236. “She spent $5K behind my back. How can I trust her?”

Alex (34) and Jackie (33) have been married for 11 years, raising four young kids while navigating a financial dynamic that’s been strained for nearly as long. Alex is meticulous and cautious — he’s tracked every expense since 2016 — while Jackie follows her instincts and believes God will provide. But when she secretly enrolled in a $5,000 coaching program and later pushed for a $16,000 photography course, Alex’s trust shattered. Now he feels like he’s carrying the entire financial load, while Jackie feels discouraged and untrusted. Their arguments spill into daily life, even in front of their kids. Can Ramit help them rebuild trust, confront their conflicting money beliefs, and finally create a system that brings peace instead of panic? In this episode we uncover: • Why Alex has tracked every dollar since 2016—and how control became his default coping strategy • Jackie’s belief that “money will come” and the role faith plays in her financial decisions • How a secret $5,000 coaching purchase shattered Alex’s sense of safety • The emotional toll of raising four young kids while constantly feeling financially behind • How Jackie’s childhood of scarcity and inconsistent money messages shaped her impulse-driven spending • How Alex’s upbringing around saving, stability, and tithing taught him to equate control with security • Why relying on miracles and unexpected windfalls creates a fragile financial foundation • Jackie’s desire to feel heard, supported, and validated—instead of managed • Why Alex feels lonely and burdened in the role of financial gatekeeper • How a shared money system can shift them from crisis-mode to long-term partnership • The first steps they take toward rebuilding trust, financial clarity, and a plan they can both commit to Chapters: (00:00:00) “Do you trust each other?” (00:17:40) “We had $300 and no plan” (00:29:15) Ramit breaks down their numbers (00:37:15) “If we just made more, everything would change” (00:50:52) “I wasn’t taught to dream — just to survive” (00:58:53) “Hope isn’t a financial strategy” (01:07:33) “I want the positive behavior without the crisis” (01:16:36) “The house is on fire” (01:29:07) “That changes everything” (01:36:56) Where are they now? Alex and Jackie’s follow-ups This episode is brought to you by: Gusto | Try Gusto at https://gusto.com/ramit and get 3 months free when you run your first payroll Leesa | Go to https://leesa.com for 30% off mattresses PLUS get an extra $50 off with promo code RAMIT, exclusive for my listeners Factor | Go to https://factormeals.com/ramit50OFF and use code RAMIT50OFF to get 50% off your first box, plus free breakfast for 1 year Rocket Money | Cancel unwanted subscriptions and reach your financial goals faster at https://rocketmoney.com/ramit Trust & Will | Protect what matters most in minutes at https://trustandwill.com/ramit and get 10% off plus free shipping Links mentioned in this episode • If you want help with your finances, join my Money Coaching program at https://iwt.com/moneycoaching. Connect with Ramit • Get my new book, Money For Couples • Get Money Coaching with Ramit • Download the Conscious Spending Plan • Listen to my book—now on Audible • Get my New York Times best-selling book • Get my no-numbers journal • Other episodes • Instagram • Twitter • YouTube If you and your partner have a money issue and you want my help, I occasionally select a couple to work with, free of charge. Apply for my help here.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Ramit Sethi?

  It's kind of funny when I talk to small business owners who are super frustrated by the vendors that they work with because I'm like, y'all know you're the boss, right? You can fire them. You can make changes today. So if you don't like the platform that you are working with, move off of it. I've done it many times. If a CPA that you are working on goes dark on you after April, find somebody who's better. And that is where our partners at Gelt come in. Gelt is a modern CPA firm that helps your business take control of your tax strategy year round. By working with Gelt, you get access to one dedicated tax strategist with real human expertise powered by cutting-edge technology that handles the rest. And right now, they have two Q3 exclusive offers. Extension Rescue, where

• 0:46Ramit Sethi?

  Gelt takes over your tax extension with fast onboarding and no stress, keeping you deadline safe. The Retirement Catch-Up, where Gelt models your prior year retirement contribution opportunities to maximize what's on the table before October 15th. This offer is included for all new clients this quarter. A great CPA is a year-round partner who stays in touch with you. And Gelt is taking on new clients now. Now is the time for business owners to get ahead, not in January. So find out if you qualify at joingelt.com/ramit. That's join G E L T dot com slash ramit.

• 1:26Ramit Sethi?

  When I was thinking about quitting my last job to do I Will Teach You To Be Rich full-time, I created a rule for myself. I couldn't go full-time with IWT until it earned at least as much as my monthly salary for three months in a row. And this really helped me take my business seriously. Now, for new business owners, I recommend something similar. And as you are getting set up, I also recommend keeping things simple by using Shopify.

• 1:55Ramit Sethi?

  Shopify is the commerce platform behind millions of businesses around the world and 10% of all e-commerce in the US, including brands like Mattel and Jimm Shark. They've got ready to go, beautiful templates for important things like your website, landing pages. Plus, they have helpful AI tools to make everyday tasks easier, like generating discount codes and enhancing your product images. It's like having a full marketing team behind you. They've got easy to run email and special media campaigns to help you connect with new customers. And everything is in one place. Tackle your inventory, payments, analytics, and more without having to jump from platform to platform. With Shopify, nothing stands between your idea and a real business, so go make it one.

• 2:38Ramit Sethi?

  Start your free trial at Shopify.com/ramit. Start your free trial at Shopify.com/ramit. You trust each other when it comes to money?

• 2:48Speaker 01

  Not completely.

• 2:49Ramit Sethi?

  When was the example where you lost financial trust?

• 2:52Speaker 01

  She was like, I gotta tell you something. And then she's like, I spent $5,000 on this coaching program. That for me was like, whoa.

• 3:01Ramit Sethi?

  How did you feel?

• 3:02Speaker 01

  It just like the floor dropped out, like it hurt really bad.

• 3:05Speaker 02

  The next morning, I had an extreme panic attack and I thought that I was gonna die in my sleep because I had made that decision.

• 3:11Speaker 01

  Like, I know that this like tracking system is archaic and doesn't work.

• 3:14Ramit Sethi?

  You're at least not counting 20% of the stuff you're spending, which is why your savings account's dwindling, which is why you're gonna be in a real financial problem in a matter of months.

• 3:23Speaker 02

  God was very much like, this is not what I have for you. We saw the miracles that happened to bring us out of that, that it's almost like, oh, it's okay if we're in debt.

• 3:32Ramit Sethi?

  Hope is not a financial strategy. God is not a financial strategy. We need to make a plan. Alex and Jackie live in North Dakota. He's 34, she's 33, and they are raising four children under the age of eight. Let's take a second to just acknowledge how amazing it is that they could find a few hours to spend with me today. In his application, Alex said this about Jackie. "In 2024, she took us $15,000 into debt for a photography business course so we could make more money. It took nine months and a lot of miracles to pay it off, and I've had a lot of trouble trusting her financially after that." Now, there are layers here. Today, you're going to hear how their faith shapes their money decisions,

• 4:15Ramit Sethi?

  sometimes as guidance, but other times as a crutch to avoid responsibility. And before we dive in, I want to hear from you in the comments. When was the time you lost trust with your partner over money? What happened? And did you ever get it back? Today, the question is whether they can stop repeating the same cycle and finally build a plan that they will both follow. I'm about to open Alex and Jackie's Conscious Spending Plan, which breaks down their net worth, income, and where they spend their money. You can download and create your own CSP for free at iwt.com/csp. Assets: $300,000. Investments: $98,000. Savings: $16,000. Debt: $224,000,

• 4:59Ramit Sethi?

  which leaves them with a net worth of $189,000. Their gross income is $91,000. But here is the real problem. Their fixed costs are 87%. That means that almost every dollar they earn is already spoken for before they ever get to savings, investment, or guilt-free spending. And with four young children, that is a very dangerous place to be. Can these two learn to trust each other and pull themselves out of this financial hole? Let's get into it right now. Alex, in your application, you wrote something that really caught my eye. You wrote "constant bickering about spending."

• 5:41Speaker 01

  Yeah.

• 5:41Ramit Sethi?

  "I track everything meticulously, but we still overspend, and I blame Jackie."

• 5:49Ramit Sethi?

  What's going on there?

• 5:51Speaker 01

  I'm able to track things and meticulously organize things and have a lot of trouble with what to do with that. And and leading in or I guess, yeah, I guess like leading in a way that makes us both on the same team instead of me putting myself in this role where I feel like I have to be like a taskmaster or in charge or something.

• 6:14Ramit Sethi?

  I see. What does it feel like to you to be in that role?

• 6:18Speaker 01

  It feels like I'm a farmer running after like 20 chickens and nothing, nothing works and it just feels like loud chaos.

• 6:27Ramit Sethi?

  Who are the chickens in this example?

• 6:29Speaker 01

  Well, I guess Jackie.

• 6:33Ramit Sethi?

  And in what ways, taking the metaphor and extending it, does it feel like you're chasing after her?

• 6:41Speaker 01

  Yeah, I feel like I want and need reassurance of hey, I'm committed to living within the means that we have right now. And I'm aware of where we're at each month. And I care about that and I'm taking that into account as I make purchases.

• 7:03Ramit Sethi?

  Do you feel you have that reassurance or no?

• 7:05Speaker 01

  Most of the time, no. Sometimes, yes.

• 7:08Ramit Sethi?

  Okay. Jackie, I'm curious what your reaction to that is.

• 7:14Speaker 02

  I feel sad because like there is some element here where I do feel like he is in control and not in the bad way. It's just I've managed my money in a way that it's like, you know, oh, Alex is the tracker. Alex is in charge. Alex is the one, you know, and I forget to text him sometimes, a lot of the times. And now we're at the point where we're not even texting.

• 7:40Ramit Sethi?

  What does texting, what does that have to do? Texting means what?

• 7:43Speaker 02

  Yeah, so that's how we track our budget. So whenever we spend something, we text each other how much we spent. So if we're at the grocery store, we just checked out. It's like, okay, I spent $200 at the grocery store. We send it off.

• 7:55Ramit Sethi?

  What? Wait a minute. Hold on. What? Am I in the Stone Age right now? Can you just pull up your phone? I just want to see like, what do the texts say? I know you, you haven't done it in a while. That's fine. Just go back to the last time you did. I want to see what some of them say.

• 8:08Speaker 02

  Okay.

• 8:09Ramit Sethi?

  I live for this. All right. What do you got, Jackie?

• 8:12Speaker 02

  Uh, forty dollars groceries, three hundred and seven dollars groceries, twenty six dollars groceries, twenty one dollars Angelic Gardens, one hundred and sixty two Target groceries, a hundred and like twenty five dollars, like bird curriculum for homeschool.

• 8:29Ramit Sethi?

  Bird? What? Oh, you homeschool your kids?

• 8:32Speaker 02

  Yes.

• 8:32Ramit Sethi?

  Okay. And you bought a curriculum for how much?

• 8:35Speaker 02

  Um, a hundred and fifteen dollars.

• 8:39Ramit Sethi?

  Okay. I noticed you're avoiding eye contact as you say that. All right. How often do the two of you talk about money? And we can include these texts, but also talking.

• 8:48Speaker 01

  Via the texts? I mean, almost daily.

• 8:52Ramit Sethi?

  Mm hmm.

• 8:53Speaker 01

  And then talking about it. Gosh, I'd love to hear your perspective too, Jackie, but I think it's, I think it's like, it was almost every day, some sort of comment or something. Almost every day. Yeah. And then, but like, in terms of a actual sit down, full conversation about it, we were meeting weekly to talk about budget, vision for the family, homeschool, all the things every Friday, but then sometimes the kids would go down later. We wouldn't do that. So.

• 9:20Ramit Sethi?

  That's impressive, though. How long were those meetings that you used to have every Friday?

• 9:24Speaker 01

  An hour to an hour and a half. And we weren't just talking money. We were talking beyond that, but money was a piece of it.

• 9:29Ramit Sethi?

  Mm hmm.

• 9:30Speaker 02

  It was big vision. Yeah.

• 9:31Ramit Sethi?

  Cool. Wow. That sounds great. Honestly, the very rare and extremely impressive. Do you trust each other when it comes to money?

• 9:38Speaker 01

  Not completely. No.

• 9:41Ramit Sethi?

  Jackie?

• 9:41Speaker 02

  I trust that he is not going to spend anything. So yeah, I mean, yeah.

