273. "We Spend 139% of our Income and still fund our adult kids"

Ramit Sethi of I Will Teach You To Be Rich speaks with Mary and Harry, 57 and 62, who are approaching retirement while spending more than they earn every month. They have a blended family of seven adult children and continue stepping in whenever one of them needs money, housing support, childcare, repairs, or help managing another crisis. Mary handles nearly all of their finances and feels overwhelmed almost every day. Harry’s income is inconsistent, and about a year ago, he revealed that he had accumulated $43,000 in credit card debt without telling her. Mary initially feared he was about to confess to an affair. Instead, she discovered that decisions she had been making were based on an incomplete picture of their finances. Today, they have approximately $476,000 in assets, $499,000 invested, just $3,000 in savings, and $435,000 in debt. Their net worth is around $542,000, but their fixed costs have reached an unsustainable 139%. With retirement approaching, Ramit makes it clear that small cuts will not be enough. Harry needs to substantially increase his income, they may need to sell their home and rent, and both of them must stop treating their adult children as financially dependent. In this episode, we uncover: Why Mary thought Harry was confessing to an affair How Harry accumulated $43,000 in secret debt Why their fixed costs reached an alarming 139% How they spend more than they earn every month Why they have only $3,009 available in savings Their $476,000 in assets and $435,000 in debt Why Mary thinks about money almost every day How supporting their adult children created more debt Why they gave one child between $20,000 and $30,000 How financial secrecy damaged Mary’s trust in Harry Why Mary became solely responsible for their finances How guilt prevents them from saying no to their children Why Mary continues covering some expenses for her adult son The text Mary sends removing him from their phone plan Why Harry needs to increase his income to $5,000 monthly How renting could reduce their fixed costs to around 59% Why selling their house feels like failure to Mary How renting could free up more than $2,000 each month Why boundaries could make their adult children stronger Whether they can transform their finances before retirement Chapters: (00:00:00) Introduction (00:02:38) Adult children, broken trust, and income imbalance (00:05:16) Harry reveals his hidden credit card debt (00:06:50) Mary fears Harry is about to confess to an affair (00:08:44) Their blended family of seven adult children (00:11:19) Rebuilding trust after financial secrecy (00:18:07) Why Mary manages the finances alone (00:24:21) Mary fears carrying a mortgage into her 80s (00:28:04) What happens if nothing changes? (00:32:20) Would they fund another family emergency? (00:35:53) How Mary inherited her beliefs about money (00:52:03) Their retirement savings and pensions (00:59:39) The true cost of rescuing their adult children (01:16:23) Ramit reviews their Conscious Spending Plan (01:18:27) Their fixed costs reach 139% (01:22:32) Mary texts her son (01:26:59) Cutting groceries, clothes, and subscriptions (01:29:00) Harry must dramatically increase his income (01:32:25) Should they sell their house and rent? (01:54:48) Mary and Harry’s follow-up This episode is brought to you by: Superhuman Mail | Sign up for Superhuman Mail today at https://superhuman.com/podcast. Fabric by Gerber Life | Go to meetfabric.com/RAMIT and apply today, risk-freeGrow Therapy | Visit https://growtherapy.com/ramit to find a therapist today NetSuite | If your revenues are in the seven figures, go to https://netsuite.ai/ramit to try NetSuite Next for free 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

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

• 0:00Speaker 00

  He said, I need to talk to you. I thought, oh, he's having an affair. He told me I had $50,000 in debt. It got us into a bigger hole.

• 0:09Ramit Sethi?

  Fixed costs are at 139%. Unacceptable.

• 0:12Speaker 00

  We are spending more than we make.

• 0:15Ramit Sethi?

  It is a grave danger.

• 0:17Speaker 00

  I worked really hard to get where I'm at. Then I made stupid decisions about helping my kids out.

• 0:24Speaker 02

  I've put us in debt. I should have said there and then, we cannot afford it. We cannot do it. I wasn't brave enough.

• 0:31Speaker 00

  I get a text. I have to go pick up my daughter. Can you give me some gas money?

• 0:37Speaker 02

  We pay for a decorator to come around and paint the house.

• 0:39Ramit Sethi?

  How old is this person?

• 0:40Speaker 00

  36. I just want to help my kids.

• 0:44Ramit Sethi?

  What about helping yourself?

• 0:45Speaker 00

  I don't know.

• 0:46Ramit Sethi?

  These boundaries are the things that allow you to retire. It's not just about saying no to your kids. It's actually about saying yes to your life. What is going to happen if nothing changes?

• 0:57Speaker 02

  Destitute, homeless. We will end up with nothing.

• 1:03Ramit Sethi?

  What would you do if you got to your 50s or 60s? And you didn't have enough money saved? Today I'm speaking with Mary and Harry. They are 57 and 62 years old. They spend more than they make every single month. And they continue to subsidize their adult children. Just listen to their numbers. I'm going to take a look at their conscious spending plan. Assets, $476,000. Investments, $499,000. Savings, $3,009. Very low. Debt, $435,000. Total net worth, $542,000? Fixed costs, 139%. That's the ballgame. Completely untenable.

• 1:47Ramit Sethi?

  And with savings of only $3,000? They are essentially hours away from running out of money. What you are seeing here is an extremely dangerous situation. Consider, not only is this couple spending more than they make. Not only does this couple have less than $5,000 in savings. This couple is in their 50s and 60s. So time is beyond of the essence. We've got to make huge changes and we've got to make them right now. I will say, I am thankful that they came to talk to me. Because burying your head in the sand is not a strategy. And I hope that we can make some huge changes together and do it quickly. Now, let's meet Mary and Harry.

• 2:33Ramit Sethi?

  Mary, you wrote something in your application to me that I would like to read. You wrote, "The biggest challenge in our relationship is a combination of adult children, broken financial trust, and a severe income imbalance. Most of the financial strain related to the adult children comes from my children, though his children have also contributed at times. Their ongoing crises and financial dependence are draining our resources and putting us at serious financial risk." Is that accurate?

• 3:08Speaker 00

  That's very accurate. And he has not read the application.

• 3:12Ramit Sethi?

  Is that right?

• 3:13Speaker 00

  So he doesn't know what I wrote.

• 3:15Ramit Sethi?

  Harry, what's your reaction to that, hearing it for the first time?

• 3:17Speaker 02

  Total agreement. We've helped them. Now we really need to help ourselves.

• 3:22Ramit Sethi?

  Okay. What was behind when you wrote that? Where were you and what was happening?

• 3:27Speaker 00

  I was incredibly overwhelmed. We have given one of my children quite a bit of money.

• 3:36Ramit Sethi?

  How much?

• 3:38Speaker 00

  Probably $20,000, $30,000. And the problem is, it was out of our HELOC. So it contributed to a huge chunk of debt. And Harry's income is inconsistent. So it's hard to manage the finances every month. And it's a huge burden. A burden that I bought on us, a burden that Harry's contributed to. And I do the finances. So it was, I was just overwhelmed. I was probably done at that point, you know? Ready to do, to escape.

• 4:19Ramit Sethi?

  How often do you feel overwhelmed with money?

• 4:21Speaker 00

  Most of the time, almost every day. It is always on my mind. Yeah.

• 4:27Ramit Sethi?

  You wake up, you think about it? Go to work, you think about it? At night, you think about it?

• 4:32Speaker 00

  Mm-hmm.

• 4:33Ramit Sethi?

  What do you feel when you, money is on your mind?

• 4:37Speaker 00

  I'm angry at myself for contributing to our, our financial difficulties, the debt that we're in. And I keep trying to maneuver figures around to see if we can do something better. We don't live outside of our means. We hardly go out to eat. We don't buy a lot of clothes. Harry drives, what, 2007 Subaru? That's held together with duct tape and zip ties, you know? So I don't know what else to cut.

• 5:12Ramit Sethi?

  If you don't live above your means, what do you think is going on here?

• 5:16Speaker 00

  I've made some very poor choices. He's made some very poor choices. And it's very easy to point a finger and blame each other. I think we got ourselves into a big mess with having this HELOC and not using it appropriately. So now we're in a ton of debt. There were instances where Harry was not honest with me about his debt. He recently, about a year ago, told me I had $50,000 in debt. So a lot of decisions we made, or I made, without knowing about that. And so it got us into a bigger hole.

• 5:59Ramit Sethi?

  Feels like a lot.

• 6:00Speaker 00

  It is a lot.

• 6:01Ramit Sethi?

  And Harry, where are you on this? The 50K of debt? What was that?

• 6:05Speaker 02

  I was actually 43K in debt. COVID hit me, as it did a lot of the population. The big factor is, I ran on several credit cards over a period of time.

• 6:18Ramit Sethi?

  What'd you charge on them?

• 6:19Speaker 02

  Oh, just living, purchasing, flights back to the UK. Just general living. Supported minimally with the money I was bringing in. Last June, I saw that Mary was struggling with her side of the financial debt, which I've contributed to. And I had to be brave enough, courageous, to tell her where I was at and what I'd brought to this.

• 6:47Ramit Sethi?

  And what was that conversation like? What do you remember about it?

• 6:50Speaker 00

  He said, I need to talk to you. And we went outside and sat in the rocking chair under the trees. And I thought, oh, he's having an affair. But thank goodness he wasn't. So I was like, oh, God, what is he going to tell me? And he just said, he just spit it out. I think he said 50,000.

• 7:18Ramit Sethi?

  And what was your reaction?

• 7:19Speaker 00

  Shocked. That's a lot of money. I knew he wasn't being truthful about things. Because he wasn't being forthcoming with money, any conversations about money. Just I couldn't get a straight answer from him. So I guess I wasn't surprised, but I was shocked at the amount of money. But I didn't, I didn't yell or scream at that point.

• 7:46Ramit Sethi?

  What did you do?

• 7:47Speaker 00

  I told them to research all the different options. Bankruptcy, debt consolidation, and that we would work through it. And we'd, we'd figure, we had to figure something out. So.

• 8:01Ramit Sethi?

  Today, are you better off or worse off?

• 8:06Speaker 02

  The 43K was immediately dealt with by a debt consolidation company, who advised me as not to go into bankruptcy. So I followed pursuit of that. And they got it down to 21. Right now, I'm at 18 with payoffs.

• 8:23Ramit Sethi?

  Okay. How long have the two of you been together?

• 8:26Speaker 02

  16 years.

• 8:27Speaker 00

  16 going on 17.

• 8:29Ramit Sethi?

  Married for that long?

• 8:30Speaker 00

  No, no. We bought a house together in 2014. So that's when we would say, we were common law married, married in a bank.

• 8:40Ramit Sethi?

  Are you legally married now?

• 8:41Speaker 00

  Yes.

• 8:42Ramit Sethi?

  Are there children involved here?

• 8:43Speaker 00

  Yes, we have a blended family. Seven kids all together, all grown. Harry has three boys in the UK. And a son out here in the States. And then I have two boys. One lives in Australia. One lives close to us. And then a daughter as well. And we also have five grandchildren, one on the way. And one of the grandchildren we have. We're fostering one of our grandbabies. Yeah.

• 9:19Ramit Sethi?

  Got it. Okay, great. How old is that grandchild that you're fostering?

• 9:24Speaker 00

  He's almost five months.

• 9:26Ramit Sethi?

  Five months, wow. Okay, great. What role does money play in your relationship?

• 9:32Speaker 00

  It's just a big obstacle for our relationship and moving forward and having the life we want to have. We do argue a lot. I feel very lost on how to get out of this big hole and how to talk about it. It is one of the things we argue the most about. We argue about money. And we argue about our kids sometimes, but it's usually because of money. So it just feels like an obstacle we can't overcome. Yeah.

• 10:05Ramit Sethi?

  Would you say that you have been trying to overcome it? Or have you been trying to ignore it?

• 10:10Speaker 00

  Both. I try to overcome it. And then I get frustrated and I ignore it for a long time.

• 10:22Ramit Sethi?

  And what about we? I hear you. What about we as a couple?

• 10:26Speaker 00

  We talk, but we don't get anywhere. We don't have the answers. We don't know where to go forward. We have our home. It's our biggest expense. And it feels like that is what's staring at us in the face. Like, you might not be able to afford this house. But it also feels like, even if we sold our house, it would feel like I'm a failure. It really would.

• 10:54Ramit Sethi?

  Do you feel like you're a failure with money now?

• 10:56Speaker 00

  Yes. I feel like I worked really hard to get where I'm at. And then I made stupid decisions about helping my kids out. And it put us in a really bad space. That's my contribution to our debt.

• 11:16Ramit Sethi?

  Okay. Harry, what's the role of money in your relationship?

• 11:19Speaker 02

  Well, obviously not speaking with Mary about my financial misuse since.

• 11:27Speaker 02

  Revealing to Mary what I'd done on my own to put us in a hole. I felt a massive sense of relief telling Mary that we need to stop the bleeding, work a game plan together and be hardcore on taking care of ourselves before we take care of anybody else.

• 11:54Ramit Sethi?

  Have you done that? What's the game plan that you're working with right now?

• 11:58Speaker 02

  Well, in terms of revenue, I work in sports coaching. I've started building up slowly my coaching, private coaching, skills lessons, et cetera, et cetera, which is evolving. I'm generating a lot more income to contribute to the house account.

• 12:15Ramit Sethi?

  So you're increased your earnings. That's good. Now, Mary, you mentioned that when you talk about money together, that it is frequently combative. Can you think of a time in the last few months where you've had a combative conversation?

• 12:29Speaker 00

  It usually happens when I'm stressing about money and I'm like, we have to make more money. We have to figure this out. I started getting on him about what are you doing to get clients? What do you, you need to be more aggressive. You need to charge more money for sessions. You can make more money and you know, you just have to go for it a bit more.

• 12:52Ramit Sethi?

  So can we recreate this conversation?

• 12:53Speaker 00

  Yeah.

• 12:54Ramit Sethi?

  Who was the one who began that conversation?

• 12:57Speaker 00

  Probably me.

• 12:58Ramit Sethi?

  Okay, go ahead and speak to him and I'll just listen in.

• 13:00Speaker 00

  Harry, you need to make more money. I don't see you working very hard to get clients and I know that people want you to coach them. I know they want clinics and I just don't see you being aggressive and getting that.

• 13:22Speaker 02

  I understand and I, I can see that coming from you.

• 13:27Ramit Sethi?

  Is this how the conversation goes?

• 13:29Speaker 02

  Yeah.

• 13:30Ramit Sethi?

  Are you sure? I'm finding it's hard to believe. I don't think you all talk like this. There's not a single sentence of combativeness in this. I'd never heard a couple talk like this.

• 13:37Speaker 00

  No.

• 13:38Ramit Sethi?

  How does it really go?

• 13:39Speaker 00

  Maybe a better conversation would be when we're talking about when I give some money to my son for gas.

• 13:46Ramit Sethi?

  Okay, talk about it.

• 13:47Speaker 00

  Harry, I gave Patrick 80 bucks for gas because he's helping us. He's coming down to fix your car and he needs gas money.

• 13:57Speaker 02

  Okay.

• 13:58Ramit Sethi?

  That's it?

• 13:59Speaker 02

  I have no choice.

