268. "We Make $150K… So why are we broke?"

Ramit Sethi of I Will Teach You To Be Rich talks to Lauren and Mick, a married couple in their 30s with two kids, $93K of debt, and a dream of moving into a bigger home. They earn around $150K a year combined, but with 89% of their take-home pay already going to fixed costs, just $5K in savings, and years of impulsive spending, their money is stretched far beyond what their lifestyle can support. Both Lauren and Mick have ADHD, which they say makes it harder to manage bills, avoid dopamine spending, and follow through on financial systems. Ramit acknowledges those challenges while encouraging them to explore a deeper issue: ADHD can make money management more difficult, but finding ways to navigate those challenges is still an important part of making the financial decisions their family depends on. In this episode we uncover: • Why Lauren and Mick earn $150K but still only have $5K in savings • How $93.5K of debt is keeping them trapped • Why their 89% fixed costs make a bigger house impossible right now • How ADHD affects their impulse spending, overdue bills, and financial systems • How consolidating $35K of credit-card debt did not solve the behavior behind it • Why they have avoided fully combining their finances after seven years of marriage • How Mick losing his job for a year changed their relationship with money • How both of their childhoods shaped their current spending habits • Why wanting a third child and bigger home is creating pressure they cannot afford • Why small cuts will not fix a structural financial problem • Why Ramit says their household needs a clearer path to $200K in income • What it takes to turn a fantasy of a better life into a real financial plan • How Lauren and Mick responded after the conversation Chapters: (00:00:00) They admit their biggest money mistake (00:01:18) Meet Lauren & Mick (00:02:04) Their shocking financial numbers (00:05:05) How ADHD affects their spending (00:07:08) LEGOLAND, LEGO, and impulse purchases (00:12:22) How job loss changed everything (00:17:38) Breaking down their finances (00:21:22) "Do you respect money?" (00:24:40) Why 89% fixed costs is a disaster (00:26:24) Breaking down $93,500 in debt (00:33:15) Why they still want a bigger house (00:35:11) How childhood shaped their money habits (00:42:43) Why they keep resisting a financial plan (00:53:00) Rebuilding their spending plan (01:02:21) Can they earn more money? (01:08:36) Ramit rebuilds their budget (01:14:16) The income they actually need (01:16:56) Their new financial plan (01:21:23) Lauren & Mick's biggest takeaways (01:24:17) Ramit follow-up: ADHD & money This episode is brought to you by: Grow Therapy | Visit https://growtherapy.com/ramit to find a therapist today Factor | Head to https://factormeals.com/ramit50off and use code RAMIT50OFF to get 50% off and free daily greens per box, with new subscription only, while supplies last until 09/27/2026. (See website for more details) Trust & Will | Protect what matters most in minutes at https://trustandwill.com/ramit and get 20% off DeleteMe | Get 20% off all consumer plans when you go to https://joindeleteme.com/ramit and use promo code RAMIT at checkout Wispr Flow | Try Wispr Flow for free at wisprflow.ai/ramit When will you finally feel rich? Join Ramit’s free live event on July 13 and learn how to build real financial security and more options with your money. Save your seat at iwt.com/liveevent 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 Apply to be coached for free on this podcast at https://iwt.com/apply

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

• 0:00Ramit Sethi?

  Are you feeling stuck with your money? Have you told yourself, "I need to figure it out." But you haven't really done it? I understand that not everyone is going to sit down and read multiple books about money. I get that. That is why I created Rich Life: The Road to 100K. This is a step-by-step program that shows you how to build a money system that works. Like figuring out the date that you're going to have $100,000 invested, how to automate your money, and how to cut through the noise. Plus, you will get access to weekly live events and a community of like-minded people, plus a library of my best materials. This is the program that will finally help you get on track with your money,

• 0:43Ramit Sethi?

  and you can join today at iwt.com/100k.

• 0:48Speaker 01

  If I want an Xbox, like, yeah, let's go buy it.

• 0:51Ramit Sethi?

  How can you have a spending problem, and then at the same time you want to get a house?

• 0:54Speaker 01

  We're not mindful with money.

• 0:56Speaker 02

  We both have ADHD. So we really need the dopamine hit. Whenever we want something, we just do it.

• 1:01Speaker 01

  So much of that debt came from poor decisions we both had made when we were younger.

• 1:07Ramit Sethi?

  Which poor decisions are you still making today with your money?

• 1:10Speaker 01

  Not having a plan and spending it on things that we probably don't need.

• 1:13Speaker 02

  I took our older kid to Target. He points out this pillow, and I was like, "All right, I need this."

• 1:19Ramit Sethi?

  It's not like he even asked for it.

• 1:20Speaker 02

  Well, it's not his, it's mine.

• 1:22Speaker 01

  We were doing this Legoland trip, and ended up making a lot of impulse buys at Legoland, so.

• 1:26Ramit Sethi?

  For Legos?

• 1:27Speaker 02

  Legos are our whole personality now.

• 1:30Ramit Sethi?

  I'm going to say something that's going to be uncomfortable to hear. The money you have right now, it's not working. You will end up without a house. You will end up without enough money in the bank. It will be gone.

• 1:43Ramit Sethi?

  I love when people dream about money. What do they want in their rich life? What do they want to experience, taste? Where do they want to go? The problem is, a lot of people stop there. Like, if you want a bigger house, or another child, or a better life for your family, amazing! But at some point, we've got to go from a dream to a plan. Otherwise, it's just a random fantasy. And I don't want to see that. Today, I'm talking to Lauren and Nick, 34. And thirty six years old. They've been married for seven years. They have two kids. Let me take a look at their application. Lauren wrote in and she says, "We have so much debt and struggle to get on top of it. We want a third kid, but can't see that happening soon with our current spending habits.

• 2:26Ramit Sethi?

  We're trying to move into a three-bedroom apartment, or better yet, a condo or standalone house that our kids can grow up in." They're writing in saying they have a spending problem, but then in the next sentence, they want to upgrade their house? Okay, I gotta find out what their numbers are. I'm gonna take a look at their conscious spending plan, and if you want my help with your CSP and taking control of your money, you can join my money coaching program at iwt.com/moneycoaching. Let's take a look. Assets: twenty thousand. Investments: eighty-nine thousand. Savings: five thousand. Debt: ninety-three point five thousand for a total net worth of twenty thousand, five hundred dollars. Wait, their fixed costs are eighty-nine percent? Why are we talking about a new house right now?

• 3:11Ramit Sethi?

  What? You know what? Some of you just need to be told no. I'm sorry, no! You can't buy a house anytime soon. However, I'm a professional. I need to work through the process. I actually do have a lot of questions, like, how are their fixed costs at eighty-nine percent? Has it always been this way? And how would they propose they move to a three-bedroom place if they are already basically spending more than they make every single month? We're gonna find out in this conversation with Lauren and Mick. Lauren, what do you feel about your finances today?

• 3:44Speaker 02

  I get really stressed out, especially when like I have to think too hard to make it work. Since I am the keeper of the calendar, I feel like a lot of the responsibility rests on my shoulders to make sure that all of our bills are paid on time. And I don't feel like I am able to keep it up.

• 4:11Speaker 01

  Kind of what initially turned us on to your work was both of us made a lot of poor decisions when we were in our early twenties. I took out a lot of credit cards. I had a lot of credit card debt. I wasn't educated enough on what that can do to you later in life. And it took me a long time to kind of correct course. I feel like we're starting to be on that course. But at the same time, with everything being as expensive as it is right now. And, you know, we live in a very expensive city. I mean, we are debating having a third child.

• 4:51Speaker 01

  It's like, I would love to move into like a larger apartment or like rent a house. But I wish that there's a little bit more.

• 5:01Ramit Sethi?

  So if we have an amazing conversation today, 10 out of 10. What do you each want to walk out of here with?

• 5:07Speaker 02

  A game plan. Something that we can stick to that's not hard.

• 5:14Ramit Sethi?

  Oh, okay.

• 5:15Speaker 01

  I think for me, it's probably a little bit more confidence, knowing that we're doing the right thing, that the stuff we've already done was on the right track.

• 5:26Ramit Sethi?

  Do you feel like you have a plan right now?

• 5:28Speaker 01

  I feel, I mean, I feel like we've definitely

• 5:33Speaker 01

  caught up quite a bit from where we were a few years ago. Like now, we've had setbacks here and there that were very unexpected. And is sometimes it felt like taking two steps forward and one step back. So I think if we can stop taking the steps back, then that's a good thing.

• 5:48Ramit Sethi?

  All right, let's see what we can do. Now, I read your application. Thank you for submitting it. And Lauren, you wrote the application. You wrote, "We want to get better at planning ahead and managing our impulsivity around purchases."

• 6:02Speaker 02

  Yeah.

• 6:02Ramit Sethi?

  Okay, now walk me through what you mean by impulsive purchases.

• 6:06Speaker 02

  We both have ADHD. So we really need the dopamine hits to like get us through. We're like both really burnt out.

• 6:15Ramit Sethi?

  Okay.

• 6:15Speaker 02

  And so sometimes whenever we want something, we just do it because. We want it badly enough.

• 6:23Ramit Sethi?

  And how else does ADHD show up with your finances?

• 6:27Speaker 02

  Like, we got 80% there, and then taking that last 20% when we came up with the plan just got really hard. We kinda, I hyper focused on your book and the podcast for maybe six months.

• 6:40Ramit Sethi?

  Okay.

• 6:40Speaker 02

  And then.

• 6:41Ramit Sethi?

  Sounds great so far. Where's the problem?

• 6:44Speaker 02

  Well, and then I just kinda gave up on it.

• 6:47Ramit Sethi?

  So you read it, you started opening up accounts, et cetera. And then what was the point where you said like, uh, the last 20%?

• 6:53Speaker 02

  I think it was more figuring out how to do our savings and investments and things like that.

• 6:59Speaker 01

  And then, just in terms of like the, how ADHD kind of comes into play, she has a really good calendar that she sets, but I don't. And like, paying bills sometimes, like, yesterday she was like, hey, we're past due on our electric bill. Did you know that? And I was like, no. And then I paid it. But it was like, just remembering that stuff and like, all the processes, like, we really have to nail them all down. And I try to do auto pay and whatever I can. But that also gets us into trouble sometimes if we haven't remembered to like, we need enough money in this account because there's an auto pay that's going through next week.

• 7:36Speaker 02

  So yeah, the automations.

• 7:38Speaker 01

  Automations are like a double edged sword, I think.

• 7:41Ramit Sethi?

  And now, are you getting help for ADHD for other parts of life?

• 7:45Speaker 02

  Yes.

• 7:45Ramit Sethi?

  Doctor, therapist, et cetera?

• 7:46Speaker 01

  Yeah, yeah, yeah. We both are.

• 7:48Speaker 02

  We're both in therapy.

• 7:49Speaker 01

  Yeah, I, we take medication.

• 7:52Ramit Sethi?

  Great. Okay. What are the other impulsive purchases that you've made?

