] Gabriella: I just wanna be able to be in a better spot and not bring this to Florida with us.

[01:02:43] Ramit: Okay. Let’s update the CSP with your new income.

[01:02:46] Ramit: ’cause that will make a positive difference. Your old income gross Gabriela was 2060 $3 per month. What is it now?

[01:02:55] Gabriella: 5,833.

[01:02:58] Ramit: Should I just put 5 8, 3, [01:03:00] 3 here? ’cause you’re not making the 2063, right?

[01:03:02] Gabriella: Um, continue to work at the school.

[01:03:04] Ramit: Oh great. Okay. So 2063 plus 5 8 3 3.

[01:03:09] Gabriella: Right.

[01:03:10] Ramit: Okay. Nice. 78 96 gross. And then how much do we wanna put for net?

[01:03:16] Gabriella: Like take 30% off of that.

[01:03:18] Ramit: 55, 27. Holy shit. That really changes things considerably. Wow. Wow, wow. Do you guys see what just happened to your fixed cost number?

[01:03:27] Chris: It was almost half.

[01:03:29] Ramit: Yeah, it went from 109% to 66%. What the hell? That’s pretty good.

[01:03:35] Gabriella: Yeah.

[01:03:36] Ramit: Anyone wanna smile right now or would all just wanna be depressed as on this call?

[01:03:41] Gabriella: I don’t wanna be depressed, I wanna be excited.

[01:03:44] Ramit: Y’all have been so you, you’ve been unhappy with money for so long that you actually don’t know how to be happy with it anymore.

[01:03:49] Chris: That’s true. I think

[01:03:50] Gabriella: this is true.

[01:03:51] Ramit: I see the possibility 66%, y’all have a great shot at fixing this, but if you can’t see that you’re in trouble,

[01:03:58] Gabriella: it just stinks that I [01:04:00] had to go back and do a full-time job on top of my business.

[01:04:04] Gabriella: And this is not calculated in the gross monthly income. Um, but I did bring in like around $2,000 a month, um, just on my doula business. Which is not, that’s not in

[01:04:16] Ramit: here.

[01:04:16] Gabriella: No.

[01:04:17] Ramit: Why?

[01:04:18] Gabriella: Um, because it’s, it’s not stable.

[01:04:20] Ramit: All I care is about the annual, uh, annually. Do you make $24,000 per year roughly from the doula business?

[01:04:27] Gabriella: Yes. As I’ve, um, booked clients this c year, I’m booking at least two per month.

[01:04:33] Ramit: Okay. That’s amazing. So you’re telling me this why I love it. Hold on. I need to set, I need to set the right modeling for everybody. Yeah. Great. Super

[01:04:43] Gabriella: amazing. Love. Everybody

[01:04:44] Ramit: smile.

[01:04:45] Gabriella: I’m super excited ’cause this is what I’m passionate about and I’m

[01:04:49] Ramit: So why are you telling it to me as if like, somebody just killed my mom?

[01:04:52] Ramit: Why are you saying it like in that tone?

[01:04:54] Gabriella: Oh, I’m saying it because it takes a lot of work, you know. Oh, how, oh, and owning, okay. Your own [01:05:00] business. And I’m putting a lot of hours and time into it. Plus working 20 hours at the school. Yeah. And now that’s a lot. Now we working 40 work, 40 hours for my brother.

[01:05:08] Ramit: It’s too much. Right?

[01:05:09] Gabriella: It’s way too much on top of the, my Chris is not home, so I’m also running everything for the kids on the, on the evenings and then on the weekends. He’s not here either. ’cause he is at the restaurant working. It feels like I have to put in my time and energy into making more income.

[01:05:32] Gabriella: And I feel like Chris needs to really step up,

[01:05:37] Ramit: be specific. What do you need?

[01:05:39] Gabriella: I need him to make more money. I need him to really have a fire under his ass about what his career plans are. And I wanna visually see him doing something about it instead of on the weekends, wasting time, his precious time with our family.

[01:05:56] Gabriella: Or if it’s about income, I would love to [01:06:00] see him doing something that’s going to get him to advance in his career. I just don’t see it. It’s, it’s a lot of word salad. And I, and I say this to him all the time, I was like, I feel like you gaslight me. You tell me it’s gonna happen. You tell me it’s gonna be done and it doesn’t happen.

[01:06:20] Gabriella: And so then I have to come up and. Come up with a plan with my brother about getting this new job, which is why I probably wasn’t super excited because I was like, okay, now my time is even more, it’s gonna be dedicated to something else because we need the income.

[01:06:36] Ramit: Chris, it’s pretty honest comment that, yeah, what’s your reaction?

[01:06:40] Chris: This is the one spot where I’m gonna have to politely disagree with her in terms of having started a new career. And, you know, she was at her previous spot for almost a decade and she jumped the corporate ladder. So then I don’t, I don’t get that same kind of grace. I don’t get that same kind of understanding.

[01:06:59] Chris: It’s like I went [01:07:00] to school for a trade that’s paying $20, I’m making almost $10 more than that. So what do you want me to do? These unrealistic expectations of, you know, having to take care of everything overnight is not realistic. I can agree to everything in terms of my mismanagement of my money. I can agree to all that.

[01:07:18] Chris: I take full responsibility. I’ll take my, my share of the blame, but to expect that I’m gonna make this large sum of money overnight, I, I can’t agree to that because I don’t, I don’t know what it’s gonna take for me to, to get to that point. I can’t give her a solid answer.

[01:07:33] Ramit: I’m not even getting a solid answer from you right now.

[01:07:35] Ramit: What did you hear her say?

[01:07:37] Chris: So Gabby is saying that she doesn’t see me working towards making more or advancing my, my career.

[01:07:43] Ramit: What about all the other stuff she said? She said, I now have gotten this job and I work X hours at the school and I work y hours doing the birth doula and my husband is not home on the weekends.

[01:07:57] Ramit: She said all that stuff. What about that? [01:08:00]

[01:08:00] Chris: I agree with all that.

[01:08:00] Ramit: Hold on a second. I didn’t hear you. Nor do I think she heard you validate any of that stuff. I mean, she’s mom of four kids.

[01:08:09] Chris: Yeah.

[01:08:10] Ramit: And she’s, and you’re gone all week. Understandably so. ’cause you’re working hard. I understand that. Mm-hmm. But I don’t even think I heard you say like, Hey, that’s gotta be really tough, you know?

[01:08:18] Ramit: And I, I really appreciate that you do that and now you got this job and that’s really gonna help us out. That’s validating. I didn’t hear you do that. You jumped right into I don’t agree. Why did you jump into disagreeing?

[01:08:31] Chris: I think she knows, but I mean, I have no, no qualms about telling her directly. I, I appreciate everything you do and I mean, I wanna work towards giving what you need from me.

[01:08:40] Ramit: Are y’all in therapy?

[01:08:41] Gabriella: No. No.

[01:08:42] Ramit: You ever gone?

[01:08:43] Gabriella: No.

[01:08:44] Ramit: Why?

[01:08:45] Gabriella: You know, I, I love Chris and I think we have a wonderful relationship. We get along really well. We laugh and I think we just avoid talking about these hard things because we both don’t like to be [01:09:00] vulnerable.

[01:09:00] Ramit: I think a couple can be happy and have a loving marriage and still go to therapy.

[01:09:06] Gabriella: Yeah.

[01:09:07] Ramit: I don’t, you know, the old days like Yeah, in our parents’ generation it was stigmatized. Like, what’s wrong with you?

[01:09:12] Gabriella: Yeah,

[01:09:12] Ramit: my wife and I have gone to therapy many times.

[01:09:14] Gabriella: Mm-hmm.

[01:09:15] Ramit: You know, I love her. We have a great relationship. We wanna learn some skills. Might be a couple things that are irritating or a problem, but just from watching this dynamic of the way that the two of you communicate with each other, Gabriela, your inability to specifically ask for what you want, to really set boundaries as to what you need to be able to do that much work.

[01:09:35] Ramit: Every single week is really difficult. And you’re a mom of four?

[01:09:39] Gabriella: Yeah.

[01:09:40] Ramit: And we have a dad of four who’s traveling all the time then picking up 24 hours of shifts on the weekend a lot and not communicating. There’s not a lot of validation or like love between the two of you. When you’re talking about these really serious topics.

[01:09:53] Ramit: It’s one person in this corner and another person in this corner. It’s actually impossible [01:10:00] for you to get out of this hole financially speaking, unless the two of you are totally aligned.

[01:10:05] Gabriella: Mm-hmm.

[01:10:06] Ramit: So if I could make a suggestion, it would be that I would really encourage you to see a therapist regularly, because right now you don’t have any time to actually talk to each other.

[01:10:16] Ramit: Yeah. And money is just probably one of many topics to discuss. What do y’all think about that?

[01:10:21] Gabriella: No, I agree.

[01:10:23] Ramit: I’d be open to it. I mean, it’s awesome that Gabriela, you’ve been able to now make almost $8,000 a month gross. That’s incredible. It changes the entire financial picture of your family. Amazing. I think that the way you do it is unsustainable.

[01:10:39] Ramit: Like, you could maybe do this for a year and it would be brutal, but you could do it right if you know that there’s a light at the end of the tunnel.

[01:10:45] Gabriella: Right.

[01:10:46] Ramit: But there is no light right now.

[01:10:48] Gabriella: Mm-hmm.

[01:10:49] Ramit: So if we can just look at the rest of the numbers here. Just take a look. With 66%, y’all have over $3,000 a month that [01:11:00] has flowed down to guilt-free spending.

[01:11:01] Ramit: What does that tell you?

[01:11:02] Gabriella: Well, first pay the debt debts off. We have some extra funds to pay that off, and that could be a huge release. Um, and then once that is paid off, then I would wanna start really contributing to the five, two nines. Especially for, um, our oldest daughter who is not getting younger.

[01:11:22] Gabriella: Um,

[01:11:23] Ramit: you know, who else is not getting any younger

[01:11:25] Gabriella: me.

[01:11:27] Ramit: Two of you.

[01:11:27] Gabriella: And the two of us? Yeah.

[01:11:29] Ramit: Is it possible that some of your instincts, the two of you have led you astray with your money?

[01:11:35] Gabriella: Yes.

[01:11:36] Ramit: Chris?

[01:11:37] Chris: Yeah.

[01:11:38] Ramit: I’m gonna try to reorient you as to where your instincts might be off. Okay. You, you, you ever know somebody who just gets in a bad relationship over and over again and you just wanna shake ’em?

[01:11:49] Gabriella: Mm-hmm.

[01:11:50] Ramit: And they’re like, well, it’s ’cause it was winter and it’s ’cause I ate tomatoes that day. You’re like, no, no, no, no. It’s not that you have bad instincts, we’re gonna fix ’em, but your instincts are leading you astray. [01:12:00] We’re seeing an example of that right now. Right now, I go, you have $3,210 extra per month.

[01:12:06] Ramit: What would, what does that tell you? And your response is, pay off the debt faster, which I agree with. And then you jumped right into five 20 nines. Mm-hmm. I don’t think the two of you have put yourself first in a long time.

[01:12:15] Gabriella: No, not at all.

[01:12:17] Ramit: Chris, what, what does it mean that you have over $3,000 a month extra after your fixed cost?

[01:12:24] Chris: There’s some money that we can put away for, uh, retirement.

[01:12:27] Ramit: Agreed. What else?

[01:12:28] Chris: Probably don’t help to work on the weekends.

[01:12:30] Ramit: Great. Great. In, yes.

[01:12:33] Gabriella: Yes. How does

[01:12:33] Ramit: that feel, Gabriela?

[01:12:35] Gabriella: Well, you, that’s exactly why I took the job with my brother and this 70,000. I said, if I take this job, you’re gonna stop working on the weekends.

[01:12:43] Ramit: Oh, you said that. And Chris, what did you respond?

[01:12:46] Chris: I think reluctantly. I said I’d, I’d eliminate one of the shifts. If that money is actual and it’s tangible, then I think I wouldn’t have any, any, a leg to stand on and justify my being away on the weekends.

[01:12:59] Ramit: It’s interesting that [01:13:00] even with Gabby making now being the primary earner, making quite a bit of money that you said, I’m willing to give up one shift if I see the money in the account.

[01:13:13] Ramit: You are now making the most money in this relationship. Then Gabrielle, you, y’all need to have a real, honest, candid conversation about power dynamics and about what needs to happen for this family. This idea that was set 10 years ago that like, you’d like to stay at home.

[01:13:26] Ramit 4: Mm-hmm.

[01:13:27] Ramit: It’s not happening. We need to stop.

[01:13:29] Ramit: Entertaining a dream that was created 10 years ago with no numerical rigor. And we need to say, look, in order for this family to survive, especially on the kind of credit card debt that we have run up, we need two incomes. I, Gabriela happened to be the person who can earn more. I’m doing that. Therefore, here’s what I need.

[01:13:47] Ramit: I need you to be home on the weekends and take care of the kids. And I need to have two hours to myself just to do whatever I need to do. ’cause I’m grinding it out and I’ll take two hours on Sunday. And you, I know you’ve been grinding it out as well, but [01:14:00] we need to work as a team. I just don’t hear any of this clarity.

[01:14:03] Gabriella: Chris, how many times have I said these, this exact praise that Ramit just said,

[01:14:08] Chris: you brought it up a couple times. But I think what I’m gonna have to agree with Ramit in terms is like the power dynamic. I know it’s something you’ve held near and dear to your heart, you know, not working full-time. But I mean, if, if you are gonna be making the vast majority of the income, if it requires me to stay home, then I mean, I’m prepared to do that once, once that’s a regular thing.

[01:14:31] Ramit: Hold on. Too many words.

[01:14:32] Chris: Yeah.

[01:14:33] Ramit: What in the hell is happening, Chris?

[01:14:35] Chris: Yes.

[01:14:36] Ramit: Why are you overcomplicating this? I’m getting so frustrated. Just listening to you. Do you know what you are saying right now?

[01:14:43] Chris: Yeah.

[01:14:43] Ramit: What are you saying to her in one sentence?

[01:14:46] Chris: I am, I agree with you and I’m prepared to make that my reality.

[01:14:50] Chris: I mean, if

[01:14:51] Ramit: what Make what be specific.

[01:14:53] Chris: So if Gabby’s the primary breadwinner and if she requires me to be home on the weekends and [01:15:00] she needs certain things from me to accommodate, I’m, I’m happy to do that.

[01:15:04] Ramit: You are not communicating effectively, Chris, because you were actually just agreeing with Gabriela and it was so frustrating the way that you were presenting it, that even I got frustrated and I do this for a living.

[01:15:15] Ramit: Do you see the problem that even when you are agreeing and you’re saying like, yeah, I’m willing to stay home on the weekends, that it comes across like, you are disagreeing. That’s a major problem.

[01:15:26] Chris: Didn’t know that about myself.

[01:15:27] Ramit: Your lack of clarity is costing you a lot of connection in your relationship.

[01:15:31] Chris: Yeah.

[01:15:32] Ramit: Because most of the time you’re actually disagreeing with Gabriela.

[01:15:34] Chris: I think it’s because the way that I grew up and sometimes money being scarce or not around the ability to make additional income and it’s guaranteed and it’s quick, I think is a, is appealing to me.

[01:15:48] Ramit: What do you remember about your family saying about money when you were young?

[01:15:51] Chris: There wasn’t a lot of structure. There wasn’t a lot of organization. I just remember, um, you know, my, my parents split up. [01:16:00] I was in elementary school.

[01:16:01] Ramit: Mm-hmm.

[01:16:01] Chris: My father was a truck driver. He spent a lot of time on the road. So the fact of his being gone and, you know, my brother and I never wanted for anything, you know, if we wanted the latest and greatest gaming system, we had it.

[01:16:13] Chris: If, you know, whatever we. We had all the, you know, latest designer brands and all that, you know, shoes and whatever.

[01:16:21] Ramit: Wait, is this not quite similar to what your kids are experiencing now?

[01:16:26] Chris: Correct.

[01:16:26] Ramit: Dad’s not around and they can buy nice stuff, et cetera. It’s kind of the same, isn’t it?

[01:16:32] Chris: Yeah.

[01:16:33] Ramit: So is that, is that what you intended?

[01:16:35] Ramit: Is that what you want?

[01:16:36] Chris: No, I’m hoping this is gonna help correct that, but I’m fully aware that I’m kind of repeating the cycle.

[01:16:43] Ramit: What did you envision in your life about money?

[01:16:47] Chris: Uh, I think the extent of my understanding and my relationship with money was as long as I’m willing to work for it.

[01:16:57] Ramit: Mm-hmm.

[01:16:58] Chris: I can attain it.

[01:16:59] Ramit: What about your [01:17:00] mom? What did she do?

[01:17:00] Chris: She was a house cleaner.

[01:17:02] Ramit: Wow. So truck driver, house cleaner. And it sounds like your family made pretty good money.

[01:17:09] Chris: Mm-hmm.

[01:17:10] Ramit: How are they doing now? Financially speaking?

[01:17:12] Chris: My dad’s still a truck driver. His house is paid off. He bought his, ate his rig.

[01:17:16] Ramit: Mm-hmm.

[01:17:16] Chris: My mother, she refinanced a little bit ago, but I think she’s got maybe three years left on her house.

[01:17:22] Chris: Um, so they’re financially, they’re in a good spot. My father makes, um, a good amount of money even still.

[01:17:28] Ramit: Mm.

[01:17:29] Chris: He doesn’t carry a lot of debt. I don’t think he has any credit cards.

[01:17:32] Ramit: Does he invest?

[01:17:33] Chris: I don’t think so.

[01:17:34] Gabriella: They should be retired. But they’re still working.

[01:17:37] Ramit: Are they working because they have to or want to?

[01:17:39] Chris: Both has to and wants to. They’re, they’re workaholics.

[01:17:41] Ramit: It’s interesting, like considering that there are some. Messages about money that you are now bringing into this relationship such as, you know, hey, dad’s away for most of the week. Mm-hmm. Kids are provided for. What do you think about the message that dad is still gonna be working and [01:18:00] traveling when he’s in his seventies?

[01:18:03] Ramit: You think that’s true for you? Because history would suggest it might be.

[01:18:07] Chris: If I can help it, I’m, I’m, I’m intending to, to change that. I don’t,

[01:18:11] Ramit: that’s an interesting answer. If I can change that, who else could change it?

[01:18:15] Chris: I mean, no one else but me, but I’m willing to put in the work so my kids don’t have to experience what I experience as a kid.

[01:18:22] Ramit: Chris, regardless of what you even said, I’m willing to bet deep down the belief is like, I’ll just keep working. What’s the problem? I’ll figure it out. I’ll just keep working because that’s exactly what your dad has done. How does that strike you, Chris?

[01:18:37] Chris: Yeah, I mean, I, I acknowledge it. I see it. I know I say I, I don’t want history to, to repeat itself.