• 14:01Ramit Sethi?

  What do you say?

• 14:02Speaker 00

  That's what he says.

• 14:03Ramit Sethi?

  You say, okay, and that's it? It's like a pained okay. Is that it?

• 14:08Speaker 02

  I'm not in pain over it. From day one, I said, no, we can't afford it.

• 14:15Ramit Sethi?

  And then?

• 14:16Speaker 02

  I swear it's now 30 plus thousand dollars. I said, no to both of them. We cannot afford it. We cannot do it. The hidden part of that was still, I'd not revealed to Mary my current. So there's a, there's a balance there of I've put us in debt. Here's another one coming. I should have said there and then. That was a moment for me to be, I wasn't brave enough.

• 14:47Ramit Sethi?

  So is the idea, I, Harry, kept this secret, $50,000 in debt. And therefore, who am I to say, you can't help your son?

• 14:58Speaker 02

  Right. I should have been stronger and I wasn't.

• 15:01Ramit Sethi?

  Okay. So what is the dynamic happening here?

• 15:04Speaker 00

  I would do it anyway. I would justify it. There's a granddaughter involved, which makes it really hard not to help out. And that's not good for our relationship, obviously. So I don't know how to say no to my kids and I would justify it. I just want to help them. I just want to help them.

• 15:26Ramit Sethi?

  You still don't know how to say no as of today, right?

• 15:28Speaker 00

  And I still struggle. I'm in therapy to learn how to say no and.

• 15:34Ramit Sethi?

  How long have you been doing that?

• 15:35Speaker 00

  Hmm, just recently. I don't like seeing my kids struggle. I don't want to see my son lose access to our granddaughter, which would mean I, we would lose access to her, you know? And if he doesn't have a working vehicle, how's he gonna work? How's he gonna see her? And I'm making decisions based on emotion and it's really hard.

• 16:02Ramit Sethi?

  When you zoom out and you look at that conversation that you had, what role did each of you play?

• 16:08Speaker 00

  I played the aggressor, the boss. We need more money. You need to make more money.

• 16:15Ramit Sethi?

  And then when it came to spending on your son?

• 16:17Speaker 00

  The sole decider.

• 16:19Ramit Sethi?

  Right.

• 16:20Speaker 00

  Yeah.

• 16:20Ramit Sethi?

  Yeah. Here's what's happening. Okay. And Harry, what role did you play?

• 16:23Speaker 02

  I just let it bypass me.

• 16:25Ramit Sethi?

  You just said, okay. In one ear, out the other.

• 16:29Speaker 02

  Yeah.

• 16:29Ramit Sethi?

  Sort of like, whatever.

• 16:31Speaker 02

  Yeah.

• 16:31Ramit Sethi?

  Hands up, whatever. And what about the part about the, you need to earn more money? What role did you play in that?

• 16:36Speaker 02

  I didn't really have a role. I just lay down and took what was coming my way.

• 16:41Ramit Sethi?

  Yeah.

• 16:41Speaker 02

  Because of self, just selfishness guilt over what I had done.

• 16:49Ramit Sethi?

  What do you notice about both of your roles? When you're talking to each other about money in your relationship? What do you notice?

• 16:55Speaker 02

  There's no game plan between us.

• 16:57Ramit Sethi?

  Yes. What else?

• 16:59Speaker 00

  At first I'll try to be nice. I don't want to hurt Harold's feelings. So I'll be, I'll walk softly and then I get frustrated.

• 17:11Ramit Sethi?

  What I noticed is both of you take a self-centered approach. It's all about you.

• 17:16Speaker 00

  Okay.

• 17:17Ramit Sethi?

  You have the thing you want to accomplish out of the conversation. Mary, you want to tell him he needs to earn more money or pay for your kids in some way? And that's what's going to happen. You're just going to tell them. Harry, you are uncomfortable with these conversations. And so in your mind, like you said, I just lay down and take it because I want it to be over. You're not actually having a conversation. It's the chaser, the avoider. It's one person being the aggressor, the other passive and just hurry up. Let's get this over with. You can't be a team when you have this dynamic. It doesn't matter what the numbers look like. I would like to take a look at your numbers.

• 18:01Ramit Sethi?

  Before I put them up, what was it like to create the conscious spending plan together?

• 18:07Speaker 00

  I did it and when I needed a number from him, I would just say, Harry, what's this?

• 18:17Ramit Sethi?

  Why didn't you do it together? Isn't that the instructions?

• 18:19Speaker 00

  Because it's easier if I do it. I don't know if we would have done it unless I did it.

• 18:27Speaker 02

  I didn't know when Mary was doing it. So I felt I was being left out.

• 18:35Ramit Sethi?

  Did you invite him to do the CSP together?

• 18:38Speaker 00

  Um, probably not. I probably just did it. I know he didn't want to do this.

• 18:43Ramit Sethi?

  Ah.

• 18:44Speaker 00

  So.

• 18:45Ramit Sethi?

  Okay, got it. So is this a, this is a common thing?

• 18:48Speaker 00

  Yes.

• 18:49Ramit Sethi?

  What are you noticing? You look kind of embarrassed right now. What's going on right? What are you realizing?

• 18:52Speaker 00

  Um, I make decisions for us.

• 18:55Ramit Sethi?

  Yep.

• 18:55Speaker 00

  And then I say, this is what we're doing because I want to do it.

• 18:58Ramit Sethi?

  Mm hmm. And then Harry doesn't participate in part because I don't think you really like money or at least managing money. But also you both have a dynamic where you don't invite him. So he goes, great. She didn't invite me. I trust her. You know what you're doing. You're good with money, even though you're not. And so each person goes off into their own corner and does their thing. Meanwhile, what happens to the money? It just gets spent. Mary and Harry are in a self-reinforcing loop that is very difficult to get out of. Mary likes to have control. So she manages the money. By the way, she's not particularly good at it. Harry feels guilty about money because he has this secret spending. So he doesn't want to say anything about money.

• 19:43Ramit Sethi?

  It's not even his place. So he goes, oh, you're so good at it, babe. You handle it. So then Mary feels alone. She's now forced to manage the money poorly again. Oh, and by the way, she can't say no to anybody. So she just ends up giving everybody a bunch of money. Do you see how it's like a snowball and it just builds on itself? It gets faster and bigger, except the bigger it gets, the worse it gets for them? This is very difficult to escape from, but I need them to see this dynamic so that they can get out of it. We're going to take a look at their numbers right after this. Okay, I need to take you behind the scenes of how we make this podcast work so that it shows up every Tuesday for you. We've got a full production team that manages finding and interviewing potential couples. They edit, they produce the actual recordings.

• 20:28Ramit Sethi?

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• 21:11Ramit Sethi?

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• 21:35Ramit Sethi?

  Very common scenario I see when I talk to couples with kids on the podcast. A young couple struggling to afford their day to day lives, but they will not stop contributing to their kids' 529s. I get it. Parents want to provide for their kids, but a 529 is not the only option. One thing you may want to consider is term life insurance from Fabric by Gerber Life. Fabric by Gerber Life is term life insurance you can get done today. It's made for busy parents like you, all online, on your schedule, right from your couch. You could be covered in under 10 minutes, often with no health exam required. And if you've got kids, especially if you're young and healthy, now is the best time to lock in low rates.

• 22:18Ramit Sethi?

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• 23:02Speaker 00

  Assets is $476,000. Investments is $499,924,000. Savings is $3,009. Debt is $435,978 for a total net worth of $542,955.

• 23:30Ramit Sethi?

  Okay. What do you think about those numbers?

• 23:32Speaker 00

  I guess it was about what I thought it would be.

• 23:35Ramit Sethi?

  And when you look at these numbers, do you feel anything?

• 23:37Speaker 00

  Oh, that's, we need a lot more in savings. And obviously, if I want to retire at 65, we need to increase our investments quite a bit, too. What scares me is we have the mortgage. So, and it's a 30-year mortgage, which we've been paying on not that long. So, we'll be in our 80s paying a mortgage. And that, to me, is not, we can't do that.

• 24:05Ramit Sethi?

  Okay. Harry, what do you think about these numbers?

• 24:09Speaker 02

  They're not very good for the future. Should we wish to retire, if we even can?

• 24:15Ramit Sethi?

  What part concerns you the most?

• 24:17Speaker 02

  I think being locked into the house, knowing that I'm not going to live for 30 years.

• 24:22Ramit Sethi?

  Let's take a look at the rest of the numbers. Okay. Harry, can you read off the combined monthly gross income?

• 24:31Speaker 02

  $7,850.

• 24:33Ramit Sethi?

  Okay, great. So, I understand that that number is variable, but let's take it as an average, shall we? So, that means combined, the two of you, do you know your household income, annual household income? $94,000, did you know that?

• 24:46Speaker 00

  Around that.

• 24:48Ramit Sethi?

  Harry, what'd you think it was?

• 24:49Speaker 02

  Yeah.

• 24:50Ramit Sethi?

  Yeah?

• 24:50Speaker 02

  Yeah.

• 24:51Speaker 00

  I was thinking around 95, as I make 76 and then, you know.

• 24:55Ramit Sethi?

  All right. Shall we look at the rest of the numbers? So, fixed costs. Mary, what's that number there?

• 25:01Speaker 00

  $139, yeah. That's, that's what freaked me out.

• 25:04Ramit Sethi?

  What does that tell you?

• 25:05Speaker 00

  That we are spending more than we make.

• 25:09Ramit Sethi?

  Every month?

• 25:10Speaker 02

  Yep.

• 25:10Speaker 00

  Every month. Yeah.

• 25:12Ramit Sethi?

  You're spending far more than you make every single month.

• 25:16Speaker 00

  Yeah.

• 25:16Ramit Sethi?

  That is the ballgame.

• 25:17Speaker 00

  Yes.

• 25:18Ramit Sethi?

  That's it. Nothing else matters. Right there, that is why you feel anxious about money? That is why you are running out of money? And considering that you have $3,000, do you know how long you can last?

• 25:32Speaker 00

  About a week.

• 25:33Ramit Sethi?

  Two weeks.

• 25:34Speaker 00

  Two weeks, yeah. And we have a little less than that now, yeah.

• 25:38Ramit Sethi?

  It is a grave danger. Let's continue. Investments are at 8%. Your savings are at 14%. Let me take a big guess. Let me guess that in the last two to three months, you've started contributing money to your savings. True or false?

• 25:54Speaker 00

  False.

• 25:55Ramit Sethi?

  Tell me. I love to be surprised.

• 25:57Speaker 00

  I always automatically take money and it automatically goes into my savings account.

• 26:03Ramit Sethi?

  Then why is there only $3,000 in your savings?

• 26:05Speaker 00

  Because then I use that to cover.

• 26:08Ramit Sethi?

  Your kids?

• 26:09Speaker 00

  Kids, whatever, yeah.

• 26:11Ramit Sethi?

  Okay. And then finally, we have guilt-free spending at, what's that number?

• 26:15Speaker 00

  Negative 6%?

• 26:17Ramit Sethi?

  61%.

• 26:19Speaker 00

  61%.

• 26:21Ramit Sethi?

  You are spending.

• 26:22Speaker 00

  Yeah, 61%.

• 26:23Ramit Sethi?

  An extra, at least $3,000 per month. Then you make.

• 26:29Speaker 00

  Yeah.

• 26:30Ramit Sethi?

  What does all of this tell you?

• 26:31Speaker 00

  Well, it's not sustainable. Sometimes I feel it's not that bad.

• 26:35Ramit Sethi?

  Why do you think it's not so bad?

• 26:37Speaker 00

  And I shouldn't say, in December, we refinanced the house and we put the HELOC and what I owed on one of our cars into one loan. Oh, and the credit card debt. So, now, we don't have credit card debt.

• 26:55Ramit Sethi?

  So, this is why you think it's not so bad?

• 26:57Speaker 00

  So, it doesn't feel that bad because I can pay the credit cards every month. But in reality, it's all now tacked on to our, our mortgage. It was about probably another $100,000 when it was all said and done, added to our mortgage. Yeah.

• 27:15Ramit Sethi?

  What do you think about that?

• 27:16Speaker 00

  It feels like we're never gonna get that paid off.

• 27:21Ramit Sethi?

  You want me to be honest with you? You probably won't.

• 27:24Speaker 00

  Yeah.

• 27:24Ramit Sethi?

  Not the way you treat money today.

• 27:26Speaker 00

  Yeah.

• 27:27Ramit Sethi?

  What is going to happen if nothing changes?

• 27:30Speaker 02

  Destitute, homeless, just miserable and looking forward to death.

• 27:40Ramit Sethi?

  I'm not amused. I'm taking this more seriously than you are.

• 27:43Speaker 02

  I'm right on track with that because we have absolutely, we would, we have absolutely nothing and nothing to look forward to.

• 27:55Ramit Sethi?

  That's not true. That's not true. You are engaging in hyperbole to avoid the reality of the situation because it's easy to say destitute and we have nothing. You have $499,000 in investments. You have a $476,000 asset. You have some kind of pension. So, it's actually disrespectful to simply say, destitution, we have nothing. No, engage in reality. Be specific. What is going to happen if you make no changes? I want exact specifics of what is going to happen.

• 28:27Speaker 02

  If nothing changes, we will end up with nothing.

• 28:33Ramit Sethi?

  How long?

• 28:34Speaker 02

  A year.

• 28:36Ramit Sethi?

  A year?

• 28:37Speaker 02

  I'm just throwing that out. If we go on like we are going, seeing those numbers up there, we'd be dipping into, which we have been, to everything we've got just to continue down that pathway of oblivion.

• 28:54Ramit Sethi?

  You don't look at numbers frequently, do you?

• 28:56Speaker 02

  I do, but not in depth. If, if I have a dollar, could I make it two? Could I make it five?

• 29:07Ramit Sethi?

  Yeah.

• 29:07Speaker 02

  And I think we have that. We just don't know how to do it.

• 29:11Ramit Sethi?

  No, you don't have that. I'm looking at the same numbers you are.

• 29:14Speaker 02

  Okay.

• 29:15Ramit Sethi?

  You do not have some magical way to quintuple your money.

• 29:19Speaker 02

  No.

• 29:19Ramit Sethi?

  If you were 25, you would, because you just let it sit in the market. You are not 25. You were in your 50s and 60s. So, that's not happening. What you have is very simple math. I will never ask anyone to do complex math on this show. It costs you about $7,000 a month just to keep the lights on. You have $500,000. So, even if we go like a full year with no income, you could theoretically draw from your investments, all of it, and you could still go years just coasting off your investments. Now, would I do that? No, that would be extremely dumb. But we need to be living in reality with these numbers.

• 30:04Ramit Sethi?

  So, Harry, when you say like, we have a year, maybe, no, just looking at these numbers, $500,000, it costs you $7,000 a month just to keep the lights on, which is like, let's just say about $90,000, $100,000 a year. That's at least five years purely based on investments.

• 30:21Speaker 02

  Okay.

• 30:22Ramit Sethi?

  Okay? Mary, what happens if you change nothing?