• 7:57Speaker 02

  Well, this morning, I took our older kid to Target because one of the toys he bought was broken. And then he points out this K-pop demon hunter's, uh,

• 8:09Ramit Sethi?

  Pillow.

• 8:09Speaker 02

  Like pillow. And I was like.

• 8:12Speaker 02

  All right, I need this.

• 8:13Ramit Sethi?

  How old is he?

• 8:14Speaker 02

  Five.

• 8:15Ramit Sethi?

  Five. So he pointed out and you bought it? Okay. So, okay, so impulsive purchases at the store, because it's not like he even asked for it.

• 8:23Speaker 02

  Yeah, well, it's not his, it's mine.

• 8:25Ramit Sethi?

  You bought it for yourself. Okay, that clarifies things. All right. All right. Are the two of you married?

• 8:31Speaker 01

  We are, yeah.

• 8:31Ramit Sethi?

  And how long you been married for?

• 8:33Speaker 01

  It'll be seven years this year.

• 8:35Ramit Sethi?

  Seven years, okay. And the age of your children?

• 8:38Speaker 02

  Five and two.

• 8:39Ramit Sethi?

  Five and two. Okay, got it. Can you think of a time in recent few months where the two of you were not on the same page about money?

• 8:47Speaker 01

  Both our boys have birthdays that are within the same week. And so we were doing this Legoland trip. And she really wanted to like stay at the Legoland hotel. And then do like the whole nine yards. And I was like, can we like, maybe do a different hotel? And I think it took a little bit of convincing before you were like, all right, we'll do it. We ended up, we ended up picking the less expensive option. But then we also then ended up making a lot of impulse buys at Legoland, so.

• 9:20Ramit Sethi?

  For Legos?

• 9:21Speaker 02

  Legos are our whole personality now.

• 9:24Speaker 01

  That's the latest step for taxation, so.

• 9:26Speaker 02

  Because we also did like a little birthday party. I tried to do the cheapest option possible where I didn't have to do all the legwork.

• 9:34Ramit Sethi?

  Hold on, how can the cheapest option be the one where you don't have to do the legwork?

• 9:37Speaker 02

  It's $15 a kid.

• 9:39Ramit Sethi?

  Okay.

• 9:39Speaker 02

  Not bad for a kids' party.

• 9:42Ramit Sethi?

  Okay.

• 9:42Speaker 02

  But what I asked for, instead of getting actual gifts, I asked for gift cards to Legoland.

• 9:49Ramit Sethi?

  Okay.

• 9:50Speaker 02

  So I was kind of trying to crowdsource a little bit so that we would have a little extra spending money at Legoland.

• 9:57Ramit Sethi?

  Did it work?

• 9:58Speaker 02

  Yeah.

• 9:58Ramit Sethi?

  How much you get?

• 9:59Speaker 02

  Probably got like almost $200.

• 10:02Ramit Sethi?

  And how much did the Legoland trip cost?

• 10:05Speaker 01

  Two grand?

• 10:06Speaker 02

  Well, the hotel was like 700 for two nights. And then I did 110 a person for three days.

• 10:16Ramit Sethi?

  Legoland was three days?

• 10:18Speaker 02

  It was two days. They've added so much stuff.

• 10:20Ramit Sethi?

  I only went to Disneyland for one day. Like, this is crazy to me, okay? So it's thousands. Like, if you add it all up?

• 10:28Speaker 02

  1500, maybe.

• 10:31Speaker 01

  Yeah, yeah.

• 10:32Ramit Sethi?

  All right. Do you have the money for it?

• 10:34Speaker 01

  We did, but I think part of that is because I had gotten an unexpected bonus, like, shortly before. So I think we would have been struggling a little bit more right now if that didn't happen.

• 10:45Ramit Sethi?

  What are the roles that each of you currently plays with your money?

• 10:48Speaker 01

  I guess I'm like the person that executes.

• 10:51Ramit Sethi?

  And then Lauren, what's your role?

• 10:52Speaker 02

  I plan it out.

• 10:54Ramit Sethi?

  You're the planner, you're the executor?

• 10:56Speaker 01

  Yeah.

• 10:57Ramit Sethi?

  Is that true, though? Because you told me that, you know, you forgot about the bill being due.

• 11:01Speaker 02

  Well, I tell him that the bills due. Like, when I saw the electric bill was past due. And I'm like, hey, can you pay this?

• 11:10Ramit Sethi?

  Oh, so you're the planner and the reminder?

• 11:13Speaker 01

  Yeah, she is the reminder.

• 11:17Ramit Sethi?

  Okay.

• 11:18Speaker 02

  I have a hard time figuring out the overall picture, but if I know something needs to be paid, I at least try to figure out, like, generally where the schedule should be. So like, some bills I know are due like the first of the month, and some are the 15th of the month. And somebody has been a little bit slow on transferring some of the bills from his individual account to the shared account.

• 11:46Speaker 01

  To be honest, it's probably part of the ADHD, like, just not, it's become like a blindness thing. Like, because we have, like, subscriptions and like, whatever. So like, I guess with all of those, a lot of them are just automatically set to my personal card.

• 12:01Ramit Sethi?

  Yeah.

• 12:02Speaker 01

  And so, sitting down and then just transferring them all, it doesn't sound hard. And I think most people would probably think it doesn't sound that hard. But sometimes like, if there are other people that are watching that have ADHD, sometimes just doing something is not just doing something. And that's probably a lot of it, honestly.

• 12:24Ramit Sethi?

  Here's my take, and I want to see if you'll resonate with this or not. Feel free to tell me. So, I'm not an ADHD expert, but I know that it shows up in money a lot. And I think in part, today, we can probably all admit there's some ADHD showing here. I'm glad that you guys are getting help. I don't need to fully understand how ADHD works with money, but I need you to find a solution to these problems.

• 12:55Speaker 01

  That makes sense.

• 12:57Ramit Sethi?

  Even if you have ADHD, and even if it's harder for you than for other people, you still got to find a solution using all the resources at your disposal. Because you can't go through life not solving this money problem. Especially because you have kids.

• 13:10Speaker 01

  Yeah.

• 13:11Speaker 02

  I mean, we've had a lot of obstacles over the last, I mean, our whole lives, but, I mean, that's everyone. But especially the last few years, I feel like we have been really motivated to like, clear our debt and to, you know, start thinking about retirement and, you know, make sure that we have a solid foundation to build on. And then, a couple of years ago, Mick got laid off. And ever since then, I feel like we have been on this roller coaster, emotional roller coaster. So, we've been dealing with a lot of trauma from that.

• 13:55Speaker 02

  And we've also been dealing with the emotional toll that, living in a scarcity mindset.

• 14:03Speaker 02

  Takes on you. Um, yeah, so he didn't have a job for like a year. Eventually it all ran out and then he finally got a job. And we're like, yes, we can finally spend money again. And then we went a little too crazy.

• 14:21Ramit Sethi?

  You went a little too crazy, means you overspent?

• 14:23Speaker 02

  Yeah.

• 14:24Ramit Sethi?

  And by how much did you overspend?

• 14:27Speaker 02

  I can't even quantify it.

• 14:29Ramit Sethi?

  There's an interesting pattern that I am noticing with Lauren and Mick. They have a reason for everything when it comes to their behavior. And I'm actually down to talk about it all. Like you want to talk about high cost of living? No problem. If you're out of work for a year, let's talk about what to do about that. But I will also be clear when there are certain things that are not my area of expertise. I'm not an expert on ADHD. I want to establish that right now. Now, I am thrilled to hear that they are taking steps to manage it. But I do know that even with ADHD, they have to find a way to survive and thrive when it comes to their money. So that is my challenge for them today. And we're going to take a look at their numbers right after this.

• 15:11Ramit Sethi?

  I love helping couples on this show get on the same page about money. But the truth is, this is one conversation. And in order to make big changes that stick, it often takes a lot of conversations. This is why you'll hear me recommending to couples that they get regular couples therapy. I recommend checking out Grow Therapy. Grow Therapy makes it easy to find a therapist that fits you, not the other way around. They make it easy to search by what matters. By identity, specialty, availability, insurance coverage. All of those so you can find a therapist that's the right fit for you. And from there, they connect you with thousands of independent licensed therapists across the US,

• 15:52Ramit Sethi?

  offering in-person or virtual sessions, including on evenings and weekends. There's no subscription. There's no long-term commitment. You just book and pay per session with free cancellation up to 24 hours before your appointment. Whatever challenges you're facing, Grow Therapy is here to help. Grow accepts over 125 insurance plans. And sessions average $21 with insurance and some pay as little as $0, depending on their plan. Visit growtherapy.com/ramit today to get started. That's growtherapy.com/ramit. Growtherapy.com/ramit. Availability and coverage vary by state and insurance plan.

• 16:35Ramit Sethi?

  There are so many similarities between personal finance and fitness. They both involve following a plan. They both involve being intentional and changing your internal psychology. And actually, I find that a lot of people, once they get good at money, they actually transfer that to their own personal fitness. Now, part of fitness is also what you eat. And to be able to have any tools that make this easier for you is a huge win in my book. So I'd like to introduce you to Factor, which lets you eat delicious, nutrient-dense meals without all the hassle. Factor is a meal service that delivers fully-prepared, ready-to-eat meals directly to your door. And they have a lot of variety. They have over 100 rotating weekly meals, including

• 17:20Ramit Sethi?

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• 18:02Ramit Sethi?

  I want to take a look at the numbers. Help me understand what's going on. What was it like to do the conscious spending plan together?

• 18:08Speaker 01

  So we had done one a few years ago. That was the harder one, because it was the first time that we really looked into our finances and then saw like how much debt we were in.

• 18:19Speaker 02

  I had never seen how much he owed.

• 18:23Ramit Sethi?

  Oh, really?

• 18:23Speaker 01

  Yeah. And likewise, I had never seen how much she owed.

• 18:25Ramit Sethi?

  What was the amount at the time?

• 18:27Speaker 01

  Um.

• 18:28Speaker 02

  I think I was up to like 20 grand of debt.

• 18:31Ramit Sethi?

  Credit card?

• 18:31Speaker 02

  Yeah.

• 18:32Ramit Sethi?

  Okay.

• 18:32Speaker 01

  Yeah, and I was like at $18,000, I want to say.

• 18:37Ramit Sethi?

  Ah, you were married at the time, right?

• 18:39Speaker 01

  Oh, yeah.

• 18:40Ramit Sethi?

  You all never talked about it?

• 18:41Speaker 01

  No, we really didn't.

• 18:44Ramit Sethi?

  Separate accounts?

• 18:45Speaker 02

  Yeah.

• 18:45Speaker 01

  We had, we had, we still had a shared account that, you know, we paid rent through and some bills. And then I'd pay some bills through my account.

• 18:53Ramit Sethi?

  But no sitting down and let's give each other the full overview?

• 18:57Speaker 01

  Not really.

• 18:58Ramit Sethi?

  Usually like one person was like, hey, I feel like I need to know more.

