283. “We have 3 kids and live paycheck to paycheck. Are we screwed?”

Ramit digs into how years of impulse spending, money avoidance, and unequal financial responsibility have left a couple earning around $178,000 a year with $186,000 in debt and just $571 in savings. Ramit Sethi talks with Michelle and Jeff, both 45, who have three children and are approaching 20 years of marriage. They’re earning more than ever, but still living paycheck to paycheck, with fixed costs consuming 87% of their take-home pay. Michelle feels responsible for making everything work, while Jeff admits that avoiding the numbers helps him avoid worrying about money and leaves her carrying the burden. A closer look at their spending reveals a $76,000 car purchase, buy-now-pay-later spending, and more than $9,000 spent eating out reveal how their everyday decisions keep them stuck. The conversation reaches a turning point when he asks them to step away and decide whether they’re both ready to commit to change. Together, they explore the childhood experiences behind their money habits and begin building shared rules, a spending plan, and a different financial future for their family. A special thanks to our new partners at Monarch for sponsoring this episode. Try Monarch for free today, and get 50% off your first year of Monarch’s core tier at https://monarch.com/ramit, promo code RAMIT. When you sign up with my link only, you’ll get your Monarch account customized with my exact CSP categories so you can see exactly how you’re stacking up to your plan each month. That’s https://monarch.com/ramit, promo code RAMIT. In this episode, we uncover: Why earning around $178,000 a year hasn’t stopped Michelle and Jeff from living paycheck to paycheck How Michelle became responsible for managing the money and deciding which bills could wait Why Jeff avoids the numbers, even while acknowledging the pressure it puts on Michelle What $186,000 in debt, $571 in savings, and 87% fixed costs mean for their family How a $76,000 car purchase left them with a roughly $1,000 monthly payment Why Ramit pauses the conversation and asks them to decide whether they’re ready to change How childhood experiences with money still shape their spending, trust, and communication How they spent $9,275 eating out by August, including $2,747 in a single month Why they agree to weekly money meetings, shared purchase rules, and a $75 monthly dining-out limit What their follow-ups reveal about sharing responsibility and automating savings, retirement contributions, and extra debt payments Chapters: (00:00:00) Introduction (00:02:13) Earning more, still living paycheck to paycheck (00:16:50) The purchase arguments putting pressure on Michelle (00:32:04) Ramit asks them to step away and commit (00:39:04) Facing their debt and high fixed costs (00:49:08) The childhood money patterns they’re repeating (01:05:53) Where their money is really going (01:13:34) Building shared money rules (01:20:18) Reworking their budget, savings, and debt plan (01:28:51) Follow-ups 💡 RAMIT’S PODCAST NEWSLETTER • I share new ways to think about money every Saturday. Get the emails here: https://iwt.com/podcastnewsletter 🙌 GET HELP FROM RAMIT SETHI • Order my new book: Money for Couples: https://iwt.com/moneyforcouples • Take control of your money with the Conscious Spending Plan: https://iwt.com/csp • Optimize your credit cards with the 1st chapter of my book: https://iwt.com/chapter1-pod • Join my Rich Life: Road to $100K program: https://iwt.com/100k • Listen to my book — now on Audible: https://amzn.to/48zko28 🤳 CONNECT WITH RAMIT SETHI • Instagram: https://www.instagram.com/ramit/ • X: https://twitter.com/ramit ✅ SUBSCRIBE SO YOU DON’T MISS ANY EPISODES https://youtube.com/user/ramitsethi/featured/ This episode brought to you by: 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 Leesa | Go to https://leesa.com for up to 30% off mattresses PLUS get an extra $50 off with promo code RAMIT, exclusive for my listenersFabric by Gerber Life | Go to https://meetfabric.com/RAMIT and apply today, risk-free Grow Therapy | Visit https://growtherapy.com/ramit to find a therapist today Gelt | Gelt is taking on new clients now. Find out if you qualify at https://joingelt.com/ramit Want to know exactly when you’ll hit your first $100K? Rich Life: Road to $100K gives you a step-by-step system to automate your money, accelerate your timeline, and build your Rich Life along the way. Join today: iwt.com/100K Connect with Ramit: Get my new book, Money For Couples Get Money Coaching with Ramit Download the Conscious Spending Plan Listen to my book—now on Audible Get my New York Times best-selling book Get my no-numbers journal Other episodes Instagram Twitter YouTube Apply to be coached for free on this podcast at https://iwt.com/apply

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

• 0:00Ramit Sethi?

  What's the exact date where you will be debt free? What's the exact date when you'll be rich? Most people don't think this is something you can plan for. It's just something one day in the future. Wrong. This is something you can plan for. In fact, I created Rich Life Road to 100K to show you step by step how to figure it out. In the program, we cover exactly what you need to focus on, how to accelerate your timeline so you can get there faster, and how to live your rich life along the way. Plus, we have tons of added bonuses in this program, like live weekly calls, access to a great community, and a library of vast content, all at your fingertips.

• 0:42Ramit Sethi?

  You can join this program today at IWT.com/100K.

• 0:47Speaker 01

  We're trying to figure out, okay, how are we going to get the kids to school? Or which of those we could skip this month? Because I feel like sometimes we're drowning.

• 0:55Ramit Sethi?

  Your fixed costs are 87%. You have very little savings. You have kids. If something happened, you all are in big trouble. What solutions have you looked for, engaged with?

• 1:05Speaker 01

  We've done credit cards, personal loans. We have looked at bankruptcy.

• 1:09Speaker 02

  My philosophy is I give her the money and she does what she used to do with it.

• 1:14Ramit Sethi?

  Does it work?

• 1:15Speaker 01

  No, I don't really feel like I know what I'm doing. I feel like I'm just piecing things together so we can get to the next paycheck.

• 1:22Ramit Sethi?

  Why is it you?

• 1:23Speaker 01

  Honestly, I don't trust Jeff to handle the money.

• 1:25Speaker 02

  I'm in my own little world. I just don't look at it. If I don't ask about it, then I don't have anxiety about it.

• 1:32Ramit Sethi?

  You both came on Money for Couples. The only way that two of you will succeed is if the two of you are a team. And right now, this is the opposite of teamwork. I'm about to speak with Michelle and Jeff. They're 45 years old. They have three children. And in their own words, they are earning more than ever before, but they are living paycheck to paycheck. Now, one of my favorite parts of my Netflix show was being able to look at my guests' actual spending before I ever met them. And now with Monarch, I can. Monarch is a private personal finance app that brings all of a household's accounts, checking, credit cards, loans, and investments into one clean dashboard. And they've built my conscious spending plan

• 2:14Ramit Sethi?

  directly into their product exclusively for my audience. That means fixed costs, investments, savings, guilt-free spending are automatically tracked as a percentage of take-home pay. So if you want to see your conscious spending plan in a living, breathing dashboard that updates in real time, you can try it for free and get 50% off your first year of Monarch Core with code RAMIT at monarch.com/ramit. Loans, they have a Nissan Pathfinder. For $48,000? What? That's a lot of money. Whoa. Okay, so their car payment, I think, is $999. Klarna? Why are you using Klarna?

• 2:57Ramit Sethi?

  I have a lot of questions, so let's get started with Michelle and Jeff. Michelle, in your application, you said, "We can't get ahead. We're making the most money we've made in our adult lives, and it feels like we're still living paycheck to paycheck." Is that still accurate?

• 3:16Speaker 01

  Yes. We were, or I was in the process of trying to figure out how to make our bills that month. We had just started working with a debt management plan, and I was trying to figure out a budget. I was trying to figure out how are we making as much as we are, but I still go to the grocery store on Sunday and worry about the total. I'm trying to piece it together.

• 3:44Speaker 02

  The worrisome on her face of, "I gotta move this money from this account to this account or split it up between these two accounts so we can have money to feed the kids for the week." And, you know, it's the same, the worry, the anxiety, and the stress on her face is, you know, it's not something that I want to see.

• 4:07Ramit Sethi?

  And Michelle, how long have you been the person in charge of managing the family finances?

• 4:13Speaker 01

  Since the start. We joke that our relationship started with me taking his money in Monopoly.

• 4:20Ramit Sethi?

  Oh, uh-huh.

• 4:22Speaker 02

  My philosophy is I give her the money and she does what she used to do with it, and I take care of the house.

• 4:29Speaker 01

  And it just sort of continued that way, I think, because I had more experience at the time. I'd been living on my own for a while, so I was more familiar with doing things like taxes and insurance and all of that.

• 4:44Ramit Sethi?

  Got it.

• 4:45Speaker 02

  I have to ask her how much I make a year because I don't look at my pay stubs. She set up a 401K for me just last week, or two weeks ago, because whatever we need to do to make her feel secure and comfortable and financially ready for the future, I'm both for it.

• 5:05Ramit Sethi?

  Okay. How long you been married for?

• 5:08Speaker 01

  It'll be 20 years in January.

• 5:10Ramit Sethi?

  Ooh, congratulations.

• 5:12Speaker 01

  Thank you.

• 5:12Ramit Sethi?

  That's cool. That's a big one. 20 years. Children?

• 5:17Speaker 01

  We've got three of them. 16, 12, almost 13, and six.

• 5:22Ramit Sethi?

  Okay, excellent. Outstanding. Let's say that we have a really good conversation today. 10 out of 10. That's what I always plan on. What does each of you walk out of here with? Jeff, you first.