• 30:27Speaker 00

  We're just gonna continue how we are, not, not making ends meet. I mean, we'll be, we'll be able to live for a while, but it'll still be stressful. We won't be able to live our lives that we want to live, travel, go out to eat once in a while, you know? And eventually, it'll catch up to us. I don't know how long, but I won't be bringing in the money when I retire. We're still gonna be overspending every month. And the reality is, when you get older, it costs more to live because of healthcare expenses and whatnot. So, it'll just be a stressful existence. Yeah.

• 31:10Ramit Sethi?

  Will it be better or worse than you are today?

• 31:12Speaker 00

  Worse. You know, we have to replace his car at some point. That's more debt. We don't have money to replace his car. We have old appliances in our house. Eventually, we're gonna have to replace it. So, I mean, so all this stuff continues. So, it'll be, it'll be the same as what we're doing now.

• 31:31Ramit Sethi?

  It'll be worse.

• 31:32Speaker 00

  It'll be worse.

• 31:32Ramit Sethi?

  Far worse.

• 31:33Speaker 00

  Yeah.

• 31:34Ramit Sethi?

  I don't want that for you.

• 31:35Speaker 00

  I don't either.

• 31:36Ramit Sethi?

  What would happen in this scenario where you change nothing? We fast forward a few years and one of your kids calls you up and says they need help with a $10,000 car repair. What would you do?

• 31:48Speaker 00

  I couldn't help them.

• 31:49Ramit Sethi?

  What would you say to them?

• 31:51Speaker 00

  I would say, no, I can't. And then I'd probably try to figure out what I could do. You know, I can give you $5,000 because I have $3,000 in savings or we put it on the credit card. Again, I'm in therapy for. Creating boundaries, so I hope I would be able to say no.

• 32:13Ramit Sethi?

  It's a really tough situation.

• 32:14Speaker 00

  I just wanna help my kids. They had a tough life, so.

• 32:19Ramit Sethi?

  What about helping yourself?

• 32:21Speaker 00

  Yes, I would like to help myself too.

• 32:24Ramit Sethi?

  Who comes first?

• 32:26Speaker 00

  My kids.

• 32:28Ramit Sethi?

  I appreciate the honesty. I would like to understand a little bit about how you grew up with money. Mary, you mentioned your kids had a tough upbringing. I would like to go back to your childhood. What do you remember your family saying about money when you were a kid?

• 32:44Speaker 00

  Not much. My father worked very hard.

• 32:50Speaker 00

  And my mom was, for the most part, a stay-at-home mom.

• 32:53Ramit Sethi?

  What part of the country did you grow up in?

• 32:54Speaker 00

  Colorado.

• 32:55Ramit Sethi?

  Okay.

• 32:55Speaker 00

  Yeah, but my dad's from Cuba. So he was the provider and my mom was the homemaker and my mom spent a lot of money. And my dad would complain about her spending money. And he was in international sales, so he'd go out of town quite a bit. And then she'd go spend money on what she wanted.

• 33:15Ramit Sethi?

  And when he came back, would they fight?

• 33:17Speaker 00

  Yeah, they didn't fight too much in front of us, but yeah.

• 33:21Ramit Sethi?

  And was the fight serious? Or was it like we're each playing our role and it's kind of cute? Which one was it?

• 33:29Speaker 00

  No, they get serious about it. Yeah.

• 33:32Ramit Sethi?

  Okay.

• 33:32Speaker 00

  Yeah.

• 33:32Ramit Sethi?

  Are they still alive, still married?

• 33:34Speaker 00

  My, yeah, still married, married almost 60 years, but my dad died a couple of years ago. Passed away a couple of years ago. Yeah, yeah.

• 33:41Ramit Sethi?

  Okay. How is your mom with money?

• 33:45Speaker 00

  Awful. Yeah.

• 33:47Ramit Sethi?

  How so?

• 33:49Speaker 00

  Well, for instance, we went to the garden center the other day and she spent over $300 on plants. And that was like her third trip to the garden center, so.

• 34:01Ramit Sethi?

  How did she afford it?

• 34:02Speaker 00

  She makes okay money, fixed income, you know, from retirement, my dad's pension and whatnot.

• 34:09Speaker 00

  But not enough. She'll probably run out of money.

• 34:13Ramit Sethi?

  What does she say? You talk about money?

• 34:14Speaker 00

  Yeah, we talk about money.

• 34:16Ramit Sethi?

  Oh, but what do you say? That's good.

• 34:19Speaker 00

  It's hard. My mom's so nice. It's hard to tell her to stop spending money on the plants, you know? I'm like, Mom, I'll plant seeds for you, you know? But she spends a ton of money on her dog.

• 34:35Ramit Sethi?

  Is she religious?

• 34:36Speaker 00

  Yes.

• 34:36Ramit Sethi?

  Are you religious?

• 34:39Speaker 00

  Sort of.

• 34:40Ramit Sethi?

  Okay.

• 34:40Speaker 00

  Yeah.

• 34:40Ramit Sethi?

  She believe God will provide?

• 34:42Speaker 00

  No, no.

• 34:43Ramit Sethi?

  No.

• 34:44Speaker 00

  Catholic, so.

• 34:46Ramit Sethi?

  Wait, what? Hold on, I'm not familiar. I know Catholicism, but Catholics don't believe God will provide?

• 34:52Speaker 00

  Not really, not like that, no.

• 34:56Speaker 00

  Hard work and, you know, helping yourself, yeah, yeah.

• 35:01Ramit Sethi?

  Interesting, cuz she's spending money, you know that she's gonna run out of it. You talk to her about money. But what? What's the disconnect?

• 35:12Speaker 00

  She grew up in a very, not a rich household, but a well-to-do household north of Chicago. She was the baby and my grandfather would give her the credit card and she'd take the train to Chicago and go shopping, so.

• 35:24Ramit Sethi?

  Wow.

• 35:24Speaker 00

  You know?

• 35:25Ramit Sethi?

  So your mom was the somewhat wealthy daughter, daughter of somewhat wealthy family. She gets married, she likes to spend money when her husband, your dad, is out of town. You spend money you don't have as well.

• 35:46Ramit Sethi?

  And now your kids, do they spend money they don't have as well?

• 35:50Speaker 00

  Yes, I would say so.

• 35:52Ramit Sethi?

  How many generations are we talking about?

• 35:53Speaker 00

  Three.

• 35:55Ramit Sethi?

  Have you ever realized that you have multiple generations engaging in the same overspending?

• 36:01Speaker 00

  I noticed it with my kids. I mean, I noticed it with my mom, but I didn't think I was like my mom, but apparently I am.

• 36:07Ramit Sethi?

  You noticed it with your kids and your mom, but me? No, not me. Okay, so just now you've realized there is a pattern linking three generations.

• 36:19Ramit Sethi?

  What do you feel when you realize that for the first time, age 57? What are you realizing? What are you feeling?

• 36:26Speaker 00

  I'm still overwhelmed by it all. I'm just, I don't know what to do.

• 36:33Speaker 00

  I just don't know what to do.

• 36:35Ramit Sethi?

  Okay.

• 36:36Speaker 00

  We have to fix it.

• 36:38Ramit Sethi?

  Yes, what do you feel before you get to solutions? Are you happy, sad, dissatisfied, disgusted, confused?

• 36:47Speaker 00

  I just wanted to stop.

• 36:50Ramit Sethi?

  Yeah, tell me more.

• 36:51Speaker 00

  I don't, I'm not supposed to cry.

• 36:56Speaker 00

  Been working really hard to just get us on a stable ground. So, and then I feel like, and maybe this is where my mom comes from. You know, you've been working so hard, why can't you go out to dinner? Or, you know, because you don't have any money, it'll go on the credit card. Well, so what? I just, we deserve to go out to dinner once in a while.

• 37:20Ramit Sethi?

  Did your mom say that before?

• 37:22Speaker 00

  No, she just does it, just like I do, I guess.

• 37:25Ramit Sethi?

  This sounds familiar.

• 37:28Ramit Sethi?

  She just does it.

• 37:31Speaker 00

  That makes her sound really selfish and she's not, she buys for everybody too.

• 37:35Ramit Sethi?

  Oh, she's generous with other people. Too generous, maybe?

• 37:38Speaker 00

  Yeah, yeah, very much so.

• 37:42Ramit Sethi?

  What are you noticing?

• 37:44Speaker 00

  That we're very similar.

• 37:45Ramit Sethi?

  Yes, and?

• 37:47Speaker 00

  And we spend too much money. Sometimes we won't spend, spend, spend, and then I'll spend money that I shouldn't spend because I feel like I, we're owed it. Like, why not? I work so hard, why can't I?

• 38:00Ramit Sethi?

  Did you realize this before now?

• 38:01Speaker 00

  I mean, I would say that. I would, I deserve it. I work really, really hard. I deserve to have whatever it is.

• 38:10Ramit Sethi?

  And do your kids also deserve nice things too?

• 38:15Speaker 00

  Yes and no. They deserved nice things when they were younger and I couldn't give it to them.

• 38:20Ramit Sethi?

  Is this hard to talk about?

• 38:21Speaker 00

  Yeah, it is hard. It was hard.

• 38:24Ramit Sethi?

  I appreciate you doing it. It's not supposed to be easy here, but that doesn't make it feel good sometimes.

• 38:30Speaker 00

  It was hard for them. Single mom and I waited tables, I worked two jobs, I put myself through school. And they've had lights turned out, you know, electricity cut off from them. Moved them into a better neighborhood, but then we were the poor family in the better neighborhood, so that was hard for them. We didn't take vacations, we didn't do anything and I just, it was hard for them.

• 38:55Ramit Sethi?

  Keep going. It was hard for them because what?

• 38:58Speaker 00

  Because they didn't get the things that they should have gotten and they had to go through living and,

• 39:06Speaker 00

  you know, all of us crammed into a one-bedroom, two-bedroom apartment and moving and, and, you know, hustling because our car is broken down here and I don't have the money to fix it and.

• 39:19Ramit Sethi?

  What's the problem with that?

• 39:20Speaker 00

  It was hard. They, their friends went on vacations, their friends got cars, their friends had clothes. They didn't have to shop at the thrift store before it was trendy, you know?

• 39:30Ramit Sethi?

  So what?

• 39:31Speaker 00

  Yeah.

• 39:31Ramit Sethi?

  Can I, I'm asking legitimately.

• 39:33Speaker 00

  Yeah.

• 39:33Ramit Sethi?

  Things were hard for them. What's the problem with that?

• 39:38Speaker 00

  They didn't get the opportunities.

• 39:40Ramit Sethi?

  I don't think that's what you're talking about. I think you are referring to they didn't get things. Things that other people had around them.

• 39:48Speaker 00

  Yes.

• 39:50Ramit Sethi?

  And so what is the problem with that?

• 39:52Speaker 00

  Because it was embarrassing for them.

• 39:54Ramit Sethi?

  For them?

• 39:56Speaker 00

  For me too, not being able to provide for them.

• 39:59Ramit Sethi?

  Yes. Do you remember at the beginning when we were talking about your dynamics? And I pointed out that when the two of you talk about money, you are both behaving in a blank way. What was the word I used?

• 40:11Speaker 00

  Self-centered.

• 40:12Ramit Sethi?

  Self-centered. Yes. When you tell yourself this narrative about your kids, I'm sure they had a somewhat challenging upbringing. Okay, I'm not diminishing that, but we trace back, so what, so what, why, so what? And it turns out that it was embarrassing for?

• 40:29Speaker 00

  Me, yeah, it was embarrassing.

• 40:33Speaker 00

  Not having a car that worked or having food stamps or whatever, that's embarrassing.

• 40:40Ramit Sethi?

  Yeah, and now, when you look back, is it a source of embarrassment still?

• 40:45Speaker 00

  Yes and no.

• 40:46Ramit Sethi?

  Tell me.

• 40:46Speaker 00

  No, because I worked really hard. I, like I said, I worked two jobs, which then I wasn't there for my kids. So that was an issue too, but I worked very, very hard. I thought I set a good example for them, like, you know, work hard, go to school, do all your stuff and,

• 41:07Speaker 00

  and I don't know.

• 41:10Ramit Sethi?

  I just wanna share an example from my own childhood. My parents immigrants from India, my mom stayed home, dad worked.

• 41:20Ramit Sethi?

  We didn't have a lot of stuff. We had a middle-class lifestyle.

• 41:26Ramit Sethi?

  We almost never went on vacation. It was like a road trip. And yeah, like kids had fancier clothes and you know, they looked cooler. Indian kids, they don't look that cool by design. Parents are like, focus, study. You can look cool later. Uh, we certainly didn't have the cool shoes and all that stuff. And the story that our family embodies is yeah, we're not going to have as much stuff as some other people. But we love each other and we're going to work hard. They taught us to study. They taught us to get into great schools. Even if we didn't have money, they taught us how to be street smart.

• 42:09Ramit Sethi?

  So we could get financial aid. And when I look back, I'm glad I didn't have all that stuff. Like if I wore the clothes back then that I wear now, where do you go from there? So I like the adversity that I went through. What do you make of that?

• 42:29Speaker 00

  We've actually talked about that kind of stuff before. And, and my kids feel that they have more of appreciation for things. That not everything was handed to them. Although I probably, to be honest, would have handed it to them if I could. And also I think one of my kids just doesn't care. Like he wears it as a badge of honor that.

• 42:56Ramit Sethi?

  What do you make of this?

• 42:57Speaker 00

  I guess maybe I just have avoided all of it for so long.

• 43:00Ramit Sethi?

  Of course you have.

• 43:01Speaker 00

  Yeah.

• 43:01Ramit Sethi?

  It's easier to write $25,000 checks to kids and to spend on helocs and eating out and all kinds of stuff than to confront some tough stuff. To me, the story you've been telling yourself is one story. But there's a perfectly acceptable alternative story of yeah, things were tough and thank God they were. Because my kids learned not everything comes easy.

• 43:28Speaker 00

  Yeah.

• 43:29Ramit Sethi?

  That's a very powerful story. You choose. The story you chose is what?

• 43:37Speaker 00

  That it was embarrassing.

• 43:39Ramit Sethi?

  It was embarrassing. They never had enough and therefore I have to live in penance for the rest of my life. Here, take everything I've got. Cause I was a failure and I won't let that happen. I was embarrassed and I'm still embarrassed. Please take it all.

• 43:52Speaker 00

  Yeah, there's a lot of guilt there.

• 43:54Ramit Sethi?

  It's so disempowering to you and to them and to Harry. Something to think about and maybe work on in therapy. What do you think?

• 44:03Speaker 00

  Absolutely yes, I know.

• 44:05Ramit Sethi?

  Cool.

• 44:05Speaker 00

  I enable my children, especially my one child.

• 44:10Ramit Sethi?

  Okay.

• 44:10Speaker 00

  Yeah.

• 44:11Ramit Sethi?