• 19:01Speaker 02

  I mean, I probably mentioned it more than you did. At the time, it seemed like you were a little embarrassed about how much you owed and you didn't really want to share it with me.

• 19:12Speaker 01

  I mean, I probably was. I also didn't know how much you owed and I probably would have been a little, felt a little better if I knew because we were in the same boat and I didn't realize that.

• 19:21Ramit Sethi?

  Let's look at the numbers. Let me put them up on screen. So I am going to ask you, Lauren, to read off the word in bold and then the number next to it for this entire box, please.

• 19:33Speaker 02

  Assets, 20,000. Investments, 89,000. Savings, 5,000. Debt, 93,500.

• 19:44Ramit Sethi?

  Total net worth?

• 19:45Speaker 02

  20,500.

• 19:47Ramit Sethi?

  Okay. What do you think about those numbers?

• 19:50Speaker 02

  I mean, the debt is high, but I'm kind of impressed with us for having a net worth.

• 19:56Speaker 01

  I actually think I made a joke about it. I'm like, oh, we actually have a positive net worth? That's great.

• 20:01Ramit Sethi?

  Is that because for so long you had a negative net worth?

• 20:04Speaker 01

  I mean, yeah, yeah.

• 20:06Speaker 02

  I mean, the only reason why we have a positive net worth is because of our 401Ks.

• 20:11Ramit Sethi?

  Uh huh, that's okay.

• 20:12Speaker 01

  She has a 401K. I had a previous jobs where I had an automatic deduction.

• 20:19Ramit Sethi?

  Yes.

• 20:19Speaker 01

  I don't currently have a 401. Like I have my 401K account, but it's a old account, so I can't make contributions.

• 20:26Speaker 02

  Well, and then after I read your book, I was like, hey, you should convert your old 401K. 01K to a Roth IRA.

• 20:34Speaker 01

  Yeah, so I do have a Roth IRA.

• 20:35Ramit Sethi?

  That's good.

• 20:37Speaker 02

  And I've been trying to convince him to do like $20 a month.

• 20:40Speaker 01

  Which I did, I did set up a $20 a month, just contribution.

• 20:44Ramit Sethi?

  What, what's up with this dynamic of I've been trying to convince him?

• 20:47Speaker 02

  Sometimes it's a little challenging to get Mick to do things.

• 20:54Speaker 01

  Why? I guess I'm stubborn. I'm very stubborn.

• 20:56Ramit Sethi?

  Yeah, why though? It's not like she's trying to get you to eat poison. It's like, set up a Roth IRA and put 50 bucks a month. What's the resistance?

• 21:03Speaker 01

  If I, it's not in front of me in the moment. And I say, I'll do it later. I don't, I don't do it later.

• 21:09Ramit Sethi?

  That's it?

• 21:10Speaker 01

  Yeah.

• 21:10Ramit Sethi?

  It's just a, like an administrative issue?

• 21:13Speaker 01

  I, I think that's probably part of it.

• 21:15Ramit Sethi?

  I mean, just to ask it like a blunt question.

• 21:19Ramit Sethi?

  Why don't you just do it for him?

• 21:20Speaker 02

  I don't have the login.

• 21:23Speaker 01

  I think it's something that we haven't even thought about, honestly, like the questions that you're bringing up.

• 21:27Ramit Sethi?

  Yes, I can tell. And I want to know why. Like, is money important in your relationship? It's okay if the answer is no, I just want to understand.

• 21:37Speaker 01

  I would, I mean, I would say it isn't because we, when she first met me, I didn't even have a job. I was broke.

• 21:43Ramit Sethi?

  Okay, so it's not important?

• 21:44Speaker 01

  Yeah.

• 21:45Ramit Sethi?

  Do you respect money?

• 21:46Speaker 01

  In what way?

• 21:47Ramit Sethi?

  How do we respect something? If we respect food, we think about what we're gonna eat. We perhaps buy certain types of ingredients. We talk about what we're gonna eat. We clean things. We chop them with our kids or clean them with our kids. Like, it's a part of our family. You know? It's a thing that we are methodical about and thoughtful and talkative, planful. Money, same way. So I'll ask the question again. Do you respect money?

• 22:21Speaker 01

  No, I don't think, I don't think we do. I think it's something that we only think about when we need to.

• 22:27Ramit Sethi?

  Yes.

• 22:28Speaker 02

  I agree.

• 22:29Ramit Sethi?

  Okay. I believe Lauren and Mick have an external locus of control. External locus of control means they don't believe they are in control of their own destiny. That they believe that life happens to them and they exist merely to react to it. You know, a surprising amount of people feel this way. A lot of people grow up feeling very little control over their own environment. Perhaps they grew up poor. The minute they put a little bit of money aside, their boots broke or their tires got flattened. And so, no matter what they did, something happened and set them two steps back. And if that's what your parents saw and their parents and you, well, it's no surprise that you have an external locus of control.

• 23:13Ramit Sethi?

  If somebody has an external locus of control, it is virtually impossible for me to change that, especially in one conversation. It can be changed. You can practice it. You can start by setting up a $20 a month automatic savings plan and within 10 months you will see $200. So if you meet someone with an external locus of control, can they change? Sure. Is it likely to happen? No, because it's really, really hard. Mick, can you read off the combined gross monthly income, please?

• 23:44Speaker 01

  Yes, $12,470.

• 23:47Ramit Sethi?

  Cool. So it's about $150,000 a year gross. Did you know that you made that?

• 23:52Speaker 01

  Yes.

• 23:52Ramit Sethi?

  Both of you?

• 23:53Speaker 01

  Yes.

• 23:53Ramit Sethi?

  Wow. What would you tell yourself at the time where you finally got a job and you started to spend more?

• 24:00Speaker 01

  I think for us, in terms of our comfort, it was like we had breathing room because I was getting a larger paycheck again. And so, it goes back to like getting that dopamine hit, like let's go to more restaurant, let's go out to eat more. Let's, you know, buy those toys that we were not going to get for the kids or even stuff for ourselves, you know? Let me go buy a video game console or, you know, let me get a few bucks or a new Kindle or whatever it was. And it was, it was one of those things where we felt like we had deprived ourselves and then the opposite happened. And because... I think like life got interrupted right when we were on the right track.

• 24:45Speaker 01

  All of those things that, you know, we had learned from your buck and your show. And then the other things that we were doing to like, get our finances together. That became a low priority because we were just trying to survive for a few months.

• 25:01Ramit Sethi?

  Okay. What is this number here?

• 25:04Speaker 01

  Eighty-nine percent.

• 25:05Ramit Sethi?

  Eighty-nine percent. What does that tell you?

• 25:07Speaker 01

  The vast majority of our money is just going toward those fixed costs.

• 25:12Ramit Sethi?

  Exactly. Eighty-nine percent of your take-home pay goes to your fixed costs. That's the ballgame. That means you spend effectively every last cent you make going to fixed costs. Implication being, you don't have enough money for?

• 25:26Speaker 02

  Fun.

• 25:26Ramit Sethi?

  Fun?

• 25:27Speaker 01

  Savings.

• 25:28Ramit Sethi?

  Although I suspect you do spend it anyway on fun.

• 25:30Speaker 01

  Yeah.

• 25:31Ramit Sethi?

  You definitely don't have enough for savings, which is why there's zero going towards it. And a relatively small amount in savings, five thousand dollars.

• 25:37Speaker 02

  That was just as bonus.

• 25:39Ramit Sethi?

  You've been putting three hundred dollars a month away. But then why is it only five thousand dollars in savings? Were you pulling it out?

• 25:47Speaker 02

  Yeah, so the, that money is supposed to go toward our car payment.

• 25:55Speaker 01

  Yeah, I mean, we end up pulling it out for bills. That's basically, that's the basic thing that happens.

• 25:59Ramit Sethi?

  Okay. Investments are at zero. Savings are at three percent, although it's unclear if that's actually going to savings or not. And then finally, guilt-free spending says eight percent or seven hundred thirteen dollars, but we know that's not true, right?

• 26:12Speaker 01

  Yeah.

• 26:12Ramit Sethi?

  More than that, for sure. So what do you make of the fact that you are spending more than the CSP shows you have?

• 26:22Speaker 02

  I mean, it's just gonna increase our debt.

• 26:25Speaker 01

  I think that's part of like, why we're here to figure out like, what do we really need to cut back? And, and save for, because we do need the savings. I don't think everything is set up correctly.

• 26:37Ramit Sethi?

  Yeah.

• 26:38Speaker 01

  And I guess a lot of it is kind of administrative in a way. Because things aren't set up and because the visibility is not there, we're making poor choices.

• 26:48Ramit Sethi?

  I think that's partially true, yes. What's the debt? Ninety-three thousand, five hundred? What type of debt is that?

• 26:53Speaker 02

  We have two cars and-

• 26:55Speaker 01

  Two cars and-

• 26:56Speaker 02

  Credit cards.

• 26:57Speaker 01

  And, and credit cards, yeah.

• 26:58Ramit Sethi?

  Okay, break it down for me. How much is the first car?

• 27:01Speaker 01

  I want to say it's around 28, is it 28,000?

• 27:04Ramit Sethi?

  Alright, 30K.

• 27:05Speaker 01

  Around 30K. Uh, it's a Mustang.

• 27:08Ramit Sethi?

  Alright.

• 27:09Speaker 01

  Mach-E.

• 27:09Ramit Sethi?

  How much did it cost when you bought it?

• 27:11Speaker 01

  Well, 35.

• 27:13Ramit Sethi?

  Okay.

• 27:13Speaker 02

  We got a really horrible interest rate on it.

• 27:16Ramit Sethi?

  What interest rate?

• 27:17Speaker 02

  It was like 9% when we first got it.

• 27:19Speaker 01

  We got it refinanced.

• 27:21Ramit Sethi?

  To what?

• 27:22Speaker 01

  Um, now it's like 6%.

• 27:23Speaker 02

  Yeah.

• 27:24Ramit Sethi?

  Okay, what's the next car?

• 27:26Speaker 02

  Uh, it's a lease.

• 27:27Speaker 01

  Honda CR-V.

• 27:29Ramit Sethi?

  You're leasing a Honda CR-V? Why are you leasing it?

• 27:32Speaker 01

  It's brand new.

• 27:33Speaker 02

  Yeah.

• 27:33Ramit Sethi?

  What does that have to do with it?

• 27:35Speaker 02

  Cheaper monthly payments.

• 27:36Speaker 01

  Yeah, it was a cheaper monthly payment, basically. And that's, that was the whole reason.

• 27:39Ramit Sethi?

  Okay, got it. And then, how much credit card debt?

• 27:42Speaker 02

  Well, the loan that we just took out was 35,000. And that was in January.

• 27:48Ramit Sethi?

  35 what?

• 27:49Speaker 02

  Thousand.

• 27:49Ramit Sethi?

  35,000, what interest rate?

• 27:52Speaker 01

  Uh, I want to say like around 8%.

• 27:55Ramit Sethi?

  What do y'all think of this?

