Pod Insights Money For Couples with Ramit Sethi 270. “We’re sacrificing our retirement to pay for our kids’ college” About this episode Ramit Sethi of I Will Teach You To Be Rich talks to Mia and Jake, a couple in their late 30s and early 40s in a blended family with three children. Mia wrote in because she’s afraid paying for their children’s college will cause resentment in their relationship. With no idea how much they are spending, why, or what they truly want their money to do for them, Ramit helps them uncover the root of their money woes. Will they finally get on the same page, create a financial system that works, and feel confident making money decisions together?
In this episode we uncover:
• How financial discussions lead to frustration and anxiety
• The surprising cost of their previous “dream” home
• Why they sold their house and downsized
• The connection between “feeling” and making financial decisions
• How money scarcity is fueling guilt and fear
• Why Jake doesn’t understand how to make his money work for him
• A deep dive into Mia's family money rules
• Why Jake was afraid to talk about money
• How their pension influences their financial outlook
• The hidden costs of everyday living
• Why just “cutting costs” isn’t a long-term solution
• The powerful connection between clarity and confidence
Chapters:
(00:00:00) Introduction
(00:02:54) “I feel resentment from my husband because our money supports my kids”
(00:08:00) Mia and Jake’s money conversations
(00:10:28) Mia and Jake bought a huge house they couldn’t afford (00:13:38) Moving on from the house-broke mistake
(00:23:23) Mia’s old budget felt like “paper pushing”
(00:38:43) Why does Mia feel scared about money?
(00:41:39) Adjusting their fixed costs
(00:48:43) Why cutting costs is easy for Mia and Jake
(00:50:33) Their pension: a financial safety net
(01:03:03) Trading anxiety for guilt
(01:06:35) Jake’s money messages
(01:07:54) What is your rich life vision?
(01:13:40) Mia and Jake’s money system
(01:25:10) Building Jake’s confidence with money
(01:32:20) How Mia and Jake feel about their money now
(01:35:22) Mia and Jake’s next steps
This episode is brought to you by:
Leesa | Go to https://leesa.com for 25% off mattresses PLUS get an extra $50 off with promo code RAMIT, exclusive for my listeners
Trust & Will | Protect what matters most in minutes at https://trustandwill.com/ramit and get 20% off
Gelt | Gelt is taking on new clients now. Find out if you qualify at https://joingelt.com/ramit
Facet | As of the date of this recording, Facet is waiving the enrollment fee for new annual members, and for my audience, Facet is offering $300 into your brokerage account if you invest and maintain $5,000 within your first 90 days. Head to facet.com/ramit to learn more about which membership option is best for you. Offer has been extended to 12/31/2026. #FacetAd
If you’re part of a small group listening to this podcast that is willing to take action, I built Road to $100K for you - a step-by-step program on how to reach $100K. Join Rich Life: Road to $100K at iwt.com/100K.
Connect with Ramit
• Get my new book, Money For Couples
• Join my Rich Life: Road to $100K program
• 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
Transcript 18,504 words · 3 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Ramit 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,
0:43 Ramit Sethi? and you can join today at iwt.com/100k. Holy [bleep]. You're spending the most amount of money.
0:52 Speaker 01 We pay for our kids' college.
0:54 Speaker 02 If you say like, "Well, give yourselves more money and don't give money to the kids." That feels selfish.
0:58 Speaker 01 Growing up in the Midwest, you just save money, then you die, and you give it to your kids.
1:01 Speaker 02 My anxiety increases because a budget has always been really hard for me. There's always this tension of, you know, "We can't even go out to dinner this week."
1:09 Speaker 01 I feel like this pressure, just like, I'm like, "Gosh, here we go."
1:12 Ramit Sethi? You are now spending more than you make every month.
1:15 Speaker 01 That explains the savings.
1:16 Ramit Sethi? How's that feel to you?
1:18 Speaker 02 Scary.
1:18 Speaker 01 That's why we're here. I just want someone to put their arm around me and say, "Son, this is what you're supposed to do."
1:22 Ramit Sethi? That person doesn't exist. What if, instead of following that feeling, I followed the numbers?
1:29 Speaker 01 Yeah.
1:29 Ramit Sethi? By connection, by conversation, and by a Rich Life vision?
1:34 Speaker 01 In 20 years, I don't want them flying to California to have your kid tell them about money.
1:41 Ramit Sethi? You know, in America, we do some pretty funny things with our money in the name of the kids. Extracurriculars, huge birthday parties, SUV when they are two months old, and college, of course, has to be fully funded. Now, I don't have a problem with any of those things, as long as they are intentional, and as long as you ran the numbers. The problem, of course, is almost nobody does that. Most parents simply follow a script, and that script often costs them their own financial future. Today, I'm talking to Mia and Jake. She's 40, he's 38. They've been married for four years. They have a blended family with three children, two from Mia's previous relationship and one child that they share together.
2:24 Ramit Sethi? And this idea of paying for their kids' college is causing resentment between them. Mia applied, and here's what she wrote. "I don't think either of us realized how difficult it was going to be to create a stepfamily. Money is a real sticking point because my ex-husband does not contribute very much, and I want to provide my kids with what I can because we're able to." Okay, pretty complex situation. How would you reconcile this if you were sitting in my chair? Let me show you the numbers so you have a little bit more information. Assets: $443,000. Investments: zero. That's interesting. Savings: $13,900. Low with three kids.
3:08 Ramit Sethi? Debt: $176,410. Total net worth: $280,490. Okay. Fixed costs at 50%. Very nice. Investments at 22%. I'm confused because their investments above are at zero. Not sure what to make of that. Savings at 25%, which is quite high. Guilt-free spending at 3%. I don't believe that. Honestly, I'm kind of confused by their numbers. They're very perplexing, so I need to talk to them to figure out what's going on, and I have a lot of questions. Let's get started with Mia and Jake. Mia, you wrote the application, and in the application, you wrote something I wanted to ask you about. You said, "Our values are mostly aligned, and we have a plan with our money.
3:53 Ramit Sethi? But when it comes to implementing it, I feel resentment from my husband that a big chunk of our money goes to support my two kids, who are not his biological kids."
4:04 Speaker 02 Yeah.
4:04 Ramit Sethi? Is that an accurate reason for why you're here today?
4:08 Speaker 02 I think that Jake and I really do agree on our values. Like, this is what we want to do. But in the implementation of it, the reality is that a big chunk of our money is going to...
4:22 Speaker 02 Make up for the fact that I didn't plan and save earlier. When my two biological kids, our oldest kids, were younger. There's always this tension of like, well, I just, you know, we can't even go out to dinner this week. Right. And I'm like, oh, that's true. No, we can't. And then there's some guilt that I feel. And I don't think that there's any resentment about me or like our values. Cause like we've agreed to it, but there's this like underlying tension that I'm afraid will get worse if we don't sort of come to a place where it doesn't, where that underlying resentment is gone.
5:00 Speaker 01 Yeah. I mean, I, I think that it's not resentment. I think it's just frustration would probably be the, the better term for it.
5:07 Speaker 01 You know, I'm making more money than I ever have. I've gotten my job that I've really been trying to get. That's given us a lot more money. You know, my ideal life would be, you know, being able to go out to eat without thinking about it. You know, like, that's kind of like my rich, rich life is like being able to buy a few things here and there without being very stressed about things and not thinking about money, which I know is not a realistic thing. But I mean, just even walking around here, you know, just yesterday I was like, wow, these are the things we could buy with, you know, all the money that we're putting into, to school. But I don't resent Mia or anything in the, in the kids or what they were doing. That's where they were at their time and.
5:40 Ramit Sethi? When you say walking around here yesterday, these are the things we could buy. What's an example of that?
5:45 Speaker 01 I'm noticing a lot of my rich life revolves around our house and our idea of like making it a really great spot for us and the kids. And it's our forever home, hopefully. And that's ideas of maybe getting a hot tub or getting landscaping done. We put a fire pit in and I was like, oh, you know, if we just put like one of the kids tuitions, you know, we'll be able to do it in a couple of months. So it's like that kind of thinking.
6:06 Ramit Sethi? Got it. Did you have this conversation today or yesterday?
6:08 Speaker 02 Yesterday.
6:08 Speaker 01 Yeah. Yeah. Just walking around.
6:09 Speaker 02 I think the exact comment was, man, in, if we just took the money that we were spending on college in eight months, we could do a hot tub and probably start on the landscaping. And I literally don't know what we were walking by.
6:25 Speaker 01 Probably a landscaping hot tub store. So.
6:28 Ramit Sethi? Yeah, there's one right, right outside. And what was your reaction to that when you heard that?
6:32 Speaker 02 I think my general reaction is just to be quiet. Like I think internal, like, I don't even think I said anything. I think I maybe laughed and was like, yeah.
6:40 Speaker 01 Yeah.
6:41 Ramit Sethi? How long have the two of you been married?
6:42 Speaker 02 So just over four years.
6:44 Speaker 01 Four years, yeah.
6:44 Ramit Sethi? Okay, four years. And how many children total?
6:47 Speaker 02 Three.
6:48 Ramit Sethi? Three kids, that's.
6:50 Speaker 02 Two from my previous marriage, and then we have a daughter.
6:53 Ramit Sethi? How old is your daughter?
6:54 Speaker 02 Three.
6:54 Ramit Sethi? Three, okay, great.
6:55 Speaker 01 And we're spending a fortune on her preschool right now, too.
6:58 Ramit Sethi? Really?
6:58 Speaker 01 Yeah.
6:59 Speaker 02 Yes.
6:59 Ramit Sethi? Oh, okay. And how about the two other children? How old are they?
7:03 Speaker 02 Fourteen and eleven.
7:04 Ramit Sethi? Ah, okay, that's good to know.
7:05 Speaker 01 And can I just clarify one thing, too?
7:07 Ramit Sethi? Yeah.
7:07 Speaker 01 It's one of these weird things. It's like, I know it's best for the kids and our family and investing in their school. And it's like, I think it's the right thing to do, but I'm not sure. And that's kind of why we're here. It's just like, we want to, you know,
7:20 Speaker 02 The balance feels a little off.
7:21 Speaker 01 It feels off. Yeah, it's like.
7:23 Ramit Sethi? The balance of what?
7:24 Speaker 02 The money we're putting towards the kids versus the money we're putting towards the things that.
7:28 Speaker 01 And like, our savings is probably not where we want it either. We want more money in our savings, too.
7:32 Ramit Sethi? Okay, hold on. What's off with the balance?
7:34 Speaker 02 We're really emphasizing as much money as possible towards the kids between saving for college and our youngest preschool. And so like, our daily spending or like, sort of like our guilt-free spending is like, really minimal. And that doesn't feel sustainable, but also, like, if you say like, well, give yourselves more money and don't give money to the kids, that feels like selfish.
8:05 Speaker 01 Yeah.
8:06 Ramit Sethi? You both agree.
8:07 Speaker 01 I would agree with that, yeah.
8:08 Ramit Sethi? Okay, that's interesting. Do the two of you make decisions about money?
8:12 Speaker 02 You mean together?
8:13 Ramit Sethi? Well, that kind of answers my question right there. No, yeah, let's start with together. Do you make decisions together about money?
8:20 Speaker 02 I would say, big picture, yes, although I'm not sure that we've always been doing that. It's not something we think about a lot.
8:29 Ramit Sethi? Okay. You agree, Jake, or disagree?
8:31 Speaker 01 Yeah, I would agree that it's been something that we haven't talked a bunch about. I've always enjoyed, just like, we're just, we save a bunch of money. You die with a bunch of money. That's all, that's what happens.
8:43 Ramit Sethi? Oh, you grew up in the Midwest?
8:44 Speaker 01 Yes, yes, yes. Yeah, I guess I'd grown up in the Midwest. You just save money, then you die, and you give it to your kids.
8:49 Ramit Sethi? Yeah. How do the conversations about money and kids typically go?
8:55 Speaker 02 I usually say something like, we have to do the budget.
9:01 Ramit Sethi? Okay. And what is your reaction to that, Jake?
9:04 Speaker 01 Just anxiety and anger, anger probably.
9:09 Ramit Sethi? I feel anger too when I hear that word.
9:11 Speaker 01 Yes, yes.
9:12 Speaker 02 I probably, my anxiety increases because to be completely honest, like that has, a budget has always been really hard for me. Like I, it's hard for me to like wrap my head around, like what are the right buckets to think about? And so I'm trying to explain thinking like, here's my thinking Jake, here's what I think we should do. But it's probably not making a lot of sense because I barely like understand it. I just know like money is going out and it's probably more than we should have going out.
9:48 Speaker 02 And then Jake's like, well, but what about this? And then, which is usually a super reasonable question. I'm like, I don't know, you know? And so then I get stressed and then he gets stressed and then.
9:59 Ramit Sethi? Where do the kids come into this?
10:01 Speaker 02 As in?
10:02 Ramit Sethi? Like, the primary question today is, are we sending too much?
10:06 Speaker 02 Right.
10:07 Ramit Sethi? Towards our kids and this is a source of potential conflict? Where do the kids come in?
10:10 Speaker 02 I would say my default is to treat that money as if it doesn't exist. Maybe like where the kids come in is if we, it's like, well, what if we spent a little more money here? And then my response to that is like, we don't have that.
10:26 Ramit Sethi? Got it. So the, the kids' money is sacred. Like it does not exist, it's non-negotiable. Got it?
10:32 Speaker 02 Yes.
10:32 Ramit Sethi? Are you open to changing that?
10:34 Speaker 02 I'm open to it.
10:35 Ramit Sethi? Just imagine if Jake had said, I don't want to send a single cent to your kids. That would be incredibly complicated to unravel. But fortunately, they do seem to have similar values. So now the question becomes with a blended family, how do we decide the right amount of help to give? And I'm starting to suspect they have only thought about help in terms of how big of a check they can write. But there are a lot of other ways you can help kids too. And Jake, what about you? Like when the, you mentioned like, hey, can we spend a little bit more eating out or doing XYZ? And she says, well. We can't. What's your reaction?