• 5:33Speaker 02

  For me, it's more insight, more knowledge of what's going on, our ins and outs. And she's been trying to loop me in more in the last month or two as she's getting into our finances. She's learning more about taking charge of our money and...

• 5:50Ramit Sethi?

  But I'm surprised you say you want insight on this call, but I think you also mentioned you're happy to just hand her the money. So...

• 5:57Speaker 02

  100%. For me, ignorance in financial is bliss. It's selfish, yes, and not fair for me to put it on her shoulders. It's not fair to let her carry all the financial burden and have to make all the decisions and have to be the one saying, "No, we can't do this. No, we can't do that." And have to make her feel like the bad guy. It's easier for me to focus on the kids in the house and everything else in between than it is to focus on the finances.

• 6:28Ramit Sethi?

  Do you really want insight today? I mean...

• 6:31Speaker 02

  I do. I think we both need to be on the same page. So I'm not just, you know, thinking, "Okay, she's just being overreacting," or it's just, you know, her being paranoid.

• 6:43Ramit Sethi?

  So you want to take on some of that burden?

• 6:45Speaker 02

  Yeah. I'm a project manager. I do risk assessment. But if I don't know what's going on, if I don't have all the information, I can't plan.

• 6:56Ramit Sethi?

  Jeff, this is not about information. I want to set that right away. It's not about information, it's not about tools.

• 7:01Speaker 02

  No, I agree. It's just, again, it was easier just to look the other way.

• 7:05Ramit Sethi?

  Yes. Great. That's honest. So Michelle, what about you? 10 out of 10. What would you walk out of here with?

• 7:11Speaker 01

  Confident direction of what steps I need to take and what steps I can take to make sure that we are eventually in the best financial shape possible. I want to make sure that my kids don't end up in the same situation I was when my parents died, which was not being able to pay for their cremations because they didn't have any savings or insurance or anything.

• 7:40Ramit Sethi?

  I'm sorry. This is interesting because this doesn't usually happen. When I ask people, like, "What do you want to get out of this?" Most people say, "I want a plan," or something like that, which is fine. I love hearing what you both want. But Michelle, are you telling me that what you want to get out of today is making sure that your kids can pay for your cremation?

• 7:58Speaker 01

  I mean, that's kind of what prompted all of this.

• 8:03Ramit Sethi?

  We'll get to that, but that's what you want to walk out of? How much does a cremation cost?

• 8:07Speaker 01

  If you don't get a specialized urn, it's about $2,500. But...

• 8:13Ramit Sethi?

  That's the dream? $2,500 for your kids? I like hearing what you want. Sometimes I'm going to push on a little because I don't think your life is about being cremated for $2,500. That actually is really depressing.

• 8:27Speaker 01

  Yeah.

• 8:27Ramit Sethi?

  We got a dream bigger than that, right? The language in your application really stands out to me. We're living paycheck to paycheck. We've been doing it the same way for 20 years. Tell me more about that. What does that feel like to you?

• 8:42Speaker 01

  It's stressful. It's scary. I don't like not knowing what we would do or trying to figure out, "Okay, how are we going to get the kids to school?" Or, "How are we going to get my daughter up to her doctor's appointments?" We don't have anybody to help us with it, and we would be pretty out of luck.

• 9:04Ramit Sethi?

  Do you ever feel that way about, like, savings or retirement?

• 9:08Speaker 01

  If I think about it, yes.

• 9:10Ramit Sethi?

  But you don't.

• 9:11Speaker 01

  Not the way that I should now.

• 9:13Ramit Sethi?

  And Jeff, what is your role when it comes to money in this relationship?

• 9:18Speaker 02

  As I said at the beginning, I give her my paycheck, and that's all I think about it is, she's been taking my money for 20 years now.

• 9:27Ramit Sethi?

  Does it work? Because this is a common, this is actually quite a common dynamic.

• 9:31Speaker 02

  It works for me, not much for her.

• 9:35Ramit Sethi?

  That's an honest answer.

• 9:37Speaker 02

  You know, it's, "Hey, there you go. My lights are still on. You know, there's gas in the car, and we finally established ground rules of I'm not allowed to spend anything over $20 without her permission," which I agree to because I'm an impulse buyer.

• 9:52Ramit Sethi?

  But it works for you. Okay. And Michelle, does it work for you?

• 9:55Speaker 01

  No. It can be overwhelming, and I don't really feel like I know what I'm doing. I feel like I'm just piecing things together so we can get to the next paycheck, to make sure we can get through the month.

• 10:07Ramit Sethi?

  Why do you do it?

• 10:08Speaker 01

  Somebody has to, and we have the kids.

• 10:11Ramit Sethi?

  I'm not making the connection. Somebody has to. Why is it you?

• 10:14Speaker 01

  Because honestly, I don't trust Jeff to handle the money. I've seen his splurging, and I don't feel like he has the confidence or the follow-through to be able to handle it and trust that something isn't going to get turned off or something isn't going to happen.

• 10:34Ramit Sethi?

  So you do the best you can? And then what?

• 10:37Speaker 01

  I'm looking at which of those we could skip this month, which ones we could do a partial pay on, looking for solutions because I feel like sometimes we're drowning.

• 10:47Ramit Sethi?

  What solutions have you looked for, engaged with?

• 10:51Speaker 01

  We've done credit cards, personal loans.

• 10:53Ramit Sethi?

  Wait, wait, wait. Credit cards is a solution?

• 10:55Speaker 01

  It's a temporary solution.

• 10:57Ramit Sethi?

  Oh, okay. Okay, go on.

• 10:59Speaker 01

  It made it so I could pay the bill. We did get a personal loan at one point to pay off the credit cards, but did not follow through with that the right way and ended up with that debt plus the credit cards.

• 11:11Ramit Sethi?

  What else?

• 11:12Speaker 01

  We have looked at bankruptcy.

• 11:14Ramit Sethi?

  Okay. What would somebody else do in terms of a solution if they don't know how to manage their money?

• 11:20Speaker 01

  They would look at learning how to and figuring out a way to manage it with what they have.

• 11:27Ramit Sethi?

  Yes. Have you done that?

• 11:29Speaker 01

  I'm starting to. But I'm very new to it.

• 11:34Ramit Sethi?

  You've been married almost 20 years. Can we just cut to the chase? I'm not interested in what you've done in the last one month. People always clean their house before the house cleaner comes. I'm not interested in that. Have you looked into books and courses and videos and learned about how money works?

• 11:48Speaker 01

  I didn't look into courses and videos because to me, it always felt like they were geared either towards people that already had money. Or it was eat beans and never leave your house until you're completely debt free.

• 12:04Ramit Sethi?

  Okay.

• 12:04Speaker 01

  And that didn't seem sustainable either. That wasn't the way that I wanted to live my life or wanted us to have to live our lives.

• 12:12Ramit Sethi?

  Jeff, you want to add anything to what you just heard there?

• 12:15Speaker 02

  No, I'll be honest, until she mentioned she's been watching this, you know, and I mean, I knew we had problems, but again, it's the ostrich in the sand. If I don't watch anything she watches, I'm in my own little world and.

• 12:32Ramit Sethi?

  Are you in your own world about money as well?

• 12:35Speaker 02

  100%. I just don't look at it. If I don't ask about it, then I don't have anxiety about it. In my world, it was better for me not to know. And then to cause myself anxiety and worry and stress.

• 12:49Ramit Sethi?

  Meanwhile, it's not just the ostrich in the sand. The ostrich in the sand is being fed, cable is being provided, lights are being provided for the ostrich. The ostrich is living quite a good life. They're chilling.

• 13:00Speaker 02

  Yeah, I'll be the first one, you know, to acknowledge that I've saddled the burden of our finances.

• 13:05Ramit Sethi?

  Will you be the first to make a change?

• 13:07Speaker 02

  I'm trying. Michelle is teaching.

• 13:11Ramit Sethi?

  Sorry, I didn't get a yes or no answer to my question. You will?

• 13:14Speaker 02

  Yes.

• 13:16Ramit Sethi?

  It's pretty easy to tell that I am frustrated in this conversation. You know, here we have the parent child dynamic again, which is inherently frustrating talking about two adults. But it's especially such a tired old trope to have the guy be the one who's just like, I don't know, what should I do? You're better at money. I'm kind of just tired of it. I hope I'm not too forward in saying this, but [bleep] get up, guys. Stop sitting around and waiting for somebody else to come and save you. No one is coming to do it. So apologies if I come off a little too strong, but this is what's going on with me inside right now. Think about what a perfect day in your retirement would look like. How old are you? Where are you? Who are you with?

• 14:00Ramit Sethi?

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• 14:40Ramit Sethi?

  a house, tackling debt, managing investments, saving for kids' college, traveling in retirement, estate planning, all of it. Plus their mobile app makes it easy to do everything in one spot, like tracking your goals, checking balances out, messaging your planner, seeing monthly action steps and more. 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 about which membership option is best for you. Facet is an SEC registered investment advisor. I'm not a member of Facet and I have an incentive to endorse Facet as I have an ongoing fee

• 15:23Ramit Sethi?

  based contract for cash compensation based on this endorsement. All opinions are my own and not a guarantee of a similar outcome. After we traveled across the world for three and a half months, I remember when we got home and the first thing we thought when we walked in our bedroom and lay down was, it's good to be back in our own bed. And that's because we have a Lisa mattress. Now, we could have gone out and bought any mattress, but we chose to buy not only one Lisa mattress, but multiple because we love them so much. So this is a product I personally love and use, and I want to tell you why you will too. Lisa has a lineup of premium, beautifully crafted mattresses designed specifically for how you sleep, whether it's on your stomach, side or back. They use eco-friendly materials like their new Green Flex Foam made from USDA certified

• 16:08Ramit Sethi?