• 9:47Ramit Sethi?

  I have a follow up to that. Does not spending anything make you good at money?

• 9:52Speaker 02

  No, no, it's horrible. No, I'm like, no. Um, but I think that's what I can count on him for. I can count on him not to spend money.

• 10:00Ramit Sethi?

  Jackie, what can he count on you for?

• 10:03Speaker 02

  Um, to always, to either not, not know what the budget is like, um, to overspend.

• 10:12Speaker 02

  And to not communicate about money.

• 10:18Ramit Sethi?

  Okay, that's pretty interesting. Alex, would you say that that is why you applied to speak to me today?

• 10:23Speaker 01

  Yeah, definitely part of it. I definitely know that I've created an environment like I know that this like tracking system is archaic and doesn't work, right? That's why we stopped using it this month, especially after filling out the conscious spending plan. It was very clear like what, why have I been wasting all this time? So I mean, that Jackie just said is part of it, but also I know that I'm 100% responsible and complicit in creating that environment in which she felt like that. Like if I was having kinder, gentler conversations with her, I'm sure it would have went differently. And so I just want to be able to be more compassionate about it and more responsible.

• 11:02Ramit Sethi?

  With the old system where Jackie, you would occasionally text the expenses that you had incurred like groceries, et cetera. You would text Alex and then what would happen next?

• 11:13Speaker 02

  He would put them on our budget. He always updated the budget, especially before meetings if we were to have a meeting.

• 11:19Ramit Sethi?

  Alex, would you, how often would you edit the budget?

• 11:24Speaker 01

  Three or four times a week.

• 11:25Ramit Sethi?

  Three or four times a week. And how long would you say you spent per week on that budget?

• 11:29Speaker 01

  Probably like an hour a week.

• 11:31Ramit Sethi?

  Hour a week. And how long have you maintained that budget for?

• 11:35Speaker 01

  Yeah, since 2016.

• 11:39Ramit Sethi?

  Wow, almost 10 years.

• 11:42Speaker 01

  Yeah.

• 11:42Ramit Sethi?

  Do you have it? Can I look at it?

• 11:44Speaker 01

  Yeah.

• 11:45Ramit Sethi?

  Oh, throw it up.

• 11:46Speaker 01

  Yeah.

• 11:47Ramit Sethi?

  Love a good budget.

• 11:48Speaker 01

  Okay.

• 11:49Ramit Sethi?

  Whoa, oh, let me just describe what I see. Okay, this just popped up on my screen. I gotta look. So first of all, I see a lot of numbers, a lot. I see all categories. There are from row seven, which is mortgage. Let's scroll down a bit. Tithes, Zoom. Zoom is a category, by the way, for $17.

• 12:10Ramit Sethi?

  Uh, eighteen dollars a month. I do see a lot of colors. So I see gray, red and green. I can tell that some of them are just standard automated, like Spotify doesn't change. Gym membership appears to be pretty much the same, but then we have these spiky ones which are in red and green like groceries. And gifts which cycle red to green. Am I reading this right, Alex?

• 12:35Speaker 01

  Absolutely, yes.

• 12:36Ramit Sethi?

  All right. Are there any other sheets on this? I'm very suspicious. Where's the rest of this stuff on here?

• 12:41Speaker 01

  Yeah, so there's that.

• 12:43Ramit Sethi?

  Oh, God. Oh. Savings and investing is another row. And then there's like, scroll down. What is all this?

• 12:49Speaker 01

  This is random stuff to remember. So like, if this category says kids activities slash Jackie's business. Uh, if any category was like really high, I put like the large purchases here to remember why, why it was like that.

• 13:04Ramit Sethi?

  This is crazy. All right. Hold on. Before we go on, I just want to say, I knew it. I knew that it looked too simple. I was like, a ten year budget? This, this is like pretty simple. Where's the rest? And then we scroll down. There's all these weird notes. And what's on the right? I'm seeing some more numbers. Sums.

• 13:23Speaker 01

  So totals and then, so then the goal was here's the, a budget of what we were trying to hit every month and did not hit ever.

• 13:33Ramit Sethi?

  Oh.

• 13:34Speaker 01

  And so it was red if it didn't hit, fall within what we had thought it should. And green if it did.

• 13:42Ramit Sethi?

  I love tracking something for an entire decade that I never actually win at. Really motivates me.

• 13:47Speaker 01

  It's the worst.

• 13:48Ramit Sethi?

  So what did you do differently after spending an hour a week for five hundred and twenty weeks of this budget?

• 13:57Speaker 01

  We would have conversations about things and try to make adjustments. So if groceries were really over, we would say, hey, how could we meal plan? To do something different next month. Getting actual results from doing that was very hard for us.

• 14:14Ramit Sethi?

  Hmm. Jackie, what's your take on this budget?

• 14:17Speaker 02

  Yeah, just to go back to what Alex said, even we meal planned in order to, you know, cope with the budget so that next month would be better. And the meal, it was higher. It was higher. We, our systems are broken.

• 14:30Ramit Sethi?

  The system you build is supposed to guide you, not make you feel overwhelmed and lost. But that's exactly what happened here. I don't think Alex is trying to control Jackie. He's trying to control chaos through a spreadsheet. 10 years of budgets, over 500 hours, and they still feel like they're drowning. Do you see why I [bleep] hate budgets? How many people have come on this show totally overwhelmed by their financial situation? And yet they are meticulously tracking every freaking number. And I go, what's the point of this? And it's like, they look up, they are visually startled.

• 15:10Ramit Sethi?

  I don't know. I'm not sure. Why do you do it? I don't know. You do it because you crave control. And it's easier to control cell D46 than to actually zoom out and look at the real problem. And I am begging you, put your stupid [bleep] spreadsheets away. This is exactly why I created a conscious spending plan. Tracking every little tiny detail does nothing for you. It feels good. I gotta say this, I'm gonna get in trouble from a lot of workout people. I don't give a [bleep]. It's like people who go to these workout classes and they're like, oh, I feel so good. I'm sweating. Okay, you might be sweating. I could make you sweat right now. Put you in a freaking airport at 72 degrees and walk around with your heavy [bleep] backpack. You're sweating. That doesn't mean it's a good workout. It's the same thing with the way you manage your money.

• 15:55Ramit Sethi?

  Just because you're tracking 5,000 numbers does not mean you're actually getting ahead. You might feel like you are, but I'm less interested in your feelings sometimes and more interested in objective progress.

• 16:06Ramit Sethi?

  Hold on, now I'm sweating. Oh, such a good workout, everybody. Ramit Sethi sweating in his office. It's not a workout. Budgeting is backwards looking. Here's what you spent on Brussels sprouts. Look into my eyes. I do not care. The CSP says, here's what we care about. Here is where our next $100 is going to be allocated. If your system is just making you anxious and guilty and resentful, it's probably time to change the system. Now, I want to hear about why this behavior even started in the first place. How long have the two of you been married?

• 16:43Speaker 01

  It'll be 11 years in a couple of days.

• 16:46Ramit Sethi?

  Cool, congrats. That's awesome. So before kids, did you like text each other expenses?

• 16:53Speaker 01

  No, so we didn't do that. I don't know. Do you remember Jackie, when we started that? That was the last couple of years, I think.

• 17:00Speaker 02

  I didn't know how much money. I've never known. Like, I don't, I don't think I knew how much money we had in our budget during that time.

• 17:07Ramit Sethi?

  You didn't talk about money in the beginning?

• 17:11Speaker 01

  Not back then.

• 17:12Speaker 02

  No.

• 17:13Ramit Sethi?

  Okay. What was the first time you substantively talked about family finances?

• 17:19Speaker 01

  The first time I remember was, so let's see. We got married in 2014. 2015, we, I quit my job and I was the sole provider. And we, from a financial standpoint, and we were a couple hundred dollars away from running out of money completely. And I was looking at our account on my phone and we were in bed. And I turned over to Jackie and said, our rent's due in, I don't remember, 15 days. We have $300. What are we gonna do? And she looked at me and she laughed and said, well, there's nothing we can do except for go apply for jobs and go make some money.

• 18:02Speaker 01

  And the next day, she applied for a bunch of jobs and got five job offers. And then got a job at a coffee shop and started making money like that week.

• 18:10Ramit Sethi?

  Wow. What do you make of that, Alex? What do you make of Jackie's response and her reaction?

• 18:17Speaker 01

  Man, she just doesn't have the like stress that I have and the like need for control that I have. And I admire that freedom and secretly wish that I could be like that. But I also don't see how if both of us were like that, how it would work.

• 18:34Ramit Sethi?

  Hmm. What about you, Jackie? Hearing that story reflecting back, what do you notice about your reaction?

• 18:41Speaker 02

  I haven't been a steward of my finances and like having goals are just like my goal and financial goals have just been kind of pie in the sky dreams and haven't been like, you know, intangible reality, being able to be measured.

• 18:59Ramit Sethi?

  Okay, that's interesting. My reaction is a little different. Like, okay, I'm sure what you're saying, both of you is true. But from that specific story, the fact that Alex, you were like, hey, we're running out of money. I don't know how we're going to pay rent. And Jackie's like, all right, well, we got to find a job. I'll go out and then she goes out and gets one tomorrow. To me, that is a sign of somebody who's pretty resourceful. And I think, especially when you're married, you want to know that you can count on your partner. They are going to step up and know what needs to be done and just do it. And to me, that is a great example of a resourceful partner.

• 19:33Speaker 01

  Absolutely. I really admire that about her and I'm really, that that story actually makes me happy. Like, I feel really good hearing that story. Like, yeah.

• 19:41Ramit Sethi?

  Okay, Alex, when was the example where you lost financial trust in Jackie?

• 19:48Speaker 01

  Yep. So a couple of years ago, she had some dreams of like entrepreneurial dreams. And so she signed up for a coaching program for a third of our, what we had in savings. So it was $5,000 and signed up for that while I was at work. And then I came home, drove, pulled in the garage, got out of the car. And she was like, I got to tell you something. And then she's like, I spent five, I don't remember if it was five or six or something, $1,000 on this coaching program, you know? And I don't remember what you said after that, but that, that for me was like, whoa.

• 20:28Ramit Sethi?

  How did you feel when you heard that?

• 20:30Speaker 01

  Yeah, just like the floor dropped out like, whoa, I, uh. I didn't know you could do that. Like, uh.

• 20:38Ramit Sethi?

  Like, I didn't know you could do that. That's cool or something else?

• 20:41Speaker 01

  No, like betrayed. Yeah, betrayed. Like, basically. Like, it hurt really bad. Yeah.

• 20:48Ramit Sethi?

  Did you ever use that word and tell Jackie that before now?

• 20:51Speaker 01

  I'm not sure.

• 20:52Speaker 02

  Yeah, I think I got. Yeah, I definitely got that. The next morning, I had an extreme panic attack and I thought that I was gonna die in my sleep because I had made that decision.

• 21:00Ramit Sethi?

  Mm-hmm.

• 21:02Speaker 02

  Yeah.

• 21:02Ramit Sethi?

  What happened next?

• 21:03Speaker 01

  I was upset and emotionally affected by that for a while, for months, I think.

• 21:10Ramit Sethi?

  Did you ever ask her to cancel the coaching program?

• 21:14Speaker 01

  Yeah, I did.

• 21:15Ramit Sethi?

  What happened?

• 21:16Speaker 01

  She said she couldn't.

• 21:18Speaker 02

  I said, no, I said I couldn't because I was so depressed. I was, you know, we had had three children at the time. We lived far away from around the middle of nowhere. You know, my, all my friends were really new, but I just felt so depressed, so without direction, so not able to function as a human being. And I needed someone who, you know, was outside of it all to give me just a broader perspective.

• 21:44Ramit Sethi?

  So when you, when you told him, I can't cancel it, were you saying, I can't cancel it because I need this coaching program right now? Or I can't cancel it because it's literally not cancelable?

• 21:58Speaker 02

  I can't cancel it because I need this right now.

• 22:01Ramit Sethi?

  Okay. Alex, did you understand that at the time?

• 22:04Speaker 01

  No, I thought it was not cancelable as in like they, no refunds, can't cancel it.

• 22:09Ramit Sethi?

  Did you just learn that just now?