11:17 Speaker 01 It's like confusion because I'm making more money than I've ever made in my life. A little backstory, like when we first got together, we bought a huge house that was great. It hit everything on our is like 10 out of 10 wishlist, perfect. I had a big truck trying to act really tough, you know, that tough guy. That's what I need in 35.
11:34 Ramit Sethi? I didn't know this.
11:35 Speaker 01 Yeah. So yeah.
11:36 Ramit Sethi? This is when you got married?
11:36 Speaker 02 Yes. It was like, so we're both, this is both of our second marriage. And I think we were both like so happy to have happiness. We were just like, let's just like spend, let's have everything that we've ever.
11:48 Speaker 01 I don't know how we survive.
11:49 Ramit Sethi? So you bought a, how big is the house? Was the house?
11:51 Speaker 01 It was, it was.
11:52 Speaker 02 Like a almost 4,000 square feet.
11:55 Speaker 01 Yeah.
11:55 Speaker 02 Three car garage.
11:56 Ramit Sethi? That's for two of you and a little baby?
11:59 Speaker 01 Yeah, well, half the time.
12:00 Ramit Sethi? Babies need space. 4,000 square foot. Okay. So then you bought the truck? What kind of truck?
12:08 Speaker 01 Toyota Tundra and I didn't stop there. I got, I spent $3,000 on rims because that's what you need at 35.
12:16 Ramit Sethi? Totally. How much is a Tundra?
12:17 Speaker 01 I like 50,000, something like that. It's, it was great.
12:21 Ramit Sethi? Got a haul. Okay. So then what else did you get?
12:23 Speaker 02 I mean, I mean, like new furniture.
12:25 Speaker 01 New furniture.
12:26 Ramit Sethi? So you had the house, the truck, et cetera?
12:28 Speaker 01 Yeah.
12:29 Ramit Sethi? It sounds like this is in the past.
12:30 Speaker 01 And then, yeah. And then we kind of started talking about finances and we, that's what kind of got us into it. And then through conversations, we decided that, you know, the house is a money pit and we didn't, I mean, not a money, it was just, we're probably house broke at that point.
12:45 Ramit Sethi? Wow.
12:46 Speaker 01 So we sold the house, $200,000 house cheaper, same neighborhood. It feels so much more like us. It's fantastic. We sold my truck. We have one car that we had two cars paid off. We had to get a bigger car just recently because all of our kids are huge now.
13:07 Ramit Sethi? But like, how long to make the decision to sell the house? That's a huge decision.
13:10 Speaker 02 It was a big decision, but I feel like we just looked at each other and we were like, we were, we were so house broke. And it just seemed like, why are we doing this? Because it wasn't like, neither of us were attached to it. We were like, if there is something that we can change. Like what can we change? And to be like,
13:28 Speaker 01 Yeah.
13:29 Speaker 02 Credit to our, credit to our parents. Both of us were taught from a young age, like do not go into debt other than for a house. So like, we didn't have other debt. So it was sort of like, okay, if we have money to play with, this is it. It's like the house.
13:41 Ramit Sethi? What was the sign that you were house poor?
13:43 Speaker 01 I mean, this was probably.
13:44 Speaker 02 We were thinking about every penny.
13:46 Speaker 01 Yeah. And we were.
13:47 Speaker 02 That's when I was doing like the spreadsheet and it wasn't just like, it wasn't big idea numbers. It was like, we spent $12.37 at donut, getting donuts for the kids. Like we cannot spend that. It was, yeah.
14:04 Ramit Sethi? How would you describe money felt at that time?
14:07 Speaker 02 It was horrible. It just felt like being strangled.
14:11 Speaker 01 Right.
14:12 Ramit Sethi? Wow.
14:12 Speaker 01 Well, like we've even like, we had a big house gym that we worked out in. It was lots of expensive things that I'd been collecting during COVID, sold all that, like Planet Fitness is a bunch of weirdos, but it's still pretty good.
14:24 Ramit Sethi? How did, how did it feel to just sell all that stuff?
14:27 Speaker 02 It felt good. Again, we got married. We were so happy to have happiness, spent all the money. And then it was like, feeling like, okay, now we're making smart decisions. It was almost like we had an entire relationship in like three years.
14:41 Ramit Sethi? Well, what I appreciate about this is I don't mind people making decisions about money, even mistakes about money. We all make mistakes. I make them. We all make them. What I really appreciate is that you caught it. And you took a dispassionate look at the numbers and you were like, this does not work. We gotta make a change. If you actually build that skill of course correcting, you can actually go through life making a lot of mistakes. Cause you're like, let me move fast, knowing that if something goes wrong, I will correct it, learn from it, and I won't make that mistake again. So I'm willing to bet the two of you will never be house poor again. Yeah.
15:17 Speaker 02 Yeah.
15:17 Speaker 01 And that's what I love about Mia is how reflective and honest. And I think those conversations are what brought us together. We're very reflective and honest. When we make a mistake, we need to fix it.
15:27 Ramit Sethi? Yeah.
15:29 Ramit Sethi? Some of you are spending way too much time on TikTok. Stop listening to randos whose lives you do not want to copy. They're talking about all these 50 different supplements you have to take for sleep. All before you go to sleep, you need to curve your arm in this way and do this. Stop it. Here are two things that have genuinely made my sleep better. Number one, setting an alarm and going to sleep at the same time. And second, sleeping on a firm mattress. The one we chose is from Leesa. Leesa has a lineup of beautifully crafted, high-quality mattresses. Whether you sleep on your side, your back, somewhere in between, they've got a mattress that's built for you. And from the first night, you're going to feel the difference. They use premium materials in every mattress and they are designed for full body support.
16:12 Ramit Sethi? Every Leesa mattress is assembled in the US and it comes with free shipping, easy returns, and a sleep trial of 120 nights. Plus, they have a helpful sleep quiz to figure out which mattress is the best fit for you in under two minutes. Go to leesa.com for 25% off mattresses plus an extra $50 off with promo code REMIT. That's exclusive for my listeners. That's L-E-E-S-A.com promo code REMIT for 25% off mattresses plus an extra $50 off. Support our show and let them know we sent you after checkout. Leesa.com promo code REMIT. What is something big and scary that you have been putting off for months?
16:56 Ramit Sethi? For a lot of people, especially those who have started a family recently, it's getting a will. It's getting an estate plan set up. And instead of trying to figure it all out on your own, you can work with Trust and Will to get your estate planning handled right away. Trust and Will offers affordable, attorney-designed estate plans online that you can create in as little as 30 minutes. Everything is state-specific. It's tailored to your needs, regardless of what stage of life you're in. And we actually had one of my coworkers create a will using Trust and Will. Here's what she said. Getting started was incredibly easy. In less than an hour, I had a will, power of attorney, last will and testament, and HIPAA authorizations, all of which I downloaded. And if I wanted, I could have the Checked by another attorney.
17:40 Ramit Sethi? Their platform makes it easy to keep these things organized and updated. So your loved ones don't have to manage tons of paperwork down the line. Now you can use an attorney for your estate plan, but that's not an option for everyone. If you know that you have loved ones that you need to protect, Trust and Will is worth considering. Go to trustandwill.com/ramit to get 20% off. That's trustandwill.com/ramit to get 20% off. T R U S T A N D W I L L dot com slash ramit. You mentioned that when you had the house and you were house poor, it felt like you were being strangled. It felt horrible. Is it different now?
18:24 Ramit Sethi? Because you mentioned like you can't really go out to eat.
18:29 Speaker 02 I think we took all the extra money and put it towards college.
18:33 Speaker 01 Yeah, it's like that, like yanking the steering wheel this way. And now I'm like,
18:36 Speaker 02 It's like we weren't saving any, like, we're not saving enough for the kid. It's like, to some extent, maybe an overcorrection.
18:43 Speaker 02 But again, there's that whole tension about like, well, isn't that the right thing to be saving for?
18:47 Ramit Sethi? Well, isn't a house the right thing to be buying?
18:50 Speaker 01 Yeah, we don't know.
18:51 Speaker 02 Fair point.
18:51 Speaker 01 Yeah. We don't know what the right answer is. I think that, you know, I keep having someone, I just want them to put their arm around me and say, son, this is what you're supposed to do. You know, it's like, so feel free to put your arm around me and tell me.
19:02 Ramit Sethi? That's actually quite interesting. What if I told you that person doesn't exist?
19:07 Speaker 01 That's what I expected.
19:09 Ramit Sethi? Yeah.
19:09 Speaker 01 Otherwise, otherwise,
19:10 Ramit Sethi? It's not me.
19:10 Speaker 01 Yeah.
19:11 Ramit Sethi? It's not your dad. It's no, nobody is going to be that person for you, except you.
19:18 Speaker 01 Right.
19:18 Ramit Sethi? How would that strike you?
19:19 Speaker 01 I know I say I want somebody to come and put their arm around me and tell me what to do. But I want to be confident in the decisions that we're making.
19:25 Ramit Sethi? Okay.
19:26 Speaker 01 It'll make it easier to not spend that money or do this or make that decision, knowing it's in the right spots and our money's work, you know, that term money working for us. I hear people say that all the time, too. I don't know what that means, though.
19:39 Ramit Sethi? Really?
19:40 Speaker 01 Yeah, I'm serious.
19:42 Ramit Sethi? What do you think it means?
19:43 Speaker 01 Putting it into stock market, I don't know, I've just, yeah, I mean, my Midwest is probably showing right now, just you save money and you put it away and hand it off to the next group.
19:52 Speaker 02 I wonder if part of it is that we get a pension. And so we've never had to think about like a 401k or like where does the 401k money go? Like, there was never any conversation about that. I want to understand the idea of a pension. Like, I get it conceptually, but on a day to day basis, like, should I be, should I be investing more? I don't know.
20:16 Ramit Sethi? Who have you asked about this?
20:21 Speaker 02 Person, no one.
20:22 Ramit Sethi? Okay.
20:23 Speaker 02 I'm asking you.
20:23 Ramit Sethi? Okay, that's a fair answer.
20:24 Speaker 01 And like with, with the pension, what we do, our little that we know about it is that you get, retirement is the top three years.
20:31 Speaker 02 So. An average.
20:32 Speaker 01 An average. So I've got two master's degrees. I'm now, I'm gonna be a principal next year. And that's, I just keep wanting to add income so that that top three years is as high as possible.
20:42 Ramit Sethi? Okay. When it comes to the money in your relationship, the tension is around how much Mia that you are sending towards your kids. Jake, what would you do with the money if you had more of it?
20:56 Speaker 02 No judgment.
20:58 Speaker 01 I don't know, my mind's going a lot of different ways. Like, I'd probably save it. I'd put it into savings somehow, try to collect interest, that kind of thing, put some money into our house.
21:08 Ramit Sethi? Like?
21:09 Speaker 01 You know, the landscaping idea that we wanted to do, our family really liked, we inherited a hot tub and that broke. That would be something I'd probably put it into. Those are kind of my ideas. And maybe a food service, we talked about, like possibly something that, you know, health is really important to both of us. We both exercise regularly and I think to have healthy food options consistently and not add it as a stress, because when we come home from work, just everybody's dumping their problems on us.
21:35 Ramit Sethi? Have you all talked about these three things? Saving, house, food?
21:40 Speaker 02 We've talked about it.
21:41 Ramit Sethi? Any conclusions?
21:43 Speaker 02 We do want to save for the house stuff. That's probably like the most conclusion. I agree that having some sort of like a food, probably, I think we probably agree on that. Like, if we could have like healthy food prepped and delivered to us, that would be amazing. But any food service is just like so much more than what we spend on groceries. It just doesn't seem to make sense.
22:06 Ramit Sethi? Are you two aligned about money?
22:09 Speaker 02 Probably.
22:10 Speaker 01 I would say most of things. The only thing I think that would cause any conflict on us would be vacation, I think is something that Mia wants to travel and I'm not, I feel like if we're putting all that money into school, it's like I'd love to, I'd like to go sometimes, but it's not a need of mine.
22:27 Ramit Sethi? This couple is very likable. I like talking to them, but I am noticing that because they are so compassionate with each other, it's difficult to get a straight answer out of them. I'm not even sure if they agree or disagree. And so much of what's happening here is being polite to each other. Polite's good, but sometimes I need somebody to say, I don't like that. No, this is what I want. That is what I'm pushing for here. It is now my personal mission to show Mia and Jake that they can be direct with each other and be polite. Do y'all like feeling anxious about money?
23:05 Speaker 02 No.
23:05 Speaker 01 No.
23:06 Ramit Sethi? Let's try that question again. Do you like feeling anxious about money?
23:10 Speaker 02 No.
23:11 Ramit Sethi? Both are saying no.
23:12 Speaker 01 No.
23:12 Ramit Sethi? Like, very affirmatively, no.
23:15 Speaker 02 No.
23:16 Ramit Sethi? And yet, the dynamic you've built allows you to both constantly feel anxious. Okay, let's, let's find out what the numbers say and then we'll talk about them. All right. What was it like putting the CSP together?
23:28 Speaker 02 It was actually really nice because it gave me a concrete way to think about our big picture, which is nothing that I've ever been able to do before. Like I had no idea, like if somebody asked, like, what's your net worth? I don't, I don't even know how to calculate that.
23:44 Ramit Sethi? And consider how many years you kept a budget.
23:47 Speaker 01 Yeah.
23:48 Ramit Sethi? It's like, we're tracking this, we're, and like you mentioned, like, should we be tracking the price of groceries or the price of soda?
23:53 Speaker 02 Yeah.
23:53 Ramit Sethi? It's unclear. Why do you think, looking back, for the many years that you kept a budget, why do you think you were keeping that budget?