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• 16:52Ramit Sethi?

  Jeff, when's the last time you and Michelle had tension around money?

• 16:58Speaker 02

  The thing is, is I just, I walk away from it. So I don't let the tension. I just, I think I just tend to be an agreement person of, okay.

• 17:10Ramit Sethi?

  I feel like you're doing that right now to me. Jeff, do you bring up money conversations?

• 17:15Speaker 02

  Only when I don't get what I want.

• 17:17Ramit Sethi?

  Give me an example.

• 17:18Speaker 02

  The last biggest thing I asked for was a smoker.

• 17:21Ramit Sethi?

  Okay.

• 17:21Speaker 02

  Realistically, I knew we're never going to use it, but I wanted to have it.

• 17:26Ramit Sethi?

  When was this?

• 17:27Speaker 02

  Before Father's Day, I think, Michelle, wasn't it?

• 17:30Ramit Sethi?

  A few months ago. And what did you say to Michelle? Where were you and what did you say to her?

• 17:35Speaker 02

  Now I remember, we were at Costco.

• 17:38Ramit Sethi?

  Actually, can we just recreate this? Say what you actually said back then. Go ahead, Jeff.

• 17:43Speaker 02

  Look at the smoker. It'd be nice to, you know, put a turkey or, or the bacon or the cheese.

• 17:51Speaker 01

  Yeah, I don't really like smoked foods and we already had one and you barely used it.

• 17:57Speaker 02

  This one is newer and it has pellets. You know, we would use it more. You can also, you know, it's not just a smoker, it's also a grill.

• 18:04Speaker 01

  Well, we don't have the space for it and I really don't think we need it.

• 18:11Speaker 02

  But we get rid of your barbecue and we can put the new one there.

• 18:15Speaker 01

  I like my barbecue. My barbecue works absolutely fine. We just need to clean it before the summer hits.

• 18:20Speaker 02

  This one would be easier upkeep because it's pellets and not gas.

• 18:24Speaker 01

  No, I remember pellets being more expensive and that was one of the reasons we didn't use the last smoker you had.

• 18:30Ramit Sethi?

  Okay, okay. Timeout, pause. Great job. That was very authentic. Did you reach a resolution on that conversation?

• 18:38Speaker 02

  No, I didn't get it. It's, in the long run, I know it's not practical.

• 18:43Ramit Sethi?

  Why'd you ask then?

• 18:45Speaker 02

  Because it's shiny.

• 18:46Ramit Sethi?

  Is this serious? Like, are you, are you being serious right now?

• 18:48Speaker 02

  Oh, I'm serious. Yeah, no, it's, it was shiny. It was something new. It was something that I wanted, you know, like I've seen it before and I'm competing with my father and, you know, because he had one, I wanted one and.

• 18:59Ramit Sethi?

  Whoa. Michelle, what was that reaction from you?

• 19:02Speaker 01

  That was agreement because that's a lot of what it comes down to. His dad gets a smoker and suddenly he wants a smoker. His dad gets a Blackstone and talks about how great that is. And Jeff wants to get a Blackstone.

• 19:17Ramit Sethi?

  Wow. That little example there shined so much light on the dynamic here. Can I ask you both, what role was each of you playing? Jeff, what role were you playing?

• 19:30Speaker 02

  I was more of the dreamer. She is more of the real, you're realistic. She's the one that keeps me grounded and saying, it's kind of dumb. You know, you're not going to use it. Well, you used the last one maybe once.

• 19:41Ramit Sethi?

  Okay, dreamer. And when you say she keeps you grounded, if she wasn't there, what would you do?

• 19:47Speaker 02

  I would have bought it. I would have spent the money and dealt with the consequences later and that's what I've always done.

• 19:56Ramit Sethi?

  Okay. And Michelle, what role were you playing?

• 19:58Speaker 01

  I was being the authoritarian. I was trying to put rules down and control things.

• 20:07Ramit Sethi?

  I agree with everything you both just said. And I see Jeff as pushing the limits, even kind of knowing, you kind of said it with a smile, Jeff. I knew I really shouldn't get it. I knew it's not practical, but like, let me try to get it anyway. Pushing the limits. And Michelle, whether involuntarily or voluntarily, takes on the role of?

• 20:32Speaker 01

  The parent.

• 20:33Ramit Sethi?

  The parent. And the parent has to do what, Michelle?

• 20:37Speaker 01

  I have to say no.

• 20:38Ramit Sethi?

  You have to say no? You have to give a list of reasons? And I noticed that you both engage in this thing. Jeff says, what about this? Then you have to explain why not. Well, what about this? No, well, I don't know. Well, what about this? The pellets are actually more expensive. And then does anyone walk out of there feeling good? Well, I'll just ask you, did you walk out of there feeling good?

• 20:56Speaker 01

  Eventually, but I was, I was initially frustrated that it was a conversation again and it felt like I was having to defend the no.

• 21:03Ramit Sethi?

  Yeah.

• 21:04Speaker 02

  I don't know what I was expecting when I asked. Knowing, you know, I knew the outcome eventually was going to be no.

• 21:13Speaker 02

  But you always, I don't know why I did it.

• 21:16Ramit Sethi?

  You know why. Think about it. Why did you ask? You know why.

• 21:20Speaker 02

  There's a 50/50 chance that she would say yes.

• 21:22Ramit Sethi?

  Exactly.

• 21:23Speaker 02

  And that's how we got into 95% of where we're at is because I'm an impulse. And there's sometimes she just doesn't want to deal with it. And then I'm dealt with the consequences.

• 21:37Ramit Sethi?

  Who's dealt with the consequences?

• 21:39Speaker 02

  Well, both of us. Well, mostly her because then she has to figure out, okay, that $500, where is that going to be pulled from?

• 21:46Ramit Sethi?

  Michelle, what are you noticing as you hear this from Jeff?

• 21:49Speaker 01

  It's kind of frustrating because he knows what he's doing and still does it.

• 21:54Ramit Sethi?

  Yes.

• 21:55Speaker 01

  Even though it puts more pressure on me and makes things more difficult for me.

• 22:01Ramit Sethi?

  Yes.

• 22:01Speaker 01

  And I feel like he's doing it intentionally, which doesn't feel cool.

• 22:05Ramit Sethi?

  It doesn't feel cool, Jeff. That's why I didn't really buy you saying, I don't know why I do it. You know why you do it. Just like anybody knows why they walk into a casino and they gamble. Because once every 20 times, they win a little bit of money and it's a little bit of fun. It's actually fun. I could kind of see the glee on your face when you talked about the smoker and the pellets and the this and the that. It's fun for you to talk about. But it's not fun for Michelle because she's thrust into this role of being the, as she put it, the authoritarian or the naysayer, the no. That's kind of just sucks.

• 22:36Speaker 02

  No, it's not right for me to put her in that spot either.

• 22:39Ramit Sethi?

  How long you been doing this for?

• 22:41Speaker 02

  I mean, the last biggest thing was when I convinced her to buy a timeshare when we were in Vegas on vacation.

• 22:47Speaker 01

  It's been going on a while.

• 22:49Speaker 02

  Yeah.

• 22:49Speaker 01

  This dynamic, I would say probably since around 2010, 2011.

• 22:53Speaker 02

  I mean, back in 2010, it was just me and her. We were, back then, we were paycheck to paycheck, but we were making it work.

• 23:01Ramit Sethi?

  Looking back, I'm always curious about this. Do you see any clues with each other early in on your relationship, financially speaking, with where you are now?

• 23:11Speaker 01

  Oh, yeah. We have a bigger paycheck, but it's almost a mirror image of where we were 20 years ago. Still feeling like we're not making enough, still doing the silly splurges, just with a little more responsibility now because we have the kids.

• 23:26Speaker 02

  Ah, yeah. When, yeah, when we met each other, I was going through a divorce and I had disposable income. I didn't care. I was living in an RV at my parents' property. And yeah, I didn't have any, any other expenses except for the rent that I was paying them to live in the RV. And yeah, I don't look at long-term finances. I look, you know, the here and now.

• 23:51Ramit Sethi?

  Do you look at long-term for anything?

• 23:53Speaker 02

  I mean, I do have life insurance.

• 23:55Ramit Sethi?

  Just in general, are you a long-term person or no?

• 23:57Speaker 02

  I used to be, but as I got older and more cynical, I stopped.

• 24:03Ramit Sethi?

  What caused you to become more short-term thinking?

• 24:05Speaker 02

  Just the way our world is and, you know, you see every day, it's, you know, you could be go out of Walmart grocery shopping and somebody else is having a worse day than you and decides to go on a rampage. You could be watching a movie.

• 24:19Ramit Sethi?

  Were you ever long-term thinking about money?

• 24:21Speaker 02

  Yeah, with my first wife, yes.

• 24:25Ramit Sethi?

  Okay. Michelle, are you a long-term thinker or no?

• 24:28Speaker 01

  I think it depends. I want to be a long-term thinker, but I don't always have the patience for it.

• 24:34Ramit Sethi?

  But oddly enough, you talk about your impending cremation decades from now. I don't mind it. I'm, I'm learning a lot already. This is very helpful.