• 27:56Speaker 01

  Part of the reason that we did it is because, because it was all credit card debt and it was insanely high interest. I mean, it was 20 something percent interest.

• 28:03Speaker 02

  26% on most of the car.

• 28:05Speaker 01

  Yeah, and so I wanted to completely shut down any credit spending.

• 28:11Ramit Sethi?

  Yeah.

• 28:12Speaker 01

  Um, and so I'm like, we need to pay off this debt. If we keep it in the credit card, the interest rate's too high. We don't have the money to pay it off.

• 28:20Ramit Sethi?

  But like, you're still spending on credit cards, right?

• 28:22Speaker 01

  No.

• 28:23Ramit Sethi?

  No?

• 28:24Speaker 01

  I mean, I, yeah.

• 28:25Speaker 02

  The only thing that we've recently put on a credit card was the Legoland Hotel.

• 28:29Ramit Sethi?

  So, now I understand the debt. You have two car payments and the consolidated debt at roughly 8% or so.

• 28:37Speaker 01

  Mm-hmm.

• 28:37Ramit Sethi?

  So let's just say $93,000 of debt at like, let's say 9%.

• 28:42Speaker 01

  The percentage is always the thing that like sticks out to me after like reading your book and everything that I've, is like, it costs a lot of, it, it's gonna be a lot of money extra. And I think that sticks out to me, but at the same time, like the, the decisions that we made at the time, um, at least for this credit card debt solution, was... Because we're going to save some interest.

• 29:08Ramit Sethi?

  Yeah, but what about getting into credit card debt in the first place?

• 29:10Speaker 01

  That's, that was the problem. And so I think that likes so much of that debt came from very poor decisions that we both had made when we were younger.

• 29:22Ramit Sethi?

  Which poor decisions are you still making today with your money?

• 29:24Speaker 01

  I mean, I guess.

• 29:25Speaker 02

  Not having a plan.

• 29:26Speaker 01

  Yeah, not having a plan and spending it on things that we probably don't necessarily need.

• 29:30Ramit Sethi?

  It's kind of the same as it was before. The only difference is you consolidated your credit card debt.

• 29:35Speaker 01

  Mm hmm.

• 29:35Ramit Sethi?

  But the principles are still the same. You're spending more than you have.

• 29:39Speaker 01

  Mm hmm.

• 29:39Ramit Sethi?

  On largely discretionary things and fixed.

• 29:42Speaker 01

  Mm hmm.

• 29:43Ramit Sethi?

  And there's no plan.

• 29:44Speaker 01

  Mm hmm.

• 29:45Ramit Sethi?

  So like, the consolidation is just buying you time. Even if you pay it off, you'll go back into debt. Unless you change fundamentally the way that you have a relationship with money and with each other.

• 29:56Speaker 01

  Yeah, that makes sense. Yeah.

• 29:58Speaker 02

  I mean, I will say, I think that we've been doing so much better about not using our credit cards.

• 30:06Ramit Sethi?

  Notice with Lauren and Mick, when I make a suggestion, there is a lot of explanation, over explanation of why they are in this situation, where they used to be and how far they've come. And candidly, it doesn't really interest me. I can spend the next five days listening to stories about why they are here and why everything they've done is actually quite rational, and they will get nowhere. That's not even what they want. But unconsciously, they are simply bringing up old stories so that they don't have to change. Not interested. I'm more interested in, do you acknowledge where you are today and what's it going to take to move forward? What is something big and scary that you have been putting off for months?

• 30:47Ramit Sethi?

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• 31:31Ramit Sethi?

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• 32:16Ramit Sethi?

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• 33:00Ramit Sethi?

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• 33:23Ramit Sethi?

  So what are you gonna do to fix it?

• 33:24Speaker 01

  I think it's maybe what we went back to before is that we're not respecting it enough and we don't talk about it. It's not just that we don't talk about it with each other. I don't talk about it with anyone.

• 33:32Ramit Sethi?

  Correct. I don't think you think about it.

• 33:36Speaker 01

  I don't really think about it all that much.

• 33:39Ramit Sethi?

  The application that you wrote said to me, we are struggling with our spending patterns, which I thought was very insightful. Very few people actually referenced their own spending problem. That was cool. And then like two sentences later said, also, we want to get a three bedroom apartment or house. And I was like, how can that be? How can you have a spending problem? And then at the same time, you want to get a house?

• 34:05Speaker 01

  That we're not mindful with money.

• 34:07Ramit Sethi?

  Correct. To me, I think the way that you're talking about money feels like it's this abstract thing. And it's kind of just like, ah, break it in case of when we need it. And even if we just want it, Legoland, ah, like I'll kind of collect some gift cards, but like Lego, we're gonna do Legoland. It doesn't really matter how much we have. We're just gonna do it. We'll find a way. And if, if it adds to the debt, ah, it's not gonna, it's fine. It's fine. It feels very detached. A plan is deeply real and local. It, it affects like what you eat, where you go, what kind of birthday party, like there are numbers that guide what you're doing. If you had a plan like that, would it feel good or bad?

• 34:52Speaker 01

  I think it would eventually feel good. I think it would be feel like

• 34:55Speaker 02

  Scary.

• 34:55Speaker 01

  Yes, probably scary and uncomfortable.

• 34:57Ramit Sethi?

  I think that's true. I'm gonna try to make money really simple today. Because I think it's like, there's a lot of different confusing things going on. There's accounts over here and you're the planner and you're the executor, but you also execute too, and you have to remind the executor. And then there's debt, but it's consolidated. It's just like a lot. In many ways, like my finances are simpler than yours. And that shouldn't be the case. Like, trust me, it should not be the case. We should make all of our finances simple. So that we deeply understand it and that we don't have to make a thousand decisions per month. I know I don't want to do that.

• 35:31Speaker 01

  No.

• 35:32Ramit Sethi?

  I know you two don't want to either.

• 35:33Speaker 01

  Absolutely not, yeah.

• 35:34Ramit Sethi?

  All right. Help me understand how you each grew up with money. Mick?

• 35:40Speaker 01

  I didn't learn a whole lot about money growing up. My dad was supported a lot by his parents. They were fairly well off, but I think they didn't support him in the way that they should have. Like, they didn't teach him about money.

• 35:58Ramit Sethi?

  They gave him money. Okay.

• 36:00Speaker 01

  Um, and so that was a skill that he never had, and that didn't get passed on to me.

• 36:06Ramit Sethi?

  Does he at least give you money?

• 36:08Speaker 01

  He's broke. And then my, my mom, um, she was a stay-at-home mom, which is an incredibly hard job, but she also didn't really, she never worked. And she, she didn't enter the workforce. So I feel in that way, she doesn't necessarily understand sometimes how much goes into it.

• 36:29Speaker 02

  Her mom also was well off and...

• 36:32Speaker 01

  Well, not necessarily. I mean, my, my grandmother was, my mom's mom was probably the best of my grandparents when it came to teaching about money. But even so, I don't think there was enough that was passed down to either of my parents and henceforth never to like me.

• 36:52Ramit Sethi?

  Okay.

• 36:53Speaker 01

  And so...

• 36:54Ramit Sethi?

  What did they say? Did they have any words they used about money?

• 36:57Speaker 01

  My dad would not, he was the type that didn't want to buy any, like, he didn't want to spend on anything at all.

• 37:04Ramit Sethi?

  Ah.

• 37:05Speaker 01

  Um, but he was a gambler.

• 37:08Ramit Sethi?

  Oh, like a, like a real gambling addict?

• 37:10Speaker 01

  Mm-hmm.

• 37:11Ramit Sethi?

  I see.

• 37:11Speaker 01

  And so that, luckily I didn't inherit that. And so that is something that has always been a struggle, but money, like, in terms of like bills and stuff, and my parents didn't have the visibility with each other in what was going on. And so...

• 37:30Ramit Sethi?

  How'd the bills get paid?

• 37:31Speaker 01

  I have no idea. And then I would be the, I, I mean, when I was a teenager and, and, you know, eventually everything moved online. My parents aren't necessarily that tech savvy, but, you know, once that started happening, I was the one that was at least, like, making sure that the bills got paid. And just in terms of like, I would set up an auto pay or I would set up a bill pay.

• 37:49Ramit Sethi?

  You did that as a teenager?

• 37:50Speaker 01

  No. But not knowing where the money came from.

• 37:55Ramit Sethi?

  Yeah, but what about now? You mentioned that you struggled setting up autopay now and like kind of making sure everything works out, executing correctly. How do you reconcile that?

• 38:05Speaker 01

  To be honest with you, it's usually like when the problems happen, it's because I forgot like one of our cards expired and I didn't change it. Or like that, those like little minor missteps are what kind of get me into trouble in terms of that.

• 38:21Ramit Sethi?

  What do you remember about money at this point, once you're in your early twenties?

• 38:25Speaker 01

  I just wanted to do stuff and spend money because I, I mean, I'm fortunate that I didn't have any student debt, but I was like, oh, I can get a credit card and I can buy whatever I want. I want, oh, I want an Xbox. Like, yeah, let's go buy it. And I would, I was just spending like crazy, not understanding interest rates, not understanding that making a minimum payment is doing nothing.

• 38:50Ramit Sethi?

  Nobody explain this to you?

• 38:51Speaker 01

  No.

• 38:52Ramit Sethi?

  And you did not seek out learning about it?

• 38:55Speaker 01

  No, because I didn't understand that it was hurting me because I was like, oh, I can just make my minimum payments and just keep collecting debt and there's no consequence to that.

• 39:05Ramit Sethi?

  Okay.

• 39:06Speaker 01

  And like, I didn't understand credit scores. I didn't understand anything like how a savings account work. I didn't understand how a 401k worked.

• 39:15Ramit Sethi?

  What about now?

• 39:17Speaker 01

  Now I do. And now I like, I, I wish I'd known it sooner.

• 39:23Ramit Sethi?

  Lauren, what do you remember your family saying about money when you were growing up?

• 39:28Speaker 02

  So my mom has always been an entrepreneur. She's owned her own business for over 40 years. So like her office was at our home. So whenever she wanted something, like whether it was a course, she loves doing courses where she can like learn about, you know, more about her business or like get coaching from someone. She just like.

• 39:55Ramit Sethi?

  Such as money coaching?

• 39:58Ramit Sethi?

  Okay, go on.

• 39:59Speaker 02

  So whenever she wanted to buy something, her rationale was I'll put it on a credit card and then I'll go make the money to pay off the credit card.

• 40:07Ramit Sethi?

  Okay.

• 40:08Speaker 02

  My dad just kind of took care of everything. My mom didn't look at the bills. She didn't even know how to pay bills. But my dad, he didn't really hold any boundaries with my mom. Cause like even after he inherited a bunch of money from his dad after he passed,

• 40:29Speaker 02

  he wanted to put that into a house. And we looked, I remember like going to different open houses like to try and get a house and my mom was like, no, no, it was always no. And then we ended up spending it on other things like trips.

• 40:45Ramit Sethi?

  What do you take away from that?

• 40:46Speaker 02

  For me, money just allows you to do things.