24:01 Speaker 02 Because that was the number one thing I was taught about money is you balance your checkbook.
24:05 Ramit Sethi? Right.
24:07 Ramit Sethi? And so, since nobody balances their checkbook anymore, or basically uses one, you adapted that for today. And we're using Excel or some tool, using Excel.
24:17 Speaker 01 Google Sheets.
24:18 Ramit Sethi? Yeah.
24:18 Speaker 02 Do you want to know what I was doing? Because it's pretty crazy.
24:21 Ramit Sethi? I would love to.
24:22 Speaker 02 Okay. So I would, again, we spend on the credit cards because I get points for that. But we never don't pay them off.
24:30 Ramit Sethi? Great.
24:31 Speaker 02 Okay. So I would copy everything that was spent in the credit card statement, put it into an Excel spreadsheet. So I'm just copying and pasting it. And then, line by line, one, make sure everything looked like there wasn't anything there that shouldn't be there. And then, I would try to sort them into categories. Categories, I don't know why I came up with those categories I just did. And then, I would try, over multiple months, to track, to see like, are we spending on clothes what we said we should spend? Are we spending on going out to eat what we should spend? But it was like, duped, like, I knew I was duplicating work. Like, it's already there, but that's what, so I...
25:10 Ramit Sethi? But keep going. Why, why do you think you were doing all this? What did it get you?
25:14 Speaker 02 I think I felt like I was controlling our money.
25:19 Ramit Sethi? Exactly. Exactly. This is a classic example. I'm actually really thankful that you're sharing this with everybody, because there's so many people who go through the motions of playing money. They are playing money. They are moving things from here to there. Why? You know, like, the concept of a paper pusher? Let me pick this piece of paper up, push it over there? Like, we all know that's useless, but we do it. And nobody forced you to, right? No one sat you down and said, like, you gotta do this. No. If anything, it was echoes from your parents, maybe grandparents. It doesn't work. Like, if we actually took an honest look at it, we'd be like, what the [bleep] am I getting out of this? But we get a sense of control, and we like to feel like motion is productivity.
26:02 Ramit Sethi? Another great example of you correcting that and being like, hey, made a mistake, went down the wrong rabbit hole of a budget. We're gonna stop that. And you did. Amazing. Okay, let's take a look at the numbers. Mia, can you read the word in bold and the number next to it for this entire box, please?
26:21 Speaker 02 Assets, 443,000. Investments, zero. Savings, 13,900. Debt, 176,410. Total net worth, 280,490.
26:36 Ramit Sethi? Cool. What do you think of these numbers?
26:39 Speaker 02 I feel like our net worth is low considering how much we both make. I don't understand the investments line.
26:47 Ramit Sethi? Okay.
26:48 Speaker 02 Again, like, we've got the pension, so I don't know if that should be higher.
26:55 Speaker 01 Okay. I feel amazing about the debt. I think that that's something, it's our house. That's all.
27:01 Ramit Sethi? That's all mortgage debt?
27:02 Speaker 01 Yep.
27:03 Ramit Sethi? What's the interest rate?
27:05 Speaker 02 6%.
27:05 Ramit Sethi? Okay.
27:06 Speaker 02 It's also a 15-year mortgage, so we're proud of that.
27:08 Speaker 01 Yeah, so we sold from a 30-year to a 15-year. That was something else it were. So it actually paid off.
27:12 Ramit Sethi? Nice.
27:13 Speaker 01 Yeah, net worth, I don't know what, I just don't know enough about net worth.
27:17 Ramit Sethi? Yeah.
27:18 Speaker 01 Obviously, I want it to be higher, but I don't know, like, why?
27:21 Ramit Sethi? Yeah. That's a good answer. That's honest.
27:23 Speaker 01 Yeah.
27:24 Ramit Sethi? It's actually common, I would say, most people feel that way. Do looking at these numbers make you feel anything?
27:29 Speaker 01 I think the only thing I would feel would be guilt, and I think it'd be debt.
27:33 Ramit Sethi? Wait, I think I could show you this glass of water and you'd feel guilt.
27:38 Speaker 01 Yeah, I think so, too.
27:39 Ramit Sethi? That's a default baseline. Okay. So you feel guilt because?
27:44 Speaker 01 I don't feel guilt. I said if I felt, if debt was way higher, I would feel guilt. That's the only feeling that I would have.
27:49 Ramit Sethi? That's quite an interesting response, though.
27:51 Speaker 01 Yes.
27:51 Ramit Sethi? Mia, how do you feel, if at all, looking at these numbers?
27:55 Speaker 02 I'm proud that our net worth is something, right? Like, I'm proud that there's something there.
28:01 Ramit Sethi? Yeah.
28:02 Speaker 02 I'm proud of the decisions that we've made that have gotten us to have that. And I also feel, I do think guilt is a default.
28:13 Speaker 02 But guilty that it's like not more like I wish I would have made some different decisions earlier in my life.
28:19 Ramit Sethi? Cool. I appreciate that. Let's look at the income. Jake, what's the gross combined monthly income, please?
28:27 Speaker 01 Eighteen thousand, eight hundred and sixty-two.
28:29 Ramit Sethi? Cool. That means that your household income is two hundred and twenty-six thousand dollars a year. Did you know that number?
28:38 Speaker 01 Yes, we knew that.
28:38 Ramit Sethi? You knew that?
28:39 Speaker 02 I had never made that calculation of our gross. I knew our net.
28:43 Ramit Sethi? Uh huh. So you didn't know your gross. What'd you think that you made as a household ballpark?
28:48 Speaker 02 Um, I probably would have said like two hundred thousand.
28:50 Ramit Sethi? Okay. What do you think about that income?
28:52 Speaker 02 I think it's great.
28:54 Speaker 01 Yeah, no, it's great. And that's why it stresses me out. I don't know why we're
28:57 Speaker 02 Like, why are we counting pennies?
28:58 Speaker 01 So jammed up.
28:59 Ramit Sethi? This is, this is funny. Like, people don't make enough money, they go, I'm stressed out. Then people make a ton of money, they go, I'm stressed out, because why don't I feel better about money?
29:07 Speaker 01 Yeah.
29:08 Ramit Sethi? How much do you need to make to not be stressed out, Jake?
29:11 Speaker 01 Well, I know that it'd just be better problems. You know, I've, you know, I've read the subtle art where it's just you want to have good problems. So these are pretty good problems to have, but.
29:18 Ramit Sethi? But you're still stressed out, right?
29:19 Speaker 01 Yes.
29:20 Ramit Sethi? Maybe if you make five hundred K.
29:21 Speaker 01 Yes.
29:22 Ramit Sethi? Will you still be stressed?
29:23 Speaker 01 If we kept our current assets, no, I wouldn't be stressed.
29:26 Ramit Sethi? Oh, real? Five hundred is all you need to make?
29:30 Ramit Sethi? Just double?
29:31 Speaker 01 I feel like you're leading the witness. I definitely, I'm sure I'd be stressed always.
29:34 Ramit Sethi? Yes.
29:35 Speaker 01 Yeah.
29:36 Ramit Sethi? It's kind of funny when I talk to small business owners who are super frustrated by the vendors that they work with. Because I'm like, y'all know you're the boss, right? You can fire them. You can make changes today. So if you don't like the platform that you are working with, move off of it. I've done it many times. If a CPA that you are working on goes dark on you after April, find somebody who's better. And that is where our partners at Gelt come in. Gelt is a modern CPA firm that helps your business take control of your tax strategy year round. By working with Gelt, you get access to one dedicated tax strategist with real human expertise powered by cutting-edge technology that handles
30:16 Ramit Sethi? the rest. And right now, they have two Q3 exclusive offers. Extension Rescue, where Gelt takes over your tax Extension with fast onboarding and no stress, keeping you deadline safe. The retirement catch-up where Gelt models your prior year retirement contribution opportunities to maximize what's on the table before October 15th. This offer is included for all new clients this quarter. A great CPA is a year-round partner who stays in touch with you. And Gelt is taking on new clients now. Now is the time for business owners to get ahead, not in January. So find out if you qualify at joingelt.com/ramit. That's join G E L T dot com slash ramit.
31:00 Ramit Sethi? If you're retiring soon and you have a financial advisor, please listen up. Do you know how much you pay your advisor? Most people that I talk to do not know. I don't have anything against advisors per se. I do have something against paying a percentage and not even knowing how much you are paying. You can actually get quality financial help without hidden or obfuscated fees by switching to a flat fee-only advisor from our friends at Facet. Facet charges a flat membership fee for financial planning, never a percentage of your assets. And you get access to a team of CFP professionals, always a CFP, always a fiduciary, who help you create a personalized financial plan that meets you where you are.
31:43 Ramit Sethi? They can help with big things like investments, moving across the country, saving for kids' college, traveling in retirement, estate planning, all of it. Your financial plan should match up with your rich life vision and Facet can help make that possible without the exorbitant fees. As of the date of this recording, Facet is waiving the enrollment fee for new annual members and for my audience, Facet is offering $300 into your brokerage account if you invest and maintain $5,000 within your first 90 days. Head to facet.com/ramit to learn more about which membership option is best for you. Facet is an SEC-registered investment advisor. I'm not a member of Facet and have an incentive to endorse Facet as I have an ongoing fee-based
32:27 Ramit Sethi? contract for cash compensation based on this endorsement. All opinions are my own and not a guarantee of a similar outcome. Okay, let's look at the fixed costs. What's that number?
32:38 Speaker 02 50%.
32:39 Ramit Sethi? Okay, quite good. That's on the lower end of the 50 to 60%. That's exactly what I would expect to see for a high income couple. When your income goes up, like disproportionately up, this number should come down. Because you know, you can only spend so much on toothpaste.
32:55 Speaker 01 Right.
32:55 Ramit Sethi? So I think you're all doing a very nice job. I mean, look at that mortgage. $1,776. That's crazy. 9% of gross. Well done.
33:08 Speaker 02 Thank you.
33:09 Speaker 01 Thank you.
33:09 Ramit Sethi? Especially considering you had a McMansion before.
33:12 Speaker 01 Yes.
33:13 Ramit Sethi? And you, this is amazing.
33:14 Speaker 02 I'm very proud of that.
33:15 Speaker 01 Yeah.
33:16 Speaker 02 And that's probably one of the-
33:16 Speaker 01 And the other mortgage was like 2,000, way more, yeah.
33:19 Speaker 02 And I think that's probably maybe one of my, our proudest money decisions is that we made that.
33:24 Ramit Sethi? I love that. That's so cool. You all ever celebrate that, that you made that tough decision?
33:29 Speaker 02 I think we do, actually. Like, we talk, we look at each other, I would say, pretty regularly. I'm like, oh my God, I'm so happy we did this.
33:35 Speaker 01 And it feels better. Like, it feels like home, too. It's like that added bonus, it feels more like us, too.
33:40 Ramit Sethi? Yes. This is great energy. This is what, now that I see that you can do this and that you do celebrate and you have, I'm, in my head, I'm going, cool, they can do that. So now I just need to transfer that-
33:53 Speaker 02 I would love that.
33:53 Ramit Sethi? -over to other parts of your money.
33:54 Speaker 01 I'm in.
33:55 Ramit Sethi? This is very good. Okay, let's keep going. We have investments. What's that number?
34:01 Speaker 02 22%.
34:02 Ramit Sethi? Okay, so that is your pension, which is about $3,000 a month going to your pension.
34:07 Speaker 01 Yep.
34:08 Ramit Sethi? Okay, and I can see there's like a little bit of confusion on your part of like, what's happening with this pension? What does it mean? But overall, great. Savings, what's that number?
34:20 Speaker 02 25%.
34:21 Ramit Sethi? Okay, the bulk of this is kids' 529s, and then you have an emergency fund. Okay, personally, I would have put the 529s under investments.
34:30 Speaker 02 Okay.
34:31 Ramit Sethi? But it's fine. Either way, it shows me where your priorities are. And then finally, let's go down to guilt free spending. What's that number?
34:39 Speaker 02 3%.
34:40 Ramit Sethi? Do you only spend $364 a month?
34:42 Speaker 02 No, that's not right.
34:43 Ramit Sethi? Okay. How much do you spend like, you don't know?
34:45 Speaker 02 I bet that's just like what was left, probably.
34:48 Ramit Sethi? That is right. So do you think that you're spending more than 364? That would be extremely lean.
34:53 Speaker 02 Yes, of course we are.
34:54 Ramit Sethi? How much do you think that you are spending every month on discretionary items, including eating out, coffee, vacations spread out over 12 months, et cetera?
35:05 Speaker 02 I bet it's closer to like 1,500 and even that probably is us being really strapped.
35:14 Ramit Sethi? Let's not do that. Let's be, let's, how much are you realistically?
35:18 Speaker 02 No, no, I think we're realistically spending probably 1,500 to $2,000 a month.
35:22 Ramit Sethi? Let's say 2,000.
35:23 Speaker 02 Okay.
35:24 Ramit Sethi? When I do these numbers, I always want to be conservative.
35:27 Speaker 02 Sure.
35:27 Ramit Sethi? Because I never want to be surprised owing more money. If anything, I want extra money at the end of the year.
35:32 Speaker 02 Yep.
35:32 Ramit Sethi? Cool. So at 2,000, then the question is where's that money coming from?
35:36 Speaker 02 Yeah.
35:38 Ramit Sethi? I have a question. Your long-term emergency fund says 700 bucks a month, but you have only $14,000 in savings. You pulling money out of your savings occasionally?
35:48 Speaker 02 Yes, we have been, which we want to stop doing.
35:51 Ramit Sethi? Well, that's, this all makes sense.
35:53 Speaker 02 Yes.
35:54 Ramit Sethi? So you're spending more than the CSP is reporting.
35:58 Speaker 02 Yeah.