• 24:41Speaker 01

  I wasn't caring, but then we had our first kid and I recognized that we needed to be more careful in some areas and needed to start saying no to things and just...

• 24:56Ramit Sethi?

  Who needed to say no?

• 24:58Speaker 01

  I needed to say no to Jeff when he would want to do things or get things that didn't make sense.

• 25:04Ramit Sethi?

  And thus, the pattern was born. 15-plus years ago. First kid was born. Who was the person who made the decision to change the dynamic around money? Michelle, in the sense that I need to now take on the burden and say no. So I'm going to create this almost force field. I will absorb all of Jeff's inquiries. Can we get this? Can we get that? What about this? Let's buy a timeshare. And I'll take on the burden myself. And once in a while, I'll crack. Or as Jeff puts it, 50% of the time, I'll crack, which will lead us into more financial trouble. But I am the one who's going to have to say no to Jeff.

• 25:41Speaker 02

  I think in the last six months, I'm understanding that we're not in a good spot. I've not been trying to play the games of let's buy this, buy that.

• 25:50Ramit Sethi?

  What? When was the Costco thing? Father's Day.

• 25:55Speaker 01

  Yeah.

• 25:56Ramit Sethi?

  It's two months ago.

• 25:57Speaker 02

  I'm trying to be better, as she's explaining more and more and opening up more and more.

• 26:02Ramit Sethi?

  How long is it going to take?

• 26:04Speaker 02

  I don't know. I'm pig-headed. I know the ramifications. If I don't learn and if I don't ask...

• 26:11Ramit Sethi?

  What are they?

• 26:12Speaker 02

  We're going to be like my parents, living in a place that they can't afford to move out of when the floors are falling apart and the wiring is going and the mold is spreading. And there's nothing else they can do because they're on social security and they're too far in debt.

• 26:28Ramit Sethi?

  I'm being pretty relentless with Jeff. I'm asking him a lot of questions with increasing intensity and specificity. It's not an accident. I'm doing this on purpose. Jeff lives in a world where he says a lot of words that are up in the clouds and Michelle simply accepts them. You see this in couples where they've been together for a long time, so they don't really interrogate what each other means, but I don't accept that. And I have the latitude to ask him questions to make him own what he's actually saying. I think he probably has never actually heard himself say what he actually means. He's been living in the clouds and I'm here to bring him down to the street. What was it like doing the conscious spending plan together?

• 27:08Speaker 02

  We didn't. She tried to show me the numbers, but my ADHD had me thinking about other stuff.

• 27:16Ramit Sethi?

  Are you diagnosed?

• 27:18Speaker 02

  No, but we know I have it because not something, because reality, you know, ignorance is bliss. If, you know, I know that I have problems, it's definitely there. My son has it.

• 27:31Ramit Sethi?

  Yeah. Is he diagnosed?

• 27:32Speaker 02

  Oh, yeah. 100%.

• 27:34Ramit Sethi?

  Yeah.

• 27:34Speaker 02

  Definitely see the patterns of him in me.

• 27:39Ramit Sethi?

  Why have you not gotten diagnosed?

• 27:42Speaker 02

  It's like, I don't like doctors. I don't like going to doctors. It's, Michelle tells me to do it all the time. It's just, I think, again, it goes back to, you know, I don't want the reality or the medications or it's easier for me to, you know, blame it on that than, you know, than anything else.

• 28:01Ramit Sethi?

  When, when you suspected your son had ADHD, did you seek out help?

• 28:06Speaker 02

  For my son, yes, right away.

• 28:07Ramit Sethi?

  Right away?

• 28:09Speaker 02

  Yes. Yeah. When he was in elementary school.

• 28:12Ramit Sethi?

  But not for you, even though it affects your wife.

• 28:16Speaker 02

  For me, it's being selfish.

• 28:20Ramit Sethi?

  You're okay being selfish? It's rare that I hear someone admit that. You've now mentioned it twice.

• 28:27Speaker 02

  It's, it's me. It's, it's how it comes down to that. It's my health.

• 28:33Ramit Sethi?

  Look at your wife. You told me that she's the one worried at the grocery store about going up to the counter and the card doesn't charge.

• 28:39Speaker 02

  It goes, it goes beyond, you know, that. Again, if nobody communicates about where we are with the money, where we sent, you know, it's hard for me to focus on, okay, this is the issues.

• 28:51Ramit Sethi?

  Okay. I want to ask you both how you'd like to proceed here today because you both came on money for couples. This is not money for one person in a couple. It's money for couples. I have a very strong philosophy. The only way that you, two of you will succeed is if the two of you are a team. And right now, this is the opposite of teamwork.

• 29:15Speaker 02

  I've been trying to be more engaging, you know, because I know this is important. You know, we're 45 years, 46 years old.

• 29:21Ramit Sethi?

  Jeff, I don't think trying harder is really going to change much.

• 29:26Speaker 02

  For me, trying harder is better than not trying at all. The last couple of days, last week or two, I've been showing commitment to move outside of my comfort zone and going back to school. I got super out of my comfort zone and started applying for new places. And it took a lot because I don't like uncertainty and I don't like new things. And anything going forward is, is trying rather than just sitting back and letting Michelle shoulder the burden. I mean, for me, putting in an effort is, is trying rather than not.

• 30:09Speaker 01

  And part of that might be you admitting that, or at least trying to go to the doctor. I think part of your fear is going to the doctor, then saying, oh, there's nothing wrong. It's just your personality. And I say that as somebody with mental health issues that didn't go to the doctor for a very long time for them because I was afraid they were going to tell me it was all in my head.

• 30:29Speaker 02

  I know. Again, going back to that fear of the unknown. If, you know, is it my personality? Then how can I fix the personality?

• 30:36Ramit Sethi?

  Well, there's lots of ways to do that, too.

• 30:38Speaker 02

  No, I agree. I mean, I know it's, again, I'm conscious of me being selfish. I don't agree with it. It's, it's my personality. It's, it's easier for me just to, to laugh it off, to push it aside and, and just to move on to the next thing. Yes, I know it hurts Michelle, but at the same time, I don't know how to get out of the cycle.

• 31:03Ramit Sethi?

  What do you mean? She's telling you a very clear next step to get out of the cycle. Are you hearing her?

• 31:08Speaker 02

  I am hearing her.

• 31:09Ramit Sethi?

  What is she saying? Put it plainly in English for me.

• 31:12Speaker 02

  That at the end of this call, I should speak to my doctor.

• 31:15Ramit Sethi?

  Yes. And what is your response to that?

• 31:18Speaker 02

  That we will talk about it.

• 31:20Ramit Sethi?

  I'm struggling a bit right now. I want to help. I'm here. I'm prepared. I'm ready. This would be one thing if the two of you had $2,000 of credit card debt. We could be flexible. We could work through it.

• 31:34Ramit Sethi?

  The status of your financial situation is much different. You are in your 40s. You have three children. Now, is there a way to fix it? I think so. But I cannot fix it. I cannot even help you fix it unless both of you are 100% in and committed. I'm not hearing that right now. I'm hearing, we should think about it. We should talk about it. I've started trying in the last two weeks. The only way out of this is full commitment from both of you. So here's what I would like to propose. I would like for the next five minutes for you two to go off camera. And I would like for you to talk. What do you want?

• 32:14Ramit Sethi?

  Because if the answer is, hey, we're not both ready to fully commit, just come back here, tell me, and we will part ways, no hard feelings at all. But if you want my help, if you want to have a future that is bigger than a cremation, there has to be full commitment. So I want to give you the next five minutes, talk, come back, and let's discuss whatever decision you reach, I will respect it. See you back in a few. I almost ended the call right here, and I never do that. I want to help. I believe that I can help most people if they are willing to be helped. My show is called Money for Couples.

• 32:59Ramit Sethi?

  It's not money for individuals. And if I'm going to do what I do, I need both parties to want to be here. So I sent them away. I'm not sure how this is going to go. I think for the first time on this podcast, they may leave and not come back. We'll find out. Final few months of the year, I recommend using it to tie up loose ends and start the new year off right. Book your doctor's appointments, check in with your accountant, and if you have children, I recommend getting sorted out with term life insurance from Fabric by Gerber Life, so you are covered in case something happens. Fabric by Gerber Life offers term life insurance you can get done today, all online, on your schedule, right from your couch.

• 33:43Ramit Sethi?

  You could be covered in under 10 minutes, often with no health exam required. Fabric has flexible policies built to fit your family and your spending plan. Plus, free digital wills and tools to help you invest in your kids' future right from your phone. Fabric has a 30-day money-back guarantee, and you can cancel at any time. Join the thousands of parents who trust Fabric to help protect their family. Apply today in just minutes at meetfabric.com/ramit. Meetfabric.com/ramit. Policies issued by Western Southern Life Assurance Company, Cincinnati, Ohio, which operates in DC and all states except New York, distributed by Gerber Life Agency LLC using Fabric technologies. See meetfabric.com for additional disclosures. This is a paid ad.

• 34:25Ramit Sethi?

  One of my favorite things on this podcast is watching my guests have an aha moment about their money dynamics. Because these money problems are not just numbers they put on their conscious spending plan. You can build the perfect CSP, but if you don't understand why you behave the way you do, the numbers are just going to keep repeating themselves. That's what growing feels like. It's a mindset shift. It's a different way of looking at the same problem. And therapy can help you do that in every part of your life. Grow Therapy can help you find the right licensed therapist for you. Grow is therapy that works, covered by insurance. Grow connects you to thousands of high-quality licensed therapists across the US that work with your schedule.