• 22:11Speaker 01

  That was the clearest I've ever heard it said. And I, I don't, I actually don't think she's wrong about that. Like, it ended up being a really good thing for us because, aside from the trust piece of it, it ended up being a good thing for us because we had to have more conversations that were hard. And I think that was a good thing.

• 22:30Speaker 02

  I don't think he knew at the time how, how he, you, yeah, you didn't know how deeply depressed I was. I don't even think I knew.

• 22:38Ramit Sethi?

  Mm-hmm. Did the coaching program work?

• 22:41Speaker 02

  Yeah, it, it didn't work. I mean, I signed up for it in order to, for our finances, but what I got was just that, like, Jesus loves me. I don't even know how to explain it, but like, my coach was more spiritual and it was exactly what I needed for the whole year.

• 22:59Ramit Sethi?

  What, what type of course, what type of coaching was it?

• 23:02Speaker 02

  Tony Robbins coaching.

• 23:04Ramit Sethi?

  Okay, so, and like, when you say, "I originally signed up for our finances," what do you mean by that?

• 23:10Speaker 02

  One of the goals that, you know, that they have you fill out on the intake form was, "What's your goal?" And I was like, "Oh, I want to be able to make forty thousand dollars this year. That way I can contribute to our family. Alex doesn't have to stress anymore, you know, about money. I don't have to stress anymore about money. And I can become a new person, you know.

• 23:29Ramit Sethi?

  Okay, uh, that's interesting. And since then, just to stick on the earnings part of it, um, that was several years ago, have you earned forty thousand dollars a year?

• 23:41Speaker 02

  No, no, I have not.

• 23:43Ramit Sethi?

  Okay. I understand that programs and coaching can often work in unexpected ways. Like, I've had people join my Earnable Business Program, and then they realize, like, "I actually don't want to start a business." I actually find that really valuable. You know, better to know that now, spend a few thousand bucks than to go down two years of heartache. But I also think you gotta be able to afford these things. And you certainly have to be able to talk to a partner about a five thousand dollar purchase. There are two key things here that I want to address. First, did you catch when Jackie said she was depressed? I really paid very close attention to that. We throw that word around a lot. "I'm so depressed."

• 24:27Ramit Sethi?

  But real depression is extremely serious. Jackie said she felt like she could not function, isolated, lost. And instead of talking about it, she signed up for a five thousand dollar coaching program. And then she told Alex after the money was gone. If you are listening, and you've felt like that, like you're drowning, directionless, like you have no energy to do anything, then I would highly encourage you to talk to a therapist. Get the support you need before the damage becomes even harder to undo. Now, I want to talk about that five thousand dollar course. Jackie admits that she spent the money because she felt lost. However, she was able to do that because she and Alex did not have an agreed-upon number that either of them could spend without discussion. And it also-

• 25:12Ramit Sethi?

  Feels like a little act of rebellion by Jackie too. Oh, you want me to text you every time I spend money? You need to have control. Well, take this. Nobody wants to live their entire life asking permission, especially not from their spouse. There is a simple fix here. Set up a clear spending threshold. If you are below that number at the end of the month, amazing. If you are above that number, well, first of all, don't get above it. But if you do, then it is your responsibility to bring it up and come up with a plan going forward. And if necessary, discuss why you might want to adjust that number overall. The point is, you have to start somewhere more nuanced than simply spend as little as possible. If I say the word money, how do both of you feel about it?

• 25:58Ramit Sethi?

  Jackie?

• 25:59Speaker 02

  In this moment, sad.

• 26:01Ramit Sethi?

  You feel sad about money. How come?

• 26:03Speaker 02

  Because I don't have enough to give and live the life that I want to live. It's, it's hard. It's not, it's, it's a point of contention in me. And it's been a point of contention in me for, I mean, essentially since that time where I decided like I was gonna try to like hustle and like, you know, and just also being super dishonest about what I wanted to do. You know, it's like I wanted to, I mean, my dream job, right? Is to be a songwriter and, and, and yet when I put all of my energy into photography, it was not fulfilling at all.

• 26:48Ramit Sethi?

  Yeah.

• 26:49Speaker 02

  Yeah.

• 26:50Ramit Sethi?

  I hear that. There's like, um, there's a sorrow in looking at some of the choices that we made. Sometimes the results that they got us, sometimes that we made a choice out of fear instead of what we really wanted to do. I can understand why even bringing up the word money can make you instantly sad. Okay. Alex, how about you? When I say the word money, how do you feel?

• 27:15Speaker 01

  Like dizzy, dizzy and confused and conflicted. Feel like I should. Want to make a ton more money or care about money a lot, but my emotions don't match that. Like, my emotions feel kind of resigned.

• 27:33Ramit Sethi?

  Oh, resigned. That's interesting. I wouldn't have expected you to say that. I would have expected the opposite. I would have thought you would have said, I feel like I shouldn't care about money, but I actually do. And I say that because your behavior of tracking money for a decade kind of communicates that. It's very hard for people to spend an hour a week for a long time on something they don't really care about. What do you make of that?

• 27:58Speaker 01

  Yeah, I'm open to that for sure. It feels like that I liked the system, though, and not the money piece of it. That I like just fiddling around with, like, systems, if you can even call that a system.

• 28:12Ramit Sethi?

  It's a hobby.

• 28:13Speaker 01

  Yeah.

• 28:14Ramit Sethi?

  I think I understand a bit. Let's take a look at the CSP. Jackie, I would like you to read the word in bold and then the full number next to it for this entire box, please.

• 28:24Speaker 02

  Okay, we have assets, $300,000. Investments, $98,358. Savings, $16,000. And debt, $224,953. Total net worth is $189,405.

• 28:44Ramit Sethi?

  Okay. What do you think about those numbers? Jackie?

• 28:46Speaker 02

  There's regret tied into it. I still think there's a lot of regret tied into these numbers. So that's how I feel.

• 28:53Ramit Sethi?

  Okay, what regret?

• 28:55Speaker 02

  Just, you know, our first decisions, like me not getting a job right away.

• 29:00Ramit Sethi?

  You feel like it could be more had you done that?

• 29:02Speaker 02

  Yes.

• 29:03Ramit Sethi?

  Okay, all right. Alex, how do you feel about those numbers?

• 29:05Speaker 01

  Unsure. Just unsure of whether they're good, bad, what, like, what, how it matters. Yeah.

• 29:12Ramit Sethi?

  You know, I really appreciate the honesty in your answers because I think what you both just told me is actually how pretty much 99% of Americans feel about their numbers. First of all, they don't even know what their net worth numbers are. These are four numbers: assets, investments, savings, and debt. You just add them all up, make sure you subtract the debt, and you have your total net worth. The vast majority of people have never done this. So that's part one. Part two is, all right, what the hell does this mean? We need to turn money into meaning. Just seeing a number, whether it's negative 52,189,000 or 1.8 million.

• 29:57Ramit Sethi?

  What does it mean? We are not taught to think about that. And so we just sort of ignore it like the way Jackie did. You know, your first word was about regret. You kind of went back into this story. I'm like, let's talk about the numbers. But numbers are just numbers to us. They actually don't really change the way we feel unless we are trained on how to think and feel about them. Okay, all right. Let's keep going here. Let's talk about income. Alex, can you give me the combined gross monthly income, please?

• 30:26Speaker 01

  Yes, 7,664.

• 30:29Ramit Sethi?

  All right, so the household income, which I think is your income exclusively, right, Alex? Okay.

• 30:35Speaker 01

  At this point, yes.

• 30:36Ramit Sethi?

  $91,968 per year. And then let's go down to big number on this fixed costs. What's that number?

• 30:43Speaker 01

  87% 4,951.

• 30:47Ramit Sethi?

  All right, so 87% of your take home pay is spent on fixed costs. That's it. That's the ballgame. When you're at 87%, I never even need to meet you. I can already tell you're stressed out about money. So let's take a look at the rest of the CSP and see how it plays out. Investments are at 2%. That's $90 a month in post tax with a 401k contribution of $460 per month. All right. Savings at zero. And your savings amount in the bank is 16,000, which is about three months of expenses roughly. Okay, three months of fixed costs. And then finally down to guilt free spending, we are at 11% or $651 a month. Is that number true?

• 31:32Speaker 01

  It's not. We're spending way more than that.

• 31:34Ramit Sethi?

  Exactly. Okay, that's what I thought. So then if we go back up, you're in debt. So I want to ask about the quality of that debt. What is this $224,000 in debt? Break it down for me.

• 31:44Speaker 01

  Yep, everything in that is the mortgage, except for we owe 5,000 on our car.

• 31:53Ramit Sethi?

  Uh, on your credit card?

• 31:55Speaker 01

  Uh, no, uh, to a family member who loaned us money with no interest for the car.

• 32:03Ramit Sethi?

  Oh.

• 32:03Speaker 01

  Yep, no credit card debt.

• 32:05Ramit Sethi?

  Oh, so you, hold on. You're telling me you spend way more than $651 a month. Where's the money come from?

• 32:12Speaker 01

  Our savings, it just goes down every month.

• 32:15Ramit Sethi?

  Ah, you're drawing from your savings like each month?

• 32:20Speaker 01

  Yeah.

• 32:21Ramit Sethi?

  What did your savings used to be at, at the peak?

• 32:23Speaker 01

  Uh, at the peak, right before we bought our house, we had thirty five thousand in there.

• 32:28Ramit Sethi?

  Mm hmm. How long until you run out of savings?

• 32:32Speaker 01

  Uh, right. I haven't calculated, I haven't ran that calculation, but it would eventually, yeah, a couple of years.

• 32:39Ramit Sethi?

  Maybe sooner.

• 32:40Speaker 01

  Yeah.

• 32:41Ramit Sethi?

  Jackie, what do you think about this?

• 32:43Speaker 02

  Um, I feel like my attitude is the same as that time. It's like, okay, well, let's go make money. You know, like, I'm like, okay, well, let's be resourceful. Okay. Well, what are we doing? Like, that's why we're, that's why we're having meetings so that we can, you know, really get a bigger vision.

• 33:00Ramit Sethi?

  With Alex and Jackie, you can see the pattern. They are reactive instead of pro act. Their fixed costs are too high, their savings are shrinking every month, and when things go wrong, they retreat into spreadsheets and meetings. It's all so dreary. What they really need is a system to get them off the hamster wheel. And if you are in the same spot, if you're tracking every dollar, you're having endless money talks that just feel so negative and nothing's really changing, you don't have to figure it out alone. I cover exactly how to build a real system inside our money coaching program. You can sign up at I W T dot com slash money coaching.

• 33:40Ramit Sethi?

  Right now you make ninety one thousand bucks and you are spending more than you make every month. Let's say you made a hundred and fifty thousand dollars a year. Would it change the financial dynamics that we see here?

• 33:54Speaker 02

  One hundred percent.

• 33:55Ramit Sethi?

  Tell me how.

• 33:56Speaker 02

  We would have guilt for spending with groceries. I feel like every month there's this expectation that it's less than, you know, fourteen hundred or thirteen hundred, however much, you know, there's that threshold and it's just not like it really is just around that number each month. And you know, so that wouldn't be that much, but then we would have the freedom to, you know, redo some of the parts of the house that really stress us out and you know, that like, feel like everything would be organized in a, in a better way. And I feel like right now, things are just disorganized because we have this mindset that we don't have enough money.

• 34:34Ramit Sethi?

  Wait a minute, I, hold on. I asked if you make a hundred and fifty K, would it change? You were like, absolutely yes. I was like, how? And then you proceeded to tell me all the ways that you would spend more money. We would spend more on groceries, we would spend more on home renovations and like, by the way, things would somehow be organized somehow, some way. Isn't this the problem? If they're not organized at ninety-one, how are they going to magically be organized at a hundred and fifty?

• 34:57Speaker 02

  Well, I guess we could set a higher savings budget, I guess.

• 35:02Ramit Sethi?

  Let's take a look. Net income or take home pay after taxes and pre-tax withdrawals, five thousand, six hundred ninety-two dollars a month. Your mortgage is one thousand, five hundred and sixty-seven dollars. Your car payment is three hundred and seventy dollars. Okay, debt, zero. Kind of interesting though, even though you have five thousand dollars owed to family, you're not making payments on that, right?

• 35:24Speaker 01

  Oh, I put them in the wrong category then. So, two hundred a month is going towards that and then the, from that three seventy. So then one seventy is gas. I wasn't sure where to put all that stuff.