35:59 Ramit Sethi? It's not planned for, and then you pull out of savings.
36:03 Speaker 02 Yes.
36:04 Ramit Sethi? Okay. You know, your savings is about two months of expenses. Were you aware of that?
36:10 Speaker 02 Yes.
36:10 Ramit Sethi? Okay. How's that feel to you?
36:12 Speaker 02 Scary.
36:13 Speaker 01 That's why we're here.
36:14 Speaker 02 That is why we're here.
36:15 Ramit Sethi? All right.
36:16 Speaker 02 I think us being here gives us hope, right? Like, I think if we had...
36:22 Ramit Sethi? What kind of answer is that?
36:23 Speaker 02 Because I would be more mad if I didn't feel like I'm going to talk with Rumi, he's going to help me figure this out.
36:30 Ramit Sethi? Wow.
36:31 Speaker 01 I think that with me, it kind of reminds me of how I treated girls when before, like when I was going through puberty. It like scared me. I didn't understand it, so I just avoid it.
36:41 Ramit Sethi? Okay.
36:43 Speaker 01 And I want, I like, I can't be mad. I don't understand it well enough. I think that that's kind of where I'm at. I just like...
36:49 Ramit Sethi? This is a great analogy.
36:50 Speaker 01 Yeah, it's, yes.
36:51 Ramit Sethi? But wait, what's the conclusion? Because now you're married. Actually, you've been married twice.
36:54 Speaker 01 Yeah, so I'm not afraid of girls anymore. Sort of.
36:59 Ramit Sethi? Are you afraid of money?
37:00 Speaker 01 Yeah, I think I'm confused by it. And I think there's a deep seated fear of seeming dumb and it seeming like asking questions, you know? And I joke about, you know, not knowing what people say, making their money work for them. I think that this is just like a knowing gap and I want to get it fixed. So that's kind of where I'm at. So it's, I can't, I can't be mad that I don't, you know, it's like learning a new sport. You're not mad the first day. It's like I'm just trying to drink it in as much as I can right now.
37:25 Speaker 02 And I think I'm just more scared than mad. The fear is bigger than the anger for me.
37:31 Ramit Sethi? I love Jake's analogy about being afraid to talk to women when he was growing up. I think a lot of men can really connect with that memory. But I also think that at a certain point, you have to face your fears. There is no way but straight through those fears to go and talk to somebody or apply for a job. If you've been nervous about your career, you've got to face your fears with money and realize nobody else is coming to save me. And I was put on this earth not simply to save money in a savings account, but to live a rich life. Therefore, I'm going to start facing my fears. I'm going to learn how money works and I'm going to start feeling good about it. For me, I always naturally understood money,
38:16 Ramit Sethi? but things like fitness, I felt like I was the odd man out. Like everybody else learned it and I just don't get it. And so when I talk to people and they don't understand money, I have a lot of compassion. It's kind of complicated. You get a million different people telling you a million different things. And as long as you got a roof over your head, it kind of seems like it's fine. So I appreciate you being so honest about it. Mia, you said you feel fear. What's the fear of?
38:48 Speaker 02 The fear is that if something happened, if there was a catastrophic event, we don't have money to deal with it.
38:56 Ramit Sethi? If you had a fear of that, like, let's say I had a fear of slipping in the shower. Okay, I might get one of those plastic mats. You have a fear of if something happened, you won't have enough money. But your savings account is still $13,900. What's the difference?
39:16 Speaker 02 Hmm. I think in the moment that I want to go on a trip or I want to buy something, I'm just like, I'll deal with it later.
39:26 Ramit Sethi? Yeah. How often does that happen?
39:28 Speaker 02 Oh, probably all the time. Right? Because if I was really afraid,
39:32 Ramit Sethi? Yeah.
39:32 Speaker 02 I wouldn't be doing that.
39:33 Ramit Sethi? Yeah. How much do you think your relationship with money is problem oriented? Where you talk about the problems, you agonize over the problems, you discuss the problems versus solution oriented, where you say, okay, that's the problem. Here's what we are doing about it.
39:49 Speaker 02 95% to 5%.
39:50 Ramit Sethi? Yeah. 95% problem.
39:52 Speaker 02 Problem.
39:53 Ramit Sethi? Common. Really common. Just imagine with me for a second, if we flipped it. Just flipped it. 95% solution oriented, 5% problem oriented. What would that look and feel like to you?
40:08 Speaker 02 That would feel like, like when you said that you liked that we celebrated our, the decision that we made about the house. To me, it would feel like having that 95% of the time, which sounds amazing.
40:23 Ramit Sethi? So you'd celebrate more. What else would you do?
40:25 Speaker 02 I would worry less. It like, and I could spend that energy doing something I enjoy.
40:31 Ramit Sethi? Like what?
40:32 Speaker 02 Hanging out with Jake, spending time with the kids. Like I wouldn't be trapped to the spreadsheet.
40:40 Ramit Sethi? Are you trapped now?
40:42 Speaker 02 Yeah, I watch it all the time. It still doesn't make sense to me. And again, I'm just like paper pushing.
40:47 Ramit Sethi? Yeah.
40:48 Speaker 02 Yeah.
40:49 Ramit Sethi? Okay. I have a couple more questions about this. So you have preschool at $1,266 a month. How long will that last for?
40:58 Speaker 02 Another 15 months? Yeah, one more school year. Yeah.
41:01 Ramit Sethi? One more school year?
41:02 Speaker 02 Yeah.
41:02 Ramit Sethi? Okay. And then after that?
41:04 Speaker 02 Then public school.
41:05 Ramit Sethi? Got it. Cool. Um, we have a deposit into an account. What's that for?
41:11 Speaker 02 That is a joint account that my ex-husband and I each put that much money in. And it's like savings for like when the kids need clothes, like for the sort of bigger expenses.
41:22 Ramit Sethi? Got it. Got it. So that's kind of day to day versus the 529s that you are saving for. Okay, great. Uh, I mean, I love seeing this car payment at $398 a month. Amazing. Debt at 459, that's what?
41:37 Speaker 02 Um.
41:38 Speaker 01 Treadmill.
41:38 Speaker 02 That treadmill that is done in three months.
41:41 Speaker 01 Yes.
41:41 Ramit Sethi? What is the interest rate on a treadmill?
41:43 Speaker 02 It was zero percent.
41:44 Ramit Sethi? Oh, okay. All right. By the way, I noticed that something interesting. Your preschool amount is not being accounted for in the total. So let's go ahead and adjust that right now. Wow. What just happened to your fixed cost number?
41:58 Speaker 02 It's a big jump, 10% jump.
42:00 Ramit Sethi? Yeah, jump 10%. So let's recognize a couple of things. Number one, childcare and preschool, very expensive.
42:08 Speaker 01 Yeah.
42:10 Ramit Sethi? Number two, suddenly having that really high income and the low fixed costs, which was something I was like, great job. It's not so low anymore.
42:21 Speaker 01 Right.
42:21 Ramit Sethi? Now preschool is temporary. And as you mentioned, public school after. So this number will go down.
42:28 Speaker 01 Yeah.
42:29 Ramit Sethi? But things are not so loose all of a sudden. What does it tell you?
42:33 Speaker 02 It reinforces that we don't really know kind of what's going on.
42:38 Ramit Sethi? Agreed. That is true. And what does it imply for the rest of your money? If you just jump from 50 to 60%, what does it imply for the rest of how you're spending your money?
42:49 Speaker 02 That's shrinking. Yeah, that's shrinking.
42:50 Speaker 01 I'm like feeling my hands get hot right now.
42:52 Ramit Sethi? Yeah.
42:53 Speaker 01 Like I feel like this pressure, just like I'm like, gosh, here we go.
42:56 Ramit Sethi? Okay. Here's how I think about it. I appreciate that. That's real.
43:00 Speaker 01 Hmm.
43:01 Ramit Sethi? For me, I'm still like, we got a puzzle here.
43:04 Speaker 01 Hmm.
43:04 Ramit Sethi? And we're going to figure it out. Certainly you do not have a lack of money.
43:08 Speaker 01 Hmm.
43:10 Ramit Sethi? Y'all make a lot of money. So we got a puzzle. We just need to figure out which way the pieces all fit. So I'm not feeling hot hands at all right now. Okay.
43:19 Speaker 01 I am. Because you have that confidence and like you have, like you understand. And that's where it's like, I want that feeling where it's like, where most of in life, there's a problem, we'll fix it.
43:28 Ramit Sethi? Exactly. All right, we got to make some other adjustments. We have this deposit for your kids that was also not reflected. Look at the number now on your fixed costs. We're at 64%. So the financial picture has actually dramatically changed. Now I'm going to be a little more directive on my questions. Because at 50%, I really don't care what you're doing. You do whatever you want, but at 64%, I have questions. Utilities are 409. Why? That's a lot.
43:59 Speaker 02 I would assume that our electric and gas are high because I basically run the washing machine 100% of the time and then the hot tub also.
44:11 Ramit Sethi? What? How much does a hot tub cost? I truly do not know.
44:15 Speaker 02 Well, just the electricity to run it, to heat the water.
44:19 Ramit Sethi? How often do you get in the hot tub?
44:20 Speaker 01 Well, it's
44:20 Speaker 02 Well, now it's broken.
44:22 Speaker 01 So
44:22 Ramit Sethi? Great.
44:22 Speaker 01 It was so old it had a CD player on it.
44:25 Ramit Sethi? But like, can I ask you, like, when it broke, did you notice your utility bills going down?
44:30 Speaker 02 I have not figured out how to
44:32 Speaker 01 We have not
44:33 Speaker 02 Disconnect it, like to to stop.
44:37 Speaker 01 Yeah, that's
44:38 Speaker 02 Basically, we're still paying for a broken hot tub to run.
44:40 Speaker 01 Yes.
44:40 Ramit Sethi? Fix that.
44:41 Speaker 01 Yes.
44:42 Ramit Sethi? All right. This number is unusually high.
44:45 Speaker 01 Okay.
44:45 Ramit Sethi? And at 64%, we don't have room for that.
44:47 Speaker 02 Yeah.
44:48 Ramit Sethi? Debt payments at 459.
44:49 Speaker 02 That'll end in three months.
44:51 Ramit Sethi? Oh, okay. Let's zero it out then, just to see. Okay, so watch. So this, we zeroed it out and it brings us down to 60%.
44:57 Speaker 02 Okay.
44:58 Ramit Sethi? Nice. Okay, I'm going to leave it at zero.
44:59 Speaker 02 Okay.
45:00 Ramit Sethi? Groceries and gas are, first of all, why'd you combine those two? It's a little odd combination.
45:05 Speaker 02 Because it's what we put on the credit card.
45:09 Speaker 02 Like, it all goes on the credit card.
45:11 Ramit Sethi? You should change that.
45:12 Speaker 02 Okay.
45:13 Ramit Sethi? Gas should go with your car. Car's everything related to the car. Okay, so gas, parking tickets, parking, all of it should go there.
45:23 Speaker 02 Okay.
45:23 Ramit Sethi? That way you just have a good sense. A lot of times, people don't realize, oh, my car payment's 350, which mine used to be. And then when I netted out everything else, I added it all together, it was over $1,000 a month, including parking and gas and everything. So we got to know these numbers. Know your numbers.
45:39 Speaker 01 So move, so move the gas up to the car payment.
45:41 Ramit Sethi? Exactly.
45:41 Speaker 01 Okay.
45:42 Ramit Sethi? How much are you spending on groceries per month?
45:44 Speaker 02 I do think we probably spend about $1,200 on groceries per month.
45:48 Ramit Sethi? Okay. What are you buying for 1,200? I'm not the grocery Grinch, I'm just curious.
45:53 Speaker 01 I think that's an area where we could really cut back. And I think that it's so cyclical too, because when you add To grown children, like the meals change and we're trying to be proactive. And when the, when the, the older kids are not with us, then we try and do leftovers or things like that. And then it's just trying to save money. But I definitely think that that's a spot.
46:14 Ramit Sethi? What do you think Mia?
46:15 Speaker 01 That we could save.
46:16 Speaker 02 Um, I agree that we can, we probably could cut back on that a little.
46:22 Ramit Sethi? If you could bring this number down, your groceries, instead of 1,200, what would you bring it to?
46:26 Speaker 02 I think we could realistically do 800. I think we'd do 200 a week.
46:30 Ramit Sethi? You cut 400 off?
46:31 Speaker 02 I think we could.
46:32 Speaker 01 I agree. That's pretty good. Okay. How do we do that though? Like that's, what's the action steps? Like you just, do you just pull out $800 and every time you go and then it's just, that's it?
46:41 Ramit Sethi? Excellent question. When you start, most people in America do not shop to a number. They go to the grocery store and they're just like, that looks good. And when you are building the skill of sticking to a number, you can do that. You can literally pull out $200 a week in cash or a simpler way is to simply, you know your number. Every week, we're going to spend $200. Now, lifestyle is lifestyle. If you go in twice a week, fine. It's a hundred bucks each time, but you gotta keep a note on your phone somewhere where you're tracking it. Over time, what I've found is that people who are effective at hitting their grocery number, they basically eat the same thing a lot.
47:22 Ramit Sethi? Like people who are hitting a number, especially when they need to hit a strict number, they basically come up with a meal plan and that's it. So that's number one. The second thing I've learned about patterns of successful people hitting a grocery number is one person is doing the shopping. Cause they just know the numbers, they're connected. If another person goes and buys it, sometimes they have to, but they may not have that tacit knowledge that the primary person does.
47:50 Speaker 01 Right.
47:51 Ramit Sethi? So that's what I would do.
47:52 Speaker 01 Okay.
47:52 Speaker 02 That's really helpful. Thanks.
47:53 Ramit Sethi? Cool. I'm gonna take this down to 1,100. Still leaving your gas in here, which you can move later.
47:59 Speaker 01 Okay.