• 35:07Ramit Sethi?

  Virtual, in-person sessions, nights, weekends, they have an option that will work for you. You can search by what matters, by identity, specialty, availability, insurance coverage, you can find a therapist who's the right fit for you. Grow makes it easy to book an appointment in minutes and begin sessions in as little as two days. See if you could pay as little as $0 for therapy in seconds at growtherapy.com/ramit. That's growtherapy.com/ramit. Growtherapy.com/ramit. Availability and coverage vary by state and insurance plan. I waited. Five minutes came and went. Seven minutes came. It was like the Apollo 13 movie.

• 35:50Ramit Sethi?

  The time has come and gone, and suddenly the flickering came back. And to me, that's actually a beautiful moment. You have to really want help to come on Money for Couples. It's not easy. It is not. It is hard. It's hard to talk about your relationship publicly. It's hard to share numbers that are often embarrassing or shameful, maybe to even admit that you or your behavior or even your character may need some development. That is incredibly difficult. So I give them props for coming back. I really appreciate it. I appreciate every guest that does. How was your conversation?

• 36:30Speaker 02

  I think we're on the same page. I mean, it's realigning. We took a second to realign expectations, and you're both expressed what we wanted out of this, that I need to take that step of going to the doctor and seeing if it's in my head or if it's just my personality, but I have to make that conscious step of being supportive and not just looking at myself and what's right for me. But I'm willing to change. I'm willing to learn.

• 37:01Ramit Sethi?

  And Michelle, what about you? What'd you talk about?

• 37:03Speaker 01

  I mean, straight up, I asked him or let him know that this needs to be something that he wants to do because he wants to do it, not just because I want him to do it. I also accepted that I need to be willing to share the control and talk about it and not just model it up.

• 37:23Ramit Sethi?

  Great.

• 37:24Speaker 01

  This is about creating an action plan, not a, I hope this happens in the future plan.

• 37:31Ramit Sethi?

  I love that. So just so I'm clear, are you agreeing you're going to go talk to a doctor about ADHD and whatever else may be on your mind and see what they say?

• 37:42Speaker 02

  Yeah, I've already committed to it, Michelle.

• 37:44Ramit Sethi?

  I think that's awesome. It's going to make a profound change in your life. ADHD and money is a studied phenomenon. This is very well studied. We had an ADHD expert on Money from the Financial Therapists Association, Dr. Christine Hargrove, in our Rich Life program. We're going to put a link for people if they'd like to join the program, and they can access that. We have a whole community in the program where many people share openly about what it's like to have ADHD, how it relates to their money. This is an important topic, one that we talk about. That's number one. I want you to get diagnosed if appropriate, or at least talk to your doctor. That's a massive change. I actually want to just take a second to give you both a round of applause.

• 38:26Ramit Sethi?

  I actually think this could be a different trajectory for the two of you for the rest of your lives and for your children. Fantastic. This is big. Shall we continue on knowing Jeff has work to do? He's going to see a doctor. He's going to pursue that of his own accord, not because Michelle wants it. Michelle has already committed to being willing to give up some control. And so we know those things are going to require a lot of work, a lot of time and compassion from each other, but let's just assume that those happen very well. Let's keep moving. I would like to put this conscious spending plan up on screen, and I would like to go through it.

• 39:09Ramit Sethi?

  Okay, assets, $26,800. Investments, $264. Savings, $571. Debt, $186,000, for a total net worth of negative $159,170. Okay? What is the debt?

• 39:28Speaker 01

  Both of our student loans, I want to say we're around 65.

• 39:33Ramit Sethi?

  Okay.

• 39:33Speaker 01

  The car.

• 39:36Speaker 01

  And then credit card, the credit cards and the loans.

• 39:38Ramit Sethi?

  How much are the credit cards?

• 39:40Speaker 01

  The credit cards are at 18,400, and the loan is currently at 17,500.

• 39:47Ramit Sethi?

  What do you make of these numbers?

• 39:48Speaker 01

  They suck.

• 39:49Ramit Sethi?

  Yeah? What else?

• 39:50Speaker 01

  From my perspective, it doesn't look like there's a way out of it. To be, one thing I did want to add that I didn't get to, when we took out the personal loan, what spurred it on was we were going to have a judgment against us from creditors, and we were facing garnishment.

• 40:06Ramit Sethi?

  Yeah.

• 40:06Speaker 01

  And we needed the loan to pay that off. There was still student loans at that point, too, but we were focused on not getting garnished.

• 40:17Ramit Sethi?

  Why?

• 40:17Speaker 02

  It was 25% of my take-home pay. That would have killed us. That would have, we wouldn't have made the pay rent.

• 40:23Ramit Sethi?

  What'd you end up doing? Took the loan out?

• 40:26Speaker 02

  Took the loan out.

• 40:27Ramit Sethi?

  Did it help or hurt?

• 40:28Speaker 01

  It ended up hurting because we didn't do it the right way.

• 40:31Ramit Sethi?

  Exactly. Okay, income. We have $14,887 a month in gross income. That's $178,000. That's a lot.

• 40:42Speaker 01

  Yeah.

• 40:43Speaker 02

  Doesn't feel like it.

• 40:44Ramit Sethi?

  You take home $10,600 a month. That's pretty good. Again, keeping in mind, you have three kids, so we need to put this in context. $178,000, you're essentially contributing nothing to your 401K.

• 40:57Speaker 01

  We just started the 401Ks. I was nervous about losing money in the paycheck, so I started it off at, I think, 1%.

• 41:03Ramit Sethi?

  Your fixed costs are 87%. Well, right there is why you feel stressed out about money, Michelle. That plus Jeff ignoring it. 87% means you can't get ahead, and it effectively means you are spending more than you make every single month. Are you aware of that?

• 41:19Speaker 01

  Yes.

• 41:20Ramit Sethi?

  Yeah. All right, let's take a look. Your rent or mortgage is, huh, am I reading this right? $1,695?

• 41:27Speaker 01

  It is rent. We are extraordinarily lucky, have an amazing landlord.

• 41:31Ramit Sethi?

  Amazing. 11.39%. Never leave. Where's all the rest of the money going? 87%. Utilities, 668, fine. Car payment, $1,000. Is this for one or two cars?

• 41:44Speaker 01

  One.

• 41:45Ramit Sethi?

  What'd you get?

• 41:46Speaker 01

  It is a Nissan Pathfinder.

• 41:49Ramit Sethi?

  Why? And how much did it cost?

• 41:51Speaker 01

  Because we needed the seating for five people. The winters here can be harsh, and you do need to be able to get up your hills. Otherwise, you're going to be walking half a mile in the snow.

• 42:00Ramit Sethi?

  How much did the car cost?

• 42:03Speaker 02

  $76,000.

• 42:05Ramit Sethi?

  Seventy six thousand dollars. Who decided on that one?

• 42:09Speaker 02

  Uh, that was me. The, we got the little flyer, "Hey, uh, we can get you in a better car" and, and all this. And we just went in there with the understanding that we would, you know, not pay more than what we were paying when we left. I decided in the long run that it would be better for us to have a newer car with a better warranty, uh, that has less miles that we could maintain.

• 42:35Ramit Sethi?

  Jeff, looking back, was that a good decision?

• 42:38Speaker 02

  No, it was not. Um, because we, I think our payments went up. It was like three hundred dollars extra a month.

• 42:47Speaker 01

  He was very convincing at the time and the idea of having a more reliable, reliable vehicle did seem like a smart move. Um.

• 42:57Ramit Sethi?

  You grew up poor?

• 42:58Speaker 01

  Yes. Well, technically, yes.

• 43:02Ramit Sethi?

  That's a luxury vehicle.

• 43:04Speaker 01

  I will also add that part of it, I think, was also the fact, "Oh, you're going to approve us for financing on a nicer car."

• 43:12Ramit Sethi?

  That's a classic, that's exactly who they target. First of all, you should not be responding to things coming in the mail. Any mail you get is by definition, a bad deal. They're literally buying high-risk addresses and sending it and giving you the worst deal. And you bought it. Again, I'm not saying this to berate you or beat you down. I'm actually trying to show you the game being played around you and you were susceptible to it, but you also willingly participated in it. So this is accountability is learning, "Hey, we did this decision." We. Jeff was convinced by the, the, "We need this and that." And he says, "Looking back, it's a bad decision." Agreed. Michelle, we need a more reliable

• 43:55Ramit Sethi?

  car. And now here you are with a thousand dollar payment. That's crazy. All right, let's move on. Uh, debt management plan, that's four hundred eighty-six dollars. What is that?

• 44:07Speaker 01

  It's a nonprofit. They helped us work with our credit cards to get them shut down, get the, uh, interest rates lowered on most of them. And we pay that, they pay them. There is no additional fee that they add on to it or anything.

• 44:20Ramit Sethi?

  Cool. What's the other debt?

• 44:22Speaker 01

  Uh, loans that were not rolled into the debt management plan, because that was just credit cards. So that's the personal loan. Um, we had a loan for furniture that were finished, almost paid off on.

• 44:35Ramit Sethi?

  You took a loan for furniture?

• 44:37Speaker 01

  Yes, because we couldn't afford to pay.

• 44:39Ramit Sethi?

  How much was the furniture?

• 44:41Speaker 01

  I want to say it was three thousand dollars.