• 35:34Ramit Sethi?

  All right, that's, let me just fix it. All right, fine. That's fine. Um, groceries at one thousand, five hundred fifty dollars a month. Okay, clothes at a hundred, phone at one forty-eight, tithing at five hundred and sixty-nine dollars a month, and subscriptions at a hundred and twenty-three dollars a month. What do y'all think about those fixed costs?

• 35:53Speaker 01

  Grocery sticks out to me as being really high. We have four kids, but still it feels pretty high.

• 35:58Ramit Sethi?

  Okay, Jackie?

• 36:00Speaker 02

  I mean, groceries is as much as our mortgage.

• 36:03Ramit Sethi?

  Yeah, that's true. Groceries and your mortgage are the same. Yeah. What else? Like, if you just zoom out, how do you feel about this, the overall way that you're spending your fixed costs?

• 36:13Speaker 02

  Well, I don't like the result.

• 36:16Ramit Sethi?

  Keep going.

• 36:17Speaker 02

  Because of the tension that it's creating in our, in our marriage.

• 36:23Ramit Sethi?

  You had mentioned earlier, you know, we could save more. It's kind of unclear to me where you would get the money to save more.

• 36:29Speaker 02

  Right. I think that's where it was like, oh, if we made a hundred and fifty K, we would have more to save for.

• 36:35Ramit Sethi?

  Yeah, I think that's probably true. You'd probably be able to save a little bit more, but my guess is you would end up spending just as much.

• 36:40Speaker 02

  Yeah.

• 36:41Ramit Sethi?

  Do you have a list of things, Jackie, that you want to buy when you're financially able to?

• 36:46Speaker 02

  Yes.

• 36:48Ramit Sethi?

  What's on that list?

• 36:49Speaker 02

  Yeah, I think it would be just a lot more giving, like being able to maybe even open up a storefront. Or like even, I mean, something small is like, you know, having the money to record music and yeah.

• 37:10Ramit Sethi?

  Alex, do you have a similar list?

• 37:13Speaker 01

  Not, not really. Yeah, not really.

• 37:16Ramit Sethi?

  That's exactly what I suspected. Alex doesn't have a list because he doesn't dream. He's just a mechanic. He's a money mechanic, just turning the wrench. But it's interesting, you know, some people are like, I want to be able to take this type of vacation. Didn't hear that from you, Jackie. I did hear, I want to be able to give more. That's interesting. And maybe I want to be able to spend some on my hobbies, songwriting, things like that. Interesting. What happens in the guilt free spending? It says six hundred and something dollars, six hundred and fifty one dollars. What do y'all spend each month on discretionary purchases?

• 37:56Speaker 02

  Curriculum, homeschool curriculum, kids' extracurricular activities, whether that's like homeschool PE or, you know, co-ops or music or swim lessons.

• 38:11Ramit Sethi?

  Is there a limit on how much you spend on for kids?

• 38:16Speaker 02

  No.

• 38:17Ramit Sethi?

  No limit, but there's a limit on a lot of other stuff, huh?

• 38:21Speaker 02

  Yeah.

• 38:22Speaker 01

  Oh, like, did we assign a limit? Yes, but it's arbitrary because we don't follow it.

• 38:26Ramit Sethi?

  That's okay. That's common. But just the idea of like, can you imagine saying no to something for kids, something that they really want or that you think they really need for financial reasons?

• 38:40Speaker 01

  I can.

• 38:41Speaker 02

  Yeah.

• 38:42Ramit Sethi?

  Would you do it?

• 38:43Speaker 01

  I would.

• 38:44Ramit Sethi?

  You would? Jackie, would you?

• 38:45Speaker 02

  Um, I mean, no, it's been, I think we've talked about, you know, music is a, is a very big expense. And I don't know, Alex, where that falls, um, where, where does that fall? Like, within the budget?

• 38:59Speaker 01

  Oh, like on our system?

• 39:00Speaker 02

  Yeah, on our system.

• 39:02Speaker 01

  Kids activities.

• 39:03Ramit Sethi?

  Throw, throw that up, Alex. Let's just look at that for a second again.

• 39:06Speaker 01

  Yeah.

• 39:07Ramit Sethi?

  Let's look at the single source of truth for the last 10 years. This will be good. Quite an interesting swing here. Uh, some months it's $1,000, other months it's $120. So if I had to guess, I'm guessing this is like an average of 600 bucks a month just for kids activities. All right, hold on, hold on a second. Miscellaneous, holy [bleep], $398 in a month, $409, $978, $904. What's miscellaneous?

• 39:36Speaker 02

  I mean, let's look at the footnotes.

• 39:38Ramit Sethi?

  Yeah. These are actually coming in useful, even though I made fun of them for like 10 minutes straight.

• 39:42Speaker 01

  Yeah. Oh, we bought a new couch, a used couch, garden stuff, hotel for, for kids activities.

• 39:50Ramit Sethi?

  Keep going to miscellaneous. What else are y'all spending on miscellaneous?

• 39:53Speaker 01

  Kids birthdays.

• 39:54Ramit Sethi?

  Yeah, that's a good one. Homeschool curriculum, plants for the yard.

• 39:58Speaker 01

  Yep.

• 39:58Ramit Sethi?

  Dodgers game, zoo membership. Okay. These are all like normal family expenses. I get it. But what I notice is there is no strategy. It's just random stuff. And, and when you're making, you know, a good income, $91,000.

• 40:18Ramit Sethi?

  Those things do add up. They really add up because we're not talking about one or two things. We're talking about like every month, there's at least a thousand dollars of expenses that are not accounted for here. And your net in your take home pay is 5,600 bucks per month. You're at least not counting 20% of the stuff you're spending, which is why your savings account is dwindling, which is why you're going to be in a real financial problem in a matter of months. Jackie?

• 40:45Speaker 02

  Oh, no. I this, see, I don't like that this excites me. I don't like that this excites me. Why does this excite me? Because then I'm like, now we have to go do something. Whereas like Alex, you know, I think that, you know, it's hard when I want to make more money and you don't care about money. Because I feel like I can't care about money, but I do care about money. But then I work at home and I'm like, I, you know, I stay at home. I don't work at home. I stay at home, but it's like, should I be working? And then it's like, well, I don't want to work because I want to be at the kids. I don't know. It's just so.

• 41:18Ramit Sethi?

  That was interesting.

• 41:19Speaker 02

  Sorry, sorry. I kind of went on a rant.

• 41:21Ramit Sethi?

  Does that happen a lot? This kind of spinning about money? Or is it only now that we're looking at it?

• 41:27Speaker 02

  Now that we're looking at it.

• 41:30Ramit Sethi?

  Alex, have you ever wanted Jackie to look at the budget that you kept?

• 41:35Speaker 01

  Yeah.

• 41:36Ramit Sethi?

  Did you ask her to?

• 41:37Speaker 01

  Yes.

• 41:38Ramit Sethi?

  What'd she say?

• 41:39Speaker 01

  Sometimes she'll look at it and sometimes I can't even think about it, which is kind of sad. I actually don't even know. It doesn't, it hasn't resulted in us really looking at it closely.

• 41:49Ramit Sethi?

  Jackie, what'd you do when he asked you to look at it?

• 41:51Speaker 02

  Um, the last time I was willing to download the, the app so that I can see how much money we have in our bank account before I spend.

• 42:04Ramit Sethi?

  Like how much you have in your checking account, right?

• 42:06Speaker 02

  Yes, yeah.

• 42:07Ramit Sethi?

  Okay, so what, what did that tell you? Like it's 200 or 4,000, like what does that tell you?

• 42:14Speaker 02

  It says, you know, whether or not I can spend XYZ on groceries. I mean, when I'm, if I'm out buying groceries.

• 42:23Ramit Sethi?

  But what if it says 200 bucks in the checking account and you have like 500 bucks of groceries? What are you going to do then?

• 42:29Speaker 02

  Go put some back.

• 42:31Ramit Sethi?

  Can I tell you something?

• 42:33Ramit Sethi?

  I understand the dynamic if you were poor. I understand that. Like, when people are truly poor, they actually have to know how much they have in their checking account, and they are literally putting stuff back on the shelves because the money is just not there. You'll make $91,000 a year. I don't think looking at your checking account to gather information about your financial situation is the right level you should be operating at. You actually have to be up-leveling in the way you think about it. That's like thinking about net worth, thinking about investments, fixed costs. Like, it's as simple as what's on the sheet, but it's more complex than how much you have in your checking account. To put it another way, I would never allow myself to get to the point

• 43:18Ramit Sethi?

  where I have to put a bag of cookies back onto the shelf. That needs to be sorted out months prior. When I asked Alex and Jackie if making $150,000 would change everything, they said yes instantly. Yeah, nice fantasy. That's not gonna happen. All of us believe that more income will magically solve our money problems. But in reality, they would probably just scale up the same mistakes. More groceries, more hobbies, more stuff for the kids, more money, same problems. And they even know it. Jackie admits that she gets excited by a crisis because it forces her to act. Now, I used to feel like that when it came time to write an essay because it was due the next day in college. That's kind of funny when you're 20 years old. It's not so funny when you have children at home

• 44:02Ramit Sethi?

  and you're talking about 80-something percent of your net income going to fixed costs. And she spins about whether she should work or stay home or just hide from money altogether. It's classic avoider behavior. And meanwhile, Alex has been attempting to engage over a spreadsheet for 10 years, a spreadsheet she won't even look at. You know, I talk about this in Chapter 6 of Money for Couples, my new book. This is the chaser-avoider dynamic. It is exactly as it sounds. One partner chases, the other avoids, and both of them end up exhausted basically in exactly the same places where they started. If you're gonna spend time agonizing about money, worrying about money, stressing about money... My feeling is you might as well actually get some results.

• 44:45Ramit Sethi?

  It's like those little annoying kids who sit there and they pretend to brush their teeth. They don't actually brush. I mean, you're standing in front of the freaking sink. You might as well just brush your dirty little teeth. Get that filthy plaque off it. I'm not going to name who, but I was taking care of some little kids. My limited experience with kids, I did not realize they lie about brushing their teeth. So we're like, all right, go brush your teeth. They're like, yeah, I brushed my teeth. And then I was like, what's this antenna going up in the back of my head? I was like, let me smell your breath. A phrase, by the way, that I have not uttered in about 35 years. I just had this intuitive feeling, so intuitive. I smelled that **** like it was from hell. I said, what the ****? I forgot that kids lie about brushing their teeth. I sent them straight back in there. Go back in there, don't come out for 10 minutes.

• 45:30Ramit Sethi?

  Every parent on this podcast, I really feel for you. I truly do. Some disgusting **** happening in bathrooms across America. All right, now, back to Alex and Jackie. The truth is, unless they break this cycle, they're going to be having the same fights 10 years from now. I'm not going to allow that. I want to find out where their relationships with money came from, right after this break. Alex, what do you remember your family saying about money when you were growing up?

• 45:54Speaker 01

  Sure. We didn't talk about it a ton. I remember being told to never, like, if I've ever put anything on a credit card to pay it off that same month and never carry credit card debt. I remember, when I was 15, my first job was a bussler and I made tips. So I put everything into my savings and I only spent tips. And so, in my head, if I'm not saving everything, it's not enough. But that's not what, my parents never said that, but that was what I sort of picked up from that job because I did that when I was 15.

• 46:26Ramit Sethi?

  And what did your parents do?

• 46:28Speaker 01

  My dad was in, uh, the, he worked for an insurance company and was in like, sales management. My mom was a kindergarten teacher.

• 46:38Ramit Sethi?

  Okay, got it, got it. Were they religious?

• 46:41Speaker 01

  Yeah.

• 46:41Ramit Sethi?

  They were, okay. And you two are both religious, correct? I saw the tithing.

• 46:45Speaker 02

  Yeah.

• 46:46Ramit Sethi?

  Cool. What'd they teach you about money, besides?

• 46:51Ramit Sethi?

  Save and pay off debt.

• 46:53Speaker 01

  Yep. Always give 10%. Be faithful with that no matter what and you'll, it will pay off.

• 47:00Ramit Sethi?

  Okay.

• 47:00Speaker 01

  That was pretty much it. I mean, then give if you can and help, help people out. They were really good about that.

• 47:06Ramit Sethi?

  And then after you graduated, you got a series of jobs.