47:59 Ramit Sethi? And that brings you down to 57%. Honestly, you're in great territory, great territory. It's a little higher than I would like, considering your income, but 57% is within parameters. Subscriptions at 315, what's this for?
48:12 Speaker 02 So that would be all of the different TV services. So like every single one, which I think we could totally.
48:19 Speaker 01 Yeah, we could.
48:20 Speaker 02 I don't care about that very much.
48:21 Speaker 01 Yeah, same.
48:22 Ramit Sethi? How much can you take it down to?
48:23 Speaker 02 200?
48:24 Speaker 01 Yeah.
48:24 Speaker 02 At least.
48:24 Speaker 01 Yeah.
48:25 Ramit Sethi? Yeah, okay. Great, I love that you say easy. Let's keep it easy.
48:28 Speaker 01 Okay.
48:28 Ramit Sethi? All right, 200. We don't need to cut to the bone on everything.
48:33 Speaker 01 Right.
48:33 Ramit Sethi? You know what's, I'm interesting noticing that the two of you are very good at cutting costs. Like, I have not seen any resistance from you. It's uncommon. Most people like fight consciously and unconsciously. The two of you know, you're like, yeah, we can cut that.
48:50 Speaker 01 Yeah.
48:51 Ramit Sethi? Like, what, what is that? Why is it so easy for you to cut costs?
48:55 Speaker 01 For me, it's the greater good of our family. And I think that like financial stability would create such a safe environment in a household where we're comfortable moving forward.
49:05 Ramit Sethi? Okay. What about you, Mia?
49:07 Speaker 02 I agree with Jake and I think I'm comfortable with it because it's just hypothetical. When push comes to shove and I'm actually like, there's a pair of shoes I want. I'm like.
49:19 Ramit Sethi? That's quite interesting. Wow, very insightful, both. We're gonna tackle that as well. I think that you also might both be really comfortable with this because it's what you know. How long have you been told, gotta cut costs, gotta, that's bad, don't spend money?
49:35 Speaker 02 Forever.
49:36 Ramit Sethi? This is what you know?
49:36 Speaker 01 That's my, that's my education on money is don't spend money you don't have.
49:39 Ramit Sethi? Exactly. So to me, it's like me saying like, drink a glass of water. Yeah, you've been drinking water, you know, for a long time.
49:45 Speaker 01 Right.
49:46 Ramit Sethi? It's quite striking how easy it is for Mia and Jake to cut costs. Most couples do not find it this easy. They resist at every turn, even if they're in severe debt. But I also suspect that there is something much deeper going on here, which is that for Mia and Jake, being good with money means not spending a lot at all. So while I want to cut some of their costs because I think they are a bit out of their parameters. I also know that that alone is going to take them back to their comfort zone. Cut costs, shrink, I don't want to spend any money. That's not the path to a rich life for them. The path to a rich life, manage your costs, but also think critically about these major decisions.
50:29 Ramit Sethi? Like your investing, your 529s, and yes, even their guilt free spending. Your pension, can we just talk about this for a minute?
50:37 Speaker 02 I'd appreciate that.
50:38 Ramit Sethi? All right. So your pension, I looked into it and I, I understand that you looked into it a bit as well before you came here. What have you learned about your pension?
50:45 Speaker 02 When we retire, if we max out our pension, so if we wait till we're, whatever the rule is, right? Like there's a formula, I think.
50:55 Speaker 01 Rule of 88, it's the year is taught plus how old you are. Easy at 88.
51:00 Speaker 02 So if we wait to that, then we get for the rest of our lives, every month, 80% of the average monthly income of our top three years.
51:14 Ramit Sethi? Great. And when will you be able to retire based on that?
51:20 Speaker 02 Between 55 and 60.
51:21 Speaker 01 Yeah, I think it was 54 even because we both have been in, going into that pension since 21.
51:27 Ramit Sethi? Great. How do you feel about that?
51:29 Speaker 02 Good.
51:29 Speaker 01 Good. It feels good.
51:30 Ramit Sethi? You're good.
51:31 Speaker 01 Yeah. It's just like this in the distance thing. I've never, it's.
51:35 Speaker 02 I guess one question I have is I don't know if, you know, 20 years from now, 80% of what I make, if that's enough to live on, like I don't understand how to make the, the estimation of like, how much will inflation go? Like, I don't.
51:51 Ramit Sethi? Well, I don't know the details of that, but I'm willing to bet a little bit that your pension indexes for inflation. So usually, a lot of different types of pensions and the like will account for inflation. They're not just going to pay you in today's dollars 20 years from now because it would be worth far less. You could look into that and literally you could just type in I P E R S inflation.
52:18 Speaker 02 Yeah.
52:19 Ramit Sethi? And I would not be surprised if it's like, yeah, we account for inflation, et cetera.
52:23 Speaker 02 Got it.
52:23 Ramit Sethi? Do you have a sense of how much you might make in the last three years average? Like a ballpark is helpful.
52:31 Speaker 02 Like each year, you mean, like what our yearly income would be?
52:34 Ramit Sethi? Yeah, like what can we use to project?
52:36 Speaker 02 Sure. I think it'd be safe to say 140.
52:41 Ramit Sethi? Yeah. Each?
52:42 Speaker 02 Each.
52:42 Ramit Sethi? Okay, we can make some rough estimations, but in general, that's like quite amazing. Like very few people have pensions like this anymore. You know that?
52:49 Speaker 01 That's what we've heard. Yeah, everybody we talked to says that.
52:51 Ramit Sethi? And the benefit of this like is back in the day, in our parents' time, a lot of people had pensions. So basically like the two of you, they're kind of like, ah, I don't really think about investing. Like it's taken care of. All I know is I need to put the X money in the pension. And then they retire and then they just get a check every month. And by the time the two of you retire, your house will be paid off. Your expenses will be way lower. No more, you know, perhaps the food goes down. Certainly all the savings going to 529s, investing, all that stuff goes away. And you're just like, oh, wow, this is a lot of money and we're 54, 55, which is quite young.
53:26 Speaker 01 Yeah.
53:27 Ramit Sethi? It's a great life. That was more typical in our parents' time. And then companies took that and they said, this is really expensive, especially because people are living longer. And also we can get away with just shifting it on the burden of people. Let's make them save for it. You are responsible for your 401k or your IRA. And like, we don't have to account for this for the rest of their lives. So cool. You're all living in the, um, the public system of getting a pension. It's awesome if you are in it. Awesome. Okay. Saving $700 a month, how did you pick that number?
54:04 Speaker 01 I think it was a thousand. I think we started with a round number, didn't we?
54:07 Speaker 02 Yeah.
54:08 Speaker 01 And then it was just like, that seemed like too much with what we were spending and. We just kind of went down to 700, I think.
54:14 Speaker 02 Yeah, there's not much.
54:14 Speaker 01 There's not like it's it's just.
54:16 Ramit Sethi? It's arbitrary.
54:17 Speaker 02 It's arbitrary.
54:17 Speaker 01 It could be anything.
54:18 Ramit Sethi? So I just want to point a couple of things out. If as we have made some adjustments, you'll notice that you are now spending more than you make every month.
54:27 Speaker 01 That explains the savings.
54:28 Ramit Sethi? Yeah, that's why your savings are being depleted. And that's why, in part, you feel
54:33 Speaker 02 Yeah.
54:34 Ramit Sethi? scared about money and scarce and like it's bad news. Because it kind of is.
54:39 Speaker 01 Yeah.
54:40 Ramit Sethi? But we could make some changes. What are the other big numbers on the CSP that are kind of flashing bright red?
54:46 Speaker 02 Well, the 529s is a lot.
54:50 Ramit Sethi? Yeah, that's a big one. So tell me, what is the thinking behind the $2,700 a month going towards the kids 529s?
55:01 Speaker 02 When I was growing up, my parents told me what you want to avoid more than anything else is debt. And even though paying for school is a good investment, if you can avoid debt, do it. And they helped me so that I didn't have any debt coming out of college. So that's one is probably like, that's just in my mind, like something that was just always like a given. Like if I can pay for my kids' college so that they don't have debt when they graduate college, I want to do that.
55:33 Ramit Sethi? Because debt is bad.
55:36 Speaker 02 Because debt is bad.
55:37 Ramit Sethi? Anything else?
55:38 Speaker 02 Like the cost of college now, like it's just so outrageous. If it was, you know, even like 15 years ago and they were taking out like a total of 60K for college. Like, okay, not ideal. But now it's like 100, 150, like that's so much debt. It just seems so big.
55:59 Ramit Sethi? Okay, okay. Is there any element of this was done for me, so I want to do it for them?
56:06 Speaker 02 Yeah, I think the reason I hesitate is because I'm just trying to like emotionally gauge like, is it that? And I do think there's some like element of like pay it forward, right? Like I was given that, like, this is what parents should do, like.
56:20 Ramit Sethi? Yeah, that's reasonable. What if the two of you did not make 230 plus thousand dollars a year? What if you made 75 K a year? Would you still be saving for kids 529s?
56:31 Speaker 02 I think we would probably still, don't you think? We'd still do some?
56:35 Speaker 01 Yeah, I don't think we could, but I'd be doing everything I can. I think that my, my thing is it was done for me and I want my kids to have that same advantage that I had and that like you will give it to you, but you gotta go earn it after that kind of thing. And I know there's so many different avenues of making money, but like my way of thinking is safe and just go to school, get a job that pays and that's, that's all I was told. And so I think that that's just like anxiety telling me to like, make sure my kids have that same opportunity that I had.
57:04 Ramit Sethi? Yeah.
57:05 Speaker 01 Yeah, no, this is like this, the more you dig in, the more it's harder to defend and to talk about, but I just don't know. It's just like this, an agreed upon truth that we've really not dove into.
57:15 Ramit Sethi? Agreed upon truth being?
57:17 Speaker 01 That we pay for our kids' college.
57:18 Ramit Sethi? Got it. It's like a universal truth, an axiom.
57:23 Speaker 02 Yeah.
57:23 Speaker 01 But it's like an agreed upon that we've never really dug into why. Yeah. I think that that's, I think this is very eye opening.
57:29 Ramit Sethi? That's what I specialize in. And that is what I love. I don't mind if people take a quote, universal truth that we have, like, I should buy a house and they end up buying a, I don't mind that. But we've got to interrogate the logic.
57:44 Speaker 01 Yeah.
57:45 Ramit Sethi? There's a very simple message that many parents in America have, and that is, I need to pay for my kids' college. Now, I think it's a very nice idea. I also think it is a bit simplistic. The idea that I simply need to take all the money I've got and hand it over to my kids. I don't know how much. I don't know where they're gonna go. I haven't talked to them about it, but I will sacrifice heaven and earth so that they don't have to go into debt. It feels really good. But it lacks any analysis at all. This is not about loving your kids. It's about thinking critically about one of the biggest financial decisions in your life.
58:26 Ramit Sethi? And what I am begging everyone on this podcast and everyone who watches it to do is to go deeper. Go beneath the surface of this very nice, positive idea of helping kids and calculate how much? How are they going to use it? What if we contributed this much, not that much? What if we gave them nothing? What if we give them a million? And really start to craft that decision as part of your rich life. Mia, can you tell me what your family said about money as you were growing up? What do you remember?
58:55 Speaker 02 I just remember do not spend. And I remember always feeling like I always wanted to spend money. I was the kid who like, I got babysitting money. It did not go into savings. I wanted to spend it right away. And I felt, I always felt like I was doing something wrong. Spending money is wrong. Like my parents are so amazing. They're true minimalists. Like they don't need much stuff. They will eat the exact same meal for the rest of their lives.
59:24 Speaker 01 You would like them.
59:25 Ramit Sethi? Yeah. Interestingly, they also did take you to travel.
59:28 Speaker 02 Yes.
59:29 Ramit Sethi? And you've mentioned you would like to take your kids to travel. So a lot of similarities in how your parents raised you. Of course, the college thing, paying for you, you want to pay for them. Makes sense. Did you ever find yourself confronting any contradictions about money?
59:45 Speaker 02 I feel like the only contradiction that we ever confronted was the fact that I didn't seem to be able to do what they were doing. Like the contradiction was they do it, they're able to do it. It doesn't seem hard to them. And for me, I'm not able to do it. It seems very hard to me. Like that was the contradiction.
1:00:03 Ramit Sethi? Is it still hard?
1:00:05 Speaker 02 Yeah.
1:00:05 Ramit Sethi? Okay. Are they still alive, still married?
1:00:09 Speaker 02 Yep.
1:00:09 Ramit Sethi? Cool. How are they with money now?
1:00:11 Speaker 02 Exactly the same.
1:00:13 Ramit Sethi? Really?
1:00:13 Speaker 02 Incredibly responsible. I, I think maybe the only difference is that they're spending more on travel in their retirement than they did. When we were kids, which I think makes sense.
1:00:25 Ramit Sethi? Are they enjoying their money?
1:00:26 Speaker 02 A thousand percent.
1:00:27 Ramit Sethi? Wow. This is a very healthy relationship in general.
1:00:32 Speaker 02 Yeah. Maybe I wish that they could have explained to me how it felt easy to them. Like what I saw was like there were spreadsheets. And there was money tracking. I didn't see and they didn't talk about maybe the choices that they made. Like we could buy this, but I'm not buying it because we want to travel or whatever. Like I didn't see any of that. They're super responsible with money. They were obviously making trade offs.
1:01:06 Ramit Sethi? They didn't tell you?
1:01:06 Speaker 02 But they didn't tell me that.
1:01:07 Ramit Sethi? Okay. Jake, anything that Mia is missing? Partners often know best.
1:01:12 Speaker 01 I mean, they are, they're a unit and they are methodical and they, everything she said is exactly correct. It's just, it just seems flawless.
1:01:20 Speaker 02 It seems flawless. It's like they never make a mistake.