• 40:51Ramit Sethi?

  Go deeper than that.

• 40:52Speaker 02

  Money allows you to, I guess, enjoy life, but it's not something you should ever really have to think about.

• 41:00Ramit Sethi?

  Ah, that is insightful. I shouldn't really have to think about money. I want to use it on the things I love and that's it.

• 41:10Speaker 02

  And later on, when I became a teenager, I basically reframed that into like, I'm such a great manifester of money. Like I always figure something out to make it easier. So like when I went to college, like at that point, my parents had gone through bankruptcy

• 41:33Speaker 02

  and a divorce. And so I was living with my dad who didn't have a job and at the time like FAFSA,

• 41:43Speaker 02

  like you have to put your parents' information. Now that they were divorced, they just went through bankruptcy. As long as I put my dad's information on it, who's unemployed, like, so I got grants for like my entire college. So I didn't have any loans or anything like that. So.

• 42:00Ramit Sethi?

  Why'd they declare bankruptcy?

• 42:02Speaker 02

  Because they had over a hundred and forty thousand dollars of credit card debt.

• 42:06Ramit Sethi?

  Why?

• 42:07Speaker 02

  Because my mom would put things on a credit card and then try to make money to pay it off. And she couldn't keep up with it. Not a good way to do it.

• 42:18Ramit Sethi?

  You yourself went into credit card debt, right?

• 42:20Speaker 02

  I asked for an American Express card when I was three.

• 42:25Ramit Sethi?

  That's pretty good.

• 42:26Speaker 02

  I'm an only child. My parents were making some pretty good money when I was a kid.

• 42:31Ramit Sethi?

  So how did that happen after seeing your mom go through that and dad?

• 42:35Speaker 02

  I couldn't pay more than the minimum payment. And so I would just transfer my balance from card to card so that I would get the zero interest. And so I was just holding on to it instead of paying it off. It wasn't going up, but it was just there.

• 42:52Ramit Sethi?

  I think Lauren tries to game the system, but ultimately she games herself. The Legoland and then the FAFSA thing, I don't really mind it, but they all come together to suggest that she's trying to find a way out of any constraints. I don't want to be bound by these. And that is very problematic because if you are going to make a turnaround plan with your money, you actually have to totally buy in. You can't try to evade it. You can't try to come up with excuses why it's not a right anymore. You have to say, black and white, this is my plan. It is by definition constraining me and I love it. Until Lauren has a very powerful vision for what she and Mick want to do with their

• 43:34Ramit Sethi?

  money, they will forever be trying to escape, evade, come up with little ways and diversions around it. I have a couple of questions about your numbers. $1,100 a month for car and gas. Do you need two cars?

• 43:50Speaker 01

  Yes.

• 43:51Ramit Sethi?

  Okay, how come?

• 43:52Speaker 01

  I commute to work. I have a fairly long commute. And then Lauren works hybrid. She works in the office one day a week. The rest, she is working from home, so she needs to be able to pick up the boys or take them to whatever.

• 44:07Ramit Sethi?

  Got it, okay. You have $980 a month in debt payments. That is for your roughly $33,000 consolidated loan?

• 44:17Speaker 01

  Correct.

• 44:18Speaker 02

  Well, no, because there's a couple of things that are about to fall off.

• 44:22Ramit Sethi?

  What are you going to do with the extra money?

• 44:24Speaker 02

  Preschool.

• 44:25Ramit Sethi?

  Oh, so I noticed there's no childcare on here.

• 44:28Speaker 02

  Yeah.

• 44:28Speaker 01

  So.

• 44:29Ramit Sethi?

  How's that?

• 44:30Speaker 01

  We're fortunate that my mom lives very close to us. She's like half a block away.

• 44:35Ramit Sethi?

  Okay.

• 44:35Speaker 01

  And so she helps immensely with that. And then Lauren works from home.

• 44:41Ramit Sethi?

  How much is preschool gonna cost?

• 44:43Speaker 02

  It's a co-op, so it's not like a full-service daycare or anything. It's around four hundred and eighty.

• 44:54Ramit Sethi?

  Ah, where's that gonna come from?

• 44:58Speaker 01

  Yeah, I mean, part of it.

• 44:59Ramit Sethi?

  Did you notice Lauren's reaction? What was it?

• 45:02Speaker 01

  It was, we don't know.

• 45:03Ramit Sethi?

  Yeah. Is yours the same?

• 45:05Speaker 01

  A little bit. I mean, yeah, some of it's gonna come because we're gonna be saving money on our debt payments per month, but otherwise it's one of those things where like, oh, we'll figure it out.

• 45:17Ramit Sethi?

  When are you guys gonna start getting ahead of this? Because I feel like for the last, what, fifteen years? It's been you're behind the eight ball, you're reacting to money. And like, you literally know that you have preschool coming up in a matter of months. You have two kids. Like, there's a lot at stake here. And you're talking about potentially having a third or not. When are you gonna get ahead of your money?

• 45:44Speaker 02

  Start today.

• 45:45Speaker 01

  Hopefully right now.

• 45:47Speaker 01

  Yeah, I mean, we haven't, so that this is the time to do it. I mean, we have to.

• 45:52Ramit Sethi?

  Is there a reason powerful enough for you to change?

• 45:56Speaker 01

  I think about my own children all the time in terms of like, teaching them the right skills. If I'm not setting an example for my own children, they're gonna run into the same situation and like.

• 46:10Ramit Sethi?

  What example are you setting for them?

• 46:11Speaker 01

  Right now, not a good one. I mean, we're setting the example that you don't talk about money, you need to react to it.

• 46:17Ramit Sethi?

  Yep. What else?

• 46:18Speaker 02

  That you shouldn't even worry about money because we can just do anything we want. I would really love to never have to tell my kids, oh, we can't afford that.

• 46:30Speaker 01

  But I mean.

• 46:31Ramit Sethi?

  Can I, can I push on there for one second? So. I don't like that phrase.

• 46:35Speaker 02

  Yeah.

• 46:36Ramit Sethi?

  Because I find that when parents say that, kids internalize it. They don't really understand what afford it means. And then parents repeat it 10,000 times. And then their kid comes on this show with $4 million in their bank account, and they still don't believe they can afford it. They have been imbued with this sense of scarcity, regardless of the actual situation of their finances. So I don't like that. But I love saying no to a kid.

• 47:08Ramit Sethi?

  So are you saying, I don't want to say no? Or I don't want to say, we can't afford it?

• 47:13Speaker 02

  We do say no to him.

• 47:15Speaker 01

  I also think we don't stick to our guns enough. I think we'll say no, and then he'll push back. And then it's like, alright. As opposed to like, no.

• 47:25Speaker 02

  Holding boundaries.

• 47:26Speaker 01

  Yeah, there's not enough boundaries. And I think that's also a poor example that we're setting, is that we don't hold boundaries with ourselves in a lot of ways. And so how are they going to learn boundaries if we're not doing it?

• 47:38Ramit Sethi?

  Bingo, bingo. That is the crux of today. If you can't hold boundaries with yourself, then you can't hold boundaries with your partner. If the two of you can't hold boundaries as a unit, then you definitely can't hold boundaries with your kids. Alright, I want to open up your CSP, and I want to ask you some questions. First thing we're going to do is figure out the preschool. Because that's coming up. This is a guarantee. It is going to happen. Right now, your debt is going to go down. It's $980. That's going to come down by how much?

• 48:09Speaker 02

  About 300.

• 48:10Ramit Sethi?

  Okay, so $680. 86%.

• 48:14Speaker 02

  Well, and this is where we get stuck. Because like, we've already switched our phone provider. So we shaved off $100 a month. Car payments are fixed, and like, we have an electric car. So we're not... Paying that much for gas, still way too high.

• 48:32Ramit Sethi?

  Way too high. It needs to be like 60% or lower. So, alright, we'll work with what we got right now. Now, you mentioned preschool. That's gonna be how much?

• 48:41Speaker 02

  $4.80.

• 48:42Ramit Sethi?

  $4.80 a month. Alright, let's put it, uh, I'm gonna put it here on subscriptions, okay? That's 7.30, watch what happens. What's this number now?

• 48:53Speaker 01

  $92.

• 48:54Ramit Sethi?

  92%. It went up!

• 48:58Speaker 01

  Yeah, we're in an even worse position.

• 49:01Ramit Sethi?

  Yeah, but in your heads, I think you think you'd be doing well. Like, hey, we actually like, um, paid off a couple hundred bucks for our phone. That's the story you would tell yourself. That story is at odds with reality. In the same way that the story you tell yourselves, like, "Hey, I'm actually not spending as much as I used to." Yeah, but you're spending more than you make every single month. We need reality, not the story that we are telling ourselves. That story is often wrong. I'm not sure they're actually living in any sort of financial reality right now. I think part of the reason why is that they simply have not actually felt real consequences of their financial decisions. Even being in a bunch of debt, what did they do? Consolidated the loans, which basically is buying some time. No real consequence.

• 49:46Ramit Sethi?

  Cable hasn't been turned off. Power hasn't been turned off. So, how bad is it really? This is how a lot of people think. In their case, they have made a plan. People rarely address the root behaviors that got them into trouble. Like, for example, let's say every morning I wake up at 6:30, I walk over to the fridge, I take a big old stick of butter, and I rub it all over my feet. This is what I do in my morning ritual, okay? I rub that shit, it's dripping with butter. And then I just go, "Oh, let me walk around the house." I slip and fall right into a big old spider web with a huge tarantula. And I'm sitting there going, "Oh, woe is me, how did I end up in this spider web?" And I finally escape. And so, the next day, you know what I do? I do the exact same thing, because I never realized

• 50:29Ramit Sethi?

  I gotta change my root behaviors and not rub butter on my freaking feet. That's how so many people are when it comes to money. They might even make a debt payoff plan, although almost nobody does that. But they rarely, rarely address the root cause of how they got into debt in the first place. And if you do not address the root cause, the root behaviors, you're very likely to end right back there once again. You know, one element we haven't discussed meaningfully is that they are considering having another child and moving into a house. Where? Where's the money gonna come from? That is what we are talking about next. You had mentioned that your goal is to consider having a third kid and get a three-bedroom place.

• 51:15Ramit Sethi?

  Where's that on the CSP?

• 51:16Speaker 01

  It's nowhere. And that's part of the reason why we're here too, is like, we'd love to do that. But there's no feasible way of doing that.

• 51:25Ramit Sethi?

  Do you agree with that, Lauren?

• 51:27Speaker 02

  I mean, we still really want a three-bedroom. Right now, we're in a two-bedroom that is, it's rent-controlled, which is great. It's in exactly the location that we want it to be. It's a pretty big apartment, but the last few months, we've been dealing with a really big cockroach infestation.

• 51:46Ramit Sethi?

  Yeah, you get an exterminator?

• 51:47Speaker 02

  They've come out twice, and it turns out that our neighbors also have it below us, so it's not just us. And it's really gross, really frustrating.