[01:18:42] Chris: Like I’m not in the driver’s seat seat. Um, but I need to make a change and I need, I need to do it like yesterday.

[01:18:48] Ramit: Okay. Thank you very much for being honest. It’s really interesting to hear about your mom and dad. Extremely impressive. Very evident how money messages are transmitted from generation to generation, you know, and [01:19:00] it’s probable that without a change, um, some or maybe all of your kids will pick up some of these money messages for themselves.

[01:19:09] Ramit: Mm-hmm. Gabriela, what about you? What do you remember your family saying about money when you were younger?

[01:19:13] Gabriella: My parents also immigrated here. My dad came from a poor family, farming family, and my mom, um, they lost everything at gunpoint in Venezuela. Um, and then they, their family moved here.

[01:19:26] Chris: Growing up it was, my dad was working,

[01:19:30] Gabriella: he had his master’s in business administration, so he was able to work the corporate ladder and my mom stayed

[01:19:35] Chris: home.

[01:19:36] Gabriella: Mm-hmm. But my mom also handled all of the finances and um, she was a natural accountant for the family. And I saw my parents have healthy conversations about money. They met weekly every Sunday night. My dad, you know, sit down with his spreadsheets, my mom. Then they would just do all these things and planning, savings, um, [01:20:00] retirement, um, saving for our vacations.

[01:20:03] Gabriella: Um, my mom built a whole, um, allowance system for us, so we did chores and stuff and the house, my parents always were telling us what to do or like how to manage our money.

[01:20:14] Ramit: How are they doing financially?

[01:20:16] Gabriella: Financially? They are very well, they’re doing very well. They retired, they lives in Florida and I was 55 and up active community.

[01:20:25] Ramit: You talk to them about money.

[01:20:27] Gabriella: I talk to them all the time about money.

[01:20:29] Ramit: What do you say?

[01:20:29] Gabriella: When I got laid off at the post and I got this, um, payout, I grabbed your book and that’s how I actually learned how to invest and I was excited about it. So I called my dad and I was like, I did not know that the money sitting in my IRA wasn’t making any money.

[01:20:43] Gabriella: Mm-hmm. And I actually had to invest it. Um, but when I read your book, I learned how to do that and then he was like, oh, great. Let’s sit down and do this together.

[01:20:51] Ramit: What about your family finances?

[01:20:53] Gabriella: I also talk very openly about our family finances because with the mortgage being held with them, [01:21:00] there’s many times where we’re not able to make that mortgage.

[01:21:03] Gabriella: So we’ve been actually for the past two years, only been paying the mortgage interest.

[01:21:08] Ramit: What do you mean you’ve only been paying the interest? It says that your mortgage is $1,898 per month. Are you telling me you have not been paying that?

[01:21:15] Gabriella: Yes.

[01:21:16] Ramit: How much is the interest that you’ve been paying?

[01:21:18] Gabriella: It’s $998 and 17 cents a month.

[01:21:23] Ramit: So you’ve basically been paying like about half of what it says here?

[01:21:26] Gabriella: Yeah.

[01:21:27] Ramit: Can I ask y’all, now that I’ve understood a little bit about your backgrounds, what do you think is going on? I want you to imagine that the two of you are floating above this conversation. You put on white lab coats your scientists, and you’re about to analyze what is going on here.

[01:21:44] Chris: I think some of the money isn’t being accounted for. Like I think on the CSP we put a certain value on groceries. We probably spend a lot more.

[01:21:53] Ramit: Okay. Gabriela.

[01:21:56] Gabriella: I was gonna put a lab. Come on. Okay. Um, [01:22:00] these people do not know where their money’s going or someone is not, is hiding where, what they’re doing. Um, because this doesn’t make any sense and or they’re just not taking money seriously.

[01:22:14] Ramit: I agree with all those. It doesn’t make any sense.

[01:22:17] Gabriella: It doesn’t. And I’ve tried to make sense of it and it, I can’t, like I’ve beaten the spreadsheets, I’ve looked at it.

[01:22:25] Ramit: That’s because the answer is not gonna be found in a spreadsheet.

[01:22:28] Gabriella: Yeah.

[01:22:29] Ramit: Obviously there’s money not being accounted for. That’s obvious. Like thousands of dollars every month.

[01:22:35] Ramit: The fact is the two of you are not only not aligned, you are actually polar opposites. You’re sneaking expenses in here. You’re not using the same system with each other. Like teammates both want to win at the same goal.

[01:22:54] Gabriella: Exactly.

[01:22:55] Ramit: You two are actually fighting each other. Each of you [01:23:00] might be getting what you want, but you’re certainly not achieving what a team would want to achieve.

[01:23:05] Ramit: I actually don’t think you know what your team wants to achieve. Do you?

[01:23:09] Gabriella: We are in a, a lot of alignment. One was we wanna do more family vacation, and then the other one was to retire. Well, I, I wanna retire young

[01:23:20] Ramit: guys. You can’t do either of those. I,

[01:23:24] Gabriella: yeah, we can’t.

[01:23:26] Ramit: Can I just be very direct with you?

[01:23:28] Gabriella: Yeah.

[01:23:29] Ramit: You cannot take vacations when you have $32,000 of credit card debt mere years after going bankrupt. You just can’t. That’s just not acceptable. You just cannot do that. You cannot retire early. You’re 40 years old. You have $0 in savings. That’s not going to happen at your current trajectory. Deep down, you know that you cannot afford vacations.

[01:23:51] Ramit: You know that, right?

[01:23:53] Gabriella: Right. I know that. And then it hurts. Yeah. It hurts to know that we’re living our family time when the kids [01:24:00] are home and we can’t do family vacations. I did not grow up like that. I mean, we went on family vacations once a year.

[01:24:08] Ramit: One of the best signs that someone is not going to get ahead with their money is trying to recapture how they grew up living without matching their socioeconomic status.

[01:24:19] Ramit: You do not have the same kind of money your parents had. You have way higher expenses. You have four kids. Your family did not have four kids, four kids in private school. Your family did not have that. Chris, deep down, do you know that you cannot afford vacations?

[01:24:35] Chris: I do.

[01:24:35] Ramit: Why’d you guys go to Belize? You couldn’t afford that.

[01:24:38] Chris: Convincing myself with the points, with the miles, with the hotel. A lot of the yeses outweighed the fact that the reality that we probably shouldn’t have gone on that trip.

[01:24:49] Ramit: I mean, look, y’all came to me because you want help. I can help you, I want to help you, but I can’t help if the two of you continue to lie to yourselves, like [01:25:00] you’re telling me, oh, you know, we’re aligned.

[01:25:01] Ramit: We want to take vacations with the kids. That shouldn’t even be the top five things you’re discussing right now. That’s just not practical. It’s not real. And by avoiding what you actually need to do, you’re just kicking the can down the road so that this pattern can repeat Going to Florida. I mean, maybe, maybe that’s the right move, maybe not.

[01:25:21] Ramit: But is that really the solution to the problems here? I don’t think so.

[01:25:26] Chris: Mm-hmm.

[01:25:27] Ramit: You’re gonna end up in Florida just in the same situation you are today. But I don’t hear any focus on like, where’s the money going?

[01:25:34] Gabriella: Mm-hmm.

[01:25:35] Ramit: And how do we pay off our debt aggressively? And how do we figure out why we got into debt and never get there again?

[01:25:41] Ramit: I haven’t heard that once.

[01:25:42] Gabriella: Yeah.

[01:25:43] Ramit: Why am I bringing it up? How come no one on this call is bringing it up? I think the answer is that you wanna magically have the debt just sort of go away, not think about it, and just keep living life where you buy the kids a bunch of stuff, send them to private school, take vacations.

[01:25:57] Gabriella: Yeah.

[01:25:58] Ramit: And not really change [01:26:00] anything substantive. Tell me if I’m wrong.

[01:26:02] Gabriella: No, you’re not wrong. I mean, this is why, like another reason why I am, you know. Took the job with my brother is like, okay, now we can now pay aggressively on the debts. I have always been trying to like commit to paying off debts and not accumulating these debts.

[01:26:20] Gabriella: It’s just really hard to do it with a partner who doesn’t see the seriousness of it. I’ve been seeing these red flags for a while. There’s a lot of stuff that’s not necessary that you’ve purchased and I’ve, you know, I’ve brought this up to you before. I’ve gone to our storage units and I’ve opened up boxes and it’s just packages and packages of things.

[01:26:44] Ramit: What’s in there?

[01:26:45] Gabriella: It’s like soccer jerseys and shoes mostly.

[01:26:49] Ramit: Chris, how many shoes you got? Probably 20 pairs. Gabriela, do you agree?

[01:26:54] Gabriella: I can’t even, I couldn’t even have the heart to count this ware of shoes, but I’ll just see [01:27:00] like a new one or I’ll find a box in the garage. I’ll sometimes do the same thing for the kids and buy them Jordans when I’m just like going to the school closet and trying to get free clothes for the kids.

[01:27:11] Ramit: Chris, what’s your response when she asks you what are these Jordans

[01:27:14] Chris: probably deflect? Maybe avoid the, avoid the question altogether.

[01:27:19] Ramit: It’s pretty honest. Why do you buy ’em?

[01:27:21] Chris: I think just that behavior growing up as a kid and my parents kind of getting me whatever I wanted. I think for them it’s just kind of like dad taking care of them and making sure they look, they look good.

[01:27:32] Ramit: What is it costing you? To continue this pattern that you learned when you were a kid

[01:27:38] Chris: costing us to be $32,000 in debt.

[01:27:41] Ramit: Yep. What else?

[01:27:43] Chris: Gabby’s overdue. Patience with me and putting a strain on our relationship.

[01:27:48] Ramit: Mm-hmm. What else?

[01:27:49] Chris: Looking on the weekends.

[01:27:51] Ramit: Yep. What are the kids learning

[01:27:53] Chris: material goods over time and togetherness.

[01:27:57] Ramit: Yeah. Four kids gonna take that [01:28:00] same message to their families.

[01:28:02] Chris: Mm-hmm.

[01:28:03] Ramit: Oh, I, I just work hard, just grind. Grind myself to dust just so I can buy What? Shoes. That cannot be the purpose of your life. That’s not even the most important thing to you as part of your rich life. This is why I asked, did you grow up poor but you didn’t.

[01:28:21] Ramit: Your family made good money. It’s just that your dad was absent a lot and he bought stuff and it replaced his time, and now you continue doing exactly the same thing. Your time is gone. You buy your kids 20 pairs of shoes in a storage room when you have $32,000 of credit card debt. What does it sound like when I say it out loud?

[01:28:41] Chris: That was pretty crazy.

[01:28:42] Ramit: I mean, look, y’all know what you should do. You don’t need me to tell you, but I am curious if we just stopped talking right now, what do you think would happen?

[01:28:51] Chris: Think we’d have to come up with a plan and be realistic and fully transparent. I’d be prepared to not work on the weekends.

[01:28:58] Chris: I’d take a hard look at the [01:29:00] stuff that I have in the crawlspace. Collecting dust I would put on Facebook Marketplace, put on eBay.

[01:29:05] Ramit: And then what would you do with the money?

[01:29:06] Chris: Pay down the debt.

[01:29:07] Ramit: Gabriela, what about you? If we stopped talking right now, what would you do?

[01:29:11] Gabriella: Uh, continue doing what I was trying to do with selling items.

[01:29:16] Gabriella: And every time I do that, I pay down the debt. And then once the debt’s paid off, I wanted to start contributing to the Roth. But with the immediate Florida move, I would just keep saving money to help with like a down payment and moving costs.

[01:29:33] Ramit: How much do you need for that?

[01:29:34] Gabriella: For the moving costs? Um, definitely around 20,000.

[01:29:38] Gabriella: Closing costs, 20,000. Um, so we need at least 50,000 for the move itself.

[01:29:44] Ramit 4: Mm-hmm.

[01:29:44] Gabriella: We’re looking at different options for the house. Um, my parents are offering, depending on what we pick, to continue to roll over the mortgage into the new home so we can take the full equity of this house and put it down and then [01:30:00] just continue the, um, the $433,000 mortgage with my parents.

[01:30:04] Ramit: How much would you get for the house if you sold it today?

[01:30:08] Gabriella: It, well, we could sell it for eight 50.

[01:30:10] Ramit: You’d sell it for eight 50. And then your, uh, mortgage is 433. So minus expenses, et cetera. What do you clear? 400.

[01:30:17] Gabriella: 400,000? Yep.

[01:30:19] Ramit: That’s pretty good. But you gotta have a down payment,

[01:30:22] Gabriella: right?

[01:30:22] Ramit: Do you need to buy.

[01:30:23] Gabriella: We don’t need to buy.

[01:30:25] Gabriella: Um, I just have grown up with the mentality that when you rent, you’re throwing away money.

[01:30:32] Ramit: Hold on. What’s that? I smell horrible instincts. Oh yeah. Anytime you grow, anytime you say to yourself, I grew up thinking whatever you’re about to say next, do the opposite. ’cause your history has not led you to the right place.

[01:30:50] Ramit: It’s led you astray. Talk to me about that. No, you’re throwing money away on rent. What does it mean?

[01:30:55] Gabriella: Yeah. And instead of them, you know, putting money towards, um, building [01:31:00] an equity in your home, um, you’re just spending money. Every time we’ve taken out a mortgage, it’s been less month, less per month for what we would get.

[01:31:10] Gabriella: Um, if we rented it would be a huge downsizing and we’d be spending more on rent.

[01:31:18] Ramit: Are you sure? Have you looked at the buy versus rent in the area you’re going to in Florida?

[01:31:23] Gabriella: Yes.

[01:31:24] Ramit: You have?

[01:31:26] Gabriella: I did.

[01:31:27] Ramit: Let’s look right now.

[01:31:28] Gabriella: Okay.

[01:31:29] Ramit: Just gimme a nearby city.

[01:31:30] Gabriella: Sarasota.

[01:31:31] Ramit: And what are we looking at? How many bedrooms?

[01:31:33] Gabriella: Um, we’re looking at a four or five bedroom.

[01:31:36] Ramit: Hold on. Only in America do I talk to a couple. That went bankrupt a few years ago now has hundreds of thousands of dollars of debt. They go Ramit, sayi. I need a five bedroom house. Craziest part is that both of your parents are immigrants. Just call them right now and say, how many five bedroom houses [01:32:00] exist in the country you were born in?

[01:32:02] Ramit: What would they say

[01:32:03] Chris: that Brian wants?

[01:32:04] Gabriella: Nothing.

[01:32:04] Ramit: Like the president lives in one. That’s it.

[01:32:08] Gabriella: Yeah. I guess it’s hard for me to accept again, because I grew up and my parents provided a four bedroom home in the same town that we are in right now. So

[01:32:17] Ramit: the reason that it is so difficult to accept is that in America we like to believe that each generation will do a little bit better, better have a little bit easier.

[01:32:26] Ramit: Yeah. And because of NIMBYs, sort of like your parents’, uh, generation, my par, everybody who bought a house, the minute they buy a house, they go, I don’t want anybody to develop any houses around me. So they’ve stopped more housing from being built. Now it’s incredibly expensive. And so the very same house you grew up in, you could never afford it.

[01:32:46] Ramit: It’s impossible for you. You realize how frustrating that is. I, it’s so hard. Totally get it. Yeah. Like it doesn’t feel good. And so your conclusion is we’re gonna do it anyway.

[01:32:58] Gabriella: Yeah, you’re right.

[01:32:59] Ramit: And [01:33:00] I have to encourage you not to do that. That is exactly what got you in this situation. Can you afford to buy a five bedroom house?

[01:33:07] Ramit: I don’t know. I haven’t looked at the listings, but. Almost certainly not with zero savings. Mm-hmm. It’s just not possible. Can we really have a five bedroom house when we have $0 in savings today? Does that sound realistic?

[01:33:24] Gabriella: No.

[01:33:25] Ramit: Can we move to Florida in a matter of months, which is gonna cost us $50,000?

[01:33:33] Ramit: Where’s the money coming from?

[01:33:34] Gabriella: Yeah, I think we were just banking on the sell of the house.

[01:33:39] Ramit: I think Chris and Gabriela believe that moving to Florida will solve their problems. And this is really common. A lot of couples believe that if they change their location, they get a fresh start, maybe they’re closer to family, cheaper cost of living, that’s gonna somehow reset their financial situation.

[01:33:55] Ramit: And actually, I wanna say I agree a lot of the time, I actually think moving [01:34:00] geographically can be one of the most powerful things you do. But as they say, wherever you go, there you are. And so the question I would ask is, what’s gonna be different in Florida? Because if we’re honest, they’re gonna bring the same spending patterns to Florida, the same communication patterns, the same debt.

[01:34:21] Ramit: They’re gonna still avoid looking at their actual numbers and operate primarily on feelings. The only difference is they’ll be doing this in a different state. And here’s what really concerns me. They haven’t truly considered the numbers on this move yet. Another example of how they are focusing on feelings, but they are ignoring the numbers.

[01:34:40] Ramit: They’re talking about selling their house for 850 k, clearing 400 K, using that to buy another house in Florida, but they also need at least $50,000 for moving costs in a down payment. Their mortgage payment will likely go up, not down. And what about the core issue? They don’t have a system for their money, so okay, they could move to Florida, but [01:35:00] without addressing the root problem, they will end up in exactly the same situation.

[01:35:06] Ramit: If you are listening to this, you should always ask yourself for the important things in life, what is the real problem here? What is the root problem? Until you understand that you’re just throwing darts randomly at the wall. If you need help on identifying the root problem, get in my money coaching program.

[01:35:25] Ramit: The point here is focus on the actual things that matter, not just the accoutrements around those things. For this couple, the question isn’t, should we move to Florida? Maybe, maybe not. The real question is, are we willing to fundamentally change how we operate as a financial team? You cannot build a.

[01:35:48] Ramit: Serious, successful financial life. Just hoping one thing after another happens, right? I hope he gets a better job. I hope this doula thing works. I hope we [01:36:00] sell, blah, blah, blah. That’s just hoping you already went bankrupt once. What I’m trying to get you to do is to actually develop a system and approach where we go, Hey, we’re gonna live beneath our means.

[01:36:10] Ramit: We’re gonna save and invest money every single month. That’s gonna come first before freaking eating out and buying shoes and taking vacations. That’s not who we are anymore. But the truth is, I can’t change your identity. So you tell me what do you wanna do?

[01:36:26] Gabriella: I wanna change my identity

[01:36:28] Ramit: To what?

[01:36:29] Gabriella: To someone who is living within our means and accepting reality and driving to that so that we can ensure a better future.

[01:36:39] Ramit: Okay. What about you, Chris?

[01:36:42] Chris: Yeah, I wanna learn how to be frugal. Have a mindset of, you know, I think this is as severe and as dire as it gets. And I guess having gone through it and having had an escape route is kind of like, oh, well, you know, that was a close call. Um, that might not be [01:37:00] there next time.