1:01:23 Speaker 01 Like we go over their house. I know exactly what meal we're going to get every single time.
1:01:27 Ramit Sethi? Oh, really?
1:01:27 Speaker 01 Yeah, it's, yeah.
1:01:29 Ramit Sethi? That's interesting.
1:01:30 Speaker 01 Yeah. And it's like they just, it's very systematic. I mean, it's like.
1:01:34 Ramit Sethi? Do you have that with your food at home?
1:01:36 Speaker 02 No.
1:01:37 Speaker 01 No.
1:01:38 Ramit Sethi? Do you have that with your savings? Like, how did you choose the number 700? Is it methodical?
1:01:44 Speaker 02 No.
1:01:44 Speaker 01 No, they've, they have, they have a system where they're.
1:01:48 Speaker 02 I don't know what it is.
1:01:49 Speaker 01 Yeah, I don't know what it is, but they definitely have something.
1:01:51 Ramit Sethi? But it's quite interesting, right? It's not that they are the perfect unit. It is that their behavior and attitudes are methodical.
1:01:59 Speaker 01 Yes.
1:02:00 Ramit Sethi? The clue is when you go over there, you know exactly what you're going to eat. That actually is a huge reveal.
1:02:05 Speaker 01 Yeah.
1:02:06 Ramit Sethi? That they have some type of system. It's not surface to you, but they have it. Just the same as if you ask me, what's my savings amount and savings rate? There's a reason for it.
1:02:18 Speaker 01 Right.
1:02:19 Ramit Sethi? And the best part of all is you all can do that for your system.
1:02:23 Speaker 01 And I think the part that I'm most envious about is how much they're willing to help their family and like help their kids or, you know, Mia's brother, you know, or something, what are those?
1:02:31 Ramit Sethi? Yeah.
1:02:32 Speaker 01 Those kind of situations.
1:02:33 Ramit Sethi? Wait, but you're helping your family a lot.
1:02:35 Speaker 01 Yeah, and I think that maybe that's part of what the allure is to.
1:02:38 Speaker 02 I do think that's something we both value.
1:02:40 Speaker 01 I value helping out my kids when they're older.
1:02:43 Speaker 02 Like when you talk about, I know consciously that like the idea of paying for college a hundred percent doesn't necessarily need to be, like, it doesn't have to be a hundred percent, right? But like, when you talk about lowering that, it like makes me feel a little, you know, like, oh, I don't know if I can do that. Because I think there is, we both have this value of like, we take care of our family like that should be.
1:03:08 Ramit Sethi? So what? So what if when I suggest, which by the way, I have not even done today. But so what if I were to suggest, instead of paying for a hundred percent of college, you pay for ninety, or eighty, or fifty?
1:03:22 Speaker 01 Yeah.
1:03:23 Ramit Sethi? And it makes you feel anxious and guilty? So what?
1:03:27 Speaker 02 Well, that doesn't feel a lot better than feeling anxious. So if I was already feeling anxious about money and you say like, let's just trade the anxiety for guilt. That doesn't sound very good.
1:03:36 Ramit Sethi? My point is that just because you feel guilt does not mean that you have to follow that feeling. So sometimes it just, the question is, so what? Oh, I feel guilty. And?
1:03:49 Speaker 01 Yeah.
1:03:49 Ramit Sethi? I'm gonna feel guilty. That's how I was trained for generations. I'm gonna acknowledge that feeling. I'm gonna ask, why am I feeling guilty? Oh, because my invisible script is that I have to pay for one hundred percent of college. I'm gonna write that down and I'm gonna turn the page and say, okay, I'm gonna set that aside for a minute. So what?
1:04:08 Speaker 02 Yeah.
1:04:08 Ramit Sethi? What if, instead of following that feeling, I followed the decision? The one that's informed by numbers?
1:04:16 Speaker 01 Yeah.
1:04:16 Ramit Sethi? By connection, by conversation, and by a rich life vision?
1:04:20 Speaker 02 Can I just stop there for a second? Because that feels like a really big, like.
1:04:27 Speaker 02 Shift in my thinking is that idea of like, I don't think I realized how much I was letting feelings and not decisions impact the money picture. Like, I never thought of it that way. And I feel like that's exact, like you just captured it. Like, I let the feelings instead of the decisions control what I'm doing.
1:04:47 Speaker 01 Yeah.
1:04:47 Ramit Sethi? Amazing. Well, well done. That takes a lot of introspection to make that connection. Feelings are valid, but in my experience, way too often, I'm talking over 95% of the time, people are making life-changing financial decisions through feelings alone. Feelings do not come first on this. We've got to start with the vision of a rich life, and then the numbers, and then we can talk about the feelings. Great insight. Okay. Jake, what do you remember your family saying about money when you were a kid?
1:05:21 Speaker 01 My parents were fantastic. They were so supportive, but just money was never discussed at like ever. I knew we were well off. I knew we got basically whatever we wanted. But it was just, it was never, I have to this day, no idea how much money we had, or what they had, what they have currently. They're separated now. I have no idea.
1:05:43 Ramit Sethi? Would you, you mentioned well off. Would you say like, upper-middle-class, wealthy?
1:05:47 Speaker 01 Yeah, I would say, I would say, upper-middle-class, probably towards wealthy in Midwest, in the small town that we grew up in.
1:05:55 Ramit Sethi? To help you with college?
1:05:56 Speaker 01 Yes, yes.
1:05:56 Ramit Sethi? They paid for the whole day?
1:05:57 Speaker 01 Yeah. I didn't really try until about 25. Like, I think I was kind of a late bloomer. I joke about, I wasn't getting scholarships. It was just like getting into school. So they just blindly supported me and they, and they got me. And I have, I've had conversations with them that said, you know, we, we gave you that opportunity, but you took it and run with it and ran with it. And that was the.
1:06:18 Ramit Sethi? Are they going to give you money as part of an estate or inheritance?
1:06:24 Speaker 01 Yes, I've talked a little bit about my, to my dad. It's a mythical number. I don't know.
1:06:29 Ramit Sethi? He hasn't told you?
1:06:29 Speaker 01 No. And I've discussed a little bit with them, but it's just, it, it's just the way they, I have no hard feeling. I just, it's just not a conversation we've had ever in 38 years. So.
1:06:41 Ramit Sethi? What money messages do you think you are bringing from your childhood to this relationship?
1:06:47 Speaker 01 I think I follow every pattern of the idea of just avoid it, shut the door, pretend it doesn't exist. Like, are we rich or we poor? I just love to just. Just ignore it, but I think that that's something that's been really hard because I think there's the fear and then the unknown. So it's just avoiding.
1:07:04 Ramit Sethi? Okay, so avoiding. What about you Mia?
1:07:06 Speaker 02 I think I watched my mom, you know, every weekend she would be on the computer doing spreadsheet. I think.
1:07:14 Ramit Sethi? So you kind of just like copied it?
1:07:15 Speaker 02 Yeah, and I don't know what she was doing, but I have a spreadsheet.
1:07:18 Ramit Sethi? It's really funny. It's just the same thing generation after generation. It's a little ironic, isn't it, that Jake's parents are going to give him some amount of money? It sounds like it could be somewhat large and he's afraid of money. He doesn't know what to do with it. He doesn't want to pay attention to it. He doesn't want to pick up a book about it. He's playing defense and yet at the same time, that is the exact same lesson they are passing on to their kids. These generational messages do not fade easily. If you do not fight to develop a new relationship with money, you're probably just passing on the one that your parents gave you. And frankly, although most parents try to do their very best, most parents didn't know what the hell they were doing with money.
1:07:59 Ramit Sethi? So I want you to do more. Your parents didn't have access to YouTube. They didn't have my book at their public library. They didn't have access to all this stuff for free. You do. What is your rich life vision together?
1:08:13 Speaker 02 I think both of us agree that in our rich life, we don't have to track every penny. I think that would be like number one for me. I would love to have that feeling I feel about the house. Like I made the right decision. I'm doing the right things. That is what I want. And I think for both of us, like that is what we want to feel.
1:08:34 Ramit Sethi? Great. Okay. What else is in your rich life?
1:08:37 Speaker 01 I would add that I think after this, just in this conversation alone, it's changed to I want to be confident in the decisions we're making. I think, you know, knowing we're doing this and I love that the conversation about using data to make those decisions. Like right now, we're just using opinions and feelings. That's something we hate at our work.
1:08:54 Ramit Sethi? Yeah.
1:08:55 Speaker 01 And it's like, well, if we're just going off opinions, we're going to go off a mine then, you know?
1:08:59 Ramit Sethi? Exactly. I say that a lot.
1:09:00 Speaker 01 Yes. And it's just like, and we, in our jobs, like we're always trying to use data to make decisions and then.
1:09:06 Ramit Sethi? The two of you have been playing not to lose.
1:09:09 Speaker 01 Yes.
1:09:10 Ramit Sethi? Money. I don't sense that the two of you are playing to win right now. It's like, ah, let's just not make a mistake and let's just put the money for the 529s.
1:09:16 Speaker 01 Yeah.
1:09:17 Ramit Sethi? Is there anything about in the rich life, anything about, um, we want to get food delivery service three times a week. We want to travel. We want to take our kids or put them in this type of tutoring service. It's what, what else? Give me specifics.
1:09:31 Speaker 02 A thousand percent the landscaping and like the hot tub.
1:09:34 Ramit Sethi? Yep. How come you're saying that even though it's your thing?
1:09:38 Speaker 02 I agree.
1:09:38 Speaker 01 I think, I think we, I, I think it is like, that's something that we constantly, we're, we're talking about that lately. And I think it started with your book. That, that's what really that I'd never ever thought about what I was saving my money for. And I think that that's really kind of driven me a little bit more about like where we're saving those money.
1:09:55 Ramit Sethi? So you never, you never.
1:09:56 Speaker 01 I never had a thing.
1:09:57 Ramit Sethi? Never had a vision.
1:09:58 Speaker 01 No, I would be, I just want to save money. I don't want to spend money.
1:10:02 Ramit Sethi? Playing not to.
1:10:03 Speaker 01 Yeah, playing not to lose. I mean, that was like, that was my MO, a hundred percent.
1:10:07 Ramit Sethi? You know, in life, if you do not have a vision for your money, one will be created for you.
1:10:13 Speaker 01 Right.
1:10:14 Ramit Sethi? And that vision typically is buy a big house, buy a big car, et cetera, et cetera, et cetera. And then just fast forward until you die. Actually, exactly what you said.
1:10:24 Speaker 01 Pause and rewind, but then.
1:10:25 Ramit Sethi? Yeah, you went back and so you unwound some of that, which was awesome, but still did not replace that with a new vision. It was just like, ah, save the money. And then Mia, your vision was first, we need to have the house, et cetera. And then after unwind, it's like, well, I need to be doing these things that my parents taught me. And so how am I going to do that? Take all the money and put it for my kids. $3,000 a month. The thing about this is it's actually like a very loving decision. It can be seen as a very rational decision. All those can be true, but I don't think you would be here if it weren't actually causing a problem.
1:11:09 Speaker 01 Right.
1:11:10 Ramit Sethi? And what is that problem in a sentence?
1:11:13 Speaker 01 We don't have the money to do it.
1:11:15 Speaker 02 It's making us take out of our savings.
1:11:19 Speaker 01 Yeah.
1:11:21 Ramit Sethi? So you agree, we don't have the money?
1:11:23 Speaker 02 Not the way we're spending now.
1:11:25 Ramit Sethi? Okay. I want to get back into the numbers, but before we do that, conceptually, what do you think needs to happen?
1:11:31 Speaker 01 I think the number one thing is we can't spend, we cannot take money from savings anymore. Like, that is our last thing, and I think I'd almost like to put more money into savings because of the fear of, you know, I think we could play-
1:11:44 Ramit Sethi? Where's the money gonna come from?
1:11:45 Speaker 01 Probably the 529s, I think would be one. I think that we talked about those minimal things that we talked about.
1:11:52 Ramit Sethi? Mia, what do you think conceptually needs to happen with your money?
1:11:54 Speaker 02 We need to make a decision about the amount of money that we feel is right for college, and then use that decision to then make the rest of the money work. Like, right now, it's just, it should be 100%, but should it? Like, we've never actually questioned that in any way.
1:12:13 Speaker 01 Yeah.
1:12:14 Ramit Sethi? You never thought about the number itself? Whoa, okay, I have to ask some questions.
1:12:18 Speaker 01 Because is that blind, like, that, like, you're supposed to do this, and it's like this ghost telling us that we have to do that?
1:12:25 Ramit Sethi? Yes, well said. It's a ghost.
1:12:27 Speaker 01 Yeah.
1:12:28 Ramit Sethi? Probably no one has even ever explicitly said, "You need to be funding 100% via 529." Nobody.
1:12:35 Speaker 01 And if somebody would've said it, it would've been bajillion dollars. I'm like, "All right, well, let's start saving bajillion dollars."
1:12:39 Ramit Sethi? Exactly, hoping to work. It's a Midwest work ethic.
1:12:41 Speaker 01 Yes, it is, the grind.
1:12:42 Ramit Sethi? Set a goal, and we can execute. In fact, you even asked me to do that for you today.
1:12:46 Speaker 01 Yes, yes.
1:12:47 Ramit Sethi? Give me a plan and let me execute. I don't want to have to think about it. And you notice, I listen, but I never accept that mantle, because you two will have to think.
1:12:58 Speaker 01 Yeah.
1:12:58 Ramit Sethi? And then it will make it that much more likely that you will actually follow through.
1:13:02 Speaker 01 Yeah.
1:13:03 Ramit Sethi? I think Mia and Jake have this one invisible script that is so firmly rooted in the center of everything related to their money discussions that they just cannot see around it. Whenever they start talking about money, this looming ghost, as they called it, is standing right in front of the living room, and it's saying, "You gotta pay for your kids' college. In fact, you have to send them every last cent you've got." On the question of the amount that you are putting aside, which is $2,700 a month for 529s, do you know how much that will turn into for your kids?