  All right. Thank you for walking me through how you grew up with money. Eye opening. I appreciate that. Do you hear the story that Mary tells herself? It's a pretty powerful one. It's a pretty painful one, too. What I notice is that she has carried that pain through to today. And it's almost as if she feels so guilty that she is going to go the rest of her life trying to make up for it. That is no way to live life. Feeling like you are behind, feeling like you are trying to atone for something you did wrong. You could never even get up to just neutral. I guess I just think about it differently. When I hear people going through some sort of adversity, especially one where they came out stronger, I think to myself,

• 44:56Ramit Sethi?

  how fortunate that you were able to get that lesson. We don't all get lessons of adversity that we come out stronger for on the other end. But if you were able to get that lesson or give that lesson, what a blessing. That's why sometimes when people come on this show and I have tough conversations, sometimes they cry or sometimes they don't like me for a while. What a blessing. What a gift that I could give them to have someone be honest with them. Maybe for the first time in many, many years. When I look back at my own life, I remember not being good at math, especially compared to my friends, starting in seventh grade. My mom used to pick me up from middle school and she could tell what my math grade was based on how low my head was

• 45:41Ramit Sethi?

  when I was walking down the little field to the car. And I know that I wasn't good. My friends were a lot better than I was. And I look back and I think to myself, wow, I learned early on that I was never going to be great at math. But I really tried. I busted my ass. I worked really hard to try to at least get to neutral. And now I know that is not a strength area for me. Okay. What a great way to look back and tell that story. And my wish for Mary is that she looks back at the way she raised her kids and maybe just has a totally different interpretation. Maybe it goes something like this. I was a single mom. It was really hard. I wish I could have done more for my kids, but I did the very best I could.

• 46:25Ramit Sethi?

  You get to choose your story. And Mary and Harry are a great example of that. One of my coworkers mentioned that she has been struggling with anxiety. She went online. She found a place called Grow Therapy and she booked a therapist that worked around her schedule. And she even mentioned she feels really taken care of. If you've been thinking about getting therapy, this is your sign to check out Grow Therapy, this episode's sponsor. Grow Therapy makes it easy to find a therapist that fits you, not the other way around. They make it easy to search by what matters, by identity, specialty, availability, insurance coverage, all of those, so you can find a therapist that's the right fit for you. And from there, they connect you with thousands of independent licensed therapists

• 47:10Ramit Sethi?

  across the US, offering in-person or virtual sessions, including on evenings and weekends. If there's something in your life you'd like to change, Grow Therapy can help you start. There's no subscription. There's no long-term commitment. You just book and pay per session with free cancellation up to 24 hours before your appointment. The therapist you want takes your insurance on Grow. Grow accepts over 125 insurance plans and sessions average $21 with insurance and some pay as little as $0, depending on their plan. Visit growtherapy.com/ramit today to get started. That's growtherapy.com/ramit. Growtherapy.com/ramit.

• 47:54Ramit Sethi?

  Availability and coverage vary by state and insurance plan. When I was starting my business, if someone had told me about infrastructure and systems, I would have just ignored them, honestly. But years later, I can look back and see the wisdom of having simple business systems. I have literally spent millions of dollars disentangling bad systems that we put into IWT along the way. So if you have the chance to start your business in a simple way, I recommend checking out NetSuite. NetSuite is the AI-powered business management suite that securely connects all of your data. Trusted by over 43,000 customers, NetSuite brings your financials, inventories, commerce, HR and CRM into a single source of truth.

• 48:39Ramit Sethi?

  And now with NetSuite Next, you can automatically surface custom insights with AI agents working alongside you to solve problems, answer questions and even handle routine work. NetSuite is customized for a wide range of industries, so it supports the way your business works. Whether your company earns millions or even hundreds of millions, it's time for NetSuite Next, where your business meets AI. If I'd had this system back when I was building IWT, it would have changed everything for me. For the first time ever, you can try NetSuite Next for free. If your revenues are at least in the seven figures, go to netsuite.ai/ramit. Built for every industry, ready for every boardroom, netsuite.ai/ramit. Harry, what about you?

• 49:24Ramit Sethi?

  What do you remember your family saying about money when you were young?

• 49:27Speaker 02

  It was important, but I came up from a total working class background. My father was a coal miner and we always had holidays in the same place in Scotland every year growing up. My dad would go to work, come home, didn't do what the other people did, go to the bar or the local miners community and stuff. We wanted for nothing. We didn't have a lot. My father was very astute with money. So I lived on an estate, a neighborhood that wasn't in the mining community. So I knew later on in life that they'd saved and, and, and bought that house.

• 50:10Speaker 02

  It had orchards and apple trees and all the good stuff. From the age of 10, school holidays, I'd be sent to work on the local farm's potato picking. I was taught to graft and work hard. I earned very good money. We decided after a period of years to purchase a house together. I started drinking heavily and I stopped working hard, which is what everything I'd been taught to do. I'm six years into dry.

• 50:44Ramit Sethi?

  Wow.

• 50:44Speaker 02

  Now.

• 50:45Ramit Sethi?

  Congratulations.

• 50:46Speaker 02

  But what it took out of me was I stopped.

• 50:50Ramit Sethi?

  Stop working?

• 50:51Speaker 02

  Yeah.

• 50:53Ramit Sethi?

  And what about beyond the work? Did it change you here, your mindset?

• 50:56Speaker 02

  Yeah.

• 50:57Ramit Sethi?

  What did it do?

• 50:57Speaker 02

  I became very insulated and isolated.

• 50:59Ramit Sethi?

  Yeah.

• 51:00Speaker 02

  I became very enclosed.

• 51:05Speaker 02

  And not speaking with Mary about the start of my

• 51:11Speaker 02

  financial use, irregular use of credit cards, there was no income.

• 51:17Ramit Sethi?

  Did you used to be open about money?

• 51:19Speaker 02

  We were reasonably open. I have money in England through my trust and finance and inheritance money, which we've now come to a resolution of numbers and figures on exactly what I've got over there.

• 51:34Ramit Sethi?

  Really? What is it?

• 51:36Speaker 02

  Well, I'm 68. It'll be $360,000.

• 51:41Ramit Sethi?

  So this is an inheritance you have that will mature at age 68?

• 51:44Speaker 02

  Yeah.

• 51:45Ramit Sethi?

  Why 68?

• 51:46Speaker 02

  That enrolls into my UK pension plan, which gives me more money because I'm 10 years short of a full UK pension.

• 51:56Ramit Sethi?

  So at 68, will you get the full cash amount?

• 51:59Speaker 02

  That will mature.

• 52:00Ramit Sethi?

  You'll be able to get the full amount?

• 52:01Speaker 02

  Yeah.

• 52:02Ramit Sethi?

  Okay. Is it accounted for in the conscious spending plan?

• 52:06Speaker 02

  I wasn't involved in it, so I would say no.

• 52:09Speaker 00

  No, I asked you.

• 52:10Speaker 02

  Did you?

• 52:12Ramit Sethi?

  Is it in there, Mary?

• 52:13Speaker 00

  I think so.

• 52:14Ramit Sethi?

  So we have investments at $499,000.

• 52:17Speaker 00

  That's including yours, I believe, yeah.

• 52:20Ramit Sethi?

  Okay, so that's 340 of his, plus 150 of the two of you, is that correct?

• 52:28Speaker 00

  No, I have more than that.

• 52:30Ramit Sethi?

  Okay.

• 52:31Speaker 00

  I want to say I have 250 at least, yeah.

• 52:38Ramit Sethi?

  250, so what's with the other 250 here?

• 52:40Speaker 00

  That must be Harry's.

• 52:43Ramit Sethi?

  Do you see why you doing this on your own is not working?

• 52:48Speaker 00

  I do, I have no clue what I put there or why when I did this.

• 52:53Ramit Sethi?

  Exactly. Now, listen, I'm not trying to come down on you. I want to just tell you the dynamic because I see this all the time. This is so common. We have the person who's not involved with the money, Harry. Then we have the person who spends hours and hours. They're involved, they often create multiple spreadsheets. They got all these forms and confusing things. They have their own weird system, sound familiar, Mary? And yet they are not skilled with money and they cannot answer basic questions. And that very person is the one who takes on all the anxiety, but they are not skilled at all.

• 53:31Ramit Sethi?

  Mary, this is you.

• 53:32Speaker 00

  Yes.

• 53:33Ramit Sethi?

  Can't answer basic questions about investments. It's not acceptable. It's actually not acceptable for the two of you to be in this dynamic. We have one person doing the money who does not know what she's doing and it explains why you all are getting nowhere, you're only going down.

• 53:51Ramit Sethi?

  I'm going to assume that this is accounted for in this investment part of the CSP, both of your investments, which actually makes these numbers even more troubling.

• 54:01Speaker 00

  Okay.

• 54:02Ramit Sethi?

  Because without Harry's $250,000, you'll have even less invested.

• 54:10Ramit Sethi?

  A quarter million dollars less.

• 54:13Ramit Sethi?

  So after an entire career.

• 54:15Speaker 00

  That's it.

• 54:15Ramit Sethi?

  250. What does that tell you?

• 54:18Speaker 00

  I didn't invest.

• 54:21Speaker 00

  Yeah, it started late, the retirement. I've emptied my retirement before, so it tells me that I'm not going to retire.

• 54:31Ramit Sethi?

  Before you get to the solutions, what does it tell you about your behavior?

• 54:36Speaker 00

  In avoidance mode, even though I worry and juggle numbers all the time, I really don't have a grasp of it.

• 54:44Ramit Sethi?

  Yes. How long have you been worrying about money? Forever, right?

• 54:49Speaker 00

  Yes.

• 54:49Ramit Sethi?

  Yeah.

• 54:50Speaker 00

  Yeah.

• 54:51Ramit Sethi?

  And now it's become second nature to you, it actually is a familiar feeling. If you were to not worry, who would you be?

• 54:57Speaker 00

  I have no idea.

• 54:58Ramit Sethi?

  Exactly. That's what a worrier always says. And so worrying has now become your familiar friend and that worry now allows you to, you treat it as responsibility. You see worrying as I'm responsible with money and then at the same time you go and write $25,000 checks that you don't have the money for. But I'm worried, so like, I must be responsible. No. It's a vicious cycle you've put yourself in. And then Harry ignoring the money, not talking about the money, compounds it. Okay. Mary, earlier you said I'm not supposed to cry. Why?

• 55:38Speaker 00

  Because it's embarrassing.

• 55:39Ramit Sethi?

  Huh. I don't think it's embarrassing.

• 55:42Speaker 00

  It is.

• 55:42Ramit Sethi?

  I think it's real.

• 55:43Speaker 00

  The only person I feel comfortable crying around is Harry.

• 55:47Ramit Sethi?

  Okay. This stuff is hard.

• 55:51Ramit Sethi?

  And I actually kind of love that you felt it was embarrassing and you did it anyway. Because I like when people sometimes do stuff that feels embarrassing. That's what it takes to be good. And that's actually probably what you're both going to have to do.

• 56:07Speaker 00

  Great.

• 56:08Ramit Sethi?

  And that's okay. Because sometimes, as you put, Harry, you're in a hole. And if you want to figure out how to get out of that hole, you can't do things the way you've done it. Embarrassing. So what? I cried in front of tons of people. I'm still here.

• 56:23Speaker 00

  Yeah.

• 56:24Ramit Sethi?

  So what?

• 56:25Speaker 00

  It's embarrassing being here.

• 56:28Ramit Sethi?

  I would say it's bold. So many times I hear you choosing one narrative when I would just choose a totally different one. That's embarrassing to cry. No, it's honest. It's embarrassing to be here. No, it's bold and courageous.

• 56:43Ramit Sethi?

  I don't know which one is right. But since I get to choose my story, I'm going to choose the empowering one.

• 56:48Speaker 00

  I like that.

• 56:50Ramit Sethi?

  Yeah, you can do the same thing.

• 56:51Speaker 00

  Yeah.

• 56:52Ramit Sethi?

  Okay. What role does guilt play in your financial decisions?

• 56:58Speaker 00

  We parent our adult children with a lot of guilt.

• 57:02Ramit Sethi?

  Yeah.

• 57:03Speaker 00

  And we want to help them and it brings chaos into our lives.

• 57:11Ramit Sethi?

  You have chaos in your life?

• 57:13Speaker 00

  Yeah.

• 57:13Ramit Sethi?

  Yeah. You agree, Harry? All right. You like it?

• 57:18Speaker 00

  No. We love our grandson though, right now, but no.

• 57:22Ramit Sethi?

  I think you like it.

• 57:24Speaker 00

  You think we thrive on chaos?

• 57:26Ramit Sethi?

  Yes.

• 57:28Speaker 00

  I'm exhausted.

• 57:29Ramit Sethi?

  So?

• 57:30Speaker 00

  I really want some peace.

• 57:32Ramit Sethi?

  What would you be willing to do to get that peace?

• 57:34Speaker 00

  I want to say anything, but I'd keep helping my children. And they always come to us, knowing that that will help.

• 57:44Ramit Sethi?

  When was the last time you said no?

• 57:46Speaker 00

  I don't know.

• 57:47Ramit Sethi?

  Harry, when was the last time she said no?

• 57:50Speaker 02

  I don't think there is a last time currently. I understand why, but they're not going to love you any less for saying no. And they all know what a fantastic mother you are anyway. I see it all and it's commendable, but it hurts us. You have the ability to say no without any guilt because you've done more than enough for five families.

• 58:24Ramit Sethi?

  Because of how stuck they are in their stories, I want to try something radically different. There's a phenomenon in psychology called inoculation theory. And they used to use it with kids, teaching them how to say no to smoking. So you know what they would do, this is in the 80s? They would bring them up in front of the room and they would have one kid go up to them and say, "Hey, kid, you need to smoke a cigarette, this is what the cool kids do." And then the other kid would go, "No, I don't like to smoke, it's not good for my health." And they would inoculate themselves by creating a small argument against smoking. And so when the real life thing happened and they got bullied or peer pressured to smoke,

• 59:07Ramit Sethi?

  they would know exactly what to say, they were already inoculated. So I want them to take that principle and apply it here. I want them to get out of their own heads and start to give my wife and me advice for what we should do. You know why it works? Because people love to give other people advice. Let me ask you this. My wife and I have come to you for advice. We're not in a good financial position. We are approaching retirement a few years away. We don't know if we can retire. We have a mortgage. It's a lot. I don't know if we're ever going to pay it off. We have debt, we've taken out on the mortgage. Our income is inconsistent. We have five kids and they're adults and they come to us.

• 59:53Ramit Sethi?

  And we love them and we try to help them. And sometimes we give them money and sometimes we babysit and sometimes we help them get a new appliance. We never really have taken a look at ourselves, our own money.

• 1:00:09Ramit Sethi?

  Because we've been so busy with the chaos. Seems like we take one step forward and two steps back. My wife and I fight. We fight because we love our kids. We want to make sure they're okay. I'm starting to think that I don't know what to do because our time is running out. What advice do you have for us?

• 1:00:30Speaker 00

  I would say let your kids stand on their own two feet and they're adults.

• 1:00:35Ramit Sethi?

  But I love them.

• 1:00:36Speaker 00

  And so stop enabling them and let them figure it out.

• 1:00:40Ramit Sethi?

  But I love them.

• 1:00:41Speaker 00

  And you can still love them.

• 1:00:44Ramit Sethi?

  But they need my help.

• 1:00:46Speaker 00

  And you can love them by letting them be adults.

• 1:00:51Ramit Sethi?

  I just, I feel so guilty.