[01:37:00] Ramit: That’s exactly right. That’s a really good way to look at it. Like we lucked out last time. Mm-hmm. We’re out of lives.

[01:37:07] Chris: Yeah.

[01:37:08] Ramit: Like that’s it. Yeah. And next time we end up in a much worse, perhaps desolate place.

[01:37:14] Chris: Yeah.

[01:37:14] Ramit: It’s not like the two of you are bachelors, you have four kids. You have very heavy load to carry.

[01:37:22] Ramit: So here’s what I’d like to do. I like to go back to the conscious spending plan. The two of you make $169,000 per year. Now

[01:37:30] Gabriella: that’s a significant amount

[01:37:31] Ramit: when you hear that it’s actually over 175, maybe 180 k when you factor in everything, what does a couple who makes 180 K do with their money?

[01:37:43] Gabriella: Are you saying invest it?

[01:37:44] Ramit: Mm-hmm.

[01:37:46] Gabriella: Make sure that it covers all the fixed costs so that there’s a roof over our head and food on the table.

[01:37:55] Chris: What else, Chris? They’re in, in control of how the money’s being spent [01:38:00] constantly sitting at the table and talking to each other. Where are we with our spending? You know,

[01:38:05] Ramit: in my opinion, a couple that makes $180,000 a year does not have credit card debt.

[01:38:10] Ramit: That’s simply unacceptable. That, uh, couple saves and invests aggressively because they’re making a lot of money.

[01:38:17] Gabriella: Yeah.

[01:38:18] Ramit: They are selective about what they buy. They do not just buy whatever’s in front of ’em.

[01:38:24] Gabriella: Yeah.

[01:38:24] Ramit: Because a couple that is making $180,000 has standards for themselves. They’re very thoughtful about what they want.

[01:38:32] Ramit: If they can afford it, they get it. They don’t apologize for it. But they’re not just going wherever and just buying whatever’s in front of them, that’s not, not gonna happen. And a couple that makes $180,000 is aligned because in order to make 180 K, you probably have to be working one or two very good jobs.

[01:38:48] Ramit: And that means it’s a lot of time, a lot of work. If they have four kids, they have to be communicating effectively, which means if they don’t have the skills to do it, they buy the skills. How they go to therapy or they [01:39:00] get a communications coach.

[01:39:01] Gabriella: Yeah.

[01:39:02] Ramit: How much of that rings true for you?

[01:39:04] Gabriella: A hundred percent.

[01:39:05] Ramit: Shall we make some changes on the CSP?

[01:39:08] Gabriella: Yeah.

[01:39:08] Ramit: Alright. Alright. So you all told me what you wanna accomplish. I’m just the executor. You tell me what changes you wanna make on your conscious spending plan. Let me remind everybody listening and watching. Because of Gabriela’s new income, their joint fixed costs are 66% and they have 34% left over or $3,210.

[01:39:29] Ramit: Alright, one at a time. Let’s make a change. Gabriela. First.

[01:39:33] Gabriella: Maybe we add a thousand dollars more into our debt payments.

[01:39:37] Ramit: Okay, let’s go to Chris. Now what do you wanna do

[01:39:40] Chris: the grocery stand? A little bit low. I’d probably do 2000 for the groceries to be a little bit more realistic.

[01:39:46] Ramit: Really? Who does

[01:39:47] Ramit 4: the grocery shopping?

[01:39:48] Chris: I do.

[01:39:49] Ramit: Really?

[01:39:50] Chris: Yeah. In my head I’m like, okay, well if we batch cook and if we do this and that, it could be closer to 1500. But,

[01:39:57] Ramit: okay. Chris, one of the main problems going on here is that [01:40:00] you lie to yourself.

[01:40:01] Chris: Yeah,

[01:40:02] Ramit: you gotta stop that. You can’t fix this by doing this lying thing in your head. And that needs to be worked out in therapy.

[01:40:08] Ramit: I’m not joking. This is actually one of the biggest roadblocks to you all succeeding. You lie to yourself all the time.

[01:40:15] Chris: Mm-hmm.

[01:40:16] Ramit: You’ve lied to me multiple times on this show. I love it. I love getting lied to now I can get away with it. Getting lied to every day. You can’t get away with lying to yourself.

[01:40:25] Chris: Yeah.

[01:40:25] Ramit: Stop it.

[01:40:26] Chris: Okay.

[01:40:26] Ramit: Okay. I know you have four kids. That’s a lot of kids, but 2000 bucks a month for groceries when you go shopping, Chris, do you ever look at the prices?

[01:40:36] Chris: A thousand percent of the time, but I think my Achilles is because Costco is a little bit further away and given my schedule and it’s a little bit harder to get to, you know, bulk shopping.

[01:40:47] Chris: Um, where our money could probably go a little bit further and, um, the, the realistic total would probably go down or be closer to 1500.

[01:40:54] Ramit: I’m just gonna go back to how my parents solved it. Y’all just need to figure it out.

[01:40:59] Gabriella: Yeah.

[01:40:59] Ramit: Spending [01:41:00] 500 extra dollars a month. ’cause you can’t find time. Well guess what?

[01:41:03] Ramit: Now you have the weekends free. Take a couple kids and enjoy.

[01:41:06] Gabriella: That’s exactly what I said.

[01:41:07] Ramit: Great. Done. 1500 It is. Let’s move on. Chris, what’s your suggestion?

[01:41:11] Chris: Probably throw a little bit in, um, post-tax retirement.

[01:41:14] Ramit: Alright. How much?

[01:41:16] Chris: I’d say maybe anywhere between 500 or a thousand bucks.

[01:41:18] Ramit: Alright, let’s just say a thousand bucks.

[01:41:20] Ramit: Fine. So watch what happens here. You’re now at 11% for investments. That’s pretty good. And you’re down to 13% for guilt-free spending or $1,189 right. What do y’all think about that so far?

[01:41:34] Gabriella: I like that.

[01:41:35] Ramit: I like that too. How often you eat out,

[01:41:37] Gabriella: huh? The last time we ate out was for your birthday, your 40th birthday.

[01:41:41] Chris: Yeah. So that was September. But um, are we counting, like yesterday I brought take, take out food, carry out.

[01:41:47] Ramit: Uh, yeah. We’re counting that. Hey everybody. Are we counting less than 24 hours ago? Yeah. We’re counting that. Just gimme a number. How many times do you eat out per week?

[01:41:57] Chris: Not often. I mean, we don’t, we make coffee at home.[01:42:00]

[01:42:00] Chris: It’s more like, okay. I, I just landed from the airport. Do you feel like cooking? No. Okay. I’ll bring, I’ll bring takeout. We don’t, we don’t go out a lot.

[01:42:06] Gabriella: And the takeout is like between $70 to a hundred.

[01:42:11] Ramit: How often? That’s like once every week.

[01:42:14] Gabriella: Maybe once every week.

[01:42:15] Ramit: I think you all have been spending a lot of money on stuff that you’re not tracking.

[01:42:18] Ramit: Okay. It’s impossible for me to give you specific feedback here because the numbers just aren’t accurate. Yeah. Like you have 20 pairs of expensive shoes. You got all this stuff that’s just being spent randomly.

[01:42:28] Chris: Mm-hmm.

[01:42:29] Ramit: Because it’s not properly represented. The best I can tell you is like don’t. Yeah. And more importantly here, here’s what you have left right now, I just wanna show you something.

[01:42:39] Ramit: You have $1,189 a month total that you can spend. Oh. And there’s one other thing. You’re actually saving no money per month.

[01:42:48] Gabriella: Yeah.

[01:42:49] Ramit: This is a major, major problem. You’re this close. To losing everything. Yeah. It’s only because you have these backstops. First you went bankrupt. Now you [01:43:00] have your parents who will backstop you.

[01:43:02] Ramit: Yeah. That you are leaning on them like a crutch instead of actually building your own ability.

[01:43:08] Chris: Mm-hmm.

[01:43:08] Ramit: Build a healthy financial life.

[01:43:10] Chris: Yeah.

[01:43:10] Ramit: So we’ve got a number of problems here. I want to talk about some of the debt. If we take your credit card debt, the high interest debt, if you pay $2,500 a month, you’re paying that off in 16 months.

[01:43:24] Ramit: So like just under a year and a half, and you’re gonna end up paying $6,700 in interest. But once you pay that debt off, it really frees things up. Like your student loan debt at $750 a month, you can pay that off in three years.

[01:43:40] Ramit 4: Mm-hmm.

[01:43:41] Ramit: You can see that it starts to really compound. First we knock this thing out, then we knock that thing out and each time we knock it out, we have a little bit of extra money to put somewhere else, like investing, et cetera.

[01:43:51] Ramit 4: Right.

[01:43:51] Ramit: That starts to build a cycle. Let me pause right there. What do you take away from that, Chris?

[01:43:57] Chris: If we start tackling the debt with some kind of a [01:44:00] structure.

[01:44:02] Ramit: Yep.

[01:44:02] Chris: More money becomes free and we’re able to kind of have a little bit more freedom to really do what we want, but at the same time be strategic about how the debt is being eliminated.

[01:44:13] Chris: Not as opposed to like just. Shotgun blast in the dark hoping something gets hit.

[01:44:18] Ramit: That’s exactly what you two have been doing so far. It’s just like randomly like, let’s do this. Let’s hope that, but you’re actually sabotaging yourself at the same time. ’cause you’re spending more on the credit cards. Yeah, the credit cards need to be frozen and not used.

[01:44:29] Ramit: Again. That’s, it’s over. You’re gonna have to figure out how much to put in savings. Y’all are. You need savings. It’s very important.

[01:44:39] Gabriella: Yeah.

[01:44:40] Ramit: Without savings, you’re in grave risk. And even if you’re able to save a thousand dollars a month for savings, didn’t you tell me it would be at least $20,000 to move to Florida?

[01:44:49] Chris: Yeah.

[01:44:50] Ramit: The way I see it is you have two options. One is you could sell the house, no doubt. You could walk away with 400 K, you could pay off all of the debt, [01:45:00] wipe it, bank a bunch in savings, retain your high incomes and go to Florida. But in Florida it’s gonna be very difficult for you to buy a house. So your option would be one you could rent and with your income you could swing it.

[01:45:20] Ramit: Two, you could buy, you might have to tap into your parents for help. But I see it as you two are just trading one place for another. Your financial situation wouldn’t get better. It might actually get worse ’cause your expenses would go way up. Or you could stay here, make a plan and save that 50 thou 20, 30, $50,000 you would spend in moving costs down payment, all that stuff.

[01:45:44] Ramit: Put it towards this and commit that we’re gonna stay here for like five years and we’re not even thinking about moving until we have at least this much saved up and invested, et cetera. That’s another option. It’s totally up to you two, but I don’t get a sense that until now you have discussed [01:46:00] these type of decisions with numbers.

[01:46:02] Ramit: Mm-hmm.

[01:46:02] Gabriella: 100%. And I think it was part of my fear of not being able to get what I, what we want for the family.

[01:46:13] Ramit: Mm-hmm.

[01:46:14] Gabriella: I wanna be close to my family and I’m tired. I’m too tired of being alone. And I guess I’m trying to force this move. And I know deep down in my heart that we need to stay here to fix our finances.

[01:46:33] Ramit: Of all the things we talked about today, this is the one that really reached you, has really gotten you

[01:46:39] Gabriella: the thought of like not being around family and raising the kids and all being together, and Chris continuing to work away from us. It’s like I’m losing time.

[01:46:54] Ramit: Well, can I say this? If, if it is that important to you, you might be able to make it [01:47:00] happen, but probably not in the way that you thought.

[01:47:03] Ramit: You probably can’t live in a five bedroom house that you own. You probably can’t put all your kids in private school. Maybe you probably can’t take all these vacations every year. You just can’t. And you certainly cannot stay at home with the kids. That’s just not realistic. If you wanted to, if this is the number one thing in your family, you might be able to make it happen, but it would probably require Chris getting a higher paying job.

[01:47:29] Gabriella: Yeah.

[01:47:30] Ramit: The expenses have to come way down. You would have to both be aligned and have a ironclad vision together. You can’t be arguing with each other, even trying to convince each other that day is over and you would probably not be able to do it next year.

[01:47:45] Gabriella: Yeah.

[01:47:46] Ramit: So there’s possibilities.

[01:47:49] Gabriella: Yeah.

[01:47:49] Ramit: Again, there are variables, but right now you’re not operating with real numbers.

[01:47:54] Gabriella: Yeah.

[01:47:54] Ramit: And while I feel your desire to wanna get close to family, I’d actually love to help you [01:48:00] get there, but you have to be using real numbers and the debt that you have incurred is a weight against you being able to go back there.

[01:48:10] Gabriella: Yeah.

[01:48:11] Ramit: What has surprised you most about our conversation today?

[01:48:15] Gabriella: Where I thought I was a little bit in more control of our finances.

[01:48:21] Gabriella: I have been pushing, forcing these things to happen without actually looking at the numbers.

[01:48:28] Ramit: Is Chris, your partner in the next chapter of your rich life that you wanna embark on?

[01:48:34] Gabriella: Absolutely. I don’t wanna do this alone. I want him to be right there with me with a clear vision.

[01:48:42] Ramit: What do you need and expect from him?

[01:48:45] Gabriella: I need and expect for him to fit, drive into finding a higher income.

[01:48:51] Ramit: How much

[01:48:52] Gabriella: I want him to be making $150,000 at some point,

[01:48:57] Ramit: may, maybe he can, and I’m gonna ask [01:49:00] Chris what his takeaway is, but maybe he can’t. Maybe he won’t.

[01:49:04] Gabriella: Yeah.

[01:49:05] Ramit: How are you gonna handle that?

[01:49:06] Gabriella: I really don’t know how I’m gonna handle it, because I feel like I’ve sacrificed a lot of the beginning parts of our marriage and motherhood, and I just want it to be his turn.

[01:49:20] Ramit: Okay. Chris, what surprised you most about

[01:49:22] Chris: today’s conversation? What surprised me is just the fact of like something so simple as far as talking numbers never crossed my mind to just sit down and, and talk specifics. I feel like I missed that somehow. That, and then also just, I mean, I, I always knew, you know, I know how Gabriela is close to her family and how desperate she is to get there.

[01:49:46] Chris: I feel like we were at a point where, you know, I kind of had a career path. I’m starting this position, it’s gonna take a little time to get to where I need to get to within the company. But I feel like the urgency or the, you know, maybe the [01:50:00] expectation is a little bit unrealistic on, on her part. Um, but it, it’s not lost on me.

[01:50:05] Chris: I, I know what, I know what she wants. I just, I’m asking for a little bit of patience getting there. Um, and in exchange I am committed to making the changes I need to make, um, to lower the debt, to be aggressive about our conscious spending plan. Um, and, you know, drive towards something that we’re both aligned in, which is living a debt-free life and towards financial freedom.

[01:50:31] Ramit: Can you all finish this sentence for me in full? Just say, I feel, and then tell me what you feel. Chris, you first please.

[01:50:38] Chris: I feel relieved.

[01:50:41] Ramit: Great. Gabriela. Gabriela,

[01:50:43] Gabriella: I feel disappointed.

[01:50:46] Ramit: Mm-hmm. Why is that?

[01:50:49] Gabriella: We’ve had plenty of time and I, we just lost a lot of time. I

[01:50:55] Ramit: think that’s a pretty honest assessment.

[01:50:57] Ramit: Sometimes when you’re trying to move forward, people end [01:51:00] up spending a lot of time looking backwards and it becomes very hard for them to go forwards because they’re just stuck in the past. I’m gonna give you some really direct feedback. This is how I would handle it if I were you. So first off, um, immediately I would begin therapy.

[01:51:18] Ramit: Once a week I would read the book and I would start to implement every single step of it. Each of you would be responsible for at least two numbers in the family finances. I would. Become extremely aggressive about debt. The family mission is now to become debt free. Everything gets sold. Everything.

[01:51:40] Ramit: Because if you can find $7,500 of stuff to be sold and you put that directly towards the credit card debt, that shaves off months and months of payments, next we would be meeting every single week, each of us showing up, alternating. Who is in charge of the meeting? Chris, you gotta be there. You gotta show [01:52:00] up.

[01:52:00] Ramit: Doesn’t matter. Find a time that works for both of you. The weekends need to be crystal clear about who is taking care of the kids. The other needs a little relief. Both of you work hard, it’s time to settle that you need to be saving money. You need to be saving at least 10% of your money.

[01:52:15] Gabriella: Yeah,

[01:52:16] Ramit: so y’all gotta cut some expenses and or make some money.

[01:52:19] Ramit: I would raise my rates on my doula business immediately. Chris. I would look for a higher income job. It has to happen like in order for you to get where you wanna go, you cannot simply wait. You need that level of aggression with your career too. That’s talking to your boss, finding out when. When are you getting the raise?

[01:52:37] Ramit: Be specific. And if they’re not providing it to you, find somebody else who will. Debt’s gotta be paid off. No more spending on credit cards. Build the savings account. As for the Florida thing, I mean, it’s possible. If it were me, I wouldn’t do it. I wouldn’t do it for at least a year because you just staying where you are with this low mortgage.

[01:52:58] Ramit: And fixing all this [01:53:00] financial stuff, you will. It’s like repairing a wound and then when you go off into the forest, you’re healed. That is an amazing way to go. Again, you don’t, you’re not obligated to do what I say. I’m just telling you what I would do.

[01:53:11] Chris: Mm-hmm.

[01:53:13] Ramit: I wanna thank Chris and Gabriela for being willing to have this conversation.

[01:53:16] Ramit: It’s not easy to look at your money, your relationship and your relationship patterns that you’ve been caring for years. They are at a point where they finally have more options. There’s more income, there’s a clearer plan. There’s a chance to really change their trajectory, but it requires reorienting the way they make decisions.

[01:53:39] Ramit: Can they slow down? Can they communicate clearly? Can they truly change the way they make life decisions together? And this is especially true with major life decisions like moving, in my opinion, this is an amazing opportunity to use this decision as a test for how they can make [01:54:00] major life choices in a healthier, more thoughtful way.

[01:54:04] Ramit: Let’s take a look now at how things are going in their follow-up.

[01:54:09] Gabriella: So our biggest surprise from the conversation, well for me, was digging deep into kind of our past, how. Our relationship is outside of money and kind of the psychology of how we approach money. I wasn’t expecting to go so in depth on that.

[01:54:31] Gabriella: And then the realization that where we, we were at for our retirement, uh, was pretty significantly low for what we are trying to achieve in our future.

[01:54:44] Ramit 4: I’d say I agree for the most part, our behavior patterns, how our past kind of led up to where we are in terms of finances, or at least for me, um, you know, with my father and my mother, the way that they would spend on material things and not [01:55:00] necessarily talk about, you know, how to save money or, you know, um, all that, but how I was falling into the same behavior pattern as my father.