• 44:43Ramit Sethi?

  What'd you get for three thousand?

• 44:45Speaker 01

  We got a new couch. We got a new web seat. Um, I will also 100% say part of this was emotionally coping with my mom passing and us having to take over the upstairs of the house that had been hers and wanting it to be ours.

• 45:07Ramit Sethi?

  I'm sorry to hear that. I want you both to get out of this cycle where it feels like there's always something coming up. That's what it feels like, right?

• 45:18Speaker 01

  Yes.

• 45:19Ramit Sethi?

  I mean, we're not even halfway down the fixed costs and there's just something that comes up. There's a car, there's a credit card, there's a sofa, there's on and on and on. How long has it felt like that?

• 45:29Speaker 01

  Always.

• 45:30Ramit Sethi?

  Like, the car did not need to happen. Not that car. And there are a variety of other decisions I'm sure we will discover that did not need to happen. So the real path forward is for the two of you to do some heavy sustained work on what are we getting out of being in this really reactive place? Both of us. Can I just check in before we get into the numbers? How's everybody feeling right now? Michelle?

• 45:58Speaker 01

  I'm okay.

• 45:59Ramit Sethi?

  You, you look a bit like there's something going through your head and I just want to check in with you. And I want to make sure that we're not, nobody feels like, "Hey, you know, this is just like hopeless." That's never my intention. Michelle, how are you feeling?

• 46:13Speaker 01

  Yeah, no, I definitely don't feel hopeless. I think it's just emotional conversations.

• 46:17Ramit Sethi?

  Yeah, they're hard.

• 46:19Speaker 01

  Yeah, and I can be overly emotional.

• 46:23Ramit Sethi?

  There's a lot of work to unpack there. Let's keep going. We have, um, medical, two hundred, groceries and household good, two thousand dollars a month. What's that?

• 46:31Speaker 01

  I have been struggling to get that down. Um, that was our average over the last several months when I was looking at our purchases.

• 46:41Ramit Sethi?

  Okay, we'll look at that in detail. Um, clothes, a hundred, pets, three hundred. How many pets?

• 46:48Speaker 01

  Uh, we've got three dogs and then we also have three cats.

• 46:54Ramit Sethi?

  Oh, my God.

• 46:56Speaker 02

  Yes. We have.

• 46:57Speaker 01

  Yes.

• 46:57Speaker 02

  We have five cats and three dogs.

• 47:02Ramit Sethi?

  You have eight pets?

• 47:06Speaker 02

  Yes.

• 47:07Ramit Sethi?

  Okay. All right.

• 47:08Speaker 02

  One of them we got from her parents after they passed away. So we can't really just tell him to go find someplace else to live.

• 47:15Ramit Sethi?

  How, how much of this stuff that we're seeing on the CSP is like emotionally driven?

• 47:20Speaker 01

  The debt, most definitely.

• 47:21Ramit Sethi?

  The car was emotional?

• 47:23Speaker 01

  Yes.

• 47:24Speaker 02

  The car, I mean, we went from having 26% interest on a car loan and they're like, "Oh, we'll give you this loan for 10%." And it was kind of a reward for us. In my mind, it was a reward for us getting back on track.

• 47:40Ramit Sethi?

  Jeff, that's emotional.

• 47:42Speaker 02

  I think it's 90% of my spending was emotional and self convincing.

• 47:49Ramit Sethi?

  Yes, yes.

• 47:50Speaker 02

  If I really need it.

• 47:51Ramit Sethi?

  Thank you.

• 47:52Speaker 02

  I'm able to then put Michelle into my way of thinking.

• 47:58Ramit Sethi?

  Let's just continue going down the list here. We have eight pets for three hundred dollars a month, phone, four hundred forty-six dollars a month. What?

• 48:07Speaker 01

  I'm working on that one.

• 48:09Ramit Sethi?

  Subscriptions at a hundred and ninety-two dollars a month and miscellaneous at five hundred dollars a month. Eighty-seven percent, you're broke.

• 48:15Speaker 01

  Yeah.

• 48:16Ramit Sethi?

  Just looking at it, what do you see here?

• 48:18Speaker 01

  Spending too much.

• 48:20Ramit Sethi?

  Okay. Jeff?

• 48:21Speaker 02

  Yeah, we're spending more than we make.

• 48:23Ramit Sethi?

  Okay. Your investments are at zero. Your savings are at a hundred and fifty dollars a month. And that started recently because your total savings are five hundred and seventy-one dollars.

• 48:34Speaker 01

  Yes.

• 48:34Ramit Sethi?

  And finally, your guilt-free spending or what remains is one thousand two hundred fifty-two dollars. I'm certain it's higher than that. Would you agree?

• 48:41Speaker 01

  It has to be with the way we feel every month.

• 48:44Ramit Sethi?

  What does this CSP tell you? Besides, you're spending too much. What kind of people are you based on these numbers?

• 48:53Speaker 02

  More impulsive.

• 48:54Ramit Sethi?

  Yeah.

• 48:54Speaker 02

  We, we are short-sighted rather than long.

• 48:57Ramit Sethi?

  Yes.

• 48:58Speaker 02

  Um, and more instant gratification.

• 49:01Ramit Sethi?

  Mm-hmm.

• 49:01Speaker 02

  We were able to buy it, makes, you know, that dopamine.

• 49:04Ramit Sethi?

  Yes. Why do you think you do it?

• 49:07Speaker 02

  It's just how I grew up. I mean, if I didn't have what I wanted, you know, it's,

• 49:13Speaker 02

  we were told, "No, a lot."

• 49:15Ramit Sethi?

  What, what did your family say about money when you were growing up? When you were young?

• 49:19Speaker 02

  Didn't talk about it. I mean, we had the government brown box cheese and we, you know, there was times we didn't have the quarter for lunch.

• 49:27Ramit Sethi?

  Mm-hmm.

• 49:27Speaker 02

  Because my parents made, you know, a hundred dollars more than the poverty line. So instead of getting the free lunch, we had reduced lunch. But at times, we couldn't have the breakfast or lunch because we didn't have the money to pay the school. But we didn't talk about that. You don't talk, you don't ask for, for help. You just do it. And consequences and, you know, there was times where you get home, there was no electricity, there was no running water. You just dealt with it. What happened as you got older? I ended up starting to pay my parents to live where I was living with them. I've been paying my parents since I was 14. I would work my job, then my money would go from me, from my hands to my parents and that was it. You know, and that continued on.

• 50:09Ramit Sethi?

  How old were you when you stopped paying your parents?

• 50:13Speaker 02

  When me and Michelle moved in together after the tree fell into the motorhome? So 24.

• 50:21Ramit Sethi?

  You basically have been paying somebody since you were a kid.

• 50:24Speaker 02

  Since I was 14, yeah.

• 50:25Ramit Sethi?

  Yeah.

• 50:26Speaker 02

  It was for me, a way for me to pass on the responsibility somewhere else.

• 50:30Ramit Sethi?

  Yes.

• 50:31Speaker 02

  Took it off my shoulders and put it on somebody else.

• 50:33Ramit Sethi?

  Let's go back to your childhood. What, what do you remember about your dad?

• 50:37Speaker 02

  Was a drill sergeant. So, um, so it wasn't a good relationship. I didn't have a good relationship with my mom. My mom was those, that typical, the housewife of, of the eighties and, you know, perpetuated this circle from her dad and.

• 50:56Ramit Sethi?

  Can I ask a question? This is gonna be a tough question. You don't have to answer, but I, I had to ask to understand something. Was your dad disappointed in you?

• 51:03Speaker 02

  Oh, yeah. 100%.

• 51:04Ramit Sethi?

  Okay.

• 51:05Speaker 02

  He would remind me of that all the time.

• 51:07Ramit Sethi?

  Does he still do that?

• 51:08Speaker 02

  Oh, yeah.

• 51:09Ramit Sethi?

  What, what do you see in the fact that you compare yourself to your dad, he gets a smoker, you want a smoker, et cetera?

• 51:16Speaker 02

  For me, I, I, I, I see that. I'm always strive to be better than him. I've always made it a point not to, to be like him, not to raise my children the way I was raised. I have Michelle, who's definitely a strong, opinionated woman, unlike what I grew up with. That's why I value about her because she will, she will call me out on my stupidness.

• 51:45Ramit Sethi?

  As opposed to your mom, who is the quote "traditional eighties housewife," and because your dad was a drill sergeant, who I'm assuming was very directive, told you all the things she needs from you and you're doing wrong, et cetera, you now, what, hate being told what to do? Hate being told no? Look at Michelle's face.

• 52:07Speaker 02

  Yeah, I don't like being told no. Um, but then I also understand the value of when Michelle says no.

• 52:14Ramit Sethi?

  Not really. You hate being told no. We've seen that multiple times. "No, we can't get the smoker. Come on, the pellets. No, we can't get the car. Well, come on, it's for the warranty." This seems to be a recurring trend. Am I reading it wrong?

• 52:27Speaker 01

  No.

• 52:28Ramit Sethi?

  So why are you disagreeing with me?

• 52:30Speaker 02

  It's my nature, I guess.

• 52:31Ramit Sethi?

  Yes. This nature to disagree, to be contrarian, to provide the devil's advocate.

• 52:38Speaker 02

  Yeah, it was a game for me when, with my father.

• 52:41Ramit Sethi?