1:13:39 Speaker 02 Yes.
1:13:39 Speaker 01 It's like 98,000.
1:13:41 Speaker 02 For our oldest, because we have the least amount of time. It's, um- Because he'll be in college in four years. So that'll be like a hundred, about a hundred thousand.
1:13:50 Speaker 01 I think it was ninety eight.
1:13:51 Ramit Sethi? Okay, let's say a hundred, that's fine. And then how about for the others?
1:13:54 Speaker 02 And then I think it's a hundred and thirty. And then for our youngest, who's three, I think it's like.
1:14:00 Speaker 01 Fifty.
1:14:01 Speaker 02 No, I think it's more than that. I think it's like one seventy.
1:14:03 Ramit Sethi? So like, is that the right amount?
1:14:08 Speaker 01 I have no idea.
1:14:08 Ramit Sethi? Is it not amusing?
1:14:10 Speaker 01 Yeah, I really haven't thought about that.
1:14:11 Ramit Sethi? Like shocking that you are spending almost the most on this entire sheet? I'm just looking, is there any number higher than that?
1:14:19 Speaker 02 I don't think so.
1:14:19 Ramit Sethi? Your pension, but aside from that, you're spending the most amount of money?
1:14:26 Ramit Sethi? And you haven't asked yourself, is this the right amount?
1:14:29 Speaker 01 No, we've never. And then we get the idea that like, well, if it just it'll transfer over to the next kid or something like we just like justify without.
1:14:35 Ramit Sethi? Of course. No wonder you feel guilty. You don't know even the basic numbers. And in many ways, I think you like feeling guilt because it's a familiar feeling. The minute you you sold the house, which was a momentous move. Ah, what do we do next? Ah, put it over here for five years. It's like no time to stop and think and say like, what is the right decision for us? Even though we made this huge life change.
1:15:03 Speaker 01 Yeah.
1:15:04 Ramit Sethi? Is a hundred K right or not? I don't know. Have you talked to your kids about college funding?
1:15:10 Speaker 02 Yes.
1:15:11 Speaker 01 A little bit.
1:15:11 Ramit Sethi? What does a fourteen year old say? What's the conversation been?
1:15:13 Speaker 02 The conversation has been, um, we can help you with public university. But we, if there's something else that you want to do, you're going to have to, you know, do scholarships or loans. And I think I've talked with him too about, you know, you don't, as much as possible, you know, you don't want to have debt.
1:15:32 Ramit Sethi? Can I suggest a reframe of that conversation? Because it feels like almost every conversation that people our age.
1:15:41 Ramit Sethi? That the parents who were lucky enough to talk to us, that's how they talked. So it's like, all right, gotta dust off this document. All right, here's what I can do for you. I can pay for this, but not that, so you need to not do this. And it's just like a lecture. Meanwhile, you're actually telling them something amazing. Hey, Dad and I saved up this much money. We worked really hard. I want to tell you what it took for us. This is what we did. And then this happened. And we, as you know, education has been so amazing for us. We went to college, we teach, et cetera. And so when it comes time for you to get to college, we want to give you an amazing gift.
1:16:24 Ramit Sethi? And that gift is that we can fund $75,000. Now, that could be your first year. You could split it out over four years. At that point, you're an adult. It's going to be up to you. But we are going to teach you and we trust that you will make the right decision. But we worked really hard and we love you and we trust you. What is the difference?
1:16:48 Speaker 02 Well, one, it communicates the message of him being the decision maker.
1:16:53 Ramit Sethi? Yes.
1:16:55 Speaker 02 Also, it shows confidence.
1:16:57 Ramit Sethi? Yes, keep going. What else?
1:16:59 Speaker 01 It makes him like a collaborator and like we're bringing him in like he's collaborative. It's part, it's work together and not like, stop whining, I'm paying for your college.
1:17:08 Ramit Sethi? Totally.
1:17:08 Speaker 01 Like the message.
1:17:09 Ramit Sethi? Exactly. And what about the part about how you share what it took for you? What about that?
1:17:14 Speaker 02 Totally different than than what we got. Like, that's one of the things I said I wish my parents would have done is say, how did you do that?
1:17:20 Ramit Sethi? Yes.
1:17:21 Speaker 02 Yeah.
1:17:21 Ramit Sethi? And I love that you caught that. Yes, notice that you were invisibly passing on the same message to them. Don't tell them how it happened because deep down, a lot of parents believe we gotta shield our kids from money. Wrong. You get the gift of talking about money in every function, at the grocery store, at a department store and for college. You get the gift of talking to them about that. So flip that entire worldview. We don't get to protect them. No, that's, that's, they're not weak little fragile beings. No. They are strong. And, and of course, what this really, really, if you peel it all the way back implies. We need to get good about money.
1:18:01 Speaker 01 So we can share.
1:18:02 Ramit Sethi? So that we can share that with our kids. And guess what? It's totally okay to tell your kids. In fact, they love it when you admit mistakes. Hey, we don't actually know any of that. We had to fly across the country, meet this guy who who lit us up. And that's why we came back and we started reading this book.
1:18:21 Ramit Sethi? Kids, eat that up.
1:18:23 Speaker 02 Can I tell you like what I'm feeling right now?
1:18:25 Ramit Sethi? Yes.
1:18:25 Speaker 02 Like, I had a way bigger emotional, positive emotional response to thinking about empowering my kids with money than I had. Like, when I thought about saving for college, there was no feeling associated with that. But the feeling of like, I want my kids to know how to do this. Like, that, that's what I want.
1:18:47 Speaker 01 This is everything we believe in, in education and like building kids up.
1:18:50 Ramit Sethi? Empowering your kids.
1:18:51 Speaker 01 You can handle it and like, you're part of this.
1:18:53 Speaker 02 And I don't know why I.
1:18:55 Speaker 01 I'm just thinking about like, in 20 years, I don't want them, you know, flying to California to have your kid tell them about money.
1:19:04 Speaker 01 Yeah, it's like.
1:19:05 Ramit Sethi? That's amazing. It's funny, when you mention that, actually, I felt my own heart beating faster.
1:19:10 Speaker 01 Yeah.
1:19:11 Ramit Sethi? It's very powerful, what is happening right now. Especially the fact that you are both teachers is like, you're incredibly connected to this concept of teaching and empowering. I love that. I'm a teacher as well, just in a different format. I actually think, Mia, based on what you told me, it would be more empowering for you to give 30K and teach than to give 120K.
1:19:34 Speaker 02 Yeah.
1:19:35 Ramit Sethi? So what does that open up?
1:19:37 Speaker 01 My mind's just blown right now. I just like, I like, you know, we always, the phrase that I do, I talk about in my school is that high expectation with high support. And I have low expectation with low support. And I, and like, do not look at that. And let's make decisions on feelings. It's like, I am having the most cognitive dissonance I've had in 20. It's just like, I like, it's like this weird, you keep talking about like, it's no longer, I'm not like sweating, my hands aren't sweating, it's like tingling feeling a little bit like it's, that's, that's really interesting. I just, yeah, it's.
1:20:09 Speaker 02 This may be like the first time that I've felt like hopeful about money.
1:20:12 Speaker 01 Yeah, I would agree with that, too.
1:20:14 Speaker 02 We just weren't making decisions.
1:20:16 Ramit Sethi? Correct.
1:20:17 Speaker 01 No, we were doing, everything was feeling based.
1:20:19 Ramit Sethi? Invisible scripts, feelings.
1:20:21 Speaker 01 Yeah.
1:20:22 Ramit Sethi? And letting those guide everything.
1:20:25 Ramit Sethi? Honestly, pretty amazing to watch this breakthrough. But what you're about to see makes this all the more magical. Because at this moment, while we were talking, we stood up to take a quick break and I walked out of the room, but the cameras kept rolling. Take a look.
1:20:41 Speaker 01 I think that like I need to figure out the hot tub. We should disconnect it.
1:20:45 Speaker 02 But I think with the kids, we could, we could say like, guys, food, we want to have healthy food. So if we're gonna eat pretty much the same thing every week, if there's something that you want that's different, we're gonna give you a budget and you have that amount of money that you can spend to plan a different meal. But otherwise, we're gonna just like, every week it's gonna be the same thing because
1:21:07 Speaker 01 I love.
1:21:08 Speaker 02 We wanna spend our money elsewhere.
1:21:09 Speaker 01 Dude, and I think about the point where he said, like, I'm afraid of falling on the bath, but I'm not gonna put a mat down.
1:21:14 Speaker 02 The other thing that I'm realizing about.
1:21:17 Speaker 01 We need to talk to the kids about money.
1:21:19 Speaker 02 Well, yes, for sure. But I think, like, when he was talking about like having a different, about feelings and not decisions, like, I would just look at the budget and be like, we're spending too much. That was a feeling. So then like, we just have to spend less. But then it was just like, how, where, what? There was no like.
1:21:37 Speaker 01 Let me type it into this chart.
1:21:39 Speaker 02 There was no like, I want this, so that's what I'm gonna do. Even though like, I knew that kind of, you know? But yeah, I don't, I don't want my kids. I want to teach them. And I love like how he's talking about like, hey.
1:21:59 Speaker 01 The way he phrased it, like, oh my god.
1:22:00 Speaker 02 Yes, yeah.
1:22:03 Speaker 01 I'm giving you this.
1:22:05 Speaker 02 It's a gift and I'm so excited to be able to do it. Let's, let's, you know, whenever you wanna look at your account, we can pull it up and see how much is in there.
1:22:14 Ramit Sethi? This is why I do this podcast. And it is why I am so proud that hundreds of thousands of people are here every single week to witness it. Well done. I am honored to watch this happen in front of me. Now, let's get back to their numbers. The question is, what can we do? To use our money to live our rich life. Who would like to go first?
1:22:36 Speaker 02 I think I would like us to make a decision about like an amount of money that we want to give the kids. And it's not hypothetical. It's not, it's like, we're going to give you this much money. And then, once we've made that decision and we know how much we have left each month, then we look at everything else and figure out.
1:22:55 Speaker 01 That sounds awesome.
1:22:56 Ramit Sethi? Do you have a sense of the number?
1:22:58 Speaker 02 My gut right now is saying like 75,000. If that feels high, I'm open to that being lower.
1:23:06 Speaker 01 Let's meet in the middle and go like 60. I think that that, because I was thinking 50. I think like, would that be something maybe?
1:23:11 Speaker 02 Are you okay? I feel, are you okay with 65? Let's do 65.
1:23:15 Ramit Sethi? 65,000, okay.
1:23:16 Speaker 01 Is that like a random, like again, I feel like I'm.
1:23:18 Speaker 02 It doesn't matter if it's random because at least we decided.
1:23:21 Ramit Sethi? Yes.
1:23:21 Speaker 01 Yeah.
1:23:22 Ramit Sethi? Great, great, great, great insight.
1:23:24 Speaker 01 Do we get, I mean, would you then adjust and go back and it's like?
1:23:28 Ramit Sethi? What I'm going to try to do right now, so we know the age of your kids.
1:23:30 Speaker 02 14, 11, and 3.
1:23:32 Speaker 01 And your ex is contributing some too.
1:23:35 Speaker 02 That is true, is that their dad, it's a smaller amount, but 15,000 per kid.
1:23:41 Ramit Sethi? Oh, okay. So he'll contribute 15,000 for the two kids, the older, older kids. And then you want to get a total of 65,000.
1:23:50 Speaker 02 Yep.
1:23:50 Ramit Sethi? Let's look at the rest of this. We ran some calculations and we'll speak broadly. It will change specifically as you dive into your own numbers. But in general, what we found is that you need to be saving. You want to guess?
1:24:03 Speaker 01 2,300.
1:24:04 Ramit Sethi? Okay. What do you think?
1:24:05 Speaker 02 Uh, 1,900.
1:24:07 Ramit Sethi? Good. It's about 1,600.
1:24:09 Speaker 01 Okay. That's a lot.
1:24:10 Speaker 02 That's a lot less.
1:24:11 Ramit Sethi? A lot less, about half.
1:24:13 Speaker 01 Yes. Yeah.
1:24:14 Ramit Sethi? And the reason that you can save less and still hit your numbers, one, you've lowered the amount, although you didn't really even know how much you were saving anyway.
1:24:23 Speaker 01 Right.
1:24:24 Ramit Sethi? But two, your oldest obviously needs more because they're going to be going to college in just a few years. Your youngest has. Almost decades. So that number is like way less that you need to be putting. So when we combine it all, it's about 1,600 a month. Again, the number will change depending on several variables. You should calculate this carefully at home. So let's put that in 1,600. That's a lot from 2,700 to 1,600.
1:24:51 Speaker 02 Yeah.
1:24:51 Ramit Sethi? Okay, so let's take a look at what's going on here. Right now, we have 57% in fixed costs. We have your investments at 22%. That is your post-tax. Well, that's your pension.
1:25:06 Speaker 01 Yeah.
1:25:07 Ramit Sethi? $1,600 a month going towards the kids. And then you've got 700 bucks going towards your emergency fund, leaving you only 4% in guilt free spending.
1:25:16 Speaker 02 You know how you recommended like separating groceries and gas?
1:25:18 Ramit Sethi? Yeah.
1:25:18 Speaker 02 Can we just like do that?
1:25:19 Ramit Sethi? Yeah.
1:25:20 Speaker 02 Okay.
1:25:20 Ramit Sethi? How much is gas?
1:25:22 Speaker 02 Probably 200 a month.
1:25:24 Speaker 01 Yeah, 200.
1:25:25 Ramit Sethi? I'm moving gas up here to 609.
1:25:28 Speaker 02 And then I think we can get the groceries and gas. I think we can get groceries to 800.