[01:55:09] Ramit 4: Exactly. But the other biggest takeaway for me is after going down the numbers and then talking about Gabby’s additional income, that would be, um, you know, soon how salvageable our situation, um, actually is how the CSP showed a reduction in debt to 66%, um, was a little bit more manageable.

[01:55:30] Gabriella: Um, for me, the biggest takeaway was to accept that our situation is different than what I grew up with.

[01:55:38] Gabriella: And to not dwell on the idea of being a stay at home mom, um, and that I. Need to help by working full-time or working with a higher income in order to really get us out of the financial situation that we’re in. And that [01:56:00] I also can’t just let go of tracking our expenses and our finances and just hope for the best.

[01:56:09] Gabriella: Um, and that I really need to work with Chris on tracking, um, where our money is going and having a clear picture and demand that like ask for exactly what I need from him so that we can succeed instead of, um, shutting down or letting go. And also maybe, um, nagging him or, you know, approaching it where he gets annoyed and, and avoids it as well.

[01:56:39] Ramit 4: For my biggest, um, or the things that I’ve committed to change, um, I have three. So one is kind of putting a stop to those purchases, like the treadmill or, you know, nice new pair of shoes that I can justify with whatever excuse. Um, so [01:57:00] doing away with those, um, whenever I travel my per diems, keeping a close eye on those.

[01:57:06] Ramit 4: Oh and no more working Saturdays. Which I just, I started today for now.

[01:57:13] Gabriella: Uh, what I’ve immediately committed to is, um, freezing my credit card use, um, working full-time with a excited and happy heart meeting Chris. Every week we decided to meet every week on Sunday evenings to review our spending and make sure we’re on track with our conscious spending plan.

[01:57:40] Gabriella: We have also committed to reading the books again. Um, I will read this with Chris and they’ll actually finish this one together. And the most important thing that I’ve committed to, and I’ve changed my

[01:57:52] Ramit 4: mindset is, um, being open to

[01:57:57] Gabriella: waiting a year to move to Florida. [01:58:00] Um, and with that move also being realistic on the house that we get there.

[01:58:07] Gabriella: Um, being and committing to something that’s more economical, downsizing if we need to. Um, that is more in our budgets, using actual numbers and, um, that we can actually afford without getting us into, um, a similar situation that we found ourselves in the past.

[01:58:27] Ramit 4: So recapping while lawyer. Uh, I think, uh, for me, the biggest change that I’ve seen, and I think you may partially agree or fully agree, somewhat agree.

[01:58:39] Ramit 4: I think I’ve just kind of committed to letting go to materialistic things in terms of purchases and just kind of like justifying it. Um, but now seeing the bigger picture where we want to go, where we want to end up. Gabby had a lot to do with it, but the treadmill was gone. Um,

[01:58:57] Gabriella: I did own the treadmill [01:59:00] and he was happy to let it go.

[01:59:01] Ramit 4: I, I helped put it in the flatbed for the new owner along with, uh, other piece of workout equipment.

[01:59:08] Gabriella: So we sold that for $2,600.

[01:59:11] Ramit 4: Yeah. Made, made a little money back. Um, couple of items on eBay right now as we speak. Plenty to go, plenty to catalog and list. So I’ve just found it a lot easier to just kind of not even think about it and just, you know, mm-hmm.

[01:59:25] Ramit 4: Prioritize the future and kind of break the cycle of just, you know, mindlessly buying things that I just don’t need. So that’s kind of like my takeaway. I can be better at budgeting, not budgeting, but you know, we had our responsibilities of what we’re gonna track. I can do better, um, with that. But going for the bigger picture, I think, um, is different from me.

[01:59:47] Ramit 4: So I’m committed to that. Leading into that, that’s my takeaway. Thus far,

[01:59:52] Gabriella: I’ve been going crazy with selling things. Um. So I’ve like sold TVs, I’ve sold [02:00:00] furniture. I even sold a toilet. Um, still working, um, still acquiring new clients for my business. And every time I sign on a new client and I get paid, I pay myself and I pay off debt.

[02:00:19] Gabriella: Um, so we’ve done a pretty good job with paying off credit cards.

[02:00:23] Ramit: Paid off a couple so far.

[02:00:25] Gabriella: Yeah. Like two or three of yours?

[02:00:27] Ramit: Yeah.

[02:00:27] Gabriella: And, um, definitely working on getting mine below 60%. Um, trying to make more income where we can. Um, but we have decided that moving to Florida would still be a priority, even if it’s maybe not the most financial, um, least smart thing to do.

[02:00:47] Gabriella: But because Chris, Chris is traveling is even gotten even more frequent. Um,

[02:00:54] Ramit 4: I have left the restaurant

[02:00:57] Gabriella: that took some time.

[02:00:59] Ramit 4: I did it. [02:01:00]

[02:01:00] Gabriella: You didn’t, but not when you said you would.

[02:01:04] Ramit 4: I, I got rid of the Saturdays and then,

[02:01:07] Gabriella: yeah. You said you weren’t gonna do the weekends at all.

[02:01:10] Ramit 4: I said I would

[02:01:10] Gabriella: once I started.

[02:01:11] Gabriella: Once you saw my first paycheck and you said first paycheck, I have to see it to believe it. And Matt came around and you still continued to work,

[02:01:20] Ramit 4: but,

[02:01:21] Gabriella: and then it was the Saturdays only, and then. Last week you decided to do it behind my back, but we still have to work on our marriage therapy.

[02:01:36] Ramit 4: But I’m done.

[02:01:36] Ramit 4: I’m done for good.

[02:01:37] Gabriella: Yeah, so I think we’re still going to, to move in the summer. Um, we haven’t bought a house yet, but we are going to list the home in a couple of weeks and we figure we’ve already talked to family. We can stay with them

[02:01:52] Ramit 4: during the summer and that should help with

[02:01:56] Gabriella: being able to save up money.

[02:01:58] Gabriella: I think we can still do better about tracking [02:02:00] expenses. I got Monarch for couples and I really enjoying it because I could put the conscious spending plan right on there and it has all of our accounts tied to it. So that’s our update. We’re doing better. Could do even better, but we’re working on it and, um, we’re excited.

[02:02:19] Ramit: Yep. 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 iwt.com/apply. Or second, you can join my money coaching program instantly at iwt.com/money Coaching. In that program, you get access to live virtual events, monthly group coaching calls, live q and as, and an amazing huge community of other people like you.

[02:02:49] Ramit: Check it out at iwt.com/money coaching.

Last Updated on April 7, 2026 by Katie

Have you considered setting up Facebook ads to promote your product or business, but are not sure where to begin? 

Or maybe you’re interested in becoming a Facebook ad manager, but don’t have the experience to give yourself credibility?

Either way, this Meta Ads Mastery review is just what you’re looking for! I’ve been lucky enough to dive behind the walls of this training and I’m going to share what I found with you.

After reading through this review, you’ll know exactly what this course offers and whether it’s right for YOU.

Let’s dive in!

 

Ready to go? Join the FREE webinar HERE.

 

 

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Meta Ads Mastery Review: What is It?

With Meta ads reaching over 2 billion active users each month, there’s never been a better time than now to start advertising on Facebook. 

And many savvy marketers, including Lauren Dallas, who created this course, have shown what incredible results can be achieved.

With the right Meta ad strategy, you can reach your ideal audience who want to buy what you’re selling.

Meta Ads Mastery teaches just this – how to set ad goals, ideal client mapping, setting up social media accounts for profit, funnel strategy, lead magnet creation, AI assistant for ad creation, meta pixel set up, ad design, audience strategy, campaign set up and scaling tips.

Each course section is taught in easy-to-digest bite-sized videos and includes supporting downloads.

Not only that, but you get access to a ton of cool bonuses, which I’ll give more details about below.

And another thing I really loved about this course is the encouragement that – you’re not doing this alone.

Lauren and her coaching team hold weekly coaching sessions where you can ask them – anything – and get access to other helpful tools.

Let’s take a closer look at the different sections in the course.

 

What’s Included in the Course?

Meta Ads Mastery offers a ton of in-depth training to help you as a complete begiinnner to create, launch, profit and scale your first ads.

You can expect six course sections with 5-10 videos in each, plus bonuses and coaching recordings.

Here’s an overview of the course content.

 

Max – Your AI Assistant

Max is your meta advertising expert assistant and your secret weapon for creating ads that convert! Hosted on ChatGPT, you get access to Max with the Meta Ads Mastery training.

No longer do you have to stare at a blank screen for hours deciding what to put in your ad. Just plug your ideal client information into Max and tell him what type of ad you want and – Voila!

Max will produce multiple ad ideas in seconds that are proven to get results. No more guesswork – just ads that work.

Lauren and her team have pre-trained Max with their high-converting ad frameworks. This includes hooks, headlines, captions, CTAs and even split test ideas.

 

M1 Foundations & Ecosystem

This section is where you’ll get yourself ready to create winning ads. You’ll learn how ads work, understand objectives and set your goals.

Other parts to this section include:

• Creating your profit plan, which shows you how to put money in and get profit out
• Facebook and Instagram page setup for success
• How to set up your Meta for business the right way
• Bonus: Free Instagram audit if you choose to use this platform

 

M2 Offer and Funnel Design

Here you will dive into what funnels actually are, why you need one and what makes one profitable.

You’ll define your ideal client and uncover what they really want (with proven ChatGPT prompts).

Other parts of this section include:

• How to create a lead magnet and examples of ones that convert
• Landing page best practices and a backend tech walkthrough to help you create yor own
• What a Meta Pixel is and how to install it on your website (if you have one)

 

M3 Scroll Stopping Ads

Next in this Meta Ads Mastery course, you’ll learn the psychology behind what stops the scroll.

On top of that, the course covers Meta ad types, how to spy on competitors, and:

• Hooks that stop the scroll and the triggers that make them work
• The 3 core creative ad styles and how to design single-image ads and talking-head ads

 

M4 High Value Audiences

Next in the course is an in-depth look at audience strategy and how to simplify your targeting for faster learning and cheaper results

Lauren also explains the 5 ad mistakes to avoid and how to define and create your Meta ad audiences.

After finishing this section, you’ll have an entire targeting system built inside Ads Manager. 

This saves you time in the long run, having targeted audiences to plug into your campaigns for immediate results.

 

M5 The Profit Launch Plan

This next section gets even more exciting as you get access to a 10-point launch checklist.

Furthermore, Lauren hosts a step-by-step walkthrough on how to set up a lead generation campaign from scratch.

She also explains what ad metrics matter, how to interpret them, how to fix common problems and how to manage budget.

 

M6 The Scale System

The last training section in Meta Ads Mastery takes you through a scaling framework, including budget scaling, creative scaling, and audience scaling.

Another top part of this training is how to grow your warm audience with the Content Waterfall Strategy. This will help you to keep your sales campaigns profitable.

And to finish, Lauren explains what retargeting is, why it works and how to use different retargeting copy angles that convert.

Overall, I found the course content easy to follow and in-depth enough to give me all the tools I needed to succeed with Meta ads. 

Plus, it was nice to know there was extra help available.

If you have any burning questions about the course or ad setup, you can post a question to the team in Skiool or ask your question in the weekly coaching sessions.

 

Join the Meta Ads Money Machine FREE webinar HERE.

 

Meta Ads Mastery Review: What Bonuses Are Included?

Alongside all the great content in the main training, you get access to multiple valuable bonuses. These include:

• Meta support hack. Learn how to navigate blocked ads and unlock priority human chat support when you need it
• Selling from stories masterclass. Learn 15 Instagram engagement and sales tactics.

• Audience targeting cheat sheet. Free spreadsheet filled with detailed audience targeting criteria.

• Ad copy swipe file. Grab Laurens best performing copy framework for your own ads.

• Copy and paste ad vault. See behind the curtains of Laurens 5 best performing ads.

 

How Much is Meta Ads Mastery?

The Meta Ads Mastery course is being offered at $297.

You also have the option to break it down and pay in x3 monthly instalments of $129.

This includes all 6 sections of the course, the bonus stack, weekly coaching sessions and access to Max – your AI-powered Meta ads expert.

You will also get access to all future updates to the training for free, so you can be sure you adhere to all the latest Meta updates.

 

Meta Ads Mastery Review: Who is It Right For?

Meta Ads Mastery (MAM) is perfect for those with little or no knowledge of advertising on Facebook or Instagram.

Lauren walks you through everything, including setting up your first Facebook and Instagram business profiles.

The training teaches multiple ad tactics, including video and image creatives, so you don’t have to be on camera if you are not your brand.

And, if you struggle with anything, there is a huge amount of help from Lauren and her team, who are always present in the Skool community.

Alongside beginners, MAM may also be helpful for those with ads experience, but who might not be seeing results.

Lauren opens up about a range of different Meta ad types and tactics you might not know about and she advises on common mistakes and fixes.

 

Does Meta Ads Mastery Have Support?

Meta Adds Mystery is hosted on the Skool platform, which has a real community vibe.

You can join the daily discussions and ask questions whenever you get stuck.

If you have any course questions, you can email the team or join the weekly live coaching sessions.

Here you are asked to submit your questions ahead of the live event and if you miss a session, the recording is uploaded within 24 hours for you to watch at your leisure.

Learn more in Laurens FREE webinar.

 

Meta Ads Mastery Review: Any Success Stories?

There are a ton of happy stories inside the Skool community, which has been great to see.

There is a member wins thread with many good student comments on all of Laurens’ different courses.

Here are a few that stood out:

Here are more reviews from current students:

 

Meta Ads Mastery Review: Final Thoughts

To sum up this Meta Ads Mastery review – I believe this course is IDEAL for anyone looking to promote and/or scale their business or product with Facebook advertising.

Whether you are a complete beginner looking to make money from Facebook or have some marketing experience, Lauren has filled the course with a ton of value.

All the videos are easy to follow and the weekly coaching sessions make you feel like you have support every step of the way. Not only that, the vibrant community in Skool lets you know you are not alone and that you have many other newbies learning with you.

However, it’s important to be realistic and know that results are not guaranteed.

You will need to spend the time to set up your ads correctly, test creatives and go through a learning phase.

But if you stick with it, learning how to set up Meta Ads with Lauren could be your ticket to a profitable future!

 

 

Last Updated on April 6, 2026 by Katie

Are you delivering world-class work on Upwork but still watching your profile stall?

The gap between being a talented professional and being a successful platform partner is often invisible until your Job Success Score (JSS) starts to dip.

If you are struggling to understand why your reputation isn’t matching your skill level, you aren’t alone—but the solution starts with identifying the silent killers of freelancer success.

A polished portfolio might get you through the door, but your reputation is forged in the messy middle of a contract.

Trust, timing, transparency, and clear boundaries are what actually drive your JSS.

The hardest truth is simple: mistakes that kill your reputation on Upwork often happen outside the final deliverable.

They happen in missed expectations, poor-fit jobs, vague communication, and careless policy slips.

 

Key Takeaways

• A strong portfolio wins attention, but your reputation and Job Success Score depend on the full client experience during contracts, including clear communication, steady updates, and meeting expectations.
• Job Success Score measures client satisfaction over time, weighted more heavily by larger jobs and long-term relationships—one rough contract can drag it down longer than expected.
• Avoid the 7 reputation-killing mistakes: sending generic proposals, charging wrong rates, over-promising timelines, taking bad-fit jobs, going quiet on updates, treating Upwork casually, and breaking platform rules.
• Protect your profile by focusing on trust-building habits like tailored proposals, fair pricing, realistic timelines, job vetting, consistent presence, and strict compliance to encourage repeats and steady growth.

 

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Why a Strong Portfolio Does Not Always Lead to a High Job Success Score

A portfolio proves what you can produce. It does not prove the service delivery that drives your Job Success Score, like what it feels like to hire you.

Clients judge the full experience and their expectations.

They notice whether you reply with clarity, keep the project steady, explain decisions, and make the work feel organised.

Work samples and portfolio links can win the click. They cannot rescue a stressful contract.

That gap catches new freelancers off guard. They think, “My work is good, so my score should be good too.”

Upwork doesn’t work that way. The platform rewards completed contracts and satisfied clients, not only attractive examples.

In other words, your portfolio is the shop window. Your reputation is what happens after someone walks through the door.

Further reading: How to create a winning Upwork profile.

 

A portfolio wins attention, but contract outcomes build trust

First impressions still matter, of course. A client may open your profile because your samples look sharp or your niche feels clear.

Still, trust is built later. It grows through the contract, and it often depends on details clients remember long after the files arrive:

• Whether your replies were calm and useful
• Whether deadlines felt under control
• Whether scope stayed clear
• Whether working with you felt easy, not heavy

Even public feedback with five stars doesn’t always tell the whole story. A client can leave a kind review, then give weaker private feedback if the process felt rough.

Top Rated status, the ultimate long-term goal, requires more than a strong portfolio.

Upwork rewards the working experience, not only the finished work.

 

What Job Success Score Really Measures, and Why Job Quality is Only Part of the Picture

Job Success Score , or JSS, according to Upwork, is Upwork’s running measure of how well your contracts turn out over time.

The JSS calculation updates daily, evaluating performance across rolling 6-month, 12-month, and 24-month windows. Then Upwork shows the best score from those periods.

That means one rough contract can linger longer than you expect.

JSS is shaped by client satisfaction first. That includes public feedback, private feedback, and the reason a contract ended.

It also gives more weight to bigger jobs. Current guidance shows contracts worth $250 to $1,000 count more than very small jobs, and contracts above $1,000 count more again.

Long-term relationships also help. Once a contract runs for 90 days with payment, it starts adding extra positive weight.

For freelancers trying to grow, that changes the game.

A strong niche, sensible pricing, stable client work, and reviewing client history matter because they shape the contracts you accept in the first place.

In practice, 90% or higher is widely seen as the healthy line.

 

The hidden signals that shape your score behind the scenes

What hurts many freelancers is the part they can’t see.

Clients often use feedback to answer a simple question: Would I recommend this freelancer?

• Kind public feedback can still sit beside weak private feedback
• Larger contracts can lift or damage your score faster
• Long-term relationships can steady a profile over time
• Contract endings matter, even when nobody leaves a dramatic review

That’s why reputation on Upwork can feel strange at first. You may think the project went fine, yet your profile behaves as if something is off.

 

The 7 Mistakes That Kill Your Reputation on Upwork, and How to Stop Making Them

These are the mistakes that cause slow, quiet damage. They reduce trust, shrink repeat work, and can drag down JSS without much warning.

Most aren’t talent problems. They’re business habits, and that’s good news, because habits can change.

 

1. Sending generic proposals that make you look careless

Generic proposals rarely destroy your score on their own. The real damage comes earlier.

They lower your hire rates, attract poor matches, and make you sound like you didn’t read the brief.

That creates a bad chain. Fewer replies lead to more desperation. Desperation leads to rushed bidding, which wastes Connects.