• 1:00:53Speaker 00

  Why?

• 1:00:54Ramit Sethi?

  They had a tough childhood and I want to give them everything that they didn't have.

• 1:00:59Speaker 00

  See, that's why I trip up. They're adults. You give them, you give them love. You gave them everything you could at the time and you still are. And now you need to focus on yourself.

• 1:01:12Ramit Sethi?

  So what am I supposed to do? Next time they come to me for help? Am I supposed to just slam the door in their face and kick them out?

• 1:01:19Speaker 00

  No.

• 1:01:20Ramit Sethi?

  What do I do?

• 1:01:21Speaker 00

  Just tell them, you'll help them, you know, figure out solutions, but you are not fixing it for them.

• 1:01:29Ramit Sethi?

  I don't know how to do that. They come to me for help. I'm their dad. I'm going to give them every last cent, every last scrap off my back to help them. That's what a parent does, right?

• 1:01:42Speaker 00

  No.

• 1:01:43Ramit Sethi?

  Oh, what do I do?

• 1:01:44Speaker 00

  Parent helps their child learn how to navigate the world and stand on their own two feet. And they have to figure out things for themselves. If you keep fixing it for them, they're never going to figure it out.

• 1:01:58Ramit Sethi?

  What about my wife? She's not involved with the money. I don't know, we don't really talk about money. What, what do you think I should do with her?

• 1:02:05Speaker 00

  Sit down and have conversations, go for numbers.

• 1:02:09Ramit Sethi?

  I try to, but it's easier to do it myself. Harry, what advice do you have for me?

• 1:02:13Speaker 02

  You gotta sit down and have a coming together with your wife.

• 1:02:18Ramit Sethi?

  I try to, but she doesn't even want to look at the spreadsheet.

• 1:02:20Speaker 02

  No, you're gonna have to sit her down, make her a cup of tea and just tell her straight on. And then do it tomorrow and then do it the day after. And then say, this is really serious. I need this to happen. We need to be together for our children because we love them. And it's going to be the best thing for everyone. Physically, we can help them. We can babysit. We can go around and paint some doors or something along those lines. But what we can't do is pay for a decorator to come around and paint the house or the doors. Or get a guy in to service the whatever. But we can do the best we can. But we have to, have to be together on this.

• 1:02:59Ramit Sethi?

  Okay. What the [bleep]? How are you so good at giving me advice?

• 1:03:05Speaker 00

  He actually says that to me.

• 1:03:09Ramit Sethi?

  I've already. Am I in a, am I on a different planet right now? What just happened?

• 1:03:13Speaker 02

  I just read my own script.

• 1:03:14Ramit Sethi?

  That was quite outstanding. Now, stay with me, everybody.

• 1:03:18Speaker 02

  That's rock.

• 1:03:20Ramit Sethi?

  What if we just flipped it? And you took your own advice for a second, all jokes aside?

• 1:03:25Speaker 00

  No, yes.

• 1:03:26Ramit Sethi?

  Let's, let's live there for a second. Because what you just did was almost miraculous. You got out of your own heads. You saw things for the reality of the situation. My wife and I, in this scenario, are in big financial trouble. Mary, you were, you were honest. You were relentless. You love them. You can't help them do everything. Can I flip that to you?

• 1:03:53Speaker 00

  Yes.

• 1:03:53Ramit Sethi?

  You love, actually say it to yourself.

• 1:03:55Speaker 00

  I love them, but I can't do everything.

• 1:03:58Ramit Sethi?

  Yes. Now I'm going to ask you a few probing questions. So what are you going to do if your kid comes to you and asks for help because their stove broke down?

• 1:04:08Speaker 00

  I would say I understand how that feels. Let's brainstorm and see what ideas you have, but money wise, we can't help you.

• 1:04:18Ramit Sethi?

  That's quite amazing. You looked uncomfortable doing it, but you did it anyway.

• 1:04:22Speaker 00

  Mm-hmm.

• 1:04:22Ramit Sethi?

  That's pretty cool. What'd that feel like?

• 1:04:24Speaker 00

  I would do it for a stove. It's hard when I get a text. I don't have any money. I have to go pick up my daughter. Can you give me some gas money?

• 1:04:35Ramit Sethi?

  What the [bleep]?

• 1:04:36Speaker 00

  And then I do.

• 1:04:37Ramit Sethi?

  Oh, I'll just, I'll fix that for you right now. Give me your phone. I'll turn off giving money on there. I don't even know how to do that. Do you know, nobody in my life would text me for money like that? I, I want you to hear how abnormal that sounds to me. That is not the relationship that I have allowed myself to be in. So are you hearing how weird that sounds to me?

• 1:05:02Speaker 00

  No, I, I'm an ATM.

• 1:05:04Ramit Sethi?

  Yes. And instead of love, it's money. What if he just didn't reply, honestly? What would happen?

• 1:05:12Speaker 00

  Maybe that means he doesn't get his daughter, but maybe next time he'll figure it out.

• 1:05:17Ramit Sethi?

  Do you have any texts on your phone right now begging for money? Cause I would love to reply to them for you. I specialize in writing other people's texts. Is there one?

• 1:05:26Speaker 02

  On our way coming into here, this is not me grassing up. And I laugh about it because it's insane. He's taking care of our grandson at our house. But he went up to his house, forgot the formula to feed him. Arrived back at our house, said, hey, mom, I forgot the formula. I haven't got enough gas to get back home and get back down.

• 1:05:58Ramit Sethi?

  How old is this person?

• 1:06:00Speaker 00

  Thirty-six.

• 1:06:01Ramit Sethi?

  Okay.

• 1:06:02Speaker 02

  And I'm not slam dunking anybody here. And that's why I laugh insanely in madness.

• 1:06:07Ramit Sethi?

  So he said, will you pay me for the gas to go back to?

• 1:06:10Speaker 00

  It wasn't the gas, though.

• 1:06:11Speaker 02

  No, but he hasn't got enough gas to get back. So we gave him money to go to the store to get formula to feed him.

• 1:06:18Ramit Sethi?

  I get it. You all get this, you all have heard these stories about, you know, parents get to be 80 years old, 85. They, they have no money. They're living in a trailer and there are other, maybe there's one or two responsible siblings and they're going, mom, dad, you don't understand when you die, this guy doesn't know how to hold down a job. He hasn't had a job in 45 years. And mom and dad don't know how to deal with this. They have a deep, daunting realization that they have truly screwed up their kids. And, but they don't know what to do because now it feels too late. They are embedded, entrenched. How far are we away from that, from that happening right now?

• 1:06:56Speaker 02

  That's our story, isn't it?

• 1:06:57Speaker 00

  Pretty much, yes.

• 1:06:59Ramit Sethi?

  How could you allow this to happen?

• 1:07:01Speaker 00

  I don't know. Misplaced guilt and wanting to help. Misplaced ways of helping.

• 1:07:07Ramit Sethi?

  But it's happening as recently as today. Are you willing to change it?

• 1:07:12Speaker 00

  I have to. I mean, if I don't, then he's gonna, yeah.

• 1:07:18Ramit Sethi?

  Yes, I want to. I mean, I think, when I'm looking for someone to make a radical change, the only acceptable answer is I'll do anything. The path you have to go on, the two of you, is so difficult, so different than anything you've ever done, that the only acceptable answer is I'll do anything. Otherwise, you have no chance of succeeding.

• 1:07:36Speaker 02

  Right.

• 1:07:37Speaker 00

  That's what I was afraid of.

• 1:07:40Ramit Sethi?

  Your worst fear is going to be your reality. You might as well just accept it.

• 1:07:43Speaker 00

  Yeah.

• 1:07:44Ramit Sethi?

  I want to give you a break. I want to give you five minutes. Go outside. Think about it. Talk about it. Because if you actually want to make a change, it is going to require you to change every single thing about the way that you interact with each other and you interact with your kids, starting today. You will not be able to give them money. There is no money. You will not be able to volunteer to help them with all these things. You will make a list of what you can offer. We can babysit twice a week. We can help with X. Here are the things we will no longer be able to assist with at all. Cold turkey.

• 1:08:26Ramit Sethi?

  And here are the consequences of you pushing us. If you text us for money, this is what will happen. If you, something breaks down and you expect us to help, this is what will happen. That's the easiest change you're going to have to make. The other stuff, we haven't even gotten to your numbers. That's going to be even harder. If you can do that, you might have a chance with your finances. Can we take five minutes and come back?

• 1:08:54Speaker 00

  Yes, please.

• 1:08:55Ramit Sethi?

  Okay, let's do it.

• 1:08:58Speaker 02

  You okay?

• 1:08:59Speaker 00

  Yeah.

• 1:09:01Ramit Sethi?

  I empathize with how they both grew up with money. Not particularly healthy environments. The problem is Mary and Harry are living in those stories. I've always said that people who have problems love to talk about their problems. I see it every day. And I don't mind. I need to empathize. I need to connect with them and hear what's going on. But at a certain point, we cannot live in those stories in the past because it will not allow you to move forward. Have you ever done this? Have you ever talked about your problems over and over again? What was it? Money problem? Relationship problem? Fitness problem? Any kind of problem? We all do it. It's a human thing.

• 1:09:45Ramit Sethi?

  But if we want to change, and if Mary and Harry want to change, I gotta get them to see things a totally different way. How come everybody teaches you how to save, but nobody teaches you the skill of spending money meaningfully? It's a tragedy to end up, older and older, having atrophied at the skill of using your money to live a rich life. I need you to take this seriously. And if you need help planning your retirement and you want to go into scenarios and more specificity, check out Facet. Facet can help you make a plan that lets you use your money for the moments that matter to you. Facet charges a flat membership fee for financial planning, never a percentage of your assets.

• 1:10:29Ramit Sethi?

  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. 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

• 1:11:12Ramit Sethi?

  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 contract for cash compensation based on this endorsement. All opinions are my own and not a guarantee of a similar outcome. Okay, welcome back. How was your conversation?

• 1:11:33Speaker 02

  Enlightening. It begins with us. We don't have to prove our love. We don't have to prove our dedication, our commitment to our children because we know that we do that. And we should have and can have control on how we help them.

• 1:11:55Ramit Sethi?

  Mary, what was your realization?

• 1:11:57Speaker 00

  I very much struggle when it comes to my children. I was hurting because I feel like we were making my son look like this selfish loser, and he's not. I made it so I'm the ATM, not him. He goes out of his way to help us all the time. Not... And he works very, very hard. And he's had a ton of personal crises in his life, which I took on. And that's the realization that's on me, that's not on him. And I need to say no. And that doesn't mean that we can't help in a different way, though.

• 1:12:42Speaker 00

  Help him stand on his feet and not enable... This can't... So... Because we need to live. And we can't live if we're bailing him out all the time.

• 1:12:55Ramit Sethi?

  So what have you decided?

• 1:12:57Speaker 00

  That we want to focus on ourselves and have a life and not enable our children all the time.

• 1:13:06Ramit Sethi?

  Okay. So you want to focus on yourselves. What does it look like?

• 1:13:10Speaker 02

  I think the foundation is numbers, finance. Where are we at in the whole? Can we get out of it? How do we do it? We have to work together financially and supporting each other emotionally with the hard and tough decisions that we have to make regarding our children.

• 1:13:32Ramit Sethi?

  I agree.

• 1:13:32Speaker 02

  I think that makes us know we're both strong. And our children know that we are strong together.

• 1:13:42Ramit Sethi?

  Yes. Do they know that you're strong right now?

• 1:13:45Speaker 00

  They see us work together. And we might not come together with money. I get frustrated. I'm controlling. I just want to do it. And so that's something I need to fix, is have more patience and less control. And that's hard.

• 1:14:02Ramit Sethi?

  Less control, or maybe another way to put it is sharing control with Harry. Trying to have less control is scary because what does that mean? But a more active phrase would be, Harry and I are going to share the numbers together. He's going to own some of them. I'm going to own some of them. We may not know exactly what these numbers are, but we're going to learn together. And over time, I am going to work, I, Mary, am going to work actively on becoming more comfortable sharing that control because that is what has to happen. How's that sound?

• 1:14:41Speaker 00

  That sounds good.

• 1:14:42Ramit Sethi?

  The language is profoundly important.

• 1:14:45Speaker 00

  It is.

• 1:14:46Ramit Sethi?

  Right?

• 1:14:46Speaker 00

  Because I don't want to give up control.

• 1:14:48Ramit Sethi?

  Yeah. And actually, if you started off this entire process by saying, "All right, I need to work on giving up control," you've already lost. Like, you coach soccer, right?

• 1:14:57Speaker 02

  Right.

• 1:14:58Ramit Sethi?

  If players come on the field and they're like, "We need to win or we are a piece of [BLEEP]." They've already lost.

• 1:15:06Speaker 02

  Right.

• 1:15:06Ramit Sethi?

  They're not even having fun.

• 1:15:07Speaker 02

  Right.

• 1:15:08Ramit Sethi?

  They're not being a team. So before we ever set foot on the field, the way that we talk and think about the mission in front of us determines if we even have a chance at winning or not. So we're not trying to give up control. We are trying to share control with my partner because we are more effective as a team than either of us are individually. Okay. I'm getting excited. How are you feeling?

• 1:15:34Speaker 00

  Excited and fearful.

• 1:15:36Ramit Sethi?

  Okay, fear. Harry?

• 1:15:38Speaker 02

  Totally up for it.

• 1:15:40Ramit Sethi?

  Great. Okay. We have some big changes to make. If you were 30 years old, we would approach things a little differently. You are not. Time is ticking. I just want to be honest about that.

• 1:15:54Speaker 02

  It's fast.

• 1:15:55Ramit Sethi?

  You gotta make huge changes and you have to execute them at a near-flawless level if you want to have a good shot. I don't expect perfection from anybody. But the time for trying to do things is over. Because of your age and because of your financial predicament, there is no time for that. It is, we are going to pick a plan. We are going to execute on it. And anything that gets in the way as an obstacle will be relentlessly pushed back or destroyed. That's it. We don't have time to mess around. In a second, I'm going to put your CSP up on screen. And what we are going to try to do is try to take these numbers,

• 1:16:40Ramit Sethi?

  which are at the moment out of control. You're spending, you know, way more than you make. We need to bring that down. And we are going to try to see what we can do about your expenses, your income, all of it. Okay? Let's put that CSP up on screen. So we're looking at the net worth section here. Right off the bat, I want to understand, you have $476,000. What is this in your assets?

• 1:17:09Speaker 00

  That is our home and my car, probably.

• 1:17:16Ramit Sethi?

  And under the debt, $435,000 of debt. What's under that?

• 1:17:19Speaker 00

  That is what we owe, the mortgage, what Harry owes for the debt consolidation, like my braces and some random things, medical bills and whatnot.

• 1:17:34Ramit Sethi?

  How much is the mortgage?

• 1:17:36Speaker 00

  What we owe?

• 1:17:37Ramit Sethi?

  Yeah.

• 1:17:37Speaker 00

  It's 375-ish, right around there.

• 1:17:43Ramit Sethi?

  Moving along, fixed costs are at 139%. Unacceptable. This number needs to come down to roughly 60%. How do you want to do it?