• 47:10Speaker 01

  Yep.

• 47:10Ramit Sethi?

  What'd you do with the money?

• 47:12Speaker 01

  At first we were saving a lot. And then we had two times where we, it dwindled. The first time was because of quitting that job, basically for mental health reasons, having no income for six months, blowing 16 grand in six months.

• 47:32Ramit Sethi?

  Lot of parallels. You had money, you saved it, you only spent the tip and then something happened. After accumulating all this money, you spent it down. Then it happened again. Here we are again. It's at least the third time. What do you make of that?

• 47:47Speaker 01

  Yeah, there, I don't know where it came from, but there must be something stuck in there about this is the like level of person I am, or some amount of worth tied into that, or like, yeah, I don't know, like, it's hard because I feel like, I'm grateful for how much I make and how much we have and I ju, I want to steward it, but I, I don't know. It's all a tangled mess. That's like as far as I, I got.

• 48:13Ramit Sethi?

  Okay. All right. What about for you, Jackie? What do you remember your family saying about money when you were growing up?

• 48:20Speaker 02

  A lot of it, you know, my mom being a single parent from in my elementary years and it was like, we don't have the money or, you know, we, we took, I think, one family vacation. It was like the most special time ever. But yeah, we just, we didn't have the money to do or to have the things that I, that I wanted.

• 48:43Speaker 02

  Even, you know, when my mom got remarried, it was, the conversation was, you know, we're not going to buy those clothes. Those are too expensive or we're not gonna, we're not gonna do that. And yeah, but, but the focus, you know, but we, we spent money on other things. Like we ate out very regularly. So the, the money was there. It's just that our values were different.

• 49:02Ramit Sethi?

  All right. So. You get older, Jackie. Did you go to college?

• 49:07Speaker 02

  Yes, yeah, Alex and I met in college.

• 49:09Ramit Sethi?

  Oh, cool. Okay. How did you pay for college?

• 49:12Speaker 02

  My parents paid for college. And well, the first quarter I paid for it because I I'd actually run away from home at that point. Um, and so all the money that I had saved um since I was sixteen to eighteen had been I'd gone into a bank account. And when I ran away from home, I took that money and I decided that I was gonna pay for my first quarter of college and then see what happened. Basically, just living on faith. I didn't really have a plan.

• 49:40Ramit Sethi?

  You mind my asking, why did you run away?

• 49:42Speaker 02

  Yeah, I ran away because I didn't feel like I could talk about my feelings and that they would be heard or receptive.

• 49:51Ramit Sethi?

  Your your family.

• 49:52Speaker 02

  Yeah, yeah.

• 49:54Ramit Sethi?

  But then one quarter later, your parents began paying for your college. How did that happen?

• 49:59Speaker 02

  We met and there were apologies made. And so I think there was just like, uh, you know, this was the plan from the beginning, like they had already planned to send, pay for me to go to college. Um, so, you know, it was like, okay, let's just resume, resume the plan.

• 50:20Ramit Sethi?

  What is your relationship like with your parents now?

• 50:24Speaker 02

  Um, with my mom, it's good. I feel like there's been a lot of forgiveness present, so that's been good.

• 50:31Ramit Sethi?

  And your dad?

• 50:33Speaker 02

  My dad actually just passed away two months ago, so.

• 50:36Ramit Sethi?

  I'm sorry.

• 50:37Speaker 02

  Yeah, yeah, that's okay. So just like, if he was like my best friend, so just like. And he was the money guy. At the same time, looking at his lifestyle, like if he would have shared his knowledge, you know, he would have been able to make more. Um, but he was so, he was just such a good, like, funny, really good at his job, really, uh, a go-getter, very resourceful. He started working for an RV business about three years ago, and he just took it to number three in Yuma, Arizona last year. And I was just so proud of him, you know, like, he just like had a strong work ethic, but whenever it came to like, Dad, like,

• 51:19Speaker 02

  how do I do these systems? Or like, will you teach me? Like, you know, he was just so secretive about it. He's like, I can't tell you the secrets. Like, I can't like.

• 51:27Ramit Sethi?

  What do you mean?

• 51:29Speaker 02

  He didn't share, like he didn't share how he did it. He didn't share, like I would always make comments like that. I should just come down and be your apprentice for like a year. Like, I would love to do that.

• 51:41Ramit Sethi?

  What did he say when you told him you want to apprentice with him?

• 51:45Speaker 02

  He was like, he just laughed it off. He just, you know, he always held me at an arm's length away. Like, he just didn't know how to be present with me.

• 51:53Ramit Sethi?

  That is confusing and

• 51:58Speaker 02

  Yeah.

• 51:59Ramit Sethi?

  sad and beautiful, all at the same time. I really appreciate you sharing that. Sorry for your loss.

• 52:05Speaker 02

  Yeah, thank you.

• 52:06Ramit Sethi?

  Notice the pattern here. Alex was told, save, tide, never carry credit card debt. Jackie was told, we don't have the money for that. And Jackie's dad was the money guy. He was resourceful and successful, but secretive. He never shared what he actually did. You know, when parents don't openly talk about money, it really disadvantages their kids. You leave them to guess. And the truth is, kids usually get it wrong. Like Jackie, for example, she learned that money is contradictory and confusing. Sometimes it's scarce, sometimes it's plentiful, but it is never explained. You'd be amazed how many parents don't talk to their kids about money. Oh, they have all kinds of convenient reasons why. We want to let kids be kids.

• 52:51Ramit Sethi?

  That's for adults. Those are just excuses. The real truth is most parents don't even understand money themselves. So how can they ever teach their kids about money? Their lack of money education to their kids is more shame than strategy. And I'm going to say something direct to the parents here, coming from a non-parent. Fix this. This is so important that if you don't improve your own relationship with money and you and your partner's relationship with money, and then educate your children, you are leaving them at a lifelong disadvantage. This is not like, oh, I never taught my kid how to ski or how to swim in a current.

• 53:33Ramit Sethi?

  No, money affects them every single week of their lives. Fix it. Alex and Jackie never got that education, which is why today they are still chasing and avoiding, still replaying those childhood money scripts. And you can see exactly how those scripts are shaping their relationship right now. When you both think about the way that you were raised with money, with your families from being young, what lessons do you think you're bringing from your childhood into this relationship with money?

• 54:03Speaker 01

  I mean, for me, definitely the 10% tithing every month, regardless of what the circumstances are. I don't think I've ever missed that, ever. That's, and then having like an extreme aversion to debt. I think those are the two things that.

• 54:22Ramit Sethi?

  Not that extreme. You have debt.

• 54:24Speaker 01

  Right. Yeah, right. So talking out of two sides of my mouth. I, it feels uncomfortable and I feel uncomfortable about it every time I think about it.

• 54:33Ramit Sethi?

  Okay. Jackie?

• 54:35Speaker 02

  But to speak to that too, Alex, I think like because we were in debt and we saw the miracles that happened to bring us out of that, that it's almost like, oh, it's okay if we're in debt. Like, did you, do you feel like you budged a little bit or compromised in this area of debt?

• 54:52Ramit Sethi?

  What, what, what's this miracle we're talking about?

• 54:54Speaker 02

  I purchased another program after the Tony Roberts program.

• 55:00Ramit Sethi?

  Okay.

• 55:00Speaker 02

  And it was $16,000 instead of $5,000. And I did ask Alex this time.

• 55:08Ramit Sethi?

  Well, what kind of program was this?

• 55:10Speaker 02

  It was a photography business, essentially going back to school to get your studio certificate, kind of.

• 55:20Ramit Sethi?

  Okay. So you spent $16,000 and then?

• 55:22Speaker 02

  And then I made $6,000 that year. And so I didn't make the money back. And, and so we had $9,000 in, that we owed on our credit card in November. And we knew that it was going to hit again in April. So we were like, okay, we have, you know, five months to make this money. What are we going to do? And so that's when we started meeting regularly. And money just started showing up. Like we had a random person give us an envelope of $1,000 at church. We had, we got into a car accident that paid us $1,200 and nobody was hurt, no one was injured. You know, at that time, I gave up my photography business, you know, like I had a heart to heart with God.

• 56:07Speaker 02

  It was like God was very much like you need to like this is not what I have for you. And so I I laid that down and like I just saw how much like he loves me and cares about us. And by the grace of God, it like we made nine thousand dollars and I could not tell you how that happened.

• 56:25Ramit Sethi?

  Wait, that's what I want to know. Where's the rest?

• 56:27Speaker 02

  The church wanted to hire me to redo their website and um work for them. So that was a thousand dollars a month.

• 56:35Ramit Sethi?

  Okay.

• 56:35Speaker 02

  So that's five thousand dollars.

• 56:38Ramit Sethi?

  That's that's great. That's impressive. So what was your takeaway from that experience? Going from November to April?

• 56:45Speaker 02

  I just felt so supported. Like I was just like, man, like we can like when we put our when we come together and put our, you know, have an intention and a goal like it can happen.

• 56:56Ramit Sethi?

  Okay. Alex, what was your takeaway from that experience?

• 57:00Speaker 01

  Grateful, but I also felt like it was really lucky. Yeah, gratitude and like wow, we were really lucky like that was that was close.

• 57:10Ramit Sethi?

  Jackie, you agree?

• 57:11Speaker 02

  Yeah, yeah, there was this element of like, wow, like God really supported us like I don't like. Yeah, like it wasn't it felt otherworldly like it wasn't me.

• 57:21Ramit Sethi?

  I'm asking and I'm probing here because you came to talk to me. Not, for example, somebody who works in the church and probably talks about money. You came to me. And so while I appreciate your religious beliefs, for me, hope is not a financial strategy.

• 57:39Speaker 02

  Yeah.

• 57:39Ramit Sethi?

  God is not a financial strategy. Right? In my view and the way that I work and in my material,

• 57:47Ramit Sethi?

  we need to make a plan. And if other things happen that we cannot explain, I'll accept them. Great, but I don't need them. I need my plan and I'm gonna work the plan and I'm gonna make, I'm gonna engineer a rich life for myself and for my family. That is my approach. How do you both feel about that? I just wanna check in right now. Alex is nodding his head.

• 58:12Speaker 01

  Yeah.

• 58:13Ramit Sethi?

  Jackie's pausing and smiling and thinking carefully about her next words. Go ahead, you don't have to walk on eggshells. Say what you feel.

• 58:21Speaker 02

  No, I think I've, I've had a lot of, my decisions are more like, are conflated with God and I've, and people have told me that. I've gotten that before, um, where it's just like, I think you have religion and like morality and XYZ conflated, like it's not, it's not related.

• 58:42Ramit Sethi?

  Oh, and how do you receive that feedback?

• 58:44Speaker 02

  I'm like, I don't know what that means. Like, that's great. I'm glad that you see that, but if you have any more insight to show me, I would, I would appreciate that.

• 58:51Ramit Sethi?

  I do. I mean, that's interesting that you've received that feedback. Here's my take. Two of you are religious and a lot of religion based on faith. What, what, uh, religious, what religion are you?

• 59:05Speaker 01

  Christian.

• 59:05Speaker 02

  Yeah, Christianity, yeah.

• 59:07Ramit Sethi?

  Alright, so, you know, a lot of religion based on faith, totally get it, and great. When it comes to money, you'll often see an intersection between dreamers and faith. Dreamers, one of the four money types in Money for Couples, you know, dreamers will use words like, um, if we are good people, God will provide. They'll, they'll sometimes say things like, um, I don't wanna work a nine to five, I'm not into that. They will look for alternative types of income streams, often finding themselves in things like MLMs, um, crypto, uh, schemes, things like that. They often believe that success is just one gig away or one deal away.

• 59:53Ramit Sethi?

  And if we just get this one thing, if we just increase our income to 150K, like, problem solved. We can pay off the debt. Dreamers don't usually like to engage about money. And I find it very interesting that you have shown me some really strong clues that you will engage about money. You're like, hey, break it down for me. Or I'm getting excited. Or, oh, we can't make a payment? Got to find a job. Like, whoa. So you have this interesting dichotomy. But I am almost certain that your faith informs the way you see money. If we do the right thing, if we sit down, we will be provided for. Maybe. I hope that's true, but I can't depend on that.

• 1:00:36Ramit Sethi?

  I need to make a plan and I need to make sure that even if nothing external happens to us, this plan works. How does that strike you?