• 52:00Speaker 02

  We've had to like empty out our entire kitchen and bathroom, like both bathrooms and like, yeah, it's, I'm over it. It's unhealthy.

• 52:11Ramit Sethi?

  What's the landlord say?

• 52:13Speaker 02

  I mean, they've been doing what they can to take care of it. Like, yesterday, they came and sealed up some of the extra cracks in the kitchen. And like, I've been talking to our neighbors downstairs, because I'm like, well, this is a problem.

• 52:28Ramit Sethi?

  So you want to help?

• 52:29Speaker 02

  Yeah.

• 52:30Ramit Sethi?

  Okay, you agree?

• 52:31Speaker 01

  I, I mean, I hope that it worked, the treatment, but I, there's a lot that I like about our place.

• 52:38Speaker 02

  Huge property.

• 52:39Speaker 01

  I do like the size of our place. I do, the rent is actually very good for the area. And so, I think like,

• 52:48Speaker 01

  I would love to have a bigger apartment because I do feel like sometimes we're a little cramped in a two bedroom with the with two boys now and so I agree to an extent but it's also something that I'm like we can't afford it right now and it's not because it's not a possibility I'm not thinking about it as much.

• 53:07Ramit Sethi?

  So what's the decision?

• 53:08Speaker 02

  Well, there's another issue with the apartment too.

• 53:13Speaker 02

  Every time it rains, it leaks and it's been like that for the last three years to the point where now we have mold growing under.

• 53:20Ramit Sethi?

  How can you stay here with kids?

• 53:22Speaker 02

  Exactly.

• 53:23Ramit Sethi?

  Like I'm usually like the guy like let's cut the fixed costs but this is crazy.

• 53:26Speaker 02

  Yeah.

• 53:27Ramit Sethi?

  Two kids and mold and roaches like.

• 53:30Speaker 02

  And like we're on the third floor like we should not be getting roaches on the third floor.

• 53:34Ramit Sethi?

  So I'm like kind of confused why not get decisive about this this sounds at first it was like alright a couple roaches then I'm like wait what the then.

• 53:42Speaker 02

  I mean, we've been trying to get this all under control and once we get it under control then we were gonna start looking but as of right now we're not getting it under control.

• 53:57Ramit Sethi?

  So you're just like stuck?

• 53:58Speaker 02

  Yeah.

• 53:59Ramit Sethi?

  You're like you're mentally stuck right now?

• 54:01Speaker 02

  Yeah.

• 54:02Speaker 01

  Well, I mean, I think part of it is that I mean, we do feel stuck because I can't feasibly see a way for us to move when we're paying what we currently do for rent.

• 54:15Ramit Sethi?

  Yeah, you'll have to move way for far away.

• 54:17Speaker 01

  Yeah.

• 54:17Speaker 02

  And which we can't because we really love our son's school.

• 54:22Speaker 01

  Well, we do love the school but the other thing too is we are also close to my mom and so and she's not gonna move.

• 54:29Ramit Sethi?

  Why don't you move in with her?

• 54:30Speaker 01

  She's she's.

• 54:31Speaker 02

  She lives with.

• 54:33Ramit Sethi?

  It's a family affair. Okay, so you obviously have to make a decision like if you're gonna stay here, stay here. But like this whole like we want to do this but we can't do that because of this and that is like driving everybody crazy. So like I I get the sense you all are not particularly decisive.

• 54:52Ramit Sethi?

  I think it's time to become especially as parents. You you can't just be like we'll see.

• 54:58Speaker 01

  I mean, my decision would be to stay because.

• 55:01Ramit Sethi?

  That's fine.

• 55:01Speaker 01

  Yeah.

• 55:01Ramit Sethi?

  No explanation needed. Lauren?

• 55:04Speaker 02

  I need more time before I'm gonna be ready to move out so if we set a date.

• 55:10Ramit Sethi?

  Pick the date.

• 55:13Ramit Sethi?

  Two months from now.

• 55:14Speaker 01

  I think we can do that in two years.

• 55:16Speaker 02

  Next year?

• 55:17Speaker 01

  If we can make it work, then yeah. My biggest concern is that like, I really love where we live.

• 55:21Speaker 02

  We don't even have enough savings to move.

• 55:24Speaker 01

  I mean, that's the other thing too, is like, how are we even gonna move?

• 55:27Ramit Sethi?

  Okay, I'm gonna put your CSP up on screen. I want you to show me how.

• 55:31Speaker 01

  Okay.

• 55:31Ramit Sethi?

  What's the rent gonna be? What's a realistic number?

• 55:35Speaker 01

  Forty-two hundred.

• 55:36Ramit Sethi?

  Great. Do you relearn?

• 55:37Speaker 02

  It kinda depends if we're looking at an apartment or a house.

• 55:42Ramit Sethi?

  How about whatever's cheaper?

• 55:44Speaker 02

  I want a house.

• 55:45Ramit Sethi?

  Alright, how much?

• 55:48Speaker 02

  In our area, it would probably be around forty-five hundred for like, a townhouse.

• 55:52Ramit Sethi?

  He said forty-two hundred.

• 55:54Speaker 01

  Yeah, cuz I was thinking an apartment.

• 55:58Speaker 01

  We put forty-five hundred and see what we can do.

• 56:00Ramit Sethi?

  Alright, fine. Forty-five hundred is, watch. Mick, your job is to get us down to sixty percent with a three-bedroom.

• 56:07Speaker 01

  Mm-hmm.

• 56:07Ramit Sethi?

  You're now at a hundred and twelve percent.

• 56:09Speaker 01

  Yeah, it can't happen, so...

• 56:11Ramit Sethi?

  It's impossible

• 56:12Speaker 01

  Mm-hmm.

• 56:13Ramit Sethi?

  for you to get a three-bedroom house. You were already at ninety-two percent. You're going the wrong direction.

• 56:19Speaker 01

  Mm-hmm.

• 56:21Ramit Sethi?

  I need you to accept reality. It is not possible to increase your housing costs in the next two years. Impossible.

• 56:29Speaker 01

  Mm-hmm.

• 56:30Ramit Sethi?

  You are almost homeless. I don't know if you realize that.

• 56:36Speaker 01

  Hmm.

• 56:37Ramit Sethi?

  We're talking about like, I like my neighborhood. I like you to have a roof with two kids.

• 56:42Speaker 01

  Mm-hmm.

• 56:44Ramit Sethi?

  The luxury that you want is not available to you anymore. You have spent too much money.

• 56:49Speaker 01

  The thing is, I don't think about those things because I'm like, this is an impossibility, so it's off my mind.

• 56:53Ramit Sethi?

  So you might as well just not pay attention and just wait until life forces you to do something?

• 56:58Speaker 01

  I mean, I think we have the ability to do it. But, right now, that's where we're, where we're stuck. We don't know how. Right now, it is really just that we're just figuring out how to make it work. I don't, that's just the way that we've always thought of it, and I guess, we didn't take it seriously.

• 57:16Speaker 02

  It's just so interesting cuz I, I've been thinking about how we always present ourselves as a unified team.

• 57:27Speaker 02

  And just from this conversation, I'm realizing that there are a lot of kinks in the communication.

• 57:34Ramit Sethi?

  Tell me, name them, please. I think you're on to something.

• 57:37Speaker 02

  Just not taking the time to talk about money and to plan for the future. And we have been very reactive about all of our spending. And I think part of that is, you know, because of the trauma of him losing his job. And it's just been one thing after another ever since.

• 58:05Speaker 02

  And we just lack the confidence in ourselves to make a plan that we can stick to. We don't, I don't believe that if I set a plan that I would be able to actually carry it through.

• 58:20Ramit Sethi?

  Agency, that belief in yourself. Okay.

• 58:25Speaker 02

  So making a plan, it feels like I get really in my head. I make the plan. I'm really excited about it. And then something else happens where I'm like, well, forget about that.

• 58:39Ramit Sethi?

  Can I reframe what you said in a different way? Like how I might look at your exact situation, but from my perspective. So I might look at it like this. I might say, wow, we both used to be in a lot of debt. We made a lot of poor money decisions. We've come a long way. I'm really proud of that. And I think that Mick and I should celebrate that. But I also know that for us to get to where we want to go, we need to completely level up. We need to level up in the way that we think about money, the way that we talk about money, behave with money, and feel about money. And finally, I used to tell myself it's one thing after another. One thing keeps coming up.

• 59:23Ramit Sethi?

  And I'm flipping that to now acknowledge, life is always going to throw things our way.

• 59:30Ramit Sethi?

  We are going to be strong enough to deal with each and every one of them.

• 59:35Ramit Sethi?

  Same situation, different interpretation. What'd you notice?

• 59:39Speaker 02

  All positive language.

• 59:41Ramit Sethi?

  Yes, what else?

• 59:43Speaker 02

  It acknowledges that we are working on it

• 59:46Ramit Sethi?

  Mm hmm.

• 59:47Speaker 02

  and moving forward.

• 59:48Ramit Sethi?

  Mm hmm.

• 59:49Speaker 02

  Instead of being stagnant.

• 59:52Ramit Sethi?

  Never stagnant, great. All of this hedging and hesitancy is getting them nowhere. They desperately need to get the ball, frankly, any ball, rolling in the right direction. And one of the messages that you hear me saying today is be decisive. Stop waiting, start taking action right now. If you are ready to stop simply watching this podcast and start taking action with your money, I recommend you join my money coaching program right now. IWT.com/moneycoaching. You'll actually be shocked at how much progress you can make in just 48 hours. You can join the program, have a plan, understand your money and know exactly what to do next. IWT.com/moneycoaching.

• 1:00:36Ramit Sethi?

  Now let's get back to the CSP with Lauren and Mick because there is a way to make their dreams a reality. Can you guess what it is? I built my company knowing that I wanted to work remotely and I wanted my entire team to be able to do the same. We work at home, we work from coffee shops, sometimes we take calls while doing walks and we all love the flexibility. But sometimes it makes it hard to sit down and type long emails, which is why we love this episode's sponsor Whisperflow. Whisperflow turns the way you naturally talk into clean, ready to send text in any app on any device. I'm talking about Slack, Gmail, Notion, iMessage, even ChatGPT and Claude on Mac, Windows and Android.

• 1:01:21Ramit Sethi?

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• 1:02:02Ramit Sethi?

  W I S P R flow dot A I slash ramit. Or click the link in the description.

• 1:02:10Speaker 01

  I think we can make more money. I especially think Lauren can make a lot more money than she is.

• 1:02:18Speaker 01

  I don't make that much more than you, but I do make more than you currently. And I do feel that like your skill set is much more valuable than you've credited yourself for. And I've talked to you about it a few times and you've been so comfortable in your job that I've stopped asking because you haven't moved on it. You could be making twice as much as what you're making with what you can do.

• 1:02:41Speaker 02

  My boss has called me the Swiss Army knife of the office. My title is Special Projects Manager.

• 1:02:49Speaker 02

  They're paying for me to get a certification in project management. So like, whatever. But I basically have created a situation for myself where I have such a diverse skill set. Because I also do web development. I do accounting. I do like everything, event planning. And he's been trying to encourage me to look for something that pays more.