• 1:17:53Speaker 02

  You've got on there, what have you got? Oh, utilities, gas, water, electric, internet, cable. Right. Subscriptions to how many things?

• 1:18:02Ramit Sethi?

  You have $135 of subscriptions per month.

• 1:18:06Speaker 00

  Yeah, and we cut some of that already. We can cut more, but it's not going to really help us. This is where I get lost and frustrated and overwhelmed. I don't know where to begin.

• 1:18:17Ramit Sethi?

  Typically, what happens is when people are in a similar situation, we start looking at the fixed costs. And what they do is they start off with really small numbers. And they'll spend about 15 minutes debating if they can cut $20 off their cellphone bill. I let them do it. And finally, they do. And it moves the number maybe 1%. And at that moment, I go, "What did you realize?" And they go, "Holy [BLEEP]." Like, "We've been spending all of our time on the wrong stuff." But it's a valuable lesson. In your case, you did not even let Harry cut the subscriptions.

• 1:18:51Ramit Sethi?

  Because you tried to skip ahead. So you actually skipped that moment of realization for the two of you. I would have rather you all went back and forth for 20 minutes on the subscriptions and then cut it. But you didn't even allow that to happen. Why?

• 1:19:06Speaker 00

  Because I know it's not gonna help that much to cut the little things out like that.

• 1:19:11Ramit Sethi?

  Is it possible that the things you think you know are maybe not right?

• 1:19:15Speaker 00

  Yes.

• 1:19:16Ramit Sethi?

  Okay, because if what you knew was accurate, you would not be in this position today. So, put your trust in the process. Don't be too smart for your own good. This is a classic problem with smart people. We wanna act like everybody else right now. I'm a statistic and I'm gonna follow the process. Cool? What do you wanna do?

• 1:19:37Speaker 00

  So what constitutes miscellaneous? Since it already is 15%.

• 1:19:42Ramit Sethi?

  Great question. Miscellaneous is automatically added as 15% of everything above. Because people often forget things like their annual car registration or some random thing they had to get fixed for their whatever. And so I automatically bundled that in. Now, for most couples, 15% if they have no debt is actually surprisingly accurate. For a couple like you that needs to make massive changes, you cannot afford to have 15%. You need to be dialed in. So I would take that number down, way down. It's currently at $957. Fact is, you can't afford that in just miscellaneous per month. So what number would you like that to be at?

• 1:20:24Speaker 00

  200?

• 1:20:25Ramit Sethi?

  Great, let's do it. I'm gonna zero this out. I'm gonna make this 200. Let's take a look at your numbers. It dropped to 125%.

• 1:20:34Speaker 02

  Insane.

• 1:20:35Ramit Sethi?

  What does that tell you?

• 1:20:36Speaker 02

  We're on the right track.

• 1:20:38Ramit Sethi?

  We dropped 700 or so dollars and went down a few percentage points. So I think this is positive movement. What's next, Harry?

• 1:20:47Speaker 02

  Minimal mobile phone.

• 1:20:49Ramit Sethi?

  Phone is 100 bucks?

• 1:20:51Speaker 02

  Yeah, I can drop that straight down to a minimal 80, straight away.

• 1:20:56Ramit Sethi?

  80, okay.

• 1:20:56Speaker 02

  That would cut off roaming and Stephen's phone.

• 1:21:00Ramit Sethi?

  Oh, you have your son on your phone plan? Ah, great. This is actually amazing. 80 bucks. Honestly, I'm glad the 20 bucks of savings, but I'm more interested in the fact that who's gonna be the one to have the conversation with your son?

• 1:21:19Speaker 02

  I'm happy to.

• 1:21:20Ramit Sethi?

  Is it, whose son is this? That's your son. Well, I don't think you should have the conversation. I think it should be mom. Mary? Mary looks visibly uncomfortable right now. She's avoiding eye contact and looking away. Mary, this is the beginning of the rest of your life. Taking your 36-year-old son off of your family plan is probably the easiest thing you're gonna have to do right now.

• 1:21:47Speaker 00

  Yes.

• 1:21:48Ramit Sethi?

  Can you text him right now?

• 1:21:50Speaker 00

  Yes.

• 1:21:50Ramit Sethi?

  Okay, do you have your phone with you?

• 1:21:51Speaker 00

  No.

• 1:21:52Ramit Sethi?

  We can bring it for you. As we're grabbing your phone, I want you to think about what you're gonna say to him.

• 1:21:56Speaker 00

  Well, he knows we're here and he knows why we're here. So I'm gonna say, we have to make some drastic changes. We're gonna give you a month more on the phone so you can get money coming in from your new job and then you have to get your own plan.

• 1:22:15Ramit Sethi?

  I love that. Here's your phone. If I can make one suggestion, I love what you said about we have to make some drastic changes. We've made a decision.

• 1:22:25Speaker 00

  Okay.

• 1:22:27Ramit Sethi?

  And then type what you said. I want you to own that power. This isn't happening to you. I'm not forcing you to do it. The two of you have made a decision. Is that accurate?

• 1:22:39Speaker 00

  Yes.

• 1:22:39Ramit Sethi?

  Okay, go ahead, take your time. And before you click send, just tell me. Okay, Mary, read me what you got so far.

• 1:22:45Speaker 00

  We made a decision. We are making drastic changes with finances and we will keep you on the phone plan for another month.

• 1:22:53Ramit Sethi?

  After that, comma.

• 1:22:54Speaker 00

  Okay.

• 1:22:55Ramit Sethi?

  We will not.

• 1:22:58Speaker 00

  We will not, I wanna say be able to pay for you anymore, but.

• 1:23:03Ramit Sethi?

  We will not pay for you.

• 1:23:05Speaker 00

  Okay, that's so, it sounds so bitchy.

• 1:23:10Ramit Sethi?

  Look at me, look at me. Do I care if anyone calls me a little bitch?

• 1:23:15Speaker 00

  That's funny.

• 1:23:16Ramit Sethi?

  Call me a bitch, America, like I care! I'm trying to teach your son how to be self-sustaining and you how to live a rich life. If somebody thinks that you're bitchy, so be it.

• 1:23:31Speaker 00

  Okay.

• 1:23:31Ramit Sethi?

  Okay, what do you got? A lot of typing over here.

• 1:23:33Speaker 00

  I'm just fixing a typo.

• 1:23:36Ramit Sethi?

  Read it.

• 1:23:37Speaker 00

  I said, after that, we will not pay the phone, for the phone.

• 1:23:43Ramit Sethi?

  We love you. I like the incongruity. We will not pay for the phone. We love you. Send.

• 1:23:50Speaker 02

  Well done.

• 1:23:51Speaker 00

  Thank you.

• 1:23:52Ramit Sethi?

  Did you send it?

• 1:23:52Speaker 00

  Yeah.

• 1:23:54Ramit Sethi?

  Take a second, hold on. Everybody look at each other. This is quite a moment. This is Mary and Harry 2.0. That may be the most difficult text that you have written. But you did it.

• 1:24:09Speaker 02

  You did.

• 1:24:10Speaker 00

  I'm gonna cry now.

• 1:24:11Speaker 02

  No, you should cry tears of joy.

• 1:24:14Ramit Sethi?

  What's going through your head, Mary? It's okay.

• 1:24:16Speaker 00

  It's, he's just going through a lot and I don't wanna make it worse. He's trying not to lose his daughter and he's trying to get his life together and not lose his house and his property. And he works really hard and it's just hard. I don't like to see him struggle. And helping him with the phone just seems like such a little thing. One less thing he has to worry about.

• 1:24:44Ramit Sethi?

  When you brush your teeth in the morning, do you worry about brushing?

• 1:24:47Speaker 00

  Since I've had braces, I do.

• 1:24:52Ramit Sethi?

  Okay, you got me on that one. When you put your glasses on in the morning, do you worry about putting them on?

• 1:24:57Speaker 00

  No.

• 1:24:58Ramit Sethi?

  No, what do you do?

• 1:24:59Speaker 00

  I just put them on.

• 1:25:00Ramit Sethi?

  You just do them. You're capable, right? You're an adult. He hasn't had to build that skill. Because there's a lot going on. I'm not gonna take away from that. Obviously, there's a lot going on with him. But also, you have stepped in. It's almost like you've treated him like he's frail.

• 1:25:18Speaker 00

  Yeah.

• 1:25:19Ramit Sethi?

  Like he's weak.

• 1:25:20Speaker 00

  Yeah.

• 1:25:20Ramit Sethi?

  And when somebody treats you like you're weak your whole life, what happens to you?

• 1:25:24Speaker 00

  You're weak?

• 1:25:25Ramit Sethi?

  You're weak.

• 1:25:26Speaker 00

  But he's not.

• 1:25:26Ramit Sethi?

  He's not weak, he's strong. Look, treat me like I'm strong. I might fall down a couple of times, but then I'm gonna get back up and I'm gonna become strong. That's the mindset that you've gotta use. I think you did something really miraculous. I want you to stand strong. When you change the relationship with somebody, it is very uncomfortable. And they will consciously and unconsciously do a lot of things to bring you back in line. That's where the two of you come in helpful. You're a team, you're a unit. Okay?

• 1:25:59Speaker 00

  Okay.

• 1:26:00Ramit Sethi?

  Great job. Let's keep moving. We shaved off 20 bucks from the cell phone, but honestly, to me, that was worth a million bucks. That was incredible. Let's keep going. We gotta get this number down to roughly 60%. We're at 124% and frankly, we need to move a lot faster. What's next?

• 1:26:15Speaker 02

  I think we could do a lot better on the groceries.

• 1:26:17Ramit Sethi?

  Great, groceries are 900?

• 1:26:19Speaker 02

  Yeah. I think we way overspend.

• 1:26:22Ramit Sethi?

  Who does the groceries?

• 1:26:23Speaker 00

  We both do.

• 1:26:24Ramit Sethi?

  From now on, one of you's gonna do it. Because one person owns the number. Who's gonna do it?

• 1:26:28Speaker 02

  Six.

• 1:26:29Ramit Sethi?

  600, you're gonna do grocery shopping?

• 1:26:31Speaker 02

  Yeah.

• 1:26:32Ramit Sethi?

  Harry's grocery shopping from now on. Mary, you good with that?

• 1:26:35Speaker 00

  Yes, I hate grocery shopping.

• 1:26:37Ramit Sethi?

  Amazing, Harry, you're on it.

• 1:26:39Speaker 02

  I'm on it.

• 1:26:39Ramit Sethi?

  600, how often do you grocery shop?

• 1:26:42Speaker 00

  All the time.

• 1:26:42Ramit Sethi?

  Can't do that anymore. Cause every time you go, it's gonna be more. So how many times a month are you gonna grocery shop?

• 1:26:48Speaker 02

  Bi-weekly.

• 1:26:49Ramit Sethi?

  So $300 each time you go.

• 1:26:51Speaker 02

  Yeah.

• 1:26:51Ramit Sethi?

  Can you do it?

• 1:26:52Speaker 02

  Yeah.

• 1:26:52Ramit Sethi?

  Amazing.

• 1:26:53Speaker 02

  Easy.

• 1:26:53Ramit Sethi?

  Easy, that's what I'm talking about. What's next? Clothes? Who's buying clothes? Zero, no clothes. Is this for the grandchild?

• 1:27:01Speaker 00

  No.

• 1:27:02Ramit Sethi?

  Then who the hell's buying clothes for $50 a month?

• 1:27:05Speaker 00

  We don't buy clothes for a while and then we'll go buy some jeans.

• 1:27:09Ramit Sethi?

  I'm sorry.

• 1:27:09Speaker 00

  Or shoes.

• 1:27:10Ramit Sethi?

  Am I living in an alternate universe? You have 119%. You don't buy clothes, that's it. Make it work. Next, this is the kinda energy we need. What's next? Subscriptions at 135? Yeah, right. Pick one.

• 1:27:23Speaker 02

  What do you wanna keep?

• 1:27:25Speaker 00

  Netflix.

• 1:27:26Ramit Sethi?

  Great, 20 bucks. Everything else is gone, goodbye. Next, car payments. Probably nothing you can do about that.

• 1:27:33Speaker 00

  That's just gas.

• 1:27:34Ramit Sethi?

  Meds, alright, I'm not trying to, that would be really cruel if I'm over here like, how much of this, you know, Tylenol, whatever do you need? I'm not doing that. Hey, what's this mortgage at, at 34.6%?

• 1:27:51Speaker 00

  That's our mortgage with, with insurance and, what else do you pay? Taxes.

• 1:27:58Ramit Sethi?

  Do you realize that you are way overspending on housing?

• 1:28:02Speaker 00

  Yeah.

• 1:28:03Ramit Sethi?

  Oh, you do, you just keep doing it? What would you like to do about that? Because if you look, we're at 116% fixed costs. Guys, we're trying to get to 60%. There's no amount of changes you can make.

• 1:28:14Speaker 00

  He can make more money.

• 1:28:16Ramit Sethi?

  Oh, that's true. Let's do that before we mess with the mortgage. All right, going up to Harry, your income is gross income, $1,500 a month. Not gonna cut it.

• 1:28:27Speaker 02

  Nope.

• 1:28:28Ramit Sethi?

  What's, what job can you get now that will raise that number to at least $5,000 a month?

• 1:28:36Speaker 02

  I have more hours now coming in through the Parks and Rec Sports Department as, cause through the summer and the fall, my hours go up tremendously.

• 1:28:44Ramit Sethi?

  Okay, that's good. What about after fall?

• 1:28:46Speaker 02

  My plan is personal coaching, which I'm building the clientele by schoolduggery.

• 1:28:54Ramit Sethi?

  Okay, that is one option, but that doesn't get us where we need to go. So I need another option that gets you $5,000 a month. What about a job? Straight up job. There are times where we have the ability, yes, to do a business. Right now, if you wanna do that extra, great. But we need something stable and predictable.

• 1:29:15Speaker 00

  There, you can talk to Parks and Rec and see, they just quieted all that land. Maybe they'll be willing to give you a full-time job.

• 1:29:23Speaker 02

  I know there is more work coming through anyway, so.

• 1:29:26Speaker 00

  They love you.

• 1:29:27Speaker 02

  Yeah.

• 1:29:28Speaker 00

  They don't wanna lose you.

• 1:29:28Speaker 02

  No.

• 1:29:29Ramit Sethi?

  Can you make it happen?

• 1:29:30Speaker 02

  Yeah.

• 1:29:31Ramit Sethi?

  Yeah?

• 1:29:32Speaker 02

  I'm not just saying that.

• 1:29:33Ramit Sethi?

  No, I'm asking, can you make it happen?

• 1:29:35Speaker 02

  Yeah.

• 1:29:35Ramit Sethi?

  Okay, you can get a job or jobs that total.

• 1:29:39Speaker 02

  I'm happy to do jobs.

• 1:29:40Ramit Sethi?

  Great, I don't care how you do it.

• 1:29:42Speaker 02

  Right.

• 1:29:42Ramit Sethi?

  I need $5,000 a month.

• 1:29:44Speaker 02

  Got it.

• 1:29:44Ramit Sethi?

  All right, I'm putting it in here. 5,000 a month, but look at this fixed cost number. All right, you see what it is right now? It's at 116%?