1:25:34 Speaker 01 Yeah.
1:25:34 Ramit Sethi? All right.
1:25:35 Speaker 02 We put the subscriptions down already.
1:25:39 Ramit Sethi? What's this miscellaneous?
1:25:41 Speaker 02 I, I actually think that we don't have to do that. Like, I think we could, like, if miscellaneous was half of that.
1:25:50 Ramit Sethi? All right. Okay, let's do that 600.
1:25:53 Speaker 02 Yeah.
1:25:54 Ramit Sethi? All right, you are down to 52% outstanding. Okay, very good. You've got 9% or $1,216.
1:26:04 Speaker 02 I feel okay with that because in a year, we won't have preschool and that will free up another 1,200.
1:26:11 Ramit Sethi? I like it. Let's, let's zero that out and see what happens. Are you ready?
1:26:14 Speaker 02 Yeah.
1:26:15 Ramit Sethi? So this is, this is what the CSP is most powerful at is projecting ahead. When you pay off debt, like credit card debt, when you pay off a mortgage, when you don't have preschool anymore. It's like, let's just look at our crystal ball a few months in the future. Boom, here we go. You're at 52% fixed costs. I'm zeroing out your preschool. Whoa, down to 43%. That's extremely low. Going down now. Y'all have 18% guilt free spending or $2,400. What do you think about that?
1:26:51 Speaker 01 That feels really good. That's really good. That's the rich life, the idea of being able to spend.
1:26:57 Ramit Sethi? Okay, now let's talk about it, because what do you want to do with that money?
1:27:00 Speaker 01 I'd like to put more into savings, I think.
1:27:02 Speaker 02 I would feel most comfortable if we had six months of like liquid money.
1:27:09 Ramit Sethi? Yeah, so that's about 30, 35,000, let's just say. So, how much you want to put into savings?
1:27:17 Speaker 01 A thousand.
1:27:18 Speaker 02 At least a thousand.
1:27:20 Ramit Sethi? You're already, you're putting 700 right now.
1:27:22 Speaker 02 Should we do like 1,200?
1:27:22 Speaker 01 Yeah.
1:27:23 Speaker 02 1,400, double it?
1:27:24 Speaker 01 Yeah.
1:27:25 Ramit Sethi? All right, I like that. 1,400 a month, which is great.
1:27:30 Speaker 01 Yeah, that feels really good.
1:27:31 Ramit Sethi? That now leaves you with $1,700 a month guilt free spending.
1:27:35 Speaker 01 Yeah.
1:27:35 Ramit Sethi? That's pretty cool. What would you do with that guilt free spending money?
1:27:41 Speaker 02 I'm trying to decide if it's travel first or house first. You'd say house first.
1:27:45 Speaker 01 Probably house first.
1:27:46 Speaker 02 I'm okay with that.
1:27:47 Ramit Sethi? Great, so let's do this, let's call, instead of vacations, which it sounds like you're not prioritizing, let's call it house. And let's put, let's put 750 a month. Let's just see what happens. 750 a month.
1:28:01 Speaker 01 That builds quick.
1:28:01 Ramit Sethi? Yeah, so how long would you need for you to be able to get something for the house?
1:28:06 Speaker 02 Well, let's say we just started with a hot tub, that's probably like 6K.
1:28:09 Ramit Sethi? So that's like a year.
1:28:10 Speaker 01 A year.
1:28:11 Ramit Sethi? A year. Are you cool with that?
1:28:12 Speaker 01 Yep.
1:28:12 Ramit Sethi? Great answer.
1:28:13 Speaker 01 Yep.
1:28:14 Ramit Sethi? Amazing answer, I just want to point something out to you. Most people, when I say like it'll take a year, sometimes it'll take seven years to get what they want. And I go, are you okay with it? They go, that seems like a long time. I go, and?
1:28:25 Speaker 01 Right.
1:28:25 Ramit Sethi? So what?
1:28:26 Speaker 01 Right.
1:28:26 Ramit Sethi? Everybody should be looking, look, get tight on this shot. So what? Oh, it's gonna take a long time. And you're gonna be seven years older anyway in seven years, you might as well have a ton of money.
1:28:37 Speaker 01 Right.
1:28:38 Ramit Sethi? A year from now, that's nothing. To be able to get this awesome hot tub and to have saved for it, no debt, amazing.
1:28:45 Speaker 01 Right.
1:28:45 Ramit Sethi? Okay, 750 a month, that leaves you with $1,000 a month guilt free, eating out.
1:28:52 Ramit Sethi? A random thing you saw on Amazon that you wanted to buy. But that's it.
1:28:57 Speaker 02 Yeah.
1:28:57 Ramit Sethi? And I personally would prefer you clear, leave a little bit of like, do not get to $1,025.
1:29:04 Speaker 01 Yeah.
1:29:05 Ramit Sethi? Right?
1:29:05 Speaker 01 Right.
1:29:06 Ramit Sethi? Clear it with room to spare. Can you all agree to that?
1:29:09 Speaker 01 Yes.
1:29:10 Speaker 02 Yes, and I would love some like specific strategies for like, like when people are doing that.
1:29:16 Ramit Sethi? I'll tell you how to do it.
1:29:17 Speaker 02 Yeah.
1:29:17 Ramit Sethi? So the biggest thing that comes up here and surprises people is eating out. Eating out is a variable cost and it's one of the very few numbers I suggest people track. Here's how you do it to make it even easier. You, just like I said, people who tend to be successful with grocery store shopping, tend to basically buy the same thing all the time. Same thing with eating out. They go, okay, we are going to spend $400 a month eating out. Okay, each time we eat out, on average, this is how much we can spend. And so let's even reverse it one more. How many entrees do we get? Are we getting a drink or two or does none? You already know every month where you are going to go out to eat and what you're gonna order. It's that boring.
1:29:58 Speaker 01 I like that.
1:29:59 Ramit Sethi? People like, they really do not like this. They're like, it takes all the fun out of it. I'm like, but it's actually really fun when you know that on Friday's pizza, and like you're looking forward to it, you know, you get to think about it, you're talking about it. And then when you go there, you, you've, you get to experience it like two times. One is planning it, thinking about it, talking about it, then two while you're there.
1:30:23 Speaker 01 Yeah.
1:30:23 Ramit Sethi? So yeah, you may not have as much serendipity. But didn't you both tell me you want to not have to worry?
1:30:31 Speaker 01 Yeah, and that's the thing. And that's a but, that's more than the other one.
1:30:36 Ramit Sethi? Exactly. And now you have a plan and you can just execute it.
1:30:39 Speaker 01 Yeah, I love it.
1:30:40 Ramit Sethi? Good question, great question. If we zoom out of these numbers, are you living your rich life? Often when we are fiddling with numbers, we're down in the weeds. And I always like to zoom out and be like, hey, does this actually feel good? If we, if we execute on all this stuff flawlessly.
1:31:01 Ramit Sethi? Are we actually living our rich life? Or did we just mechanic our way into moving numbers around in another way? So do you all like this as your rich life or not?
1:31:10 Speaker 01 I absolutely do. And I think that having a plan and I think that through this conversation, part of my rich life is not stress of pulling from savings. And I think that that like I've recalibrated a little bit in a way of understanding it. And I, and I'm like, now I'm trying so hard to not go straight to approaches and like, how am I going to do this, this, this? But it's like, I'm already like planning afterwards, like what the app's going to look like. And I think that that is going to be helpful, like knowing we know exactly what day we're going to go out to. And that is part of my rich life. And I've talked with that, with me about those kinds of things.
1:31:45 Ramit Sethi? Mia, how do you feel? Is this living your rich life?
1:31:48 Speaker 02 Yeah. And I think especially because I think I was confusing saving for college with preparing my kids for the future.
1:31:57 Ramit Sethi? Yeah.
1:31:58 Speaker 02 And those aren't the same thing.
1:31:59 Ramit Sethi? Great insight. Great insight. If anything, dumping a bunch of money on kids. I mean, it helps them with avoiding some amount of debt, but it doesn't teach them much.
1:32:08 Speaker 01 Right.
1:32:08 Ramit Sethi? You both are examples of that. And so you changing the generational messages you received, you know, in general, you receive very good messages, which is nice, but because of the benefits your parents gave you, you can raise the bar on what you give your kids. That's amazing. What surprised you about our conversation today?
1:32:28 Speaker 01 My biggest thing is how I'm perpetuating so much of what I had as my own childhood of money being in, how I've gone against every belief I have about using data, building capacity, trusting our kids. And how just because I was scared of something, I've been like the worst version of myself around money. I think is probably what I would describe it as. And I think that was very eye opening today. And I think, like you said, is digging in. I'm starting to feel a little bit more comfortable digging in if there's an actual goal there.
1:33:00 Ramit Sethi? Nice. Beautiful. Mia?
1:33:01 Speaker 02 I think my biggest surprise was that confusion between.
1:33:08 Speaker 02 Giving the kids money versus preparing them for money. Like, I did not think about it like that at all. And that feels so, that just like, I feel so much lighter.
1:33:22 Ramit Sethi? Yeah, yeah, I can see that that specifically, I think probably because of your professions and the way that you relate to your kids, like, that really connects.
1:33:32 Speaker 01 Yeah.
1:33:32 Ramit Sethi? And that's beautiful.
1:33:33 Speaker 01 Yeah.
1:33:33 Ramit Sethi? That's beautiful. What about resentment? When we began talking, there was a difference in how you looked at money. Do you think there will be resentment about money ongoing?
1:33:45 Speaker 01 I don't feel like it because I think that, like, I feel like a weight has been lifted off our chest of taking from the savings. And I think that if we're, if we follow our plan, which I know we will, like, once we get a clear plan and have steps to it that will do it, that it's not going to be like, all this hard work isn't for nothing. It's all this hard work is so that we're setting up for everybody to thrive and, and kind of do that as opposed to saving, setting up all this hard work so that it can just all go to this big lump of money that we don't even know, we haven't thought about.
1:34:14 Ramit Sethi? Great.
1:34:15 Speaker 02 I absolutely do not think that there will be resentment. And I think one of the reasons is that we have a way to make a decision that we feel good about. And when we do that, there won't be resentment because we made the decision together. And that difference between letting feelings guiding our money instead of decisions guiding our money.
1:34:36 Speaker 01 And that resentment or the resistance came from a lack of clarity and a lack of understanding. So I didn't want to dive in because it didn't make sense to me. And now I kind of like seeing you go through the numbers and like, we can do that. Like, that, that makes sense other than just clicking numbers on a keyboard.
1:34:51 Ramit Sethi? Totally. There's a purpose behind it.
1:34:53 Speaker 01 Yeah.
1:34:54 Ramit Sethi? I have a lot of confidence in them. Mia and Jake were so open with the feedback that I gave them, so willing to engage that I think they're actually going to do an amazing job. For years, they have been talking around making decisions. And I helped them immediately make some of the biggest decisions of their financial life. Watching them light up when they talk about getting their kids involved, that was when I knew this is going to stick. So I cannot wait to hear what they end up doing. Let's take a look at their follow-ups.
1:35:27 Speaker 02 Hey, Remy, it's Mia and Jake, and we just wanted to follow up with our homework.
1:35:33 Speaker 01 Our biggest surprise, or for me at least, is the unwritten rules that I followed that were really guiding my past and I wasn't really diving deep into them. So it was really fascinating to explore.
1:35:42 Speaker 02 Yeah. My biggest surprise is how much better I felt even though we're standing less for college. And that's because we feel really aligned in the belief that we want to teach our kids about money, not just give them money.
1:35:57 Speaker 01 My biggest takeaway is it doesn't matter which money we have. I'm always going to have to be concerned with money. I used to think that if I could just keep making more and more money, eventually I wouldn't have to worry about it. And all my problems would go away, but that's not the case. And I'm good with it because we have a process now for that.
1:36:10 Speaker 02 My biggest takeaway is that we are finally aligned in the way that we talk about money and that is aligned in our values. So we just feel really connected and it doesn't feel stressful anymore. We've made a few specific changes. So now that we know how we want to spend our money, it's been so much easier to go through our subscriptions and our just regular expenses and say like, yes, we want to keep doing that. No, we don't want to do that. So it's probably like the biggest change that we've made so far is just really starting to audit our spending and say like, keep doing it, stop doing it.
1:36:46 Speaker 01 And we have confidence in doing so and that makes the biggest difference. So we just want to say thank you so much. We're so lucky that you guys took the time to meet with us. Hey, Remy, it's Jake and Mia here. We just got back from vacation and I actually enjoyed it because for the first time ever, I knew where our money was coming from and how much money we had and how much money we could spend. So it really took a lot of the fear out of it.
1:37:10 Speaker 02 Yeah, we've had two of our money meetings so far and those are the first two conversations we've ever had as a couple about money that did not feel contentious. It actually felt like we were on the same team, working forward. And it's allowed us to be super intentional with our money, which I think is one of the biggest shifts for us is we're not necessarily spending less. We're just really investigating why we're spending what we're spending and then choosing to do it with much more intentionality.
1:37:40 Speaker 01 Yeah, and I've really realized how we have to be consistent. You know, we can't just miss certain things, but it's definitely worth it because I'm no longer a grumpy old man on vacation. I'm so grumpy, but at least I know where the money's coming from. So we just wanted to thank you so much for everything.
1:37:56 Speaker 02 Thank you so much. It was life changing.
1:37:58 Speaker 01 Absolutely. Thank you.
1:37:59 Ramit Sethi? If you want to know the exact month and year that you will have $100,000 in your investment portfolio, sign up for my new program, Road to 100K. I'll help you hit that number fast. Go to iwt.com/100k to sign up.
Previous 269. "I want to retire, but my wife is too scared" Next 271. "He hid $30K of debt a month before our wedding" Page updated October 29, 2026 · transcript and summary are machine-generated