• 1:03:24Speaker 02

  But we work with like nonprofits and I feel like I'm doing something positive for the world by, you know, creating, creating things for these associations that we work with. It's really fulfilling. I have a lot of flexibility in my schedule. I can like pretty much set my own schedule. If I need overtime, I just say, hey, I need some overtime to finish, finish this. And they're like, okay, you got it. But it just doesn't make as much as I potentially could. Like I could easily with my skill set, make six figures. I mean, I don't know about in this job market, but.

• 1:04:09Ramit Sethi?

  It seems like the two of you are very comfortable.

• 1:04:11Speaker 02

  It's scary when this is like the only job that I've had. Uh, it was my college job and it's been stable.

• 1:04:23Ramit Sethi?

  Would you like to see how much you'd have to make?

• 1:04:24Speaker 02

  Yeah, sure.

• 1:04:25Ramit Sethi?

  What's realistic right now? So each of you makes, I mean, together you make a hundred and fifty K, which is a good income. I'm very open when it's feasible to get like a big raise. I'm always like negotiate, get a new job.

• 1:04:38Speaker 02

  I mean.

• 1:04:38Ramit Sethi?

  Tough right now.

• 1:04:39Speaker 02

  I'm hourly.

• 1:04:40Ramit Sethi?

  Uh huh.

• 1:04:41Speaker 02

  I've been working at the same place for sixteen years. I get about a two percent raise every year. They also match 401K, which is the reason that I have a 401K.

• 1:04:52Ramit Sethi?

  Wait a minute. They match your 401K up to what percent?

• 1:04:55Speaker 02

  Four percent.

• 1:04:56Ramit Sethi?

  But you've only been getting two percent increases for the last sixteen years?

• 1:05:00Speaker 02

  I mean, there was one point where I went to them and I told them that I needed a significant increase. Um, they gave me, I want to say like six thousand dollar increase that year. And then it's still just been two percent since then.

• 1:05:16Ramit Sethi?

  Do you all think it's feasible to increase your income enough?

• 1:05:19Speaker 02

  Well, I was gonna say that I also do overtime.

• 1:05:22Ramit Sethi?

  Okay.

• 1:05:23Speaker 02

  Because I work at events and I've been asking for more opportunities to work overtime.

• 1:05:28Ramit Sethi?

  Good.

• 1:05:29Speaker 02

  So like next week I'm going to a conference where I'll be working twelve hour days.

• 1:05:34Ramit Sethi?

  Yeah. So how much is your income gonna go up?

• 1:05:37Speaker 02

  Realistically, without burning myself out, I could probably make another five grand.

• 1:05:45Ramit Sethi?

  Per what?

• 1:05:46Speaker 02

  Per year.

• 1:05:47Ramit Sethi?

  Per year. So let's call it, uh, three hundred and fifty bucks. So we'll call it four one one oh. I'm just ballparking here, but it's in the ballpark. Watch the number on fixed costs. It's currently eleven, one hundred and eleven percent. It went to one hundred and eight percent.

• 1:06:01Speaker 02

  I guess I'll start looking.

• 1:06:05Speaker 01

  Well, I mean, I, from what I'm seeing, like, I don't see a feasible way for us to move unless we're making more money. I mean, we cut back as much as we could, and we're still spending way too much. With the amount of money that we make now, like, you know, this, a salary where we live, if we were in who knows where, could go a long way. But one, I'm not gonna, I don't work remote, so I, I can't move away from my job. But I also, I, I do think that's part of where we are stuck is that maybe it's not, we're not being ambitious enough with our own careers sometimes.

• 1:06:49Speaker 02

  So I have a question for you.

• 1:06:50Speaker 01

  Hmm.

• 1:06:51Speaker 02

  At what point would you feel comfortable asking for a raise?

• 1:06:55Speaker 01

  Um.

• 1:06:57Speaker 02

  Cause he's director of fundraising.

• 1:06:59Ramit Sethi?

  Talk to him.

• 1:07:00Speaker 02

  You're director of fundraising.

• 1:07:02Speaker 01

  I.

• 1:07:03Speaker 02

  Director role.

• 1:07:04Speaker 01

  Yeah, I know.

• 1:07:05Speaker 02

  Eighty.

• 1:07:06Speaker 01

  Yeah, I know. I, um, I think I'm in a really unique situation where I am at my work. And until I can produce the results that I'd like, I am not gonna feel comfortable asking for a raise at work. I'm a fundraiser, so I have to raise funds to justify my own role. So I would have to be earning enough for my organization in order to justify asking for more money.

• 1:07:40Speaker 02

  Do you know that you won't receive it?

• 1:07:41Speaker 01

  Yes, 100%. Probably would be two or three years down the line before he would even attempt it, honestly. It's the whole reason that I haven't been even thinking about it, because in my mind, it's like, it's not possible.

• 1:07:54Speaker 02

  I also, we, we haven't mentioned that his base pay is like 80, and he has the potential of earning up to 20 grand in bonuses. So like, even if you ask about a raise and they say, no, there's still the potential for you to get that bonus. So like, what can I do to support you to?

• 1:08:20Speaker 01

  Well, I did get a, I did get a bonus, though.

• 1:08:23Speaker 02

  Well, can I finish my question?

• 1:08:25Speaker 01

  Hmm.

• 1:08:26Speaker 02

  What can I do to support you to get the maximum bonus? Cause what you got was like,

• 1:08:34Speaker 02

  He got like five grand.

• 1:08:36Speaker 01

  I don't know that you can do more to help me with it.

• 1:08:38Ramit Sethi?

  So, okay, so we're done. So it's not happening. So now the question is, do you stay in your place? Let's take that number down. What is it? 2580? Or 88%? Still too high. Either you downsize, move further away, and/or we need to cut more costs.

• 1:08:57Speaker 01

  I don't see us moving somewhere far.

• 1:08:59Ramit Sethi?

  I added 15% from the CSP. And I would like to fix that because a couple in your situation, you should not be spending $1,000 on miscellaneous. I'll give you 250 in case something comes up. We're down to 79%.

• 1:09:15Speaker 02

  Okay.

• 1:09:15Ramit Sethi?

  What else? How bold of decisions do you want to make? I actually don't get the sense that you want to get aggressive.

• 1:09:25Speaker 02

  I'm so scared.

• 1:09:27Ramit Sethi?

  Scared of?

• 1:09:28Speaker 02

  Our lifestyle changing.

• 1:09:30Ramit Sethi?

  Yeah.

• 1:09:30Speaker 02

  Considerably.

• 1:09:31Ramit Sethi?

  Yeah. So you're scared of your lifestyle changing and you would prefer to keep it the same?

• 1:09:37Speaker 02

  Well, because like the groceries, I do all the grocery shopping and the meal planning. And I plan all the meals for the week. And I don't buy organic. I...

• 1:09:50Speaker 01

  That is not true. That is not true.

• 1:09:52Speaker 02

  Okay. I get organic bananas and milk, and that's about it.

• 1:09:58Ramit Sethi?

  What am I hearing from you? You're scared of what?

• 1:10:01Speaker 02

  Well, with the groceries, because I work from home and I'm with our two-year-old all day, convenience foods are really important because I can barely even think of what to make myself for lunch.

• 1:10:17Ramit Sethi?

  Yeah.

• 1:10:19Speaker 02

  So having quick options that are already ready for my toddler is... Like, I need it for my mental health.

• 1:10:29Ramit Sethi?

  I guess I'm gonna say something that's gonna be uncomfortable to hear.

• 1:10:32Speaker 02

  Yeah.

• 1:10:32Ramit Sethi?

  Which is, I can't even appreciate how hard it is to be at home with a two-year-old. And yet, I still need you to find a solution to this. Because the money you have right now, this is not working. You will end up without a house. You will end up without enough money in the bank. It will be gone. And... Respectfully, that does not really concern me. Your need for pre-made food is just irrelevant when we are talking about the health of your family. So I'm not saying it's you, you're a bad person. I'm not saying that. Find a solution. Let's do it right now. What is it gonna be?

• 1:11:17Speaker 01

  I think the cuts that you put up there are reasonable in terms of like what we can do.

• 1:11:22Ramit Sethi?

  Yes.

• 1:11:23Speaker 01

  In terms of our rent, I don't, it'd be great to move somewhere less expensive. But there's not a lot of places around that are less expensive.

• 1:11:34Ramit Sethi?

  If you make no changes, or you nibble around the edges.

• 1:11:38Speaker 01

  Yeah.

• 1:11:38Ramit Sethi?

  What happens?

• 1:11:40Speaker 02

  We just stay in the same situation that we're in.

• 1:11:43Ramit Sethi?

  And your tires will get flat and something will come up and you will continue going on through life. One thing coming up after another. Slowly you'll, you'll wear down your savings. You'll tap into your investments. You'll go back into debt. That'll keep going for a while. That'll become unsustainable. And then it gets dangerous.

• 1:12:04Speaker 01

  Yeah.

• 1:12:07Ramit Sethi?

  This is a pretty frustrating conversation for me, in part because I can see there are so many different ways for them to get out of this financial mess and to actually start building some serious stability. But the thing is, I can't make them see it. And if I can't make them see it, I certainly cannot make them do it. It would be really easy for me to just be like boom, boom, boom, boom, boom. Here's the seven things I would do. It's so easy. It's gonna be hard, but you could do it. It will just go right over their heads. I am intentionally going slow. I'm actually intentionally sitting in the frustration because I want them to come to the conclusion themselves.

• 1:12:44Ramit Sethi?

  What I try to do here is to get them together to see where they are and then to see a path forward. The problem is with this couple, they're not even willing to take an honest look at where they are. So we can't even get to where they wanna go. I am not going to save you. You two will save you or you will sink.

• 1:13:09Ramit Sethi?

  I don't even know why you think you need more money. Like, what do you get? Does anybody know?

• 1:13:18Speaker 01

  Well, yeah, the first thing is, there's two things. And these are really the, it comes down to the only two things that we want, which is a larger apartment and to save more.

• 1:13:30Ramit Sethi?

  That's it? Great. So if you make an extra $2,000 a month, what would happen to it?

• 1:13:36Speaker 01

  It's gonna go to rent and it's gonna go to savings.

• 1:13:39Ramit Sethi?

  Can't go to both. You don't have enough.

• 1:13:43Ramit Sethi?

  I think that right now, there's no clear vision. It's just like, ah, this is like kinda bad. Like, we should do something. So everyone's just pulling out random jabs to like, you make more money. No, you make more money. But like, if you truly understood the severity of your situation and you understood a path, then you would both be on board and you'd both be like, hey, one way or another, we as a household need to make $200,000 a year. But right now, it's just, you do this, no, you do this, ah, can't do it. Okay, fine. End of story. You don't have a why. You don't understand your numbers. So you're stuck in the tactical weeds.