• 1:29:52Speaker 02

  Shoot it, go for it.

• 1:29:53Ramit Sethi?

  Watch this. I'm gonna approximate your take-home pay. Watch, 3850 net per month. Holy.

• 1:30:03Speaker 02

  That's a kick in the right place, isn't it?

• 1:30:06Ramit Sethi?

  The fixed cost just dropped to 75%.

• 1:30:10Speaker 02

  And we're targeting 60, did you say?

• 1:30:12Ramit Sethi?

  Yeah.

• 1:30:14Speaker 02

  That's on me.

• 1:30:15Ramit Sethi?

  Make it happen.

• 1:30:16Speaker 02

  I'm in.

• 1:30:17Ramit Sethi?

  Boom. That's what we're talking about. Nice work. I love that response.

• 1:30:20Speaker 02

  And I've still got time for shopping groceries.

• 1:30:23Ramit Sethi?

  Yeah, that's right.

• 1:30:24Speaker 02

  Yeah.

• 1:30:24Ramit Sethi?

  I don't care when you do it. It could be midnight.

• 1:30:26Speaker 02

  That's free. I'm in.

• 1:30:27Ramit Sethi?

  All right, good. I'm liking this so far. I'm liking it a lot.

• 1:30:31Speaker 02

  That's massive.

• 1:30:32Ramit Sethi?

  Huge. Um, Mary.

• 1:30:36Speaker 00

  Yes.

• 1:30:36Ramit Sethi?

  Good suggestion. I want to take a second and note that you brought up, he can earn more. We, it wasn't about blaming anybody. It was just like, hey, he needs to earn more. This is what I expect from partner. We modeled the numbers. It's obvious. Holy this changes the game. He goes, I'm in. This is how we have these honest conversations in Mary and Harry 2.0. Boom. Okay, let's keep going. Mary, anything on your income that like, is it possible for you to make anymore? Or are you making what you make?

• 1:31:07Speaker 00

  I work in higher education. I'm not going to get much more, maybe a little bit more.

• 1:31:11Ramit Sethi?

  Okay. Can you do anything on the side?

• 1:31:13Speaker 00

  I don't, yeah, I've tried. Maybe.

• 1:31:17Ramit Sethi?

  Maybe.

• 1:31:17Speaker 00

  Time wise is.

• 1:31:18Ramit Sethi?

  What time? You have a whole bunch of free time now. No more chaos around you. People texting you, you just send them straight to voicemail and delete. I'll just delete 75% of the texts that come in. Oh, my kid's texting, delete.

• 1:31:30Speaker 00

  Because we have a baby.

• 1:31:31Ramit Sethi?

  Oh, that's true. Okay, that's true. Five and a half month baby. That's going to take some time. All right, let's go back down. Um, listen, your rent, your mortgage.

• 1:31:40Speaker 00

  We need to figure something out.

• 1:31:42Ramit Sethi?

  Well, there's only, there's only a couple of suggestions here. Okay, I'm gonna tell you right now. Your mortgage is in a better place. With the new income, your mortgage now costs you 24%. That's better.

• 1:31:52Speaker 00

  Okay.

• 1:31:52Ramit Sethi?

  But that is only if the two of you are making that kind of money. Okay?

• 1:31:56Speaker 02

  Yeah.

• 1:31:57Ramit Sethi?

  If we factor in all the associated costs with your housing, you're probably actually at 31% or so. That's not crazy, except for a couple that is approaching retirement and has not enough money. Okay? So your housing is your biggest driver. You have one option, which is if you were to sell your house, do you know how much you'd walk away with?

• 1:32:20Speaker 00

  Maybe 90,000.

• 1:32:22Ramit Sethi?

  After expenses?

• 1:32:24Speaker 00

  Yeah.

• 1:32:24Ramit Sethi?

  Okay. And can I ask you whether in your current location or anywhere where you would potentially move? How much would it cost you for a smaller place appropriate for the two of you and the grandchild?

• 1:32:39Speaker 00

  It would be about the same, if not a little bit more.

• 1:32:43Ramit Sethi?

  It would be like 3,500 a month?

• 1:32:45Speaker 00

  It would be probably around 3,000.

• 1:32:47Ramit Sethi?

  Really?

• 1:32:48Speaker 00

  Mm-hmm.

• 1:32:49Ramit Sethi?

  I think you're probably in no position to buy right now.

• 1:32:52Speaker 02

  No.

• 1:32:52Ramit Sethi?

  But renting, um, I'm not saying you have to. I'm saying it's worth exploring.

• 1:32:57Speaker 02

  Yes.

• 1:32:58Ramit Sethi?

  If you were to find a place where you could rent, especially if it is maybe a bit out there, a bit cheaper. There's some option, smaller place, because you don't need a huge place. I actually think a smaller place would help you. You know why? Not only the cost, but it actually makes it really easy for the two of you to politely decline a lot of requests for help.

• 1:33:24Speaker 00

  Yeah.

• 1:33:25Ramit Sethi?

  Oh, I'm so sorry. We can't do that. We only have one bedroom for the baby.

• 1:33:28Speaker 02

  It's a bit of a squeeze.

• 1:33:30Ramit Sethi?

  Yeah. I like a squeeze.

• 1:33:32Speaker 00

  We already have a small place.

• 1:33:33Ramit Sethi?

  I like it.

• 1:33:35Speaker 00

  We only have a 1,300 square foot house.

• 1:33:38Ramit Sethi?

  Great. Try 950.

• 1:33:40Speaker 02

  Yeah.

• 1:33:41Speaker 00

  We just need a bedroom and an office. I work from home.

• 1:33:46Ramit Sethi?

  Yeah.

• 1:33:46Speaker 00

  And then a place for knickknack.

• 1:33:48Ramit Sethi?

  We, um, we looked in your location. My team just looked it up. They found a two-bedroom, pet-friendly place for 1795.

• 1:33:56Speaker 00

  Oh, wow.

• 1:33:58Ramit Sethi?

  You want to see what that effect I would have on you?

• 1:34:00Speaker 02

  Yes, please.

• 1:34:00Ramit Sethi?

  Yeah. Watch this. 1795, you're down to 64%. Hey, let's drop your, um, utilities. Let's put, uh, 150, a little bit more reasonable. And we'll keep your insurance, even though I think you probably would pay less, but maybe your rent would go up. So over time, we'll equal it out. You're down to 59%. That gives you $2,000 a month to be able to split among savings, investments, and even maybe eating out once a month.

• 1:34:37Speaker 02

  A life.

• 1:34:38Ramit Sethi?

  Yes.

• 1:34:39Speaker 00

  It's funny because we flip flopped because I was the one pushing him to watch the videos and everything. And he didn't want to think about it.

• 1:34:49Ramit Sethi?

  Yeah.

• 1:34:50Speaker 00

  And now I'm like, no, I don't want to rent.

• 1:34:55Ramit Sethi?

  You don't want to rent because? It's okay.

• 1:34:57Speaker 00

  Because it's a failure.

• 1:34:59Ramit Sethi?

  Mary, I love the honesty. So this is one of the reasons that I love talking about our choice to rent. We have the money. We could buy right now and we choose to rent. And I talk about it not to brag. I'm not bragging about renting. It's because in America, when we talk about renters, we typically think they are poor and they're failures. And we don't want to do that. I can see it on your face.

• 1:35:23Speaker 00

  And I already had that label, so.

• 1:35:25Ramit Sethi?

  Yeah. And so we will tie ourselves, we'll twist ourselves in a knot to avoid being thought of as poor or failures. But my whole concept of a rich life, I will teach you to be rich. Not I will teach you to copy what everybody else does. I will teach you to choose your rich life. If you want to own your place and you want to stay in it, I can help you do that. But if you want to have thousands of dollars more per month to be able to invest, to be able to live, then you may have to reconsider if you care what other people think.

• 1:36:06Speaker 00

  I need to get over it.

• 1:36:09Ramit Sethi?

  The same way you, you were treating your son like he was weak. I think you might be treating yourself like you're weak. Look at me. When I, when I talk about renting, look at my body language. You think I say, oh, I'm a poor little renter. Life is so difficult. I hate it. I hate what you think of me, society. I'm like, think what you want. I have an awesome life. This is what we chose.

• 1:36:34Speaker 02

  The smart choice?

• 1:36:35Ramit Sethi?

  For us.

• 1:36:36Speaker 02

  Right.

• 1:36:38Ramit Sethi?

  And you have to decide what's smart for you.

• 1:36:39Speaker 02

  Right.

• 1:36:41Ramit Sethi?

  Tell me, Mary, what's going on? I love watching, uh, your facial expressions right now. There's, I see pain. I see confusion. I see realization. Tell me what's going on.

• 1:36:52Speaker 00

  Again, I just feel like a failure. I worked really so hard to not be the poor person renting with the car.

• 1:37:04Ramit Sethi?

  Who says you're a poor person? Who says you're a poor person?

• 1:37:08Speaker 02

  A smart person.

• 1:37:09Speaker 00

  I did have a townhome that we sold in a short sale. When the market, you know, the whole 2008 crap and went to renting. And then we bought a house and now it's back to renting.

• 1:37:23Ramit Sethi?

  Yeah. Can I gently challenge you? So the narrative that you just said, I respect it. I know that's what's going through your head. Can you give me a different narrative that's more empowering?

• 1:37:33Speaker 00

  I made a decision to sell my townhome because I couldn't afford it anymore.

• 1:37:37Ramit Sethi?

  Yes.

• 1:37:38Speaker 00

  And renting allowed me to, to live a life with my, the child that I had at the time, my daughter. But then I really worked very hard. I had to claim bankruptcy and everything. And then I worked hard to get past all of that. And it just feels like I'm going back to it.

• 1:37:57Ramit Sethi?

  Stay on the empowering part. You're doing great. Don't tell me about how it feels going back. Tell me why you might be making this decision. What will it get you?

• 1:38:06Speaker 00

  It will get us a life. Like Harry said, we'll be able to save money, which we can't do right now.

• 1:38:13Ramit Sethi?

  Yeah.

• 1:38:14Speaker 00

  And we'll be able to go out to eat. We'll be able to explore the beautiful area we live in and go do, maybe do stuff, not spend a ton of money, but just go do stuff.

• 1:38:26Ramit Sethi?

  I just see this over and over with you, Mary, is the narrative that you first come up with is disempowering. It is about the things that are wrong and the ways that you wish you weren't in this situation. But just with a little bit of pushing, you are able to come up with a very empowering narrative. This is an exercise for the two of you to work on. What are the narratives we used to choose? And what are the new narratives that we get to choose? Okay. All right. I don't know what you're going to do with your renting versus buying. Personally, though, I really like to see this number at 59%. So I'm going to leave it in here.

• 1:39:09Speaker 00

  Okay.

• 1:39:09Ramit Sethi?

  You don't have to do it. It's your money. It's your life. But this sure buys you a lot of flexibility. Let me show you a couple of things that we could do with the numbers. Now I'm going to move quickly on this. Okay? We have $2,100 a month left over. Why? Because all that extra money you cut, including the mortgage and all this other stuff flows to the bottom. We also have 90 extra thousand dollars. Okay? $90,000 from the sale of your house. I'm going to make it 80 because, I don't know, extra fees and this and that, moving costs, whatever. But I'm going to go ahead and add that to your investments.

• 1:39:44Speaker 00

  Okay.

• 1:39:44Ramit Sethi?

  Okay? So I will put, instead of 500K, it's going to be 580,000.

• 1:39:51Speaker 00

  Okay.

• 1:39:52Ramit Sethi?

  I'm putting it all into investments. Okay? You still have $2,000, $2,139 a month. What are we going to do with that money? Well, we are going to save it and we are going to invest it. Because time is running out and I need you to have more money. We good? Let me just show you how I would do it. You all can totally adapt this and change it based on life circumstances. Okay? I would get way more aggressive with my savings because right now you are two weeks away from disaster. I don't want it. I want a thousand bucks extra a month going in there. You're now at 1583 per month. That savings account is not to be tapped anymore.

• 1:40:37Ramit Sethi?

  That savings account is one direction. Money goes in. It does not come out.

• 1:40:42Speaker 00

  Okay.

• 1:40:42Ramit Sethi?

  What else? FSA healthcare?

• 1:40:46Speaker 00

  Yeah, the flexible spending account. I didn't know where to put that.

• 1:40:51Ramit Sethi?

  You put 150 bucks into it?

• 1:40:52Speaker 00

  And now 200, yeah.

• 1:40:54Ramit Sethi?

  Do you spend it, right?

• 1:40:55Speaker 00

  Yeah, yeah, I have to spend it all every year.

• 1:40:57Ramit Sethi?

  What do you end up spending it on?

• 1:40:59Speaker 00

  Braces and

• 1:41:00Ramit Sethi?

  Oh, okay.

• 1:41:00Speaker 00

  co-pays and whatever.

• 1:41:02Ramit Sethi?

  So you use it?

• 1:41:03Speaker 00

  Yeah.

• 1:41:03Ramit Sethi?

  Great. I don't mind this. I do need some more investments here. Let me look. 417, 580. We're going to calculate how much you have. Let me take a look at what this shows us. But as I'm going to just quickly summarize this, you're at 59% fixed costs. I would like it to be lower, but I don't mind it. I think some of these things may naturally get a little bit lower. You did mention pets.

• 1:41:30Ramit Sethi?

  Can I just ask, are you all going to get more pets?

• 1:41:33Speaker 00

  No.

• 1:41:34Ramit Sethi?

  Okay, good. The answer is no. That was rhetorical. No more pets.

• 1:41:38Speaker 00

  No.

• 1:41:38Ramit Sethi?

  I love your dogs. Goodbye. We're taking a CSP off screen. I'm going to tell you some of our numbers that you may end up with.

• 1:41:46Speaker 00

  Okay.

• 1:41:47Ramit Sethi?

  Okay.

• 1:41:47Speaker 00

  That's exciting, the reveal.

• 1:41:49Ramit Sethi?

  So, right now, if we hadn't changed anything and we waited until Mary was 65 years old, okay? You'd have about a million dollars invested. If you were to withdraw 4% of that, which you could safely, roughly safely withdraw for the rest of your lives, that would be about $40,000 per year in income. It's not a lot. 40K, not a lot. You wouldn't be able to make it. But we want to add on Harry's pension, about $32,000 per year. We want to add roughly 30K of social security. So you'd have about $102,000 per year. Thoughts?

• 1:42:32Speaker 00

  That's more than I thought we would have.

• 1:42:35Ramit Sethi?

  Yeah.

• 1:42:36Speaker 00

  So if we don't have a mortgage, that's not bad.

• 1:42:41Ramit Sethi?

  Nicely put. If we don't have a mortgage and if we keep the rest of our costs pretty low. Importantly, if you retire, you may not need to keep investing. So that would be hundreds of dollars extra per month that you could use. You could save it for a vacation. You know, there obviously you need to pay off some of these debts. You could accelerate those payments. There's a lot of things you could do. Not bad. Not great, but not horrible. If you cut your fixed costs dramatically. Okay?

• 1:43:19Speaker 02

  Yeah.