Rushed bidding leads to mismatched work.

Clients spot proposal templates fast. Common signs include:

• Vague praise for the job post
• Long claims with no proof
• No mention of the client’s actual problem
• Links or samples that don’t match the task

A better proposal is shorter and sharper. It should include:

• One project-specific observation from the brief
• One relevant proof point
• One smart question that moves the project forward

 

2. Charging the wrong rate, whether too low or too high

Pricing mistakes cut both ways. Charge too little, and you often attract buyers who want champagne service on a tap-water budget.

Charge too much without proof, and clients expect senior-level results you may not yet be ready to deliver.

Both paths can hurt your reputation.

Low rates often pull in price-led clients. They compare everyone, push hard, and forgive little. High rates can work, but only when your profile, samples, and process support them.

This matters even more on larger jobs, such as fixed-price contracts or hourly contracts, because higher-value contracts carry more weight in JSS.

Using milestone payments helps structure those larger jobs.

Common pricing errors include:

• dropping your rate mid-conversation
• quoting the same price for easy and risky work
• ignoring Upwork fees when setting your number
• raising rates faster than your proof grows

A fair rate should match skill, evidence, and project risk.

Further reading: How to price your Upwork services for maximum profit.

 

3. Promising a faster timeline than you can actually deliver

This is one of the clearest mistakes that kill your reputation on Upwork. Clients often forgive a small bump in the road.

They rarely forget a promise you broke, which fails client expectations.

Over-promising shows up in familiar ways. You accept a vague fixed-price job and assume the scope is simple.

You claim expert skill in a tool you only know halfway. You say you’re free this week while juggling three other deadlines.

The final file might still be good. Yet private feedback often reflects whether the client would recommend you, not whether the work merely arrived.

Safer habits protect you:

• Pad your timeline before you quote it
• Define what is and isn’t included
• Flag risks as soon as you spot them
• Avoid “I can do that in two days” unless you mean it

A late promise stains memory faster than a strong paragraph, neat design, or working line of code can clean it.

 

4. Taking on the wrong jobs just to win work

A quiet week feels scary. Still, a bad-fit contract can cost more than no contract at all.

Every new client relationship brings risk. If the brief is muddy, the budget is thin, and the client is rushing, you’re stepping onto a shaky bridge before the wood is nailed down.

Many freelancers do this because they want momentum. What they get instead is stress, confusion, and a poor review.

Watch for red flags such as:

• vague goals and missing deliverables
• tiny budgets with big demands
• clients who need rush work but give weak details
• projects that depend on skills you’re still learning

Before bidding, vet the client’s history in the job feed. Saying no protects your future. It also leaves room for better clients and stronger retention.

Also check out these Upwork interview and negotiation tips.

 

5. Going quiet instead of giving steady progress updates

Silence feels louder in remote work. A client cannot see your effort. They only see messages, milestones, and delivery.

That means no updates often look like no progress, even when you’re working hard.

Poor communication can drag down communication ratings for availability, communication, schedule, and cooperation. It also hurts your response time.

A simple rhythm fixes much of this:

• Confirm scope and deadlines at the start
• Send a short weekly progress note
• Summarise decisions in Upwork messages
• Add context before final delivery

Those updates don’t need to be fancy. They need to be clear. “Done, next, waiting on you” works better than long waffle.

 

6. Treating Upwork like a side app instead of a real business channel

A part-time attitude creates stop-start momentum. You disappear for weeks, come back when money feels tight, then accept whatever lands in front of you.

That pattern makes reputation harder to steady, and stale projects hurt momentum.

Longer paid relationships help cushion occasional setbacks. They also build the kind of consistency Upwork tends to reward, which is key to maintaining Top Rated status.

Some freelancers learn this late, after months of random activity and thin results.

Signs of an inconsistent approach include:

• Long gaps between contracts
• Only checking the platform when bills pile up
• No follow-up before a contract ends
• Unclear working hours or weak boundaries

A steadier routine looks different:

• Regular profile upkeep
• Clear office hours
• Follow-up before current work finishes
• Small habits that encourage repeat business

Further reading: How to get repeat clients on Upwork like clockwork.

 

7. Breaking platform rules and risking everything you built

This is the most serious category of all. A bad review hurts. A policy breach can wipe out years of work.

The biggest risks are easy to name:

• Sharing contact details too early
• Using external links to move payment off-platform
• Moving payment off-platform
• Opening extra accounts
• Using fake samples or fake credentials
• Trying to manufacture reviews

Even if a client suggests moving to email or another payment method, agreeing still puts your account at risk of suspension.

Upwork’s Terms of Service remain strict on off-platform contact, fake reviews, and other trust-breaking behaviour.

Safe alternatives are simple:

• Keep early communication inside Upwork
• Keep payment on-platform
• Store key decisions in written messages
• Build reviews through real work only

Treat the platform fee like rent for your shop, not a trap to dodge. Once the shop disappears, so does the footfall.

 

Frequently Asked Questions

Why doesn’t a strong portfolio guarantee a high Job Success Score?

A portfolio showcases your skills and gets you noticed, but JSS evaluates the entire client experience, like communication, deadlines, and ease of working together.

Clients remember process frustrations more than final deliverables, and private feedback can hurt even if public reviews are positive. Focus on contract delivery to bridge that gap.

 

What are the most common mistakes that kill your Upwork reputation?

The top pitfalls include generic proposals that attract poor matches, wrong pricing that draws demanding clients, over-promising timelines, accepting bad-fit jobs, skipping progress updates, inconsistent platform activity, and breaking rules like off-platform payments.

These erode trust quietly and impact JSS through client satisfaction signals. Fix them with tailored habits like clear communication and job vetting.

 

How can I avoid damaging my JSS with one bad contract?

Vet clients and jobs carefully, sticking to your niche and clear scopes to minimise risks from mismatched work.

Use milestone payments for larger jobs, provide steady updates, and pad timelines realistically to meet expectations.

Long-term relationships and bigger successes can offset issues over time, as JSS looks at rolling windows.

 

What should I do if a client suggests moving communication or payment off Upwork?

Politely decline and keep everything on-platform to avoid suspension risks—Upwork’s rules are strict on early contact sharing or external payments.

Suggest using Upwork messages for clarity and store key decisions there. Treat fees as the cost of a trusted shop; breaking rules can erase years of progress.

 

How do I build a steady reputation for Top Rated status?

Treat Upwork as a serious business with regular activity, profile upkeep, and follow-ups for repeats, rather than a side gig.

Deliver calm, organised experiences with fair rates, good fits, and compliance to earn positive feedback weights from larger, longer contracts.

Consistent habits lead to the sustained performance badges reward.

 

Protect Your Upwork Reputation Before You Need to Repair It

Most mistakes that kill your reputation on Upwork are trust mistakes, not talent mistakes.

Strong samples help you get seen, but lasting results come from honest proposals using client-centred language, fair pricing, realistic timelines, good-fit jobs, steady updates, consistent presence, and strict compliance.

Pick one weak spot from the above mistakes that kill your reputation on Upwork and fix it before your next proposal or contract.

Need more Upork tips?

Check this guide on how to get more Upwork jobs.

 

 

Last Updated on April 2, 2026 by Katie

Trying to cut food costs can feel grim when every “budget meal” sounds like punishment on a plate.

The good news is that dirt-cheap meals under $5, can still be warm, filling, and worth looking forward to.

In the US, households are still spending a hefty amount on food each month.

Recent figures suggest average grocery spending sits around the $500 mark, while food waste can cost American consumers hundreds per year.

If you want to save money on groceries without eating badly, frugal meal planning helps by building meals around oats, bread, eggs, rice, beans, pasta, potatoes, frozen veg, peanut butter, and tinned fish (especially via bulk grocery shopping for staples like oats and rice).

Prices vary by shop and region, of course, but these ideas rely on basics that are usually easy to find. Many feed one generously, and several stretch nicely into leftovers.

 

 

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Dirt Cheap Breakfast Meals Under $5

These cheap breakfast ideas, all under 5 dollars per meal, are often the easiest to make because a few low-cost staples go a long way.

If you’re trying to get organised with food and money, these budgeting tips for beginners pair well with simple breakfasts like these.

 

1. Oatmeal with banana and milk

This is warm, soft, and far more filling than it looks.

Simmer versatile pantry staple ingredients like oats in milk or water for a few minutes, stir until creamy, then top with sliced banana.

Cinnamon or peanut butter makes it better if you’ve already got some in the cupboard.

Average costs:

• Oats, $0.50
• Banana, $0.60
• Milk, $0.40

 

2. Peanut butter toast

Few breakfasts are faster or tastier.

Toast the bread, spread on peanut butter while it’s still hot, and eat it as is or add banana slices if one is hanging about on the counter.

Average costs:

• Bread, $0.40
• Peanut butter, $0.40

 

3. Scrambled eggs on a budget

Healthy, cheap recipes like soft scrambled eggs feel plain in the best way, like a clean shirt for your appetite.

Whisk the eggs, cook them gently in a pan, and season with salt and pepper.

Meals this simple are a reminder that you can cut monthly expenses effectively without making life feel smaller.

Average costs:

• 3 eggs, $0.75
• Seasoning, pantry staple

 

4. Crispy potato and onion hash

Potatoes are one of the best budget foods going because they’re cheap, filling, and useful in a dozen ways.

Dice the potatoes and onion, fry in a little oil, and let everything go golden at the edges.

For price swings on basics, a weekly grocery price tracker shows how much stores can vary.

Average costs:

• 2 potatoes, $0.50
• 1 onion, $0.50

 

5. Egg on toast

This is the breakfast version of a reliable old jumper.

Fry or softly cook two eggs, pile them onto toast, then finish with black pepper, chilli flakes, or ketchup.

Average costs:

• 2 eggs, $0.50
• 2 slices of bread, $0.40

 

6. Easy oat pancakes

These are great for meal prep for the week.

Blend or mash oats with egg and milk for a rough batter, then spoon it into a lightly oiled pan.

They won’t look fancy, but they taste cosy and cost next to nothing.

Average costs:

• Oats, $0.50
• 1 egg, $0.25
• Milk, $0.20

 

7. Peanut butter banana oats

Cook the oats first, then stir in mashed banana and a spoonful of peanut butter.

The result is creamy, sweet, and sturdy enough to keep hunger quiet for hours.

Average costs:

• Oats, $0.50
• Banana, $0.60
• Peanut butter, $0.20

These cheap breakfast ideas will keep you going without draining your wallet.

 

Dirt Cheap Lunch Meals Under $5

Lunch is where leftover meal ideas, tins, and odds and ends start to shine.

If you’re trying to spend less, scratch cooking tips also help, like noticing the things to stop buying that quietly push your food bill up, especially grab-and-go lunches.

 

8. Tuna rice bowl

A tuna rice bowl is one of the best dirt-cheap meals under $5 that is also very healthy.

All you need to do to prepare it is cook the rice, drain the tuna, grate a carrot, then toss the lot together.

A dash of soy sauce or lemon juice wakes it up. It’s cheap, quick, and has enough protein to stop the afternoon slump.

Average costs:

• Rice, $0.30
• Tuna, $1.00
• Carrot, $0.30

 

9. Pasta with beans and garlic

Boil the pasta, warm beans with garlic in a pan, then stir everything together.

White beans, kidney beans, or chickpeas all work well. It sounds plain, but it’s hearty and surprisingly good.

Average costs:

• Pasta, $0.50
• Beans, $0.50
• Garlic, pantry staple

 

10. Peanut butter sandwich

This lunch is old-school for a reason. It’s easy to make, tastes great and you should already have the ingredients in your food cupboard.

Spread the peanut butter thickly, cut the sandwich in half, and pack it with an apple or carrot sticks if you’ve got them.

Average costs:

• 4 slices of bread, $0.80
• Peanut butter, $0.60

 

11. Potato and veg soup

Soup stretches a few cheap ingredients like a good story stretches a rainy afternoon, making it a great way of feeding a family on a budget.

Simmer potatoes, carrot, and onion in water or stock until soft, then leave it chunky or blend it smooth.

Using what you already have first also helps cut waste, something covered in the USDA’s food waste FAQs.

Average costs:

• 2 potatoes, $0.50
• 1 carrot, $0.30
• 1 onion, $0.50

 

12. Tuna sandwich with a little mayo

Mix tuna with a spoonful of mayo, spread it on bread, and lunch is done. It’s practical, no-frills, and far cheaper than buying a sandwich meal deal.

Simple lunches like this help if you’re trying to break the paycheck cycle.

Average costs:

• Tuna, $1.00
• 2 slices of bread, $0.40
• Mayo, pantry staple

 

13. Rice and beans with fried onion

If one meal deserves a place in every tight-budget kitchen, it’s this one.

Cook the rice, fry the onion until sweet, warm the beans, and mix them together.

It can become burritos, tacos, or a bowl with whatever veg is left in the fridge.

Average costs:

• Rice, $0.30
• Beans, $0.50
• Onion, $0.50

Rice and beans dishes aren’t “struggle food”; they’re one of the smartest cheap meals you can make.

 

14. Crunchy cabbage and carrot sandwich

Shredded cabbage and carrot, affordable healthy food, make a crisp, fresh filling when tossed with a little mayo, vinegar, or seasoning.

It’s one of the cheapest ways to get more veg into lunch, and the crunch makes it feel less like a compromise.

Average costs:

• Cabbage, $0.40
• 2 slices of bread, $0.40
• Carrot, $0.30

These options keep lunches under 5 dollars per meal without skimping on satisfaction.

 

Dirt Cheap Dinner Recipes Under $5

Dinner doesn’t need expensive meat or boxed ready meals to feel like a proper meal.

If you’re trying to save on a low income, these low-cost dinner ideas keep things realistic, warm, and perfect for quick weeknight dinners.

 

15. Pasta with peas

Cook the pasta and frozen peas together or in separate pans, then toss with butter, oil, or simple seasoning; using frozen peas is one of my favourite frozen vegetable recipes.

If there’s a bit of grated cheese in the fridge, scatter it over the top.

Average costs:

 

16. Courgette and egg bake

Slice the courgette and tomato, pour over beaten eggs, then bake until set.

It’s light but satisfying, holds up well for leftovers the next day, and can be adapted into casserole recipes for families with extra ingredients.

Average costs:

• 3 eggs, $0.75
• 1 courgette, $1.00
• Tomato, $0.50

 

17. Creamy mashed potatoes

Boil the potatoes until tender, mash with a splash of milk, and season well.

If your budget stretches a bit further, top with fried onions, beans, or a fried egg for a fuller plate.

Average costs:

• 3 potatoes, $0.75
• Milk, $0.10

 

18. Tuna patties

Mix tinned tuna with egg and breadcrumbs, shape into small patties, and fry until browned.

They’re crisp outside, soft in the middle, and a smart way to make one tin feel like a real dinner.

If the budget allows, swap in ground beef recipes for a heartier version or try other ground beef recipes like simple meatballs.

Average costs:

• Tuna, $1.00
• 1 egg, $0.25
• Breadcrumbs, pantry staple

 

19. Quick bean chilli

Beans are one of the best bargain ingredients because they fill you up and bring fibre and protein at the same time.

Simmer beans, tomatoes, and onion with chilli powder until thick, then serve with rice, toast, or a baked potato.

It works well as a slow cooker meal and is among the best freezer-friendly dinners.

If food spending keeps creeping up, watch for the common budgeting mistakes that make cheap meals harder to stick with, especially when opting for store-brand products.

Average costs:

• Beans, $1.00
• Tomatoes, $1.00
• Onion, $0.50

 

20. Fried potatoes, cabbage, and onion

This one-pot dinner recipe turns three low-cost basics into something savoury and comforting.

Fry the potatoes first, add onion and cabbage, then cook until you get crisp edges and soft centres.

It’s perfect for those end-of-week nights when the fridge looks almost empty.

Average costs:

• 2 potatoes, $0.50
• Cabbage, $0.40
• Onion, $0.50

 

Final Thoughts On Dirt Cheap Meals Under $5

Cooking dirt-cheap meals under $5 doesn’t mean resigning yourself to sad meals and tiny portions.

Cheap staples like oats, potatoes, rice, beans, pasta, eggs, and veg can carry you through a hard week without making dinner feel bleak, turning cheap dinner recipes into nutritious home-cooked meals.

Start with what you’ve already got, then build two or three low-cost dinner ideas or quick weeknight dinners around it, including casserole recipes for families.

Batch-cook when you can, waste less where possible, and keep a few low-cost standbys in the cupboard for stressful weeks.

If you want to push your savings further, this guide on how to save £1,000 in a month shows how small changes can add up fast, with cheap dinner recipes and casserole recipes for families as inexpensive dinner options.

 

 

Last Updated on April 1, 2026 by Katie

You know the feeling, sending proposal after proposal, refreshing your inbox, and hearing almost nothing back.

Then picture the opposite: you open Upwork, and one of your high-paying clients on Upwork has already sent new work because they trust you.

That shift changes everything. Learning how to get repeat clients on Upwork cuts the time you spend pitching to win projects on Upwork, makes income feel less shaky, and helps freelancing stop feeling like luck.

If you’re still figuring out how to make money on Upwork, repeat work is one of the fastest ways to calm the chaos.

The good news is that this usually comes from small habits, not fancy sales tricks.

Let’s start with why repeat clients, your ideal client who sends new work, matter so much.

 

 

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The Real Benefits of Repeat Clients on Upwork

A repeat client is more than a nice bonus. It’s a shortcut through the hardest part of freelancing, getting someone to trust you for the first time.

When a client comes back, the ground feels firmer. You already know their style, deadlines, and goals.

They already know you can deliver. That means less back-and-forth, less doubt, and fewer cold starts.

For beginners, that kind of momentum matters more than people think.

Instead of living job to job, you begin building a base of high-paying clients on Upwork.

One good client can turn into monthly blog posts, design updates, admin support, or fresh projects every quarter. In other words, retention beats constant hunting because it protects your time.

Repeat clients often bring benefits like these for long-term projects:

• Steadier income, or consistent freelance income, because work comes in without starting from zero each time
• Less time writing proposals, which saves connects and mental energy
• Faster project starts, since trust already exists
• Stronger reviews, because happy clients often leave better feedback over time, boosting your Job Success Score
• Bigger contracts later, leading to high-paying projects once the client sees you as safe and reliable
• Lower stress, because your week stops depending on strangers’ replies

This is why learning how to get repeat clients on Upwork matters so much early on. You don’t need dozens of clients.

You need a few who think, “This professional freelancer makes my life easier.”

 

10 Simple Steps to Get Repeat Clients on Upwork

You don’t need complicated scripts or pushy sales tactics, or to keep bidding on projects endlessly.

You need small systems that make clients feel looked after from start to finish. That works even better when you niche down and choose your Upwork specialty to offer work that’s easy to repeat.

These habits help land high-paying clients on Upwork who come back.