  Exactly. Because no matter what you, I'm saying something that is so obvious, it's transparent, it's axiomatic. And yet, you're disagreeing with me. Why? Because you love it. You get pleasure in disagreeing because probably going back to your dad, there's all kinds of stuff that was developed there. But it's very hard to be a partner with someone who disagrees reflexively just because. What are you realizing right now, if anything?

• 53:07Speaker 02

  There's more things I have to work on.

• 53:09Ramit Sethi?

  Yes. And man, it's probably been really hard for Michelle. So I would love it if we can agree on some basic stuff and then move forward. What do you say?

• 53:19Speaker 02

  Yeah. That's what I'm here is there, you see where we can, where I can improve.

• 53:23Ramit Sethi?

  Great. Michelle, you heard all of that.

• 53:28Ramit Sethi?

  I want to give you a second and invite you to chime in.

• 53:31Speaker 01

  I think part of it also is because of Jeff tries to overcompensate because of the type of father figure he had. So he tries to overcompensate in some areas like helping around the house and taking on household chores that he never saw happen.

• 53:54Speaker 01

  But on the flip side of that, he does that argumentative comes up and I don't like conflict, so I try to avoid it. And I think that's

• 54:10Speaker 01

  a result a lot of times of me saying yes to is because I don't want the argument.

• 54:14Ramit Sethi?

  Yes.

• 54:14Speaker 01

  But I do think a lot of his choices, his spending, his habits are a result of growing up poor and not having and now being an adult with adult money and somewhere in the back of your mind, oh, I can do that because I have my adult money.

• 54:30Ramit Sethi?

  It's classic. Happens to so many people who grew up poor. They make a little bit of money to go, I'm never going to go there again. I'm going to spend more, et cetera, et cetera, et cetera. It's normal, but it can become destructive. What's interesting, Jeff, is hearing that you overcompensate, as Michelle puts it, but you overcompensate in some really adaptive, positive ways, like helping around the house? That's actually awesome.

• 54:51Speaker 02

  Well, no, I mean, okay, in again, we'll go back to

• 54:55Ramit Sethi?

  Are you agreeing or disagreeing with me?

• 54:57Speaker 02

  I'm agreeing.

• 54:58Speaker 01

  He's overquoting.

• 54:59Ramit Sethi?

  Then why do you start your answer by saying, no, no?

• 55:03Speaker 02

  Reflect, kid? I don't know.

• 55:05Ramit Sethi?

  It actually reflects your worldview that I need to disagree. You're saying no, the way you said it was even disagreeable, but you're actually agreeing with me. Just say you're right. And actually, I'm complimenting you and so is your wife. Hey, this guy helps around the house. That's great. Jeff, take the compliment. Go ahead.

• 55:26Speaker 02

  Yes.

• 55:27Ramit Sethi?

  That's it. Boy, this is fascinating. This is why I do what I do. Yeah, money's fine, but I love human nature. And when I give Jeff a compliment and his first reaction is to say, no, no, no, actually, da, da, da. I go, oh, my God, the light started going off in my head. Even when I'm complimenting him, he's rejecting it. He's a contrarian. And he doesn't even know he's doing it. There's a constellation of psychological, social dynamics going on here. There's something actually called oppositional reflex. Let me read it to you. Opposition reflex is an innate, physical and instinctual reaction where an animal

• 56:10Ramit Sethi?

  or human automatically pushes or pulls against any applied physical pressure. I once got called out on this by a famous coach. He said, why do you say no when you answer questions? It shook me to my core. Because not only did I not realize I had this verbal tic, but if you dig in, you realize, oh, I'm disagreeing for no good reason. Jeff has a lot of layers to pull on. It's one of the reasons that I really want him to see a doctor. Because we can only do so much in a few hours here, but there's actually a really beautiful life ahead as you start to understand yourself. One thing I've discovered on this podcast is that a lot of us are confused

• 56:55Ramit Sethi?

  by our own behavior. Like, are you? Think about it. Do you not know why you spend money a certain way? Do you not know why you tell yourself, I should go to the gym, I should eat better, but you struggle to? You might actually be confused by your own behavior and that's a really perplexing place for us to be. That's why there's so much beauty in being able to understand yourself. That's why I love what I do. And I want you to see these different aspects of human nature and why I interject so often, say, hey, here's what's really going on here. I think it's so beautiful to see how we are irrational and confusing and complex. That's what this is about. As for Jeff, I really want him to get a better understanding of himself, not only for his own life, but also for his wife.

• 57:39Ramit Sethi?

  Jeff, I want you to see, I actually, I want you to feel a sense of delight because you just learned something about yourself. You are reflexively oppositional. And it doesn't actually help you. You disagree even when we are talking in a complimentary way about you. And it's actually not serving you. This would be topic number one or two that I would bring up with my therapist. And I would also bring it up with my doctor. Because you will be able to go so far. You cannot imagine how many opportunities have been around you, but you oppose them just normally, being a contrarian.

• 58:20Ramit Sethi?

  But actually, like, if you can change your way of looking at the world, you might find that a lot of people are much more agreeable than you think. It's like profound how deep you can go with this. So I hope you take that and run with it as you speak to some of your medical providers. It's actually amazing what you're going to be able to do. Are you cool with that?

• 58:37Speaker 02

  Yeah.

• 58:37Ramit Sethi?

  Okay. Michelle, what about how you grew up? What do you remember about your family? What did they say about money when you were young?

• 58:44Speaker 01

  Not a whole lot. I did sometimes, I did hear, you know, no, you can't have that. That's too expensive. We were okay, but barely. I remember my parents having an argument, my dad leaving. Uh, my mom kicking him out, actually, until he got his back pay. Um, I remember my mom not being able to open a checking account because she wrote too many bad checks. I remember being taught, don't answer the door if it looks like it's the electric person because they're here to shut us off.

• 59:16Ramit Sethi?

  In what ways do you continue on the models that your parents set for you today?

• 59:23Speaker 01

  There was a lot of struggling with managing bills. Um, I thought it was normal to not be able to pay all of your bills every month.

• 59:32Ramit Sethi?

  Okay, what else?

• 59:33Speaker 01

  Obviously, we don't haven't had conversations about money. It's not something that we really talk about.

• 59:39Ramit Sethi?

  Talk to your kids about money?

• 59:40Speaker 01

  No, this has been a point of contention. We will tell them, no, we can't afford that.

• 59:44Ramit Sethi?

  That's what your parents told you?

• 59:45Speaker 01

  Yes.

• 59:46Ramit Sethi?

  Why do, why do you continue the cycle?

• 59:48Speaker 01

  One, it's programmed. That's how it's supposed to be. You don't burden the kids with the problems of money other than to tell them, you know, no, we can't get that.

• 59:58Ramit Sethi?

  And, and you today do not burden the kids with money, right?

• 1:00:02Speaker 01

  No.

• 1:00:05Ramit Sethi?

  That's quite interesting. You grew up poor, right? That's how you described it? Close to poor?

• 1:00:11Speaker 01

  Close. We weren't as poor as Jeff's family.

• 1:00:14Ramit Sethi?

  Okay.

• 1:00:14Speaker 01

  We were never on state assistance, but we couldn't pay our bills. We got kicked out of houses.

• 1:00:20Ramit Sethi?

  Okay.

• 1:00:20Speaker 01

  Porklovers.

• 1:00:21Ramit Sethi?

  Lower middle class, let's call it, maybe poor.

• 1:00:23Speaker 01

  Yeah.

• 1:00:24Ramit Sethi?

  In what ways are you trying to break the cycle of money

• 1:00:29Ramit Sethi?

  that you were taught?

• 1:00:30Speaker 01

  I have started pushing to when our kids ask, you know, how, how much do things cost? Telling them something that Jeff's very much against. He will often tell them, it doesn't matter. We got it for you. Um, being transparent with them on cost of things, talking to our son about savings and things that I would like to help him do when he gets his first job to get him into the habits that I didn't have when I had my first job.

• 1:00:56Ramit Sethi?

  What about actually modeling it?

• 1:00:59Speaker 01

  I, I'm trying to, yes. That's part, again, that's a piece of why I'm doing what I'm doing right now. I want to be able to show him, number one, it's okay to ask for help.

• 1:01:11Ramit Sethi?

  Yes.

• 1:01:12Speaker 01

  Number two, it's okay if you don't know all the answers. You can figure it out.

• 1:01:15Ramit Sethi?

  Yes.

• 1:01:16Speaker 01

  And number three, here are the things you can do so that you don't fall into the same cycle that we were in.

• 1:01:23Ramit Sethi?

  Great. Jeff, you?

• 1:01:25Speaker 02

  Yeah, no, me, uh, I have been, you know, more open with our son about it, um, because he's that age and I wish my parents would have sat, sat me down and explained things better, but I think also me and Michelle have also have better patterns than our, our parents. We're not going to kick out credit card in our kids' names or bank account in our kids' names.

• 1:01:51Ramit Sethi?

  Who did that?

• 1:01:52Speaker 02

  Both of our parents.

• 1:01:53Ramit Sethi?

  What?

• 1:01:54Speaker 02

  I went away and there was a bank that sent checks to my house, thinking I was there. My parents forged my name on these checks and sent them with credit cards.

• 1:02:06Ramit Sethi?

  What? And Michelle?

• 1:02:08Speaker 01

  My mother used credit cards, uh, I think it was a Macy's or JCPenney credit card that I got, maxed it out, buying Christmas presents. Um, my dad, unknowing, my dad's kind of like, was kind of like Jeff's in that he was not very good with money.