• 1:43:20Ramit Sethi?

  But what about if you sell the house? If you sold the house, $1.1 million. If we add in all social security pension, all that stuff, it would be about $108,000 of income. What do you notice? From 102 to $108,000.

• 1:43:40Speaker 00

  Not much.

• 1:43:40Ramit Sethi?

  It's not much of a difference, right?

• 1:43:41Speaker 00

  Yeah.

• 1:43:42Ramit Sethi?

  Do you know why?

• 1:43:43Speaker 00

  Because the time of the investment, it's not enough time to grow.

• 1:43:49Ramit Sethi?

  Exactly. It's short. Now, if we stretch that number out, if, for example, you didn't retire at 65, but a couple, two, three, four, five years later, those numbers change considerably. What is the age that you would be minimally acceptable to retire at?

• 1:44:12Speaker 00

  I've had 65 in my head for so long.

• 1:44:17Speaker 00

  I'm coming to terms with 67.

• 1:44:19Ramit Sethi?

  Okay.

• 1:44:20Speaker 00

  Yeah, I don't want to wait till I'm 70.

• 1:44:23Ramit Sethi?

  Okay.

• 1:44:23Speaker 00

  I want to live some life. Yeah.

• 1:44:25Ramit Sethi?

  So at 67, rather than having $1.1 million, you would have about $1.3 million. So what you will notice is that those two years is adding $100,000 per year. Again, I'm approximating this. With shorter time periods, it can become a little dicey, but you know, I'm giving you some approximate reasonable numbers. At that point, you would have $116,000 per year of safe withdrawal income. So we went from 102

• 1:45:03Ramit Sethi?

  to 108 to 116 per year.

• 1:45:05Speaker 00

  That's more than we're making now.

• 1:45:07Ramit Sethi?

  Yeah.

• 1:45:09Speaker 00

  So to me, that's, yeah, that's better.

• 1:45:12Ramit Sethi?

  It's more than you make now, but right now you are spending way more than you make.

• 1:45:16Speaker 00

  Yes.

• 1:45:17Ramit Sethi?

  So what is the key here?

• 1:45:19Speaker 00

  Not to overspend. Keep our fixed costs down.

• 1:45:23Ramit Sethi?

  Yes. And underneath that, what is the key to making sure your fixed costs are lower?

• 1:45:29Speaker 00

  Not giving money to people?

• 1:45:31Ramit Sethi?

  Bingo. You are nailing it. Honestly, I could see the confidence just in the way you're responding to me. It's quite striking. I love this momentum I'm seeing. Yes, the way to keep your costs lower. Obviously, you made some structural changes. You make some decisions together as a unit. But ultimately, it is also about having these boundaries. These boundaries are the things that allow you to retire. It's not just about saying no to your kids. It's actually about saying yes to your life. Do you see that?

• 1:46:02Speaker 00

  I do.

• 1:46:03Ramit Sethi?

  Yes. Harry?

• 1:46:05Speaker 02

  And to work alongside that and support for both of us has increased my income.

• 1:46:11Ramit Sethi?

  Yes.

• 1:46:12Speaker 02

  Just, just do it.

• 1:46:13Ramit Sethi?

  Yes.

• 1:46:14Speaker 02

  That.

• 1:46:15Ramit Sethi?

  So

• 1:46:15Speaker 02

  Nothing else.

• 1:46:16Ramit Sethi?

  At 5,000 a month, it's okay. At 6,000, at 7,000 a month, you are putting yourself in a much better position.

• 1:46:30Ramit Sethi?

  The things that I have not outlined here, because I want to be realistic with you. I haven't really outlined vacation because right now it's not feasible. There's no money for it. In order for that to happen, you could, but your earnings would need to go up. Yep. To me, I actually love that. In our own household, there are things we want to do. And so we talk about them openly. Here's what I want to do. Here's a hotel I want to go to, whatever. And, okay, so what's it going to take? Well, we got to earn this much. We back out the math. If you decided you wanted to take a trip or you wanted to do XYZ, you both talk about it. You get excited about it. Use the scripts in the book. And then you map out how much it's going to cost. Okay, so what's it going to take?

• 1:47:15Ramit Sethi?

  Does one of those has to work on the weekend? Do we have to do this? Can we eliminate that? Then we bank the money in a named account. And when the time is right, we know the exact month and year, we're going to have enough. We take the trip guilt free.

• 1:47:30Ramit Sethi?

  What do you think?

• 1:47:31Speaker 00

  Yeah, we need to plan it.

• 1:47:33Ramit Sethi?

  Yeah.

• 1:47:33Speaker 00

  Yeah.

• 1:47:33Ramit Sethi?

  Yeah.

• 1:47:34Speaker 02

  Structure.

• 1:47:35Speaker 00

  Yeah.

• 1:47:35Ramit Sethi?

  This radical change you're about to make, it's literally changing your identities. Like I said, I joke around Harry and Mary 2.0, but it is everything. The way you talk, the way you relate to each other, to your family, all of it. Having a structured place to talk about this and maybe a third party to get help. You've seen what happens when somebody outside can help a little bit. Therapists do awesome work.

• 1:48:00Speaker 02

  Yes.

• 1:48:00Ramit Sethi?

  I would encourage that.

• 1:48:01Speaker 00

  Yes. Yeah.

• 1:48:02Ramit Sethi?

  Final reframe here. I've loved our reframes. You know, what you used to say, what you're saying. You are not cutting your children off. You are?

• 1:48:12Speaker 00

  Empowering them.

• 1:48:13Ramit Sethi?

  Yeah. Making them stronger. And when you focus on your rich life together,

• 1:48:23Ramit Sethi?

  what example are you setting for your kids?

• 1:48:25Speaker 00

  How to live life.

• 1:48:28Speaker 00

  How, yeah, how to live life.

• 1:48:31Ramit Sethi?

  Yeah. Harry?

• 1:48:33Speaker 02

  Well, we're a team. We're working together. We are empowering you. We don't want you to make the same mistakes.

• 1:48:43Ramit Sethi?

  We've seen it passed down the generations.

• 1:48:45Speaker 02

  We care for you.

• 1:48:47Ramit Sethi?

  Yeah, we care for you. That ends here. And it might feel uncomfortable, but that's okay. We don't shy away from it. We feel uncomfortable right now and we're still doing it. And you can watch us or not, that's up to you. But you're adults and we're going to trust you to learn the right decisions for yourself. It's going to take a lot. You're going to have to repeat this over and over and over again. That's okay. But it will be important for you to speak it, to say it, to text it, all of the above. Because 30, 40 years of the same type of relationship takes a while to sink in that things are changing. Okay? Did you happen to get a response?

• 1:49:27Speaker 00

  Yes.

• 1:49:28Ramit Sethi?

  Okay, can you read it out loud?

• 1:49:30Speaker 00

  LOL, okay.

• 1:49:32Ramit Sethi?

  Wow, what do you make of that?

• 1:49:34Speaker 00

  I'm not surprised. That's him. And I just worry and mother hen too much.

• 1:49:42Ramit Sethi?

  All of that?

• 1:49:44Speaker 00

  Yes.

• 1:49:44Ramit Sethi?

  All of that worry? And his response?

• 1:49:47Speaker 00

  LOL.

• 1:49:49Ramit Sethi?

  That's actually really cool. I couldn't actually ask for a better response from your son. He goes, cool.

• 1:49:55Speaker 00

  Yeah.

• 1:49:57Ramit Sethi?

  Sounds good.

• 1:49:57Speaker 00

  Yeah.

• 1:49:58Ramit Sethi?

  What surprised you the most in today's conversation?

• 1:50:03Speaker 00

  This has been such a hard issue for us and how supportive and open he was to listening and taking accountability on that it's been really hard to make ends meet.

• 1:50:16Ramit Sethi?

  What about for you? What surprised you about yourself?

• 1:50:19Speaker 00

  About me that I texted my son?

• 1:50:24Speaker 00

  I didn't want to.

• 1:50:26Ramit Sethi?

  And you did it.

• 1:50:26Speaker 00

  And I did it. And I feel okay. I feel relieved. Yeah.

• 1:50:31Ramit Sethi?

  Well done.

• 1:50:32Speaker 00

  Yeah. Yeah. And, and that we can, we have the fortitude to be able to, to do this. Yeah.

• 1:50:39Ramit Sethi?

  Good for you.

• 1:50:39Speaker 00

  Yeah.

• 1:50:40Ramit Sethi?

  I'm proud of you.

• 1:50:40Speaker 00

  Yeah, thank you.

• 1:50:42Ramit Sethi?

  Harry, what about you?

• 1:50:43Speaker 02

  In terms of being surprised, you didn't surprise me by texting Stephen because I knew you could. The biggest thing that we have now is the ability and the willpower to continue. Because of this,

• 1:51:05Speaker 02

  we couldn't have done that on the couch at home

• 1:51:09Speaker 02

  or walking the dogs.

• 1:51:11Ramit Sethi?

  And I want you to remember that because it's easy to make changes here. When you go back, it's going to be very easy to go back into your lifestyle.

• 1:51:23Ramit Sethi?

  Families driving up the driveway, people texting. This is actually one of the reasons that I strongly encourage you to move.

• 1:51:34Ramit Sethi?

  Financially, yes, but just to change an environment. You know, for example, people who are in recovery, they will often move because they have an environment that does not facilitate the new person they need to become. Well, guess what? We have a similar scenario here. You are enmeshed in a lot of unhealthy financial behaviors. And even moving 10 miles away could radically change that. I'm very proud of both of you. I am. This is a tough scenario you're in. It really is. I wanted you to understand the severity of it because if you do nothing, you will end up in a really bad position. It seems okay right now.

• 1:52:18Ramit Sethi?

  The roof is here and blah, blah, blah. But it is a very dark place you are heading towards. However, to watch the two of you realize what was going on, to commit to making changes. Then we actually went through the numbers and it is possible. But everybody has to be executing.

• 1:52:37Ramit Sethi?

  Okay. People respond to a big, bold mission. You two do, the kids do, everybody does. I think Mary and Harry have a pretty tough road ahead of them. They have family dynamics that are tightly enmeshed. They have a pretty serious financial problem. They are older. There's a lot of things against them. But I'm surprised to find myself confident in them. The way that they changed today was very impressive. Frankly, I did not expect it. And the ability for Mary to even send that text message, that was not just a text message. It was a total transformation of the way she views herself. And I could not have scripted a better response from her son. LOL, fine.

• 1:53:22Ramit Sethi?

  This is like amazing. All the stuff that was in her head may not actually be reality based. So I hope that they are able to make some big decisions. Cut those fixed costs. I think renting might be a very good option for them. Allow them to bank tons of money every single month. Most importantly, I hope they can really come together as a unit as opposed to working independently. I want to give a big shout out to Mary and Harry. Thank you for coming here. I know that wasn't easy. I know that we talked about some really intimate, serious things. And I appreciate you coming here and sharing your story with everybody. And now let's check out their follow ups.

• 1:54:04Speaker 02

  Hey, this is Harry. Hello, everyone. How are you doing? Hope all is well. The takeaways I got from that podcast was teamwork between Mary and myself. Has to be teamwork. The accounts, management of the finances. It's vital for our success. And the current changes right now is I have taken over the grocery account. So looking forward to dropping the expenditure on that. And at the same time, on the work front, I have enhanced my coaching programs with gaining more facilities and clients with immediate effect.

• 1:54:46Speaker 00

  Hi, Ramit. Biggest surprise of our time together is the generational aspect of my relationship and habits with money and how that I most likely pass that on to my own children. Biggest takeaway is I just need to change how I speak about money and finances and not be so negative. So just for instance, saying things like instead of relinquishing control of finances to Harold, that we have control together and together we have control on planning our financial future. Also, I'm just empowering myself and my adult children into having rich lives.

• 1:55:30Speaker 00

  We are sitting down tomorrow to work on our conscious spending plan together instead of me doing it by myself and saying, here you go, Harold. And discovering our rich lives, exploring that and understanding what our rich lives look like. And then what we can ruthlessly slash and then also put a little money aside to enjoy what is important to us. We are super excited to move forward on our journey.

• 1:56:03Speaker 02

  Everyone, I hope everybody is well. Harry, Mary, Bunga.

• 1:56:07Speaker 00

  Hi, everyone. Yeah, this is about take 500.

• 1:56:15Speaker 00

  We're doing really well. We are being very intentional about spending money and thoroughly thinking things through before we buy anything for the house or anything else. Harry has been in charge of groceries and he is quite the dictator. So we've had a few heated words about his, the way he proceeds with being in charge of groceries.

• 1:56:45Speaker 02

  Groceries. The initial onset when we all met up and fantastic. 900 bucks a month. June got that down to 720 and a bit of change. July, we are probably a week to 10 days to the end of the month and I've got it down to 450.

• 1:57:04Speaker 02

  Brilliant. On the work front, I've got more hours in with the Parks and Recreation Department here in, well, the sports sector of that, my coaching business. I have more clients coming in. So I've generated more revenue to put into the household account for Mary and us, me, Harry.

• 1:57:26Speaker 00

  Yeah, both of us.

• 1:57:28Speaker 02

  Both of us.

• 1:57:28Speaker 00

  We're a team.

• 1:57:29Speaker 02

  Yeah, sometimes go.

• 1:57:30Speaker 00

  Not just me. I know I'm the boss, but.

• 1:57:32Speaker 02

  Get on with it. You're rambling.

• 1:57:34Speaker 00

  As far as moving, selling our home, we're not going to do that right now. Something to definitely consider in the future. Probably just downsizing by getting a smaller mortgage, moving out of town a little bit. But right now we need to be in town and I need my dedicated office space. And we have our grandson. So not a good time to think about moving at the moment. But we're going to focus on bringing in more money and we have no credit card debt. The only debt we have is our mortgage and the debt that Harry is working on. And the other big issue that we had to work on or are working on is giving money to our adult children.

• 1:58:18Speaker 02

  Your adult children.

• 1:58:19Speaker 00

  Our adult children. It's not just my child, but you know, we'll work through that too. But the one particular adult child has been paying us back.

• 1:58:31Speaker 02

  Slowly.

• 1:58:32Speaker 00

  And do you want to add anything?

• 1:58:34Speaker 02

  No, just think we're going to sit down over the next week, maybe two, and figure out a repayment plan that is conducive for everyone, which I think we'll sit down as three adults and figure that one out. Brilliant.

• 1:58:53Speaker 00

  And we are going through the money for couples book.

• 1:58:58Speaker 00

  And I really liked the first exercise, the first couple of exercises. And when Harry told me what he would buy for me, if there was anything he could buy for me, he said a horse. He said a horse. It was all emotional. It was very emotional. That was so sweet. This is why I love Harry. And I'm going to buy him a Mini Cooper. So one day, one day we'll get there.

• 1:59:24Speaker 02

  There we go. All for now. Yeah, all for now. Signing off, she rambles, you see.

• 1:59:30Speaker 00

  Thanks so much for all your help. You really helped get us on the right path and we are moving ahead.

• 1:59:39Speaker 02

  Au revoir.

• 1:59:39Speaker 00

  Cheers.

• 1:59:41Ramit 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.