 

1. Start every project with a clear plan for scope, timeline, and next steps

Repeat work starts before you deliver anything. Clients relax when the path is clear.

At the start, confirm the goal, the exact deliverables, the deadline, revision limits, and what success looks like.

If you’re new and trying to win your first Upwork client, this habit helps you look calm and organised from day one.

A simple kickoff checklist helps:

• What you’re delivering
• When will each part arrive
• How many revisions are included
• What you need from the client
• What happens after approval

Clear expectations reduce friction. They also make hiring you again feel safe.

 

2. Use milestones that make the project feel easy to follow

Big projects can feel like handing your keys to a stranger.

Milestones lower that fear because they break the work into small, visible wins, especially for high-paying projects.

Name each milestone by result, not by vague activity. For example, a writer might use “outline approved” and “first draft delivered.”

A designer might use “homepage concept” and “final files sent.” An assistant might use “inbox audit complete” and “weekly system set up.”

Strong project management here makes approval easier now, and future projects easier to say yes to.

Each milestone should answer one question: what will the client have in hand when this step ends?

That makes approval easier now and future projects easier to say yes to.

 

3. Send short progress updates before the client has to ask

Silence makes clients uneasy. Even great work can feel risky when the client has no idea what’s happening.

One of the easiest ways to learn how to get repeat clients on Upwork is to use a simple update rhythm for communication with clients.

Send a short note after each milestone, or every few days on longer jobs.

Update formula: what was finished, what’s next, and whether you need anything from the client.

For example: “The draft is done and edited. Next, I’m formatting the final version.

I only need your logo file before delivery.” Short, calm updates build trust fast.

 

This doesn’t mean giving away endless free work. It means adding one thoughtful bonus that reduces effort on their side.

A writer might include a short posting note. A designer might organise files neatly by platform.

A VA might add a handoff summary with next actions. Small extras stick in memory because they save time.

Clients remember ease. They may forget one clever sentence or one polished mockup, but they remember when working with you felt lighter.

 

5. Make feedback simple, fast, and low-stress

“Let me know what you think” sounds polite, but it’s too open. Many clients delay feedback because they don’t know what to focus on.

Guide them instead. Ask them to review three points, or choose between two directions.

For example, “Does this tone feel right?” “Which layout do you prefer?” “Should I keep this short or make it more detailed?”

That makes feedback faster. It also keeps the project moving, which protects trust and raises the odds of future work.

 

6. Finish strong with a handoff that shows what comes next

The end of a project should feel tidy, not abrupt. A good handoff reminds the client of what they received and shows them how to use it.

Include a short recap, the final files, any needed instructions, and one logical next step.

If you wrote blog posts, suggest monthly updates. If you designed a page, mention matching email graphics.

If you organised admin systems, suggest a weekly maintenance plan.

A strong finish turns the end of one contract into the start of the next.

 

7. Ask for the next project at the right moment, not in a pushy way

Many freelancers miss repeat work for one simple reason: they never ask, even after moving beyond bidding on projects.

The best time is after a clear win, after kind feedback, or when the client mentions another need.

Keep the tone helpful. If you want better wording for these moments, study Upwork proposals that get replies and craft your Upwork proposal style here.

Try lines like, “If you’d like, I can handle the next batch too,” or, “I can turn this into a monthly system if that helps.”

Soft offers often work better than hard pitches.

 

8. Upsell with help the client already needs

A good upsell shouldn’t feel like a random add-on at the checkout counter.

It should feel like the natural next step, especially toward high-paying projects and long-term projects.

If you wrote one set of articles, offer monthly content support. If you built a landing page, offer ongoing design updates.

If you handled one admin task, offer weekly support.

Frame it around saved time, better consistency, or less work for them. When raising your rates for these packages, set profitable Upwork prices to benefit both sides.

 

9. Build a light follow-up system so good clients do not forget you

Not every repeat client comes back right away. Some simply get busy, including for long-term projects.

Keep a basic record of each client, your freelance work history with them, what you did, when the project ended, and what they may need next.

Then check in two to four weeks later with a useful note. Mention a quick idea, a seasonal update, or a small improvement they might want.

This keeps repeat customers top of mind without nagging, like leaving a porch light on instead of banging on the door.

 

10. Protect the relationship with reliability, boundaries, and calm communication

Repeat clients don’t only want talent. They want someone easy to trust, especially high-paying clients on Upwork.

That means hitting deadlines, replying in a reasonable time, and handling changes without drama.

It also means having boundaries. If you say yes to everything, quality slips and resentment grows.

Reliable freelancers often get more Upwork jobs because clients talk about ease as much as skill, boosting public and private ratings.

The professional freelancer who stays calm under pressure often wins more repeat work than the freelancer who tries to impress nonstop.

Follow these steps to build your Job Success Score, start raising your rates confidently, and secure steady high-paying clients on Upwork.

 

Common Mistakes that Stop Upwork Clients from Coming Back

Most repeat work is lost through broken trust, not lack of talent. A client doesn’t need perfect.

They need clear, steady, dependable. Aim to become a Top-Rated Freelancer by avoiding these pitfalls that drive away even high-paying clients on Upwork.

Here are the mistakes that quietly push good clients away:

• Going silent during the project, which hurts your Job Success Score
• Sending messy files or unclear deliverables
• Being vague about deadlines
• Asking for more work too early
• Overpromising to win the job
• Disappearing after the contract ends

Each of these creates extra mental load for the client. That’s the part many beginners miss.

Clients come back to freelancers who reduce stress, not freelancers who create new puzzles. Client testimonials often highlight this reliability as key to building trust.

So if you’re working on how to get repeat clients on Upwork, don’t chase clever tricks first. Clean up the basics. When trust feels solid, repeat work starts to grow naturally.

 

Final Thoughts On How to Get Repeat Clients On Upwork

A strong freelance business grows through systems, not luck. Clear milestones, steady updates, helpful handoffs, and small upsells do more than flashy sales lines ever will.

Client testimonials from satisfied clients provide external validation that strengthens your case.

Pick one system from this article and use it on your very next contract, focusing on communication with clients.

Then build from there. If your foundation still needs work, start by learning how to create a winning Upwork profile so clients trust you before the project even begins.

 

 

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My $0 to $100k Playbook (full beginners guide)

Here’s something most people never do: actually calculate when they’ll have $100,000.

They worry about money. They cut back on random things. They tell themselves that a raise will fix everything. But they never sit down and run the numbers. In this special bonus episode, Ramit walks you through exactly what it takes to get to your first $100K. The math, the system, and the mindset shifts that actually move the needle.

He covers compound interest in a way that finally makes the numbers click, shows you the exact calculator he uses to find your personal $100K date, and walks through the six steps that build real wealth. He also names the four traps he sees people fall into again and again, even when they’re doing everything else right.

No guests. No debt breakdowns. Just Ramit and the numbers.

In this episode we uncover:

• The myth that earning more will finally make you feel good about money and why it backfires
• What $100K actually means for your life in practical terms
• The compound interest chart that changes how you think about time and money
• How to find the exact date you’ll hit $100K using a real calculator
• The CEO system: What it means to cut, earn, and optimize, and how to do it without obsessing over every dollar
• Why trying to save money never works as well as automating it
• The six steps Ramit recommends and why the order matters
• The 1% December rule and why it’s worth more than years of cutting expenses
• Four traps that quietly kill momentum: get rich quick schemes, toxic frugality, “I missed my chance” thinking, and the optimization spiral
• Live Q&A: should I pay off debt or invest? How do I handle irregular income? What do I do with a Roth IRA stuck in Primerica?

Chapters:

(00:00:00) Introduction: your money map to $100K

(00:01:24) The big delusion: “If I just earned more, I’d be rich”

(00:06:04) What $100K actually means and why it matters

(00:07:13) The compound interest math most people never look at

(00:15:12) Finding your exact date: the $100K calculator live

(00:19:57) The six steps and why sequence matters

(00:20:22) Step 1: Kill high-interest debt

(00:22:28) Step 2: The CEO system: cut, earn, and optimize

(00:29:50) Step 3: Build your financial moat

(00:33:13) Step 4: Where real wealth is actually created

(00:34:25) Step 5: Build the right environment

(00:38:34) Step 6: Play offense and delete your budgeting app

(00:41:22) Four traps that quietly destroy your momentum

(00:45:29) Q&A: debt vs investing, irregular income, Roth IRA transfers, and FIRE

If you or your partner get stressed spending $150 on dinner, or are covering up spending, I’d like to help. Apply to be coached for free on this podcast at iwt.com/apply

Transcript 

[00:00:00] Ramit: Hey, it’s for me coming to you live from Japan. My wife and I are living our rich life here in Tokyo right now, and today I wanted to give you something from behind the scenes of my money coaching program. So please enjoy this exclusive program that I recorded for my members called How to Map Your Way to a hundred K.

[00:00:17] And if you enjoy this, you can find much more including live events at iwt.com/money Coaching. Welcome everybody. I’m Ramit sat and we have a very, very. Fun topic. We are gonna talk about your money map to 100 k. We are going to talk specifics. I’m gonna give you some numbers. I’m gonna give you a new way of looking at money.

[00:00:39] I actually really like when you get specific. When you tell me not just how much money you want, but why, what does it mean to you? I remember early on in my early twenties, being able to get in a taxi and not have to stand in the heat of a subway in New York was a rich life to me. What is that? 10, 15 [00:01:00] bucks?

[00:01:00] But it felt incredibly amazing. I think that having num numerical goals is really powerful, but I think it’s even more powerful to have a very specific vision. Like I could feel that sweat on the back of my back and just. Ugh, I don’t want that. I wanna sit with the air blowing on me in an August summer day in New York City.

[00:01:22] That feels rich. So that’s the kind of thing that we’re talking about. I like the vision, uh, but I also wanna talk about some freaking big numbers. What do y’all think? I’m not gonna sit around here singing Kumbaya to all of you. We’re gonna be talking specifics. Lemme show you what we’re covering tonight.

[00:01:36] Let’s just get into it. Nobody wants to do a joint affirmation with me. Ramit Seti. It’s going to be okay. We’re not doing that. Alright, here we go. Welcome to your money map to 100 k. I love this topic, especially because we get to start off with one of my favorite things of all your delusions. Tell me if this sounds familiar.

[00:01:59] If [00:02:00] I just earned more, I would be rich. How many people here have said that? Well, you’re wrong. I mean, it would be nice, that’s for sure. But there’s a common delusion that if I just earned 500 more, 5,000 more, 500,000 more, that finally I would feel good about my money. It’s very common, right? A lot of people going like, what’s the problem?

[00:02:25] The problem is that that’s not how it really works, and most people chase this idea of a specific number, but it doesn’t actually. Change the way they feel about money. And I think this is important to note because if you think that you are going to feel better about money and your money problems are just going to disappear just by having a little bit more of it, you’re actually doomed.

[00:02:48] You’re gonna be working you’re entire life towards a goal that’s not actually real. So I want to just disabuse you of that right now. And in fact, I wanna tell you the problem is not just how much you earn, [00:03:00] although earning does matter a lot. One thing the personal finance world doesn’t really tell you is that many money problems are actually solved by just increasing your income.

[00:03:08] Not all, but many. But lemme show you why this myth is so dangerous. Let’s take a look. First of all, as I said, earning more does not magically solve your money problems. Next up, when you earn more, there are a lot more opportunities to spend money. And finally, if you don’t have the right systems at 50 K, you definitely won’t at 500 K.

[00:03:26] What do y’all think of that? In fact, can you tell me an answer to number two? Can you think of an example where as you started to earn more money, there were actually more opportunities to spend it? You know what I, my message to you is I’m not gonna sit here and tell you, uh, the more you earn, you should not spend any of it.

[00:03:43] Just lock it all away. You’ve heard people in the finance world tell you that, right? It’s called, uh, avoiding lifestyle creep. If you double your income, don’t increase your spending 1 cent. No thank you. That’s not my philosophy. I actually think as you earn more, you should spend more. That’s the point. The point isn’t [00:04:00] to simply earn more, bust your butt work really hard and not do anything with it except invest and wait until you’re 92 years old.

[00:04:05] That’s not the point. But you should also pro. Probably increase your investments in savings. Alright, so I want you to understand not simply black or white. Oh my gosh, spending is bad. We’re not gonna do that. No, I want you to have a healthy relationship with money. In my experience, the vast majority of people, especially in America, have an unhealthy relationship with money.

[00:04:25] I’ll give you some examples. For example, they think that spending is bad and not spending money is good. That’s the equivalent of saying like, chocolate cake is bad. Not eating chocolate cake is good. Do you understand that? When taken to its logical extreme, what that happens in the food world, that’s not a healthy relationship with money or with food.

[00:04:45] We can’t simply classify certain things as good or bad, especially when we don’t even know why life is full of opportunities for chocolate cake. I had a publisher lunch today. You think I’m gonna sit there? Oh, I’m not going to eat this because it’s so bad. No, I had a little bit of everything. I trusted myself.

[00:04:59] I [00:05:00] know what’s right for me. I was able to say yes and no to certain things. That is the ease with which I want you to be able to handle money. Somebody says, Hey, can you fly to Vegas? We’re gonna have a birthday party. Maybe you can, maybe not you. You know your numbers. You can confidently say, I’d love to be there.

[00:05:17] I can’t wait. Or, you know what? I’d love to be there, but. Unfortunately, I can’t afford it, but I’d love to send a gift. It’s not this super, um, toxic relationship with money and I want, part of what we’re gonna cover today is improving your relationship, not only through the psychology, but through the numbers as well.

[00:05:33] So $100,000. What words come to mind when you think of having $100,000 of net worth? If you see the number 100,000 and your first response is not enough or something negative about yourself, you’re probably not gonna get there. You’re probably gonna self-sabotage yourself because it is very difficult to achieve something big if you hate the destination.

[00:05:57] For me, what does 100 [00:06:00] K mean? 100 K means you can say, maybe I can’t work overtime this weekend, even though the boss asked me to. I’m just gonna be firm. It means you can splurge on a birthday gift. It means that you have a fat emergency fund in case something bad happens, such as a layoff or elderly person in your family becoming ill.

[00:06:19] Whatever the case, whatever emergency you can breathe, this is the first taste of financial freedom and I think it’s really powerful. That’s really what we’re building towards tonight, and I want to talk a little bit about the. The, the details underneath this number. So let’s talk about how compound interest works.

[00:06:39] Okay. The first a hundred K is challenging, but it gets easier over time, especially when you have that number. It’s on your side. It’s like, kind of like you have this amazing tool in your tool belt. And why is that the case? Has anyone actually looked at the math of compounding what you, y’all don’t do this?[00:07:00]

[00:07:00] For fun on Friday nights. No. How about for the first time ever, we talk about the math behind the thing that you spend like 10 hours a day worrying about. How about that? How about we take a look at some actual numbers instead of just worrying for the next 55 years, but never actually opening a single personal finance book?

[00:07:18] How about that? I don’t even, you don’t even need to read the book tonight. Okay. But lemme show you some math. I actually love this compound interest. So here’s the principle I’m gonna show you, and we’re gonna go through it methodically. I’m gonna take you step by step, ’cause I want you to understand this.

[00:07:31] And whether it’s a hundred K, a million dollars, 5 million, the same principles apply. So adapt this for your own needs. Watch this early on. When you are on your journey to 100 K, all of your growth comes from you putting the money into investments. Like literally, you got it from your paycheck, you invested it.

[00:07:50] That’s. You invested 500. Now you have 500 bucks. You’re doing the heavy lifting, but over time, it’s this compound interest that [00:08:00] lifts your investments and carries them like the wind. It’s a really beautiful thing and I want to actually illustrate the math. You’ll get to a hundred KA lot faster than you think, and the math here is quite counterintuitive.

[00:08:15] It’s not a magic trick, it’s just math. Let’s take a look. So let’s say that you contribute $600 per month. Okay? And let’s say that you receive a 7%. Annual return, which is, I consider that a conservative return. It’s pretty straightforward. We’re already accounting for inflation and that’s sort of the typical what we can expect over time in the s and p 500.

[00:08:42] Now watch what happens each year as this compounds. It’s quite interesting. Let’s look at year one. Alright, so take a look at this chart. Year one, we have a total balance at the end of about 7,400 bucks. That kind of intuitively makes sense. You put $600 a month in there, multiply by 10, [00:09:00] that’s you know, 6,000.

[00:09:01] And then you have another like 1200 bucks or so with a little bit of interest. So you put $7,201 in. That’s the principle. You made $235 and 62 cents in interest. Alright, so first of all, are you excited by that interest amount? Yeah, I’m not either. It sucks. 235 bucks. Half of you could find that in your couch cushions right now.

[00:09:25] Let’s be honest. Okay? We don’t, we don’t need to pretend to be excited by this amount, but I, but I am interested in the trajectory. Out of $7,400. I manually, or I contributed $7,200 of that. The vast majority. Let’s take a look. What happens as time goes on. Here we are in year five. Now your balance is approximately $43,000.

[00:09:49] Now look at this. I have contributed $36,000 myself, but the interest is almost $7,000. It’s nice, right? [00:10:00] So 7,000 bucks over five years. That’s cool. But like, if we really break it down, seven, let’s just say it’s just to make the math easy. $5,000 over five years, that’s about, you know, a thousand bucks. Or, or, or just to simplify, it’s about a hundred bucks a month in interest.

[00:10:17] Ah, it’s fine. It’s not gonna change my life. But what do you notice? The trajectory is really starting to kick in. Shall we keep going? ’cause the math becomes extremely powerful. Watch this year 10, we now have $103,000. $72,000. I contributed $31,000 in interest. Almost half. Of the value, or let me put it another way.

[00:10:41] Interest is now representing half of what I contributed. This is kind of interesting. Year 10. Keep in mind, I have not increased my contributions whatsoever. It’s the same amount going in. In fact, I’m not even doing this manually. It’s all happening automatic. I’m not even thinking about this. Let’s keep going.

[00:10:58] This is where it gets really [00:11:00] interesting. Pay close attention. In fact, lean forward to your freaking screen so you can see these. Look at this year, 19. Holy. I contributed $136,000. Automatically. I didn’t even notice the money was going, but now the interest is $147,000. The interest is now bigger than the amount that I contributed.

[00:11:20] Do you understand what the hell is going on here right now? What do I notice about this? I notice that. By this point in year 19, my investment returns now eclipse how much I have contributed myself. Do you understand? That means that the money that I started investing, which started with a poultry $235 of returns, is now $147,000, and it’s still growing.

[00:11:50] At a certain point, you make more from your investments than you make in your entire salary. And that is an amazing, amazing point to be in. [00:12:00] So here we are at year 30. Now the amount I’ve contributed is $216,000, but the total investment return that I’ve accumulated, $515,000 for a total of $731,000. What do you notice about that curve?