• 1:14:26Speaker 01

  I mean, I think it's, we probably need to set a goal with a timeline. If we don't have a timeline, then there's no, there's no tackling it because we don't understand when it needs to happen.

• 1:14:40Ramit Sethi?

  It needs to happen now.

• 1:14:42Ramit Sethi?

  You need to increase your household income now. You need to cut your expenses and keep them going lower, not higher. But the way you've set your life up is that they're actually only going higher. Preschool, et cetera, et cetera. And we haven't even talked about the inability to say no to the kids. Like, it is, you have to do 50 things right. If you wanna stay living in the same place. Because of what you have locked yourself into. And that seems to me to be very difficult. Here are your options as I see it. One or both of you could get a salary increase or switch jobs. That'd be great. That'd actually help a lot. A lot.

• 1:15:23Ramit Sethi?

  If one of you did that and made...

• 1:15:26Ramit Sethi?

  Ballpark an extra thirty thousand, forty thousand dollars, that'd be amazing. One or both of you combined. Your savings need to be bulked up massively. Right now, you have five thousand dollars in savings. You really should have like forty two thousand dollars in savings. I would not even entertain the idea of moving until you had at least a year's worth seventy thousand dollars of savings. I wouldn't even think about it. If I lived in a rent-controlled place in a neighborhood you like, that's it. We're not moving. And I'm sorry about the roaches and the mold.

• 1:16:07Ramit Sethi?

  I would seriously consider what you can do about that. Put more pressure on the landlord, start documenting things, et cetera. But either you move to a way cheaper place, which probably means not in L.A. So you gotta go. Or you're there, you determine that it is safe, and that's it. There's no discussion about a three-bedroom house. It's not happening, not for the next five to 10 years.

• 1:16:34Ramit Sethi?

  There's a reason why I've been like a little impatient with the stories that you are telling yourself about all the reasons you can't. You will be poor

• 1:16:45Ramit Sethi?

  in the near term. You may lose your housing, and you will certainly be poor in the long term.

• 1:16:52Ramit Sethi?

  So I think that kind of like, it's a bit of like a sitcom environment right now. There's a lot of jokes and stuff. And like, I think it's funny, but it's not that funny, actually. I want respect for money. I want respect for your family. So what do you want to do, Lauren? I see your thinking here.

• 1:17:08Speaker 02

  I mean, my first step is gonna be, well, our first step is gonna be setting a time to sit down.

• 1:17:17Speaker 02

  Finish combining our accounts.

• 1:17:19Ramit Sethi?

  Okay.

• 1:17:19Speaker 02

  Make sure that both of us have visibility on everything. We set a new conscious spending plan where we cut our expenses. I think coming up with some guardrails in advance would be helpful because sometimes we forget where the line is.

• 1:17:40Ramit Sethi?

  I love that. I love guardrails. I love like signs that make it very clear. It's either a yes or a no, and I don't have to decide because if it's up to me, I want to get it all. That's how it works. That's how money is taught.

• 1:17:52Speaker 02

  Both of us ask for a raise.

• 1:17:57Ramit Sethi?

  And if you don't get it?

• 1:17:59Speaker 02

  Look for other opportunities.

• 1:18:01Ramit Sethi?

  Yes. One way or another, the household income has to go up. And it has to go up to a point where your fixed costs are at 60% or below. It's going to be hard. You've locked yourself in. You may have to really get creative. One car, so many different things you may have to do. Food, all the easy stuff has to be done decisively. Like, there can't be any discussion about that.

• 1:18:25Ramit Sethi?

  But there's hard stuff to be done.

• 1:18:27Speaker 01

  Yeah. Even with the preschool, it's hard because we have a co-op preschool because it's the cheapest option. Preschool is expensive.

• 1:18:34Ramit Sethi?

  Yeah, it's expensive. You have structurally set yourself up to have massive fixed costs. That's what you got. Even though you have a low rent, everything around you is expensive. Groceries are expensive. Transportation is expensive. That, like, part of what I'm trying to encourage you to do is accept reality. If you choose to live there, then you need to make more. That's it. End of story. And if it means working weekends and you're tired, that's life. It's a tough, it's a tough situation, I understand, but I would rather be the one to tell you than to have you tread water one step forward, two steps back, and then one day just, it's too much.

• 1:19:19Ramit Sethi?

  What questions do you have?

• 1:19:20Speaker 02

  Once we get out of this.

• 1:19:25Speaker 02

  I have no idea what to do next.

• 1:19:27Ramit Sethi?

  Yeah, good question. Well, I think, you know, for me, step one, especially if I'm a parent of two, is I want stability. Stability comes in the form of a big fat savings account. 10,000, then 25,000, then $70,000, yes. And what that allows is that when life comes at you, a medical expense, something you didn't predict, you have that money to fall back on. When you have that, or at least you're working towards it. You don't have to have 70K in the bank, but you have to have a plan where you know, just like your debt payoff, when will we have 12 months of emergency fund?

• 1:20:11Ramit Sethi?

  All the other stuff comes later. I just think first things first is you need stability. I think sometimes people watch this podcast because they expect that somebody is gonna come in here with a problem, I'm gonna do some cool math magic, and then they're gonna walk out totally successful. That's actually not the point of this podcast. The point of this podcast is to highlight real stories from real people behind closed doors. Sometimes we make a radical transformation. Amazing, I love it. Sometimes we make no progress. I also love that because each of those couples gets to share their story. So if I were you, watching this, listening to this,

• 1:20:54Ramit Sethi?

  I would not evaluate an episode based on how big of a progress change do they make? I wouldn't even evaluate it based on how much you like a couple. I would evaluate each episode based on what's one thing that I can take away that I learned? What is one thing that surprised me that I might actually be doing that I can take away and apply to my own relationship? I'm wishing the absolute best for Lauren and Mick. I am hoping that they come up with a plan and that they get a lot of help. Because they're in a really serious situation. And it will take big changes made very quickly in order for them to get out of it. Now, let's check out their follow-ups.

• 1:21:39Speaker 02

  So it's been about a week since our conversation with Rumi. And it's time for a little update. Mick and I have decided to implement weekly conversations where we talk about all the bills that are about to be paid, how we're doing with our savings goals, things like that. And like in all those conversations that we've had so far, we realized that the numbers that we used on the podcast weren't entirely accurate. We also don't think that that 15% miscellaneous is a real number. We looked into our subscriptions, we cut a bunch, but also realized that we weren't actually paying as much as we thought we were. I kind of estimated high.

• 1:22:22Speaker 02

  So that number has been cut by like $200 and above. And then through all of these conversations, we agreed that our conversation with Rumi lacked a lot of context. We are not in agreement about the solutions that Rumi gave us. We don't think that they're realistic for our situation. We also don't think that Rumi paid enough credence to our ADHD diagnoses and really are disappointed about the lack of homework that he did about ADHD

• 1:23:01Speaker 02

  as it affects so many millennials, which is his target demographic. So we're creating our own plan. And the biggest takeaway is really just to keep talking about money and not make it a taboo topic. So I'm really excited. I think that Mick and I are in a really good place. And with a little bit of time and effort, I think that we're gonna continue to grow financially and become a well-oiled machine. And I'm really excited to not have any more anxiety about money.

• 1:23:43Speaker 01

  Thanks again for having us on your podcast. It really was an eye-opening experience, albeit sometimes a little bit more intense than I anticipated. I think the one real big positive takeaway from this experience is that Lauren and I have been making consistent time to speak about our finances. We dove deep into the details of what we're spending and pleasantly surprised by the fact that we're spending a lot less on our fix costs than we had originally estimated, both before the podcast and during the podcast. We also were able to cut back some really simple things that we just didn't need and

• 1:24:25Speaker 01

  didn't realize we were paying, which was a great thing. I think one thing I really wish that we did dive a little bit deeper into during the podcast was regarding the fact that Lauren and I both have ADHD. And I think folks that also have it, or have other forms of neurodivergency, have very unique spending habits because of it. And I felt that it was a little bit glossed over and dismissed, which I was a bit disappointed by. Hopefully in the future, there can either be a follow-up, or you might be able to do a little bit more work into how folks that have ADHD spend,

• 1:25:09Speaker 01

  to have a more nuanced conversation. I also felt like certain things regarding parenthood or pets were also a little bit dismissed or not portrayed in an accurate or entirely realistic way that I wish they were. Ultimately, I think this was a positive experience for Lauren and I because we were able to kind of open those doors of communication and really look into exactly what we're spending and create clear goals for ourselves that weren't necessarily something just like move into a different neighborhood or make more money. All both of those things would be great. I don't think they're entirely realistic for our situation.

• 1:25:52Speaker 01

  So we've been able to double down and figure out, you know, what we've been doing that's good, cut back on some of the things that we didn't even realize we were spending on and didn't need. And...

• 1:26:06Speaker 01

  And make some good decisions going forward.

• 1:26:10Ramit Sethi?

  Interesting follow-ups. I appreciate Lauren and Mick sending the follow-ups. I appreciate them making some changes. And I want to let you know that I think it's very courageous for anyone to come on the Money for Couples show. As you can see from the diverse types of guests that we have on this show, it is personally important to me that we have people from all different walks of life. Socioeconomic, gender, sexual orientation, geography, all of it. Honestly, you have a point. If you have ADHD, things that other people take for granted come much harder to you. And many people don't understand that. So often, they look down at people and they say, "Why don't you just do this? It's not that hard." Well, actually, if you have ADHD, it can be quite hard.

• 1:26:52Ramit Sethi?

  With that said, I'm a little surprised by some of the feedback and some of the advice that they gave me. Now, I'm not an expert in ADHD diagnoses, but I absolutely acknowledge that it affects the way that we manage our money. That's one of the reasons that I invited a friend of mine, Dr. Christine Hargrove, to come to our money coaching program and give a talk about ADHD and money. That is among many of the other programs that we have for all of our money coaching members. But I'm not an expert in ADHD diagnoses, nor will I ever be. And so therefore, it is your responsibility to manage your ADHD, not to expect me to become an expert. I do think that some of us have certain characteristics that make managing money

• 1:27:38Ramit Sethi?

  or becoming healthier or staying connected to our family harder than for others. But the fact is, we have to acknowledge that and we still have to find a way to make it work. In other words, pointing at ADHD and saying, "This is why we are not able to manage our money", that just doesn't fly with me. Yes, it exists. Yes, it's hard, but you've still got to find a way to succeed. And that may be by consulting doctors, coaches. There are tons of resources out there. It may not be here, but my goal for you would be to come here and adapt the lessons you learn for your own situation. So I hope the best for Lauren and Mick. I want to see big changes because this is a serious situation. But I want to emphasize that it's got to come from you, not from me.

• 1:28:23Ramit Sethi?

  Listen up. If you want my help with your specific money questions, there are only two. Ways to get it. First, you can apply to be on this podcast at iwt.com/apply. Or second, you can join my money coaching program instantly at iwt.com/moneycoaching. In that program, you get access to live virtual events, monthly group coaching calls, live Q and A's, and an amazing, huge community of other people like you. Check it out at iwt.com/moneycoaching.