• 1:00:46Speaker 02

  Yeah, I mean, that, it feels very secure.

• 1:00:50Ramit Sethi?

  Whoa, what do you mean by that?

• 1:00:51Speaker 02

  Well, inside of hoping, it's like, there's a lot of reliance on God. And while I love relying on God, I would love to rely on God for other things and not financial security.

• 1:01:04Ramit Sethi?

  Love it. Maybe God needs to take a break from the financial advising. You know, he's got other things to worry about right now. Listen closely to Alex and Jackie's story. They talk about miracles and luck and envelopes of cash at church. But in reality, they can only afford to talk like this because they have a built-in bailout, an interest-free loan from Alex's family. This is the hidden cost of relying on miracles. You start to live as if someone will always step in to save you. And sometimes they actually do. A family member floats you money or a windfall shows up. But each of these bailouts just reinforces the idea that we need to wait to be rescued. You don't build a real system. You don't make hard choices.

• 1:01:49Ramit Sethi?

  You simply wait for the next rescue to appear. Well, rescues don't last forever. At some point, the money doesn't show up. And when that happens, you are exposed, especially because you never learned how to handle money yourself. You know, the funny thing is that when Jackie's back is against the wall, she actually stepped up very well. She told Alex, "I'm gonna go out and get a job." She did the next day. But why do we have to wait until you are running out of money? People living their rich life never wait until their back is against the wall. They make plans well ahead of time. That's why I'm pushing Alex and Jackie so hard here. Faith can bring comfort, but in the long term, faith doesn't pay the bills. A system does. So let's bring it back to trust here.

• 1:02:34Ramit Sethi?

  When the word trust gets brought up, it's like a red flag for me. I lean in, I want to know what's going on. So when we reflect on what has happened in the past with money, we have Alex who says, "I sometimes trust Jackie, but not always." Alex, you've created this Byzantine system where Jackie has to text you all this stuff, right? And then like, and then like, what do you even do with it? You like fiddle around with it. You process the data, but does nothing. And then we have the history of buying these, what I might call dreamer purchases. You know, if I buy this multi-thousand-dollar course, no, not that course, actually let me buy this course. Like, it'll all kind of, this'll be the one thing.

• 1:03:19Ramit Sethi?

  What do you notice as I illustrate what I've heard today? Jackie?

• 1:03:22Speaker 02

  I mean, I'm definitely a dreamer. I mean, yep.

• 1:03:26Ramit Sethi?

  Okay.

• 1:03:26Speaker 02

  I mean, you've nailed it.

• 1:03:27Ramit Sethi?

  How do you think being a dreamer affects the dreamer's partner?

• 1:03:31Speaker 02

  Oh, yeah. Leaves, I mean, probably have some running around trying to catch all the chickens because there's so many dreams. So I'm not the chicken, it's my dreams or the chickens.

• 1:03:42Ramit Sethi?

  Wow. Well said.

• 1:03:44Speaker 01

  Yeah.

• 1:03:45Ramit Sethi?

  Alex agrees.

• 1:03:46Speaker 01

  Yeah, I do. That's, that's true. Because I love her and I support her. And that's why, you know, went along with the things that I was brought into. But, you know, it's hard, yeah.

• 1:03:55Ramit Sethi?

  One of my favorite things is when people go through an experience and then they take away completely the wrong message. And I kind of love it, you know? Like, they're like, uh... Hey Ramit, I was running late to this thing. So I decided to run the red light. I was going 80 and there was a cop. They turn on their sirens, but then they took a left. And I realized as long as you are going 80 and your car is green, cops don't pull you over. I go, what the? That's not the takeaway from that story. There was a bank robbery and you just got lucky because they had to go to something more important. That's the wrong takeaway. In some ways, I feel there might be the wrong takeaway here. Because the takeaway of, oh my God, we have this debt.

• 1:04:40Ramit Sethi?

  So you both sat down, you both had an honest conversation about how your financial situation together. There was a sense of urgency. We have this many months. Third, you made a plan. And what did you do during those months? By the way, were you meeting regularly? Some might even say religiously all the time, never missing it, right?

• 1:05:02Speaker 01

  Yes, sir.

• 1:05:03Ramit Sethi?

  And then good things started to happen. Now I'm glad good things started to happen. That's awesome. And perhaps it, you know, there was something in the air. Perhaps it was faith. Perhaps you were more attuned to opportunities like at the church. Great, doesn't matter to me. But the fact is you were doing specific behaviors. All right. And then once the debt was paid off, what happened to those meetings?

• 1:05:21Speaker 01

  Where?

• 1:05:22Ramit Sethi?

  They stopped. And then the debt or the, the spending has gone up. Like there's a very strong correlation here. The behavior affects the outcomes.

• 1:05:33Speaker 01

  No, I mean that, yeah, that makes sense for sure. 100%.

• 1:05:36Speaker 02

  Yeah, but I don't want negative behavior to, it's like our poor choices to fuel our desire to have positive behavior. Like I'd rather just have the positive behavior outright.

• 1:05:51Ramit Sethi?

  Agreed. So let's all agree that we want to minimize the quote negative behavior.

• 1:05:58Ramit Sethi?

  Once in a while, things might happen. That's okay. Give each other some grace. No problem. But in general, let's, let's optimize for a positive, rich life. Not like preventing all the bad things that can happen. Right? Everybody's good with that?

• 1:06:12Speaker 01

  Absolutely.

• 1:06:12Ramit Sethi?

  Cool. All right. Alex, what would you need in order for you to financially trust Jackie again?

• 1:06:19Speaker 01

  I'm, I realize I'm basing it on a feeling. So like if, I don't know how to explain it, like a feeling of, of trust that, that anything that's going to be significantly impactful for our family that we'll be able to discuss and have an honest conversation about it.

• 1:06:36Ramit Sethi?

  She needs to be willing to talk to you about money? That's it?

• 1:06:39Speaker 01

  Well, I mean, I want to see like results, obviously. Like I'd love to have six months of expenses in the savings and to be trending positive instead of trending negative. And then obviously that's on both of us, but if I saw that, I would trust her also because my perception is that the, a lot of the downward trend is from purchases that she's making.

• 1:07:09Ramit Sethi?

  Jackie, what do you hear there?

• 1:07:10Speaker 02

  Okay, Alex, I mean, I could be completely wrong and off base, so let me know. But I, I remember meeting a couple of times after our debt was gone and we were trajectorying up. And it was like, okay, we're going to meet four months. Like this is awesome. You know, it was really like, like, okay, we're going to have that money in the bank. So now we can start putting money towards these dreams that we have. And I just feel like you have such resistance to that being a reality because of the fear of actually having these dreams come to pass.

• 1:07:45Speaker 02

  And so like, I remember feeling discouraged. Like I remember it's like suddenly there were like these expenses that were coming up that were preventing us from getting to four months. And I just wanted to like, snowball stuff so that we could just get that four months, you know, tucked under. Cause I think that's been a huge conversation too, is like, okay, we can once we get three months and then. It's like, but then it changes. It's like, oh, once we get four months. Okay, once we get six months. And it's like, well, it's never gonna end. And then I get discouraged. And then it's like, well, what's the point of even saving anything?

• 1:08:18Ramit Sethi?

  Okay, but Alex, I think she makes some good points, though. Is there a fear that, hey, you know, okay, we hit this thing, but now I need to move the goalpost and needs to get bigger and bigger? Are you afraid of Jackie spending money on music or another course?

• 1:08:33Speaker 01

  I feel like our current financial situation, the way it stands now without intervention, which is why we're here. Uh, we can't afford to do those things. So I, I, and it seems impossible from where we stand now without changing a lot. And so, yeah, I guess, like, there, there is a fear of like, hey, it doesn't show up to me as a fear, but I'm totally open to the fact that it might be. To me, it feels like reality says, hey, if, if we're losing money every month, we can't, like, we don't even have enough to cover expenses if something happened. I don't feel comfortable spending that on music. So that's what it feels like to me.

• 1:09:12Ramit Sethi?

  Can you both be right?

• 1:09:13Speaker 01

  Yeah.

• 1:09:14Ramit Sethi?

  Jackie, is it possible that Alex is right? You're spending more than you make. You're in a critical financial danger zone. And you are also right that you want to eventually be able to record some of your songs.

• 1:09:27Speaker 02

  Yeah, yeah, totally. That's good.

• 1:09:29Ramit Sethi?

  I'll tell you something. Life cannot simply be putting out fires for the rest of our life. How do both of you feel about that?

• 1:09:37Speaker 01

  I mean,

• 1:09:37Speaker 02

  I love that.

• 1:09:38Ramit Sethi?

  That's why both of you have to be involved. And I actually have a lot of confidence you can do it because you've proven in the past that you can do it. Like you sat down, you made those freaking meetings, you put those kids to sleep. You said, we have a goal, we're gonna solve this. And you did. The problem is that you did it in a very episodic way. It means like a one-off way. Let's just do this one thing, kind of like fix it. You basically put a patch on the wall. And you're like, ah, this thing looks good enough. We're out of here. We can't do that. This is for the rest of your life. It is a totally different relationship with money. And we're going to tackle it by looking at the conscious spending. Okay, Jackie is a dreamer, but I relish the rare opportunity to work with a dreamer because wanting to spend money is not selfish.

• 1:10:23Ramit Sethi?

  It's normal, it's actually healthy. That's why guilt-free spending is an integral part of my system. Money is meant to be enjoyed. The real problem isn't Jackie's desire to spend, it's that she and Alex don't actually have a real plan. So of course, spending feels episodic and arbitrary. And when Alex changes the rules, like three months of savings, or four, or six, of course, Jackie feels like she'll never get her turn. This is why it is so important to have regular, monthly money conversations and a conscious spending plan that you both understand. They focus you on getting clear about what you actually want, what you need, cutting back on the things you don't care about, and even protecting the things you really do care about.

• 1:11:08Ramit Sethi?

  A monthly money meeting allows you to create space for both partners to share your dreams. Now, you can do this on your own, you can use my Money for Couples book that just came out, I have the exact words to say, or if you want us to help you do it even more and make it effortless, you should just join my money coaching program. We do this, we meet every single month, you are going to love it. As for Alex and Jackie, it's time to face an uncomfortable truth. Here are your numbers. My assessment of these numbers is that you are in considerable danger. I'll tell you why I see that. When I look at your income, you're at $91,000 gross, and you have a big family.

• 1:11:48Ramit Sethi?

  So with that income and a big family, even with relatively low housing costs, the numbers really matter. The numbers really matter. Like, we can't just be randomly spending an extra $800 or $1,200 a month, which is exactly what's happening here. Your fixed costs are simply too high. You are actually spending more than you make every single month when you factor everything in, and you are putting yourself at risk because you don't have very much going to investments, and you, your savings are at zero. You are very close to running out of money, like, within a matter of months. And while I hope you have people to save you, if you don't, you are really screwed. How does my... Analysis strike you both?

• 1:12:33Speaker 02

  I'm just back there again where, you know, Alex is like, what are we gonna do? It's like, okay, let's go make money.

• 1:12:42Ramit Sethi?

  Your natural tendency is to apply a patch on the wall.

• 1:12:46Speaker 02

  Yeah.

• 1:12:47Ramit Sethi?

  Like quickly, let's make money quickly. And that mindset has to change. I'm surprised you're not freaking out.

• 1:12:54Speaker 02

  I'm, me too.

• 1:12:56Ramit Sethi?

  Why, why is that? Like you're months away from running out of money. Is it that like somebody will provide, it's always been fine, it's gonna be fine again?

• 1:13:04Speaker 02

  Yeah, yeah.

• 1:13:05Ramit Sethi?

  Alex will protect, Alex is in charge, he'll figure it out, that kind of thing?

• 1:13:09Speaker 02

  Yeah, then Alex, yeah, Alex will figure it out, yeah.

• 1:13:11Ramit Sethi?

  Okay, here's what we're gonna do. I'm putting these numbers up on screen. What I want is for us to try to get these numbers back to the standard conscious spending plan numbers. Fifty to sixty percent for fixed costs, five to 10 for savings and investing, and 20 to 35 for guilt free spending. It's not gonna work exactly the same. Everyone's is different, but we're gonna use that as our benchmark and you're gonna have to make some tough decisions. The way I think about it, my mental model is right now the house is on fire. We gotta put this freaking fire out. Once that fires out, we rebuild some stuff, all right? But first we gotta start to stop the fire, make some tough changes. Are we all down for that approach?