[00:12:18] Look at the blue curve. It’s kind of linear, it’s steady, but look at that green curve. It’s going up and up. It’s almost vertical. As an example, I think the numbers Warren Buffet made 99% of his wealth after the age of 70. That is stunning. Now I know what’s happening in your, uh, a lot of people in your head going, I don’t have 30 years.

[00:12:43] Oh my gosh. Or somebody said, you need to double that for retirement though y’all are very good at coming up with reasons this won’t work for you. Huh? You really had a lot of practice telling yourself all the reasons that things won’t work in my business. I can’t help somebody who actually doesn’t want help.[00:13:00]

[00:13:00] They come in here, they have 10 excuses why something won’t work or, yeah, okay, that’s nice to have 731,000, but that’s not enough. They can’t even absorb the lesson. That’s not who I’m speaking to. I’m speaking to people who are going, holy, that’s amazing. I didn’t realize how powerful compound interest really is.

[00:13:21] A lot of folks wondering, must be nice. To contribute $600 a month must be nice. What do you say when people say, must be nice to you about something that you’ve accomplished? How do you respond to that? I go, it is? Yeah, it is. Guess what? I’ve been investing since I was 14 years old. It is nice. Now, most people do not start investing at the age of 14, but you could start at 25 or 30.

[00:13:46] Or 40 or 45 or even 50. We can keep going. The point is, it must be nice. Yeah, it is nice to build compound interest and to let it grow. And that is what I, that’s that kind of [00:14:00] energy that I want you to have, which is, yeah, it is nice. It’s nice that I bet on myself and I learned the skills of investing.

[00:14:06] That’s what we’re trying to get to now. These three words are gonna set you back a long time unless you learn to flip. It must be nice. I can’t do 600 bucks a month. Can I do 400? I can’t do 400 a month. Can I do one 50? Great. Let me get started there. That’s the way I want you to think about this. Now, I will tell you that most people truly never run their numbers.

[00:14:32] They just hope that it works out. We don’t run our numbers when it comes to the major purchases in our life. Buying a house is the primary example. Almost nobody runs the numbers before making that purchase. Almost nobody runs the numbers before buying a car. Uh, almost nobody runs the numbers when they pay a financial advisor and on and on, they do agonize over the price of cheesecake and pickles.

[00:14:56] Two totally irrelevant numbers that have no material difference [00:15:00] on your finances at all, but we actually ignore the, the biggest numbers in our finances of all. I don’t like it. I’d rather focus on five to 10 big wins, get ’em right, and then never have to worry about how much a rusted potato costs. What do y’all say?

[00:15:15] Or do y’all wanna spend the rest of your life tracking 47,000 different skews in a spreadsheet that can barely contain itself? Here’s my philosophy. If what you’re doing isn’t working, why don’t we do it my way? How about that? Let’s go that way. We’re gonna run some numbers. I’m gonna show you the exact date that you are going to have 100 k you ready?

[00:15:34] You can also adjust it to be 2 50, 500 k, a million, whatever. I’m gonna show you the day that you’re gonna actually have a hundred K in net worth. And then you’re gonna see what happens when you make small changes like a little bit more per month, or eliminating a little bit of debt. So for our initial deposit, let’s say that it’s $1.

[00:15:54] Okay. And this box is for what you have in [00:16:00] investments right now. So if you have a thousand bucks or zero, that’s also fine. Next up, we’re gonna change the five years to however many years until you are 65. So if you’re 40, it’s gonna be 25 years. Okay? Next up. For expected rate of return, what are we gonna put?

[00:16:19] You know the answer, seven. That already accounts for inflation, compound frequency. That’s fine. We can leave that. And let’s assume that enter how much you are investing every single month. So I’m gonna use 600, but I want you to be honest. If you are contributing zero, that’s okay. Just put zero. We’ll fix that.

[00:16:41] Okay? Scroll over the lines and find out what year. You have $100,000. In this example, you can see year 2035, I have a hundred thousand dollars. [00:17:00] Sometimes it is the simplest thing that lets you see you can take control of your money. This is math. This is math, and you can actually control these numbers.

[00:17:11] Look at your date. Really look at it. This is your map to a hundred thousand dollars. Most people will go their entire lives not knowing this date or this number. It’s not a fantasy anymore, it’s actually just math. And now that you have this timeline, you can actually control it. You can speed it up, you can slow it down.

[00:17:34] How about I show you how to do some of this stuff here? We have the same 30 year period on the left side. If we, uh, on the first row, if we contribute 600 bucks. By the end of that 30 years, we’ll have $731,000. That’s just 600 bucks automatically every single month. You’re not even logging in. It just happens for you automatically.

[00:17:52] You won’t even know the money’s gone. But let’s say you increase that just by a hundred dollars, $100 a month, you wouldn’t even know it. You wouldn’t miss it. [00:18:00] You would have over $120,000 more at the end of that time period. Just a hundred bucks a month, which you wouldn’t even notice is gone. Let’s say you increased that to a thousand bucks a month, you’d have $1.2 million almost double just from going from 600 to a thousand bucks.

[00:18:19] And if you went to 1500 bucks, that’s $1.8 million over 30 years. Time makes a big difference. Y’all know you’re losing tons of money every single day that you are not investing. Some of you are losing 20 bucks, 50 bucks, a hundred bucks, $200 a day, maybe more. It’s just lit. Lit on fire. You don’t know it.

[00:18:44] ’cause you go, how can I lose money that I never had? That’s lost money. You could have had it if you put this thing into effect, but you didn’t. You sat around, you lit the voice in the back of your head. You read Dave Ramsey. You didn’t do the things you needed to do to invest aggressively and in an automated fashion.[00:19:00]

[00:19:00] You spent your time calculating the price in ounces of snap peas. What a waste. On the other hand, now that we know these numbers, we can realize there’s a much bigger game to play here. Than most of us ever realize. We started talking about a hundred K. Now we’re looking at almost $2 million right here on screen.

[00:19:19] Time matters. Automation matters, but your freaking mindset also matters. No EO is allowed, but people who are optimistic, who are confident, the folks say, that’s why we’re here. While this is amazing, you have a very good chance at making this happen. This is the system that I designed that’s gonna get you faster.

[00:19:38] Progress. Six steps. These are not particularly complex. These are not secrets, but they work and they work in sequence and they work. If you take them seriously, I’m gonna show you all of them. I want to give you a caution, which is that most people are optimizing or focused on the wrong things. You know, I joke around about people, uh, [00:20:00] focusing on the price of freaking craft cheese.

[00:20:03] But it’s actually not a joke. Most of the ways that people spend their time, their focus when it comes to money, are not looking at things like this. These are the big, big wins and this is the kind of stuff I wanna talk to you about. Alright, you’re gonna do it differently. Let me walk you through the steps here.

[00:20:18] Step one is critical. If you. Skip this one. Nothing else gonna work. Step one, you have to kill high interest debt. I use the word kill on purpose. This step alone will put you ahead of many people that you know. High interest debt, I would define as anything over 8%, 7% or 8%, but certainly any credit card debt, anything above 10%, for sure.

[00:20:39] High interest debt as an example. Let’s look at what debt is costing you $10,000 of credit card debt at 27%. Versus a 7% investment over the same period of time, one year and nine months. Debt sets you back in time and money investments grow steadily. [00:21:00] 23% credit card interest debt is going to. Destroy your wealth faster than you can patch it up or out earn it.

[00:21:07] This is like wearing a 200 pound weighted vest while going for a run. It’s just impossible to get ahead. It’s just incredibly difficult to be wearing that. So the key here is to attack that debt aggressively, and once you pay it off, you suddenly free up all that money, which can now be rerouted largely towards investments, and you can bump those contributions up.

[00:21:27] Now, how many people here. Have high interest debt. Personal loans count, student loans count, credit card debt, always counts. All of it. I will tell you that one thing I’ve noticed about people in debt is they like to do everything except pay off their debt. They do the 0% balance transfer games, such a waste of time.

[00:21:46] They do all kinds of gimmicks. Should I do this? What if I do that, transfer this, do that. Why don’t you actually just create a debt payoff plan and then automatically pay that money every single month, stop messing around, pay that debt off. That’s why I [00:22:00] say pay it off aggressively. The same way that you just calculated exactly when you’ll have a hundred K and 500 k, you can do the exact same thing with a debt payoff calculator.

[00:22:08] In fact, you can search debt payoff calculator reit, and you’ll be taken to our debt. Payoff calculator. A lot of people in debt will do anything except face reality. So they play games and gimmicks. They rearrange chairs on the deck of the Titanic, but they don’t realize the only thing that matters is paying off your debt.

[00:22:24] Stop the games, pay off the debt, then we can move on to the next step, shall we? Step two. The CEO system, you are the CEO of your money. If you were a CEO of a company, how would you engage with your money? Would you log into your Bank of America app every single day? No. First of all, if you found out someone was using a Bank of America, you would fire them second.

[00:22:45] You certainly would not be logging in every day because why? Why would you do that? That means you’re a micromanager. Stop instead. Your de your job is to make a few very important decisions, the most important decisions of your financial life, [00:23:00] to make sure that things are structured correctly, and then you have a limited amount of daily involvement with them.

[00:23:08] That’s what the CE structure’s about. There’s three parts, cut, earn, and optimize. Let’s go through each of them. C for cut costs. Cut costs, merciless. The only things you don’t care about, but. Spend extravagantly on the things you do. Now, if your first reaction is to say, what if I care about everything Ramit, just stop typing right now.

[00:23:28] I already heard it a million times. It’s not funny. It actually is a sign of intellectual laziness. Instead, I wanna talk about the cutting cost part because I know you all have heard it. That’s all personal finances about in America. Whoa, stop spending money on aluminum foil. You’re such a bad person. Bad our religious overtones so bad.

[00:23:46] Stop it. Cutting costs. There’s a really good approach to do this, which is a lot. More focused if you use my conscious spending plan. Alright, then you will already have a section called guilt-Free Spending. [00:24:00] This is things like travel, eating out, et cetera. For most people, eating out is their biggest guilt-free expense.

[00:24:05] They do it regularly. My suggestion to you is you take your top two biggest guilt-free expenses, discretionary expenses, and you target cutting them down by 50% each over the course of six months. So for easy math, let’s say you’re spending a thousand dollars a month eating out, your goal is to go next month.

[00:24:23] Nine 50, then 900, 8 50, then back up to 900 ’cause you forgot you made a mistake, whatever, all the way down to 500 bucks a month and you’re gold. Do the same thing with another one. Suddenly you now have hundreds of dollars of extra cash every single month. This is a very powerful way to operate. You do not have to optimize the price or cut the cost of ketchup ’cause that’s irrelevant and pointless and it will be too hard to try to cut 5% on everything.

[00:24:51] You cut 50% on two things. Now you’ve generated hundreds of dollars right there. The strategy is covered in more detail in, I will teach you to be [00:25:00] rich, but that is how you do it. That’s quite powerful, don’t you think? To be able to just focus on two things, really get dialed in. If you have a spouse, bring them along with the journey and that’s it.

[00:25:10] Take that money and we’ll talk about what to do with it. But you could redirect it to investments. Boom. E, earn more. Yes. Earning more is a skill. It’s really important that we, that we think about it like that. Just having a higher income alone is not gonna make you rich, but it’s sure gonna help because instead of contributing 600 bucks a month for investments, you might be able to contribute a thousand or 2000 or 5,000.

[00:25:33] That’s a very, very powerful place to be. Earning more is a, it’s not just luck, it’s actually a skill that you can develop. I’m also not talking about filling out surveys for $3 an hour. That’s not my point. I’m talking about things like negotiating a raise. I’m talking about things like starting a side business, which we cover in earn one K.

[00:25:51] That’s helped a bunch of people earn a thousand dollars a month or, and much more. Now when you combine earning more with the cutting [00:26:00] costs, you’re attacking the problem from both ends. It’s quite powerful, quite powerful. And now the third part, which is optimize your spending. Let’s talk about optimizing for a second.

[00:26:10] So there’s a few things you can do. I actually just optimized something the other day. I did this through chat. I literally chatted with American Express and got a hundred thousand free uh, points, um, for sticking with the card. You can optimize by calling up a lot of your subscriptions. Think about your cable, think about your cell phone.

[00:26:29] They often have offers. This is a great time to be able to do that. And um, I think we’re gonna actually give some word for word scripts in our money coaching program on exactly who to call, what to say. Uh, sometimes you can just email them that’s optimizing your existing expenses. But there’s also more when it comes to that.

[00:26:47] It’s, it’s not just that, it’s also. The systems that you design, for example, how many people here say something like this, I should really try to save more money. I, I [00:27:00] spend too much. You’re actually attacking this problem in completely the wrong way. That’s like me saying I should really try to brush my teeth more.

[00:27:09] I just don’t, I, I, I should just try. I know it’s bad. You have the totally wrong approach. I should just try to hug my family more. But I don’t, you know that you shouldn’t be trying to save money at all. It should actually be completely automatic. You shouldn’t even be thinking about it. I think about this hair on my freaking left toe more than I do about saving money, and yet I do save a lot of money.

[00:27:35] Why is that? Because as CEO, I set up an automatic savings transfer, and I set it up years ago and it just goes. Why am I gonna sit there and think about it and try, y’all need to stop trying stuff that’s not working and actually use a system to make it happen. That’s effective. CEO management of your money.

[00:27:56] Same thing with investing, and also same thing with. [00:28:00] These laborious budgeting apps that you are using, stop it with the freaking daily logins. Not only is it not helping you get ahead, you’re actually playing small. You are actually limiting your field of vision to this tiny little app with these tiny little numbers and you’re, you’ve created a, a chess board on which you can win.

[00:28:22] But the chess board is just this tiny piece. It’s literally an app. This is the stuff that I think about. The big picture, the millions of dollars, the compound interest, the decades, not the freaking checking account. Do I have 200 or $207 in it? That’s the wrong question to be asking. You have a systems problem if you are logging in every day, but more importantly, don’t just cut it off.

[00:28:44] You need to have the systems backing up. This stuff. I’ll show you some systems. So here’s a system excerpted from my book, chapter five of I will Teach You to Be Rich where I go into detail. And here you can see that the salary you get paid money is automatically taken out to your 401k. The rest of the money goes to [00:29:00] your checking account.

[00:29:01] That money is then automatically, some money is transferred to your Roth IRA. Some money is also transferred to your savings account in which you have a breakdown of sub savings goals, like a wedding, a down payment, emergency fund, that kind of thing. Your credit card bill automatically is paid every single month from your checking account.

[00:29:18] That covers things like your streaming services, your gym, et cetera, and any miscellaneous bills that can’t be paid through a credit card like a utility bill or something like that that can be drawn straight from your checking account. What do you notice? This is how a CEO thinks we are not logging in every day.

[00:29:34] We set it up once. We could check it every six months. We can make adjustments as needed, but we are adjusting this. We’re not adjusting, uh, the price of a brown rice at Safeway. This is the way I want you to be thinking. This is gonna to help you get to a hundred K, 500 KA million, and far beyond. Step three, build your moat.

[00:29:53] Y’all need a moat. I went to Warren Buffett’s event in Omaha a few years ago and he said something [00:30:00] that I’ll never forget. He said, um, we have set up Berkshire, so we will never run out of money. That’s just, that’s it. He was just that confident. He said, we’re never gonna run outta money the way we’ve set it up.

[00:30:11] And I thought to myself, first of all, that’s very inspiring. That’s like pretty amazing. But why can’t we do the same thing for individuals? What if we actually made it a priority to create a moat around ourselves that would protect us from some of the things that come our way? Somebody getting sick, somebody losing a job, unexpected medical expense.

[00:30:31] What would that look like? Let’s take a look. These are some of the things that really catch people off guard. In my experience, your financial moat is six to 12 months of an emergency fund that specifically that covers living expenses. It doesn’t cover eating pizza five times a week. It doesn’t cover any of your guilt-free spending or savings or investments.

[00:30:54] It’s just your fixed costs. That’s why part of your system should be to use the conscious spending plan because you have all [00:31:00] your expenses laid out. Disaster hits. You literally just look at it and you know exactly which expenses to cut. You’ve already thought about what to do in the worst case while you were at the best case.

[00:31:11] Okay? Six to 12 months. I recommend 12 months right now because in my opinion, the economy is not in a great place. Now, you’re not gonna get that tomorrow. That often takes years to accumulate, but I don’t mind if people set up a savings goal for their emergency fund to be 12 months of fixed costs. You will know.

[00:31:27] Same as you did with your investments. You’ll know the exact month and year that you’re gonna have that thing filled up. Just keep it in a high yield savings account and get on with your life. Now, once you get beyond 12 months, in my opinion, there are better places for that money. Next up, investing.

[00:31:41] That’s how you make actual wealth. Hold on. This is so important. I need to show you my big old head. Listen. You all see my conscious spending plan. You’ve seen pictures of it. You’ve seen me talk about it on the podcast, right? There’s four categories, fixed costs, savings, investments, and guilt-Free spending.

[00:31:59] People will [00:32:00] spend their entire lives agonizing over one category. Guilt-free spending. Oh my God, I don’t know if I should get the Diet Coke. I’ve been so bad. I’m a bad person. I’m bad. Stop talking about your freaking diet Pepsi. Nobody cares. It’s irrelevant. The there is one box where serious wealth is created.

[00:32:25] You know what that box is? It’s the investment box. Y’all should spend less time optimizing your rice and more time optimizing. What percentage of my net income and gross income am I contributing to my investments? Wasting your life, focusing on tiny little things over here and there. When real wealth is created in investments, you wanna talk about it?

[00:32:48] Why am I getting mad? I’m trying to help you. I don’t know why I’m getting so mad. I, I’m just thinking of all the people who spend their entire lives, you know? Oh, I don’t know. These popsicles are cheaper at Costco. We should go there Sunday. So good. Oh, the traffic dough. [00:33:00] Why are you spending your time on this?

[00:33:03] Instead of spending half as much time, it should actually be more on investments. That is where the hundreds of thousands and millions of dollars are accumulated, alright? Investing. It’s where the real wealth is created. You’re never gonna get to million 500 k, 1,000,002, 2 million is putting money in a savings account and trying harder.

[00:33:22] That’s a losing battle. Let’s invest and grow this thing. All right, so where should you invest? This is a very common question. There are lots of options. You can invest in individual stocks, individual bonds. You can invest in crypto, you can invest all kinds of stuff. I like index funds or target date funds.

[00:33:37] Target date funds are actually my favorite investments. What I tell my friends and family, it’s like literally you pick the year that you are going to be retiring, which for most people is 65 and let’s just say it’s uh, 2070. You find a fund that matches that year, a target date fund, so it’d be like Vanguard 2070, fidelity 2070 Schwab 2070.

[00:33:57] These are very low cost target date funds. [00:34:00] They are automatically diversified and they automatically become more conservative as you get older. I just love these investments. They are simple. It’s one investment and all you gotta do is put as much money as possible into them. That’s it. It’s set it and forget it.