• 1:13:52Speaker 02

  Yeah.

• 1:13:54Ramit Sethi?

  All right, let's do it. Jackie, what changes should we make on the fixed costs, which are currently 87%? To try to bring them to 60%?

• 1:14:02Speaker 02

  I need to look at groceries and look at what meals that we like to eat that don't require a lot of ingredients.

• 1:14:10Ramit Sethi?

  Great. Groceries are $1,550 a month. How much do you think you could get that number to realistically?

• 1:14:17Speaker 02

  It seems like, I mean, I wanna do 1,200.

• 1:14:20Ramit Sethi?

  All right, fine. All right, so here, watch, watch what happens. I want you to look at this number, this fixed cost number of 87% as I change your groceries from 1,550 to 1,200. What did the number drop to?

• 1:14:32Speaker 02

  Well, 81.

• 1:14:33Ramit Sethi?

  81%? Okay, cool. I feel very confident you can get to 1,200.

• 1:14:38Speaker 02

  Yeah.

• 1:14:39Ramit Sethi?

  What's next? Alex?

• 1:14:41Speaker 01

  We could drop subscriptions a bit, but I don't think it's gonna make a ton of a difference.

• 1:14:47Ramit Sethi?

  Tell me the number.

• 1:14:48Speaker 01

  Yeah, I think, let's see.

• 1:14:49Speaker 02

  Campus 14, I can get rid of Amazon and we have MLB, that's 37.

• 1:14:56Speaker 01

  I think we could get that to 70.

• 1:14:58Ramit Sethi?

  70. Alright, here's a number from 81% fixed costs, down to?

• 1:15:02Speaker 01

  80%.

• 1:15:03Ramit Sethi?

  What's next?

• 1:15:04Speaker 02

  I mean, I could do $50 in clothes.

• 1:15:06Ramit Sethi?

  Instead of 150? Four kids, are you sure?

• 1:15:09Speaker 02

  We don't need clothes every month.

• 1:15:11Ramit Sethi?

  That's a good answer. 50 bucks, down to 79%. What's next?

• 1:15:16Speaker 01

  So the part that says car payment transportation, so that 170 that's showing is gas. I'm confident we could do, we could fill up each car once in the month, which would be about like 140.

• 1:15:28Ramit Sethi?

  Alright, 140?

• 1:15:30Speaker 01

  Yeah.

• 1:15:30Ramit Sethi?

  78%?

• 1:15:31Speaker 01

  Then here's the tricky part, right? The easy call here for a lot of people would be eliminate tithing, right? Cause that would bring us immediately down to the number and then it's hard with the beliefs around that, right? So to me, the answer then is just make more money.

• 1:15:48Ramit Sethi?

  How do you feel about that, Jackie?

• 1:15:50Speaker 02

  Yeah, I mean, the same. I mean, it's like when we give 10% of what we're receiving, like that is like our way of trusting the Lord.

• 1:16:02Ramit Sethi?

  I've spoken to several people who tithe and they're in financial distress. So I have a couple of questions for you.

• 1:16:12Ramit Sethi?

  What if you did 2%?

• 1:16:16Speaker 01

  I think for me, there's just, to be honest, there's like fear, fear around the whole thing.

• 1:16:19Ramit Sethi?

  Fear of what?

• 1:16:20Speaker 01

  Oh, fear of that being wrong?

• 1:16:23Ramit Sethi?

  Uh, what do you mean?

• 1:16:24Speaker 01

  Like morally wrong to not tithe 10%? Yeah.

• 1:16:28Ramit Sethi?

  Okay, and Jackie, what if you tithe 2%?

• 1:16:31Speaker 02

  Yeah, like God would be like, hey, like I've given you $91,000 a year and you can't tithe, like you can't give me 500, like.

• 1:16:42Ramit Sethi?

  Okay, let's keep going. What if you were like, yes,

• 1:16:46Ramit Sethi?

  that's correct. I actually can't give you 569, but I can give you less.

• 1:16:53Ramit Sethi?

  I mean, what happens then?

• 1:16:55Speaker 02

  Uh, he would not support us financially or, or spiritually, or would we? I don't know if we would go to, I don't think we're going to hell.

• 1:17:07Ramit Sethi?

  This is like a, this is a very important question. Again, I, I appreciate your religious beliefs. And again, if you tell me like, hey, we're just gonna do 10 and let's move on to something else. I'm totally down for that. But to me, it's such an important question to probe. And I'm, what I'm hearing are quite murky answers. Notice I did not say zero.

• 1:17:26Speaker 01

  Yeah.

• 1:17:27Ramit Sethi?

  It's a, it's a, a different set of lenses to put on. Again, I'm not saying give up your religious beliefs, not at all. In fact, keep going to church. Like we, when I was growing up, we would go to our temple, our gurdorah, and we would do something called seva. It's um, like we would serve people food and we would like pass out brishad and stuff like that. That's, that's how we do it. And there are lots of ways to do it. I know tithing is how you were raised, Alex. But what I'm trying to do is kind of expand our possibilities here because $569 a month. Right now you are, you've made all these changes. You've essentially cut almost everything you could and you are still at 78%.

• 1:18:04Speaker 01

  Yeah.

• 1:18:05Ramit Sethi?

  You are broke.

• 1:18:06Speaker 01

  Yeah.

• 1:18:07Ramit Sethi?

  Jackie, what's going on for you? I see you thinking.

• 1:18:10Speaker 02

  I just don't know. I mean, I've just, I've never considered cutting tithing and what that would, I mean, how that would affect me mentally and spiritually and, you know.

• 1:18:22Ramit Sethi?

  Okay, fair enough. Alex, what about you?

• 1:18:25Speaker 01

  Yeah.

• 1:18:27Speaker 01

  I mean, I think it's just, for me, just what's present is yeah, just fear around it because of that being such a deep, deep belief. And not even so much from a, it's weird. More so from a, this is just the way I was raised, what you're supposed to do. For me, it's, I think more that than it is like, I believe God's gonna like lightning bolt me if we don't tithe.

• 1:18:50Ramit Sethi?

  Like tradition.

• 1:18:51Speaker 01

  Yeah.

• 1:18:52Ramit Sethi?

  It's like, I've done this my whole life. You've seen your parents do it. And if I don't do it, then what happens? And also who does that make me?

• 1:19:01Speaker 01

  Mm-hmm.

• 1:19:02Ramit Sethi?

  Cause I'm the kind of person who has tithed and never missed it.

• 1:19:05Speaker 01

  Right, sure.

• 1:19:07Ramit Sethi?

  Can I ask a provocative question? What if you brought your tithing down dramatically, but you both said, look? This is important to us. We don't like that we are in this situation. And one of the compromises we have to make right now is that we can't tie the way we want to as a family. Here is our plan, and this is gonna light a fire under us. Number one, we are going to pay off our debt. We're gonna build up our emergency fund to this amount. We're gonna set our investments and get control of our money. Two, once we hit those numbers, we are going to increase our tithing by 1%. And then at the next milestone, 1%. And eventually, we will bring our tithing back up.

• 1:19:52Ramit Sethi?

  And when we hit XYZ milestone, we may even pay back the old tithing that we missed. But right now, our house is on fire, and we have to protect our family first. How do you think that would go over?

• 1:20:05Speaker 01

  I think I'm in support of that, for sure.

• 1:20:09Speaker 02

  Yeah, I mean, that sounds like the slow growth that you were talking about.

• 1:20:13Ramit Sethi?

  Yeah. Wow. So you would both be open to that?

• 1:20:18Speaker 02

  Yeah.

• 1:20:20Ramit Sethi?

  I love that. Okay, that's amazing. One thing I really like about talking to both of you is, this is like, perhaps the most fraught question of all that we have discussed. This is goes deeper than a number on a spreadsheet. This is who you believe you are, your relationship with God. And even still, when I'm pushing and probing, you are listening and you are, you're dancing with me. And I appreciate that. That, to me, shows me you are ready to make some changes.

• 1:20:48Speaker 02

  It's really moving. I get really moved right now that like, the possibility that that God doesn't like that either? And that like, he wants to help us get back up to 10%.

• 1:20:59Ramit Sethi?

  Great. Yes. Let's make it happen.

• 1:21:01Speaker 02

  Yeah.

• 1:21:01Ramit Sethi?

  All right. Here we go. So I'm gonna take this $569 a month, and I'm gonna drop it to $50, just to see what happens. From $569 a month tithing at 10% to $50, watch this fixed cost number. Whoa, what just happened?

• 1:21:18Speaker 01

  It dropped to 69%.

• 1:21:20Ramit Sethi?

  69%. What do you both think of that right now?

• 1:21:23Speaker 01

  It's a lot better than where it was.

• 1:21:25Speaker 02

  Yeah.

• 1:21:26Ramit Sethi?

  Yeah. It's, it's a bit high still, but we are within striking distance. It is way better than where you were. Way better. I thought this was extremely interesting. In almost every situation where I've had somebody on the show and they tithe to their church, I'll ask them, "Are you willing to change that?" Almost 100% of the time, they go, "Nope." And you know what I say? "Fine, we'll work around it." The people I talk to who are tithing are often in severe debt. And still, even facing bankruptcy, even facing running out of money with kids, they'll go, "Nope, we are going to continue tithing." I'll go, "Okay, fine." That's not because I necessarily agree with it.

• 1:22:08Ramit Sethi?

  It is that it is hard enough to get people to cancel a $10 streaming subscription. You think I'm going to get someone to cancel something that is part of their identity? Not likely. Instead, my approach is, "Let me acknowledge that's important to you. I'm totally fine with it. Let me show you what else we can do." Sometimes, if you tithe, it means that you cannot buy a new car for 16 years. Sometimes, it means you cannot buy that house. You cannot send your kids to college. I just want to lay out the ramifications in black and white, and then you decide what's important to you. In this case, as I asked them, I could tell they were slightly open to changing it. And that's why I decided to go down this path and take some time

• 1:22:52Ramit Sethi?

  to show them a different way of thinking about tithing. Notice that I did not try to get them to cut it to zero. That's not my place. It wouldn't work. Instead, what I was doing was understanding what it means to them and then showing them different options. Most of us operate in the world of money in a very simplistic, sometimes even childlike way. "I like this, therefore I pay for it, and that's it." That's the extent of why we pay for a certain type of supplement that we take, or Netflix, or whatever. What we often don't realize is that we can almost take our spending and turn it into multiple dimensions. I don't mean to sound super woo-woo, but we can spend less for six months and then spend even more.

• 1:23:35Ramit Sethi?

  We can invest over here and allow us to 10x our spending 10 years down the line. There's so many different ways to look at our spending. It's almost three-dimensional, the way I see it. And that was some of what I wanted to share with Alex and Jackie. I will say, I am extremely pleased that they finally opened themselves up to a new way of looking at their tithing. That is incredibly impressive. It almost never happens. And in my opinion, it's a very positive sign for how flexible they are willing to be in order to live their rich life. So all that extra money that we just cut dropped all the way down to your guilt free spending. Right now you have $1,653 per month to spend or allocate however you want.

• 1:24:17Ramit Sethi?

  Now, obviously, we don't want you to be spending that much because you have other priorities. What are those other priorities?

• 1:24:24Speaker 02

  Savings.

• 1:24:25Ramit Sethi?

  Yeah, yeah, you need savings.

• 1:24:28Speaker 02

  And investing.

• 1:24:29Ramit Sethi?

  Yes, savings and investing. I would say probably even I might argue prioritizing savings because your current savings of $16,000 just very risky, very risky. I do want to point something out. By bringing your fixed costs down, your savings now provide a longer runway. So you're at actually four months, which is good. That's good. I really like that. I think you should do more. So let's take some of this money, $1,653, and let's put it towards your emergency fund. How much do you want to do? Let's try it. If we get it wrong, we'll change it. Jackie?

• 1:25:08Speaker 02

  Okay, let's do 200.

• 1:25:09Ramit Sethi?

  Okay, great. So 200 bucks. Watch what happens to this number and this number. 200 bucks a month means you are now saving 4% of take home pay. Usually I like to see that number at 5 to 10%.

• 1:25:24Speaker 02

  Okay.

• 1:25:24Ramit Sethi?

  Okay, so like right now, we're not hitting the number, but we're within striking distance. And usually I like to see this guilt free spending number at 20 to 35%.

• 1:25:33Speaker 02

  Oh.

• 1:25:34Ramit Sethi?

  But can I ask you something? You're at 26% right now. What number, if you had to guess, since I recommend that most people are at 20 to 35%, what number do you think you should be at for guilt free spending? Higher or lower? Like at the high end or the low end of that range?

• 1:25:50Speaker 02

  Maybe the higher end?

• 1:25:53Ramit Sethi?

  I probably would say the lower end or even lower because you have debt and you're not tithing. So how can you be spending more on like eating out and all this stuff if you're not tithing the way you want to?

• 1:26:05Speaker 02

  Totally.

• 1:26:05Ramit Sethi?

  Right? Okay, cool. So I would probably have that number below 20%.

• 1:26:11Ramit Sethi?

  Which is almost like, hey, we're gonna, as a family, come together, hit these milestones as quickly as possible, and then we can loosen up and, you know, go out to pizza once in a while. How do you feel about that?

• 1:26:22Speaker 02

  That's so good. Yeah.

• 1:26:25Ramit Sethi?

  So, I candidly feel we can do more than 200 bucks a month, like, a lot more.

• 1:26:30Speaker 02

  Let's bump it up.

• 1:26:31Ramit Sethi?

  Really?

• 1:26:32Speaker 02

  I think so.

• 1:26:34Ramit Sethi?

  Hell yeah. Tell me.

• 1:26:35Speaker 02

  Like, what's $800?

• 1:26:37Ramit Sethi?

  Damn. I like it. 800 bucks put you at 14% for savings, and 15% for guilt-free spending. Okay? Is there something about a bonus in here, Alex?

• 1:26:49Speaker 01

  Yeah, so that is something that I did not account for in the sheet.

• 1:26:53Ramit Sethi?

  How much?

• 1:26:54Speaker 01

  Uh, 10% once a year, in the spring.

• 1:26:57Ramit Sethi?

  Oh. Wow, 9,000 bucks.

• 1:27:00Speaker 01

  Yep.

• 1:27:00Ramit Sethi?

  Wait a minute, that changes everything. So what do you do with the money?

• 1:27:03Speaker 01

  Well, that covers all the costs that we're bleeding. We're still overspending, though.

• 1:27:07Ramit Sethi?

  Still?

• 1:27:08Speaker 01

  I'm, I'm, I'm pretty sure.

• 1:27:10Ramit Sethi?

  Okay, okay, we're gonna fix this [BLEEP] right now. Even with the extra $9,000, you are still losing money. Even with a $100,000 salary. So we gotta fix that systematically. So, what are you gonna do with the $9,000 now? Because, notice, you are actually not overspending anymore, if you actually stick to this plan.

• 1:27:32Speaker 01

  Yeah.

• 1:27:33Ramit Sethi?

  Every month, you are saving 800 bucks a month. You've cut your tithing, you've cut your groceries, okay? What are you gonna do with that roughly $9,000 that comes in as a bonus?

• 1:27:43Speaker 01

  Yeah.

• 1:27:44Speaker 02

  Pay off the car.

• 1:27:45Ramit Sethi?

  That's one option. What else? Throw 'em out.

• 1:27:48Speaker 01

  I'll be putting a ton of it in savings toward the emergency fund until that's locked down.

• 1:27:52Ramit Sethi?

  You could do that, yep. What else?

• 1:27:54Speaker 01

  I'll put, bump the giving back up.

• 1:27:57Ramit Sethi?

  Hmm, here's how I might think about it. I always like to have rules for unexpected income. And we do it by percentage. So for a lot of people, if they have no debt, they might do something like 70% goes to investing.

• 1:28:11Ramit Sethi?

  Thirty percent goes to guilt free spending. Something like that. Of course, if you have debt, you know, you want to put more towards debt, et cetera, et cetera. My suggestion is save like fifty percent of it. What that does is it takes your bonus and in a systematic way, it builds savings even more. So that's forty five hundred. Y'all want to do something for yourself? Maybe put some money aside for a dream?

• 1:28:36Speaker 01

  Yeah, I'd love to like put it towards the music that Jackie was talking about. I think that'd be awesome.

• 1:28:40Ramit Sethi?

  I love that. As long as the bonus comes in, I'm gonna have some money put aside in a specific savings account called Jackie's Music. What do you think about that, Jackie?

• 1:28:51Speaker 02

  Yes, yeah. This is great.

• 1:28:54Ramit Sethi?

  All right. What do you need to do in order to make this work?

• 1:28:58Speaker 01

  I feel relatively humble or confident, but Jackie, stop me if this is not correct. We don't want to do the text message thing. That's archaic and terrible. How do we track the stuff to meet these numbers? But in a way that's not sort of that.

• 1:29:15Ramit Sethi?

  Yeah, I totally agree. So Jackie, do you remember how much the grocery amount is per month?

• 1:29:21Speaker 02

  Yeah, it's twelve hundred.

• 1:29:22Ramit Sethi?

  Yeah, twelve hundred. How many times a month do you shop?

• 1:29:25Speaker 02

  Three, three times a week.

• 1:29:27Ramit Sethi?

  Okay, three times a week. So, so basically each time you go, do you know how much you spend on average each time you go?

• 1:29:34Speaker 02

  Yeah, um, probably two hundred or around two hundred dollars.

• 1:29:40Ramit Sethi?

  Okay. If you go three times a week, as you've been doing, one hundred dollars each time.

• 1:29:45Speaker 02

  Yes.

• 1:29:46Ramit Sethi?

  So you have to manage to the number.

• 1:29:49Speaker 02

  Mm hmm.

• 1:29:50Ramit Sethi?

  Now you have a number. It's actually like it becomes a whole different type of shopping experience. Like this is my mission. This is what I have to hit and you are responsible for it. You may need to talk to Alex and be like, Alex, I can't do this with all the kids. I need you to figure out how to help. So I need to be able to build up my intuition. I'm sure the two of you can discuss that, but over time you'll get really good at it. Like I give it like a month, you're gonna be sailing, sailing, you're gonna nail this, okay?

• 1:30:19Speaker 02

  Yeah.

• 1:30:19Ramit Sethi?

  Both of you working together, realizing it's not about micro numbers, it's about the big picture. There are like two or three key numbers that need to be tracked, they need to be hit. And all the rest of it, put a system around it, reduce your tithing number, reduce your subscriptions number. And the two of you should really be talking, not only at the, in the weeds level, but like, hey, how many months until our savings account is full? We can actually look at the numbers. How many months until we can start increasing our tithing by 1%? How many months until you can go record your first song? That's the level I want you talking at.

• 1:30:54Speaker 02

  That's huge.

• 1:30:55Ramit Sethi?

  Yeah.

• 1:30:55Speaker 02

  Huge.

• 1:30:56Ramit Sethi?

  It's incredible. So those changes to me are like incredible. They are actually changing who you are and giving yourselves an even better tomorrow. And you can do it all on one income if you are dialed in and systematic about it.

• 1:31:10Speaker 02

  Like I really feel confident in owning my identity that I, that I can show up for Alex and that's gonna bring us the connection that I was so deeply looking for.

• 1:31:22Speaker 01

  Yeah, just, I mean, even just having the conversation and having a plan, like I already feel trust restored and I see the part I played in that and the part that Jackie played in that and how that all came together to make that whole thing. But that we can like easily move past that and with a plan that we won't have to worry about falling into that again. Because when you have a plan and you execute it, it just keeps going.

• 1:31:47Ramit Sethi?

  Yeah, I love that. It goes up, it gets better, not harder, it gets better. That's awesome. Do you remember where these two started? Alex didn't trust Jackie with money, so he tracked every dollar for 10 years on a spreadsheet that only he understood. But the system did nothing, it never actually changed their reality. And Jackie noticed, so she kept doing what she always did, chasing dreams, waiting for a bailout from family, from strangers, from God. This is how couples get stuck. They take on roles without talking about them. Those roles calcify and soon it's 10 years later and neither one is happy. Rich life, forget about it. My partner won't even look at my spreadsheet.

• 1:32:30Ramit Sethi?

  The breakthrough for Alex and Jackie wasn't just cutting back on groceries, or even rethinking their tithing. It was realizing that neither of them could keep playing their old roles. They needed a new, shared plan that made room for their dreams and their finances. And if you're wondering how Alex and Jackie are doing today, check out this update they just sent me.

• 1:32:53Speaker 03

  My biggest surprise working for me was just that Alex felt like he had to manage my ideas. And I am genuinely excited about being responsible for my ideas, for sharing in this new partnership to create this financial budget that really works for the both of us, so that both of us can be stress-free about ideas, dreams, and the state of our finances. My biggest takeaway has been that tithing doesn't have to be a fixed number, that it can be fluid. So that's been really freeing. We sat down and talked about the budget already that we're going to be using. I feel like there's just more intention and it's fun.

• 1:33:38Speaker 03

  It's become kind of a game. I already feel like things are changing in a really positive way.

• 1:33:44Speaker 01

  My biggest surprise from the conversation was just how willing and excited Jackie is about partnering with me in the finances and coming together and each of us having sort of our own areas of responsibility. So that's a huge blessing. Biggest takeaway is that building a better financial future for our family is something that will happen via small but consistent changes over time, rather than trying to solve everything all at once. And so watching those dollar amounts build every month until we can build that emergency fund back up is gonna be really exciting. We have already resumed our weekly meetings where we talk about a bunch of different things, like our kids, homeschooling, but specifically adding the financial piece back in there

• 1:34:29Speaker 01

  and really spending time getting on the same page. We are abandoning our archaic and complex spreadsheet to use the conscious spending plan. And so it's nice to have those streamlined categories that actually make sense and lead to change, rather than sort of our craziness that we've been doing for the last almost 10 years. And then just, yeah, adjusting those category amounts so that we're saving every month instead of losing money every month.

• 1:34:56Speaker 03

  Been about three and a half weeks since we chatted with Ramit. And the biggest insight I received is that I could be in control of my own spending. Right before, it was me texting Alex my spending habits. And he would keep track of it all in the spreadsheet. And I didn't get to see the numbers. And how we've changed our direction now is I'm in charge of all of my spending. So I've been given control back. I no longer feel out of control. And that's been really nice to have these categories really set in stone per se. But even combining guilt free spending with groceries gives me a little bit of incentive because I'm like, okay,

• 1:35:40Speaker 03

  if I spend less on groceries, I'll have more in guilt free spending. So it's a little bit of mind game I play with myself. But it's been really effective. We came in under budget last month with eight dollars. So hallelujah. Thank you, Ramit, so much. We have been keeping track of receipts. We add up all those receipts at the end of the week. So we're not texting each other anymore. And the money has a place, especially when we're doing our weekly meetings. So thank you, thank you, thank you a thousand times. It's changed so much for us. It's so nice to have self-control in one area.

• 1:36:25Speaker 03

  I just hope that it continues to bleed over into other areas. So thank you.

• 1:36:30Speaker 01

  It's been a little over three and a half weeks. And the biggest insight that stuck with me is just the simplest one, which is that sharing responsibility for the finances within a partnership works wonders. And so Jackie and I have started doing that. It's been incredible. We've just been sort of synced up in a way that we haven't been in a long time. So we're really grateful for that. We eliminated fifty dollars worth of subscriptions that we realized we don't really care about or need. We have shared responsibilities with certain categories of finances. We came in under twelve hundred dollars for the first time in a long time for groceries. It was amazing to just. Live within our means for the first time while still dreaming of the things we want

• 1:37:14Speaker 01

  to save up for and do. So not only did we put away the big chunk that we were saving, but we also spent a tiny bit less than we had planned on spending and we didn't feel deprived in any way. So big changes have been happening for us and we're really grateful for it.

• 1:37:27Ramit Sethi?

  If you want my help with your specific money questions, you can apply to be on this podcast at iwt.com/apply or you can become a member of my money coaching program instantly at iwt.com/moneycoaching. In money coaching, you get access to monthly calls where I answer your questions directly on a private call and I get the chance to go much deeper on the concepts of money that have made a huge change in my life. Plus, you'll get access to a community of other people like you who will inspire you and push you to live your rich life. Check out money coaching at iwt.com/moneycoaching.