[00:34:14] It’s so easy. Okay. There’s a lot more to cover on that, but this is like 80% of it, more in chapter three and seven of I Will Teach to Be Rich. Step five, build the Right Environment, you know, um, we used to have a, uh, like a fitness program at I Will Teach To Be Rich. We were actually testing it and it would help people lose weight.

[00:34:40] Or build muscle. And it was quite fascinating that, um, people joined, they had to pay and they had goals. You know, I wanna lose 20 pounds or I wanna put on a few pounds of muscle. And we really went deep with them deep. We had a, a full-time trainer. We went deep on their macros and uh, you know, all [00:35:00] kinds of stuff.

[00:35:00] Psychology and some people really wanted to change, but they had a pantry full of crackers and chips. And they told me that it was like doing battle every single time they sat down to eat. Has anyone here had that experience sitting down looking at food? It feels like you are literally battling that food to not eat the quote.

[00:35:25] Bad stuff. If I had had my way, if money was not a concern, you know what I would’ve told him? I would’ve said, move, move. If you really, if it is your top priority in your life, to change this, you have to move because not only do you have muscle memory in your pantry, you reach in there, you don’t even have to look, you know, there’s a whole bag of Doritos.

[00:35:47] You have an entire social milieu, a a social network around you that encourages the type of lifestyle that you are trying to escape. You know, it’s kind of a similar advice that’s often given to alcoholics, which is like, if you’re in recovery, you [00:36:00] have to find a new group of people to be around Now. Most people cannot simply get up and move.

[00:36:06] It’s just, it, it doesn’t work. But I remember when I was in my, uh, late twenties, I wanted to meet more people. I wanted to live a bigger life. Uh, I wanted to get more fit. And I realized that the number one thing I could do was not to try harder, was not to beat myself up. It was simply to move to Manhattan.

[00:36:23] Boom, move there. The environment forced me to achieve all of the things I wanted to achieve. What do you notice? About what I’m telling you right now, I’m talking about fitness, but it’s actually about a rich life. The idea is you cannot simply try harder. It’s actually about needing to change your environment.

[00:36:47] What is the environment that you are currently in that is making it hard for you to reach a hundred K? The point is that there are a lot of invisible tentacles holding you to a place that’s gonna make it difficult for you to [00:37:00] succeed unless you actually recognize those and change it. So I have a few suggestions for you.

[00:37:05] Step one, stop asking. Broke people for advice. I see this every day on Reddit, people going into Reddit asking, unlike. Basically forums where people have no money. Hey everybody, I just made $20,000 from an inheritance. What should I do with it? And like put it in a savings account. ’cause you don’t know what’s gonna happen with the country.

[00:37:22] It’s going to be a disaster. Says you don’t wanna invest it at all. You can’t trust anything in any way. Investing is like gambling. It’s like, why would you ask these broke people what to do with money? The answer is they actually don’t know any better. They don’t know anyone else. They just have a few buddies on Reddit and that’s what they did wrong.

[00:37:38] Stop scrolling. TikTok for financial tips. You’ll often see what gets optimized the most for the algorithm. Not necessarily what’s the best advice. I see the worst stuff on there all the time. It’s so crazy. I’ve done a TikTok reaction video on YouTube if anybody’s interested. Just search Ramit TikTok reactions.

[00:37:53] It’s quite interesting. Find role models who normalize wealth building. That’s what we have in our community. That’s what I have in my money coaching [00:38:00] group. I want you to. Surround yourself with hundreds or thousands of people who actually are like, yeah, it’s cool to invest. Of course, we’re gonna talk about spending extravagantly on the things we love.

[00:38:11] We’re also gonna talk about our asset allocation and, and what’s our debt payoff strategy. And finally subscribe to people who tell you the truth. I’ve told you a lot of things that are quite truthful tonight, haven’t I? What is something I’ve told you that was maybe a little uncomfortable to hear, but you know, it is the truth.

[00:38:26] Shall we continue now, step six. Play offense, not defense. So here’s what you can do right now. You can delete your budgeting apps from your phone. I’m serious. I actually think it’s keeping you small. I think it’s one of those things that distracts you and makes you feel as if you’re making progress. But if you’re honest, has that budgeting app actually helped you build any serious amount of wealth, or has it kept you chained to tracking every little expense rather than focusing on the actual big picture where true wealth is created next?

[00:38:57] You can, um. Consider not [00:39:00] scrutinizing every single dollar that crosses your bank account, that’s playing defense. Oh no. Did somebody spend an extra $2 and 39 cents that was not properly categorized? Did you just lose that on $1.9 million? ’cause you actually didn’t invest automatically? How about that? I love to talk about that.

[00:39:18] Offense means deciding what’s important to you and then laying the groundwork using the systems to make it happen. And finally, here’s one more offensive move that you can do. You can do it actually right now. You can implement the 1% December rule. It’s quite powerful and it’s very simple. Let’s say that you are currently for easy math.

[00:39:36] You’re investing 10% of your income right now. Amazing. Great job. Every December, you increase that number by 1%. That’s it. From 10 to 11%, 11 to 12%, 12 to 13%. That’s it. You can stop at 20 or 25 if you want, but that’s it. Once a year, a 1% increase, and the beauty of this is [00:40:00] twofold. First, that 1% is so small, you’re not even gonna notice a difference.

[00:40:02] You literally will not notice it. But second, as you earn more. You’re automatically going to raise the total amount you contribute, especially because of this 1% December rule. So if you get a $10,000 raise, you’re going to be automatically investing even more. This single decision alone can make you hundreds of thousands of dollars over your lifetime.

[00:40:28] This single decision alone can be worth more than all the amount you spend on coffee over your entire life. And you only have to do it once a year. Offense means simplicity. The more successful you get with your money, the more you have to fight for simplicity. What do I mean by that? I mean, just having.

[00:40:51] A couple of credit cards, just having a couple of bank accounts, not having 25 different credit cards so you can squeeze out an [00:41:00] extra $11 from gas refunds and five per, but I don’t care about any of that stuff, just simple. I have an extremely simple financial system. It could be way more complex, but I fight for simplicity.

[00:41:12] You’ll have to remember you. It is normal. The financial world wants you to open up more accounts and transfer all this stuff and do all these apps. Why I have no financial apps on my phone. Why would I, I don’t need it if I have one. Once in a while I download it for a second. I use what I need and it’s goodbye.

[00:41:28] I don’t need it. So I really want to emphasize simplicity. And once you have that set up, it’s gonna feel so good. So moving along now, four traps to avoid. I have seen a lot of people implement things but still fail, and these traps quietly can destroy your momentum. So let’s walk through four traps. To avoid trap one, get rich quick.

[00:41:50] Bs. Now the, you know, you see this all the time. You see, and it’s like a lot of fads. A few years ago, what was it, buying Airbnbs a few years before that. It was all, there’s all [00:42:00] kinds of stuff. I don’t like the, the culture that glorifies you have to work 90 hours a week. I also don’t like the culture that glorifies the idea.

[00:42:08] You can make a million dollars overnight. Maybe, I mean, just like you could win the lottery, but that’s not a strategy. I prefer long-term, consistent investing. That is going to be for sure. I want to engineer success. I don’t want to try to get in the, uh, in the way of a lottery ticket. So real wealth is almost always built through systems that take time.

[00:42:28] Just accept that. Once you accept that, then you can really start to make it work. Next up, toxic frugality culture. Oh boy. Walking eight miles to save $3 on gas or, or watermelon is not a rich life. It’s actually quite ridiculous. Um, living way beneath your means. To the point where you are only fixated on a certain number 13 years from now.

[00:42:54] But once you get there, you don’t even know what to do with your life. And in fact, all of your skills at spending money have atrophied, and now [00:43:00] you are actually psychologically incapacitated. So you have to only focus on, will I have enough? Will I have enough? I need more. I need more. Oh, we don’t want that.

[00:43:06] Okay. You don’t want a life of self-imposed deprivation. You want a rich life. Remember, rich life does not mean you have to spend $5,000 a night at a hotel. It’s what’s important to you. Sometimes the most rich things in life are actually free, and sometimes they’re actually very expensive. Both are okay.

[00:43:24] Next up, trap three. I missed my chance. How many people here feel like I missed my chance? I saw it in the first five minutes. Somebody commenting, right? I was in the middle of making a point. Somebody like, how does this work if I’m 70 years old? How start now. That’s the answer y’all. You need to accept reality.

[00:43:41] If you didn’t start until late, then you need to start right now and you need to get it dialed in because you’re gonna need to be a lot more aggressive than somebody who’s starting at age 22. There is no other answer. That’s life. That’s what you came here to hear is the truth. I always promise to tell you the truth.

[00:43:56] That’s the truth. There’s nobody coming to rescue anybody. There’s no [00:44:00] secret amount of money that’s gonna fall outta the sky. I hope you get some inheritance or something, but you sort of know what life is like and so it’s better to start now and focus on what you can control. I have lots of opportunities for you to start learning how to earn more, all that stuff.

[00:44:14] Nothing changes until you go, oh my gosh, nobody’s coming to save me except myself. Okay. Um, trap number four, the optimization spiral. That’s folks who switch bank accounts ’cause my Capital One savings account dropped by 0.3% and I can get a better one over here. But they never stopped to realize, why am I doing this?

[00:44:33] First of all, how much is it actually getting me? And second, am I just endlessly focused on things that optimize the Tary local minimum or maxima that’s like, Ooh, I can make an extra $7 if I transfer these points over here and there and there and there and there. But they’re actually missing the big picture.

[00:44:49] Not only accumulating and saving hundreds of thousands or millions of dollars, but actually like enjoying it. Like, do I really want to be. [00:45:00] Spending time doing like 50 different mile transfer things so that I can get a free flight to Toledo. Maybe. But I think a good way to think about it’s what would people think?

[00:45:09] What would my kids or my family think if they saw me doing this? Like if they saw you sitting there and looking at your investment portfolio and being like, you know, I think we’ve done a nice job next year. Let’s increase our contributions 1%. They’d probably be really proud of you. Probably wanna learn if they saw you spending nine hours to save $211 for some baggage fee on United.

[00:45:27] I don’t really think, uh, that’s a great lesson to be sharing. Something for you to think about. Get your systems right, know your numbers, but then remember, you gotta leave the systems alone. Just like leaving a Thanksgiving Turkey alone. You gotta live your rich life. A rich life has lived outside of the spreadsheet.

[00:45:43] Alright, so let’s take a look now. You have a target, you have a date, you have a system. And now support and accountability. Now, with all that said. Y’all sent me a bunch of questions. Is it okay if I answer some of your questions because I know you put ’em here. We have a question from anonymous. I’m [00:46:00] investing aggressively because I’m behind on my 401k, yet I have over 50 K in debt.

[00:46:04] Should I cut back on my 401k and pay more on my debt? So mathematically, this depends on your interest rate. If your debt is at a 2% interest rate and we kind of conservatively know that we can make like roughly 7% by investing roughly then. I would just stretch that debt payoff out for as long as possible, and I would put more towards the 401k.

[00:46:26] My guess is your debt is probably somewhere between six to 8%, so if I were you, you know, you, you. You could go either way, but if it’s me, I’m doing 50 50 or I’m putting a little bit towards both. I’m also really dramatically looking at my expenses and trying to find an extra, even a hundred dollars a month can rapidly shave years off of that $50,000 debt amount, even a hundred dollars a month.

[00:46:50] So I’m looking for a hundred, 200, 300. I’m gonna earn more money as well and putting it aggressively towards that debt. And of course, once that debt is paid off, I’m gonna shift most or all of that towards [00:47:00] investing. That’s how you do it. Next up, can we invest even a little if we have a lot of debt? Yes. I just gave you an example of that.

[00:47:07] Yes, you should not wait to start investing. That is a critical, crucial mistake. You know why you saw it in the compound interest charts? If you wait even five years, it can cost you hundreds of thousands of dollars. So start investing now, even if it’s 20 or 50 bucks a month, and then of course, over time, ramp that up.

[00:47:23] Alright, next up. If our Roth IRAs are in Primerica, oh God. When I move it to Vanguard, fidelity, or Shaw, will I have taxes or penalties to pay in general? No. You will have some fees, some account closing fee? Probably. But first of all, lemme say I hate Primerica. They are horrible. Uh, but you can do something called an in Kind transfer.

[00:47:44] That’s IN. KIND. That means they’re not gonna sell your investments, they’re just gonna transfer them over. And Vanguard, fidelity or Schwab can help you do this. They have the paperwork to make it happen. How do I avoid taxes eroding my wealth? Um, I don’t really think of it that way. I think that you [00:48:00] should maximize your opportunities with tax advantaged accounts, things like a 4 0 1 KIRA, even HSA, but after that, get on with your life.

[00:48:10] I’m very happy to pay my taxes. I know that it goes to helping. Poor people and middle class people. And, um, it’s a never ending game of, um, trying to minimize or avoid taxes. Like one of my pet peeves is people who are very, very wealthy and then they, uh, like move to a place that they don’t actually want to live in just so they can save a little bit of money on taxes.

[00:48:35] I’m like, what’s the point of being rich? You know what I mean? Like why, and, and it’s because they have fixated on this idea that they need to reduce the amount they pay in taxes. The goal is not to pay the least amount in taxes. You wanna pay the least amount in taxes. Uh, drink 18 glasses of water and then hold your breath for seven minutes and you’ll never have to pay a single tax again in your life.

[00:48:57] That’s not the point. The point is to live a rich life. [00:49:00] So that’s my, uh, approach to you when it comes to taxes. I recently received a settlement of 16 k. Uh, this too much information. What is happening here? I recently received a settlement of 16 K three k, went to Max on my Roth. IRA, I have 15 K sittings in savings.

[00:49:13] I could allocate seven K for the. 2026 Roth IRA, but I’m terrified when my savings account hits below 10 K. Let me say to you that me giving you the information here is actually not going to solve it because it’s not normal to use words like terrified when it comes to money. That actually tells me that you have an unhealthy relationship with money.

[00:49:38] I actually want you to join Money Coaching, and I want you to start in the Money psychology section because you could let the money sit there for a while. Okay? You’re in no rush to do anything with it. Just let us sit there, but I want you to actually focus on improving your relationship with money first.

[00:49:53] That is going to make a bigger difference than allocating 5K here or seven K there. Amir says, when I see people talking about fire, [00:50:00] I don’t understand how it works. Does that mean that the profit from the investments is used to live my life, but that means I need to withdraw money on a monthly basis, which will reduce the investment, isn’t it?

[00:50:11] Kind of a loop? Well, let me explain. Uh, does anyone know how your retirement works? Once you retire, you stop earning money, but you still have all these expenses. Where’s the money come from? Y’all spend your entire life thinking about retirement. Retirement. Oh my God, am I gonna have, you don’t even know how it works.

[00:50:29] This is, this is exactly why I started money coaching, ’cause I need you to understand the mechanics of these important things in life. It’s okay if you don’t know. It’s actually not really explained clearly as you invest. Whether through your 401k or an IRA or whatever, you will have a certain amount of money.

[00:50:51] Let’s just say for easy math, you will have a hundred dollars easy math, okay? You can withdraw some of that money every [00:51:00] single year. The amount will actually generally stay the same depending on how much you withdraw. That’s because it continues growing over time. You can also withdraw a little bit more.

[00:51:10] Maybe you have like $10 million in an account and you don’t need to only withdraw 40 KA year. You can withdraw a lot more. And it will still keep growing or you run it down, it doesn’t matter, but you, there are a few things to know. You wanna time it so you don’t run outta money. You really do not wanna be 93 years old in America running outta money.

[00:51:27] That’s a terrible place to be. You also wanna factor in things like social security. But in general, as your portfolio starts to grow, you can actually withdraw amounts from it and it will still grow. Like Oprah, I forget the size of her portfolio. Let’s just say she’s worth a billion dollars. She bought a house for something like $35 million in, in, uh, Montecito, right?

[00:51:49] She could have just taken that from her investments and she would’ve made that money back in a matter of weeks. That’s how crazy it can be. Now you may [00:52:00] not be Oprah, but you can apply the same thing to buying dinner or paying your housing costs, things like that. So that is how it works conceptually. And that’s also why you should invest aggressively now because in retirement you can have more to live on.

[00:52:15] Alright, cool. That was a good question. I like that. I appreciate that. Um, Anthony has a common question that many people do. Anybody here have irregular income? You make. More one month, less another month. And all of this feels quite tricky to you. Yes. Okay. A lot of people like, yes, this freaking guy’s gonna gimme my answer.

[00:52:31] Okay. I’m gonna give you the answer. Alright, listen, I’m gonna give you the answer and then you should get in money coaching. ’cause we have a lot of people like this and there’s quite a simple solution for all of this. Okay? So, uh, Anthony’s question is, I run my own small business. My monthly income fluctuates from 13,001 month to 5,000 the next month to 900.

[00:52:47] How do I plan and build a system when there isn’t a fixed income coming in? Okay, so this is what you do. You want, first of all, you wanna pick a safe average of income that you can make every single month. In [00:53:00] your case, it’s gonna be higher than 900. It’s gonna be lower than 13,000 just for easy math.

[00:53:05] Let’s say it’s 5,000 a month. You can consistently guarantee you’re gonna make $5,000 per month. Sometimes it’s higher, sometimes it’s lower. But you can make that, you are gonna base your entire conscious spending plan around that number. You’re gonna build the entire thing around there. In months that you make more than that amount, you are gonna put the money in a buffer account.

[00:53:28] It’s basically another savings account. It’s not your emergency fund, it’s your buffer savings account. And so if one month you make, um, $9,000. You built your whole financial system on 5,000, so you have 4,000 extra, you’re gonna move that over to your buffer account and in months where you make less.

[00:53:49] You’re gonna draw from that buffer account. Your goal is to get that buffer account to be six months of expenses. Again, this is in addition to your emergency fund, so it’s gonna take a [00:54:00] while to do it, but it’s okay. And what happens now that you have that amount? Is it, it’s basically allowing you to simulate a W2 income.

[00:54:08] So for so many people there are like, how many people here have been for years wondering how to make this whole freaking thing work? ’cause you have an irregular income. A lot of people, right? A lot of you guys. That’s how you do it. Boom, you can, you now have line of sight on how to simulate a nice, stable income, and if you have a horrible month or even two months, you’re cool.

[00:54:33] You’re covered. Everybody who said I have irregular income, get in money coaching right now. Thank you for being here and committing to your own rich life. Thank you for going through the calculator and the examples and realizing that you are much closer to a hundred K and even more than you ever thought possible.

[00:54:49] That’s incredible. 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 [00:55:00] iwt.com/apply. Or second, you can join my money coaching program instantly at iwt.com/money Coaching. In that program, you get access to live virtual events.

[00:55:11] Monthly group coaching calls Live q and as and an amazing, huge community of other people like you. Check it out at iwt.com/money coaching.