• 1:02:30Ramit Sethi?

  Wow, I'm, hold on. I'm so shocked.

• 1:02:33Speaker 01

  I'm sure.

• 1:02:34Ramit Sethi?

  The parents are similar to what, this is like, it's like saying I drink water. Whoa, really? Oh.

• 1:02:43Speaker 01

  Yeah.

• 1:02:43Ramit Sethi?

  But, but recognizing that pattern is powerful. It's great. Did you know that before today?

• 1:02:51Speaker 01

  I didn't make the connection on the financial side. I knew part of why I fell in love with Jeff was because he reminded me of my dad with his stupid jokes and wanting to make people laugh and everything. Um, but I hadn't made the connection on the money side.

• 1:03:11Ramit Sethi?

  Okay.

• 1:03:11Speaker 01

  But my dad unknowingly used my checking information to sign up for something online.

• 1:03:16Ramit Sethi?

  I hate that. I hate that your parents did this to you, the people you should love and trust the most. Took advantage of you. I want you, if you will allow me, to trust that there is a way that you can actually feel good about money. Do you believe that?

• 1:03:35Speaker 01

  Yes.

• 1:03:36Ramit Sethi?

  Michelle says yes. Jeff?

• 1:03:38Speaker 02

  Yeah, no, definitely. I mean, there's, yeah, I do believe there's a way for us to feel better about money.

• 1:03:45Ramit Sethi?

  I had no idea that both of their parents had taken out debt in their names.

• 1:03:52Ramit Sethi?

  I actually wish I had known this earlier because it gives me so much more empathy. The feeling of being betrayed by the people closest to you and the way that that has to leak over into money just make you feel horrible about money, hate money, be obsessed with money, want to ignore money. It's all bad. Now, that was not their fault that debt was taken out, that their relationship with money was polluted from early on, but it is their responsibility to fix it. They are adults. They have children. It's important and nobody else is coming to do it for them. So that is where we are. I'm glad to understand it.

• 1:04:33Ramit Sethi?

  It provides a little bit more context and it's still their responsibility.

• 1:04:40Ramit Sethi?

  I have a lot of friends who are entrepreneurs, a lot of friends who are not entrepreneurs. And one difference between the two is that the friends who run businesses basically have to be proactive at work all the time. They cannot wait for something to happen or a boss to tell them what to do. So you'll find that they're constantly looking around corners, trying to figure out what's next so they can make plans. And I have found that being proactive is a skill. If you want to be proactive with next year's taxes, I recommend checking out this episode's sponsor, Gelt. Gelt is a modern CPA firm that helps your business take control of your tax strategy year round. By working with Gelt, you get access to one dedicated tax strategist with real human expertise powered by cutting edge technology that handles the rest.

• 1:05:24Ramit Sethi?

  They help with more than just your tax forms. They can make strategic adjustments to things like how you pay yourself, your retirement plan setup, even how you structure your business tax system. And right now in Q4, they can help you run a calculated projection so you know exactly where you'll land this year while you still have time to make changes. Gelt is taking on new clients before the year is over. The smartest tax move you can make is not waiting until next year to get started. So start your year end review at joingelt.com/ramit. I'm opening up Michelle and Jeff's Monarch accounts so we can drill down into their actual spending over the past couple of months.

• 1:06:04Ramit Sethi?

  Now, our partners at Monarch have customized their accounts to follow my exact conscious spending plan categories. And you can download the CSP template for free at iwt.com/csp or try out a customized Monarch account and see all of your numbers in real time. The two actually work together beautifully. This is available only for my listeners at monarch.com/ramit and you can use code RAMIT to try it for free and get 50% off your first year of their core tier. All right. Can we look at some of the actual spending here?

• 1:06:40Speaker 01

  Yes.

• 1:06:40Ramit Sethi?

  So I did a little digging using Monarch. We had you connect your accounts. And so this allows us to drill down a little bit deeper and see where some of the money is going. So let's take a look here. We have Klarna. Why are you using Klarna?

• 1:06:54Speaker 02

  Yeah, we used it when our TV broke and then a week later, when the child broke the new TV, we had to get a new TV because it wasn't covered.

• 1:07:02Ramit Sethi?

  Can I ask you a question? One thing after another, you have a family with three kids, you're in severe debt, you have eight pets and your TV breaks twice in like five days. Do you need a new TV?

• 1:07:16Ramit Sethi?

  Wow, dead silence on this.

• 1:07:18Speaker 01

  It felt like we did.

• 1:07:19Ramit Sethi?

  It felt like we needed a new TV. It felt like we needed a new car. It felt like we needed a new couch. It felt, it felt, it felt. What is my point?

• 1:07:25Speaker 02

  That it's reckless spending.

• 1:07:27Ramit Sethi?

  You don't have the money for it. I don't think either of you have ever said, we simply don't have the money for it.

• 1:07:32Speaker 01

  It's always been, we'll figure out how to get the money for it or how to make the purchase happen.

• 1:07:36Ramit Sethi?

  Yeah, you're not figuring it out. You have done everything except say no.

• 1:07:41Speaker 02

  For me, the TV was a way for me to unwind after 12 hours a day and, you know, and it was a way for, you know, for the kids.

• 1:07:51Ramit Sethi?

  It's not about the TV. It's about the fact that we have a couple here, you in your 40s, in severe debt and inability to say no to, like it didn't even occur to you that maybe we just say no to a TV.

• 1:08:05Speaker 02

  Yeah, I mean, it occurred for like 30 seconds and then we justified it to ourselves.

• 1:08:11Ramit Sethi?

  Yes, and you do that a lot. And that's what has led to this spending. So I'm not going to sit here and do some abracadabra with your conscious spending plan. It's actually you two that have to do the work here, not me. What needs to change?

• 1:08:24Speaker 02

  Our mindset, you know, just because we have the ability to put it on credit, you shouldn't put it on credit?

• 1:08:31Ramit Sethi?

  Guys, nothing goes on credit anymore. Tear them up. It's over.

• 1:08:37Ramit Sethi?

  Nothing goes on until you pay it off. That's it.

• 1:08:39Speaker 01

  That is part of why I did the debt management plan because it shut down all the credit cards. So I can't, we can't go back and fall back on them or use them impulsively. I've removed all of the pay later apps so that we can get them paid off and be done with them.

• 1:08:57Ramit Sethi?

  Okay, let's take a look at some other expenses here. I actually love being able to dig into these through Monarch. Let's take a look here.

• 1:09:05Speaker 01

  Honestly, I kind of liked it too.

• 1:09:07Ramit Sethi?

  Yeah, it's fun, right? It's quite revealing. And again, I like the CSP for being able to see the big picture. And then we can dig into, what the hell?

• 1:09:18Speaker 01

  Spring break, okay. That was spring break.

• 1:09:20Ramit Sethi?

  Just hold on. Not everyone can see this. Let me just describe it for a second. I, I'm looking at a monthly view of how much they spend eating out and the chart is quite interesting. So I can see they're eating out and November is 447, then December's 1,000, 800, 1,500, 1,400, and then $2,747 in one month.

• 1:09:47Speaker 01

  We took the girls to Vegas for spring break. That was why, that was the spike in eating out because we were enjoying ourselves and I was going to figure it out later.

• 1:10:02Ramit Sethi?

  And, and have you figured it out?

• 1:10:05Speaker 01

  No.

• 1:10:06Ramit Sethi?

  What would the correct decision have been?

• 1:10:08Speaker 01

  We would have done something locally.

• 1:10:10Ramit Sethi?

  Yeah.

• 1:10:11Speaker 01

  I would have taken, still taken the time off and that's what our plan is for next year.

• 1:10:14Ramit Sethi?

  Again, if you, if you made 150, $175,000 and you had no debt and you're, all your stuff was dialed in, I'd be like, God bless. This looks awesome. Looks like great food. Fantastic. You don't. You've put yourself in a position where you're in debt. You have very little savings. You have kids. If something happened, you all are in big trouble. I think that's why you came to me. Am I reading it right?

• 1:10:40Speaker 01

  Yes.

• 1:10:40Ramit Sethi?

  Yes. So what are you learning so far on today's call, right now, looking at these numbers?

• 1:10:46Speaker 02

  That the little stuff adds up. You know, you just see that you're happy.

• 1:10:50Ramit Sethi?

  Are you happy?

• 1:10:51Speaker 02

  No, not looking at the numbers. I didn't know we spent, you know, that much money eating out last, last month.

• 1:10:57Ramit Sethi?

  Okay. And Michelle, what are you learning on this call?

• 1:11:00Speaker 01

  That we need to be stricter with what we say yes and no to.

• 1:11:04Ramit Sethi?

  Keep talking. I want to hear more.

• 1:11:06Speaker 01

  For example, the eating out, I need to stick to my guns of we're not going to eat out and we'll be eating at home. No matter how tired I am or what the week was like.

• 1:11:17Ramit Sethi?

  Success requires hard work, but it often feels good.

• 1:11:24Ramit Sethi?

  Being strict, sticking to my guns, that doesn't feel good. What does it feel like?

• 1:11:30Speaker 01

  It sucks. It feels like when I was a kid and my parents told me no.

• 1:11:34Ramit Sethi?

  Exactly.

• 1:11:34Speaker 01

  And sometimes I just want to go out to dinner with my husband.

• 1:11:37Ramit Sethi?

  Yes, and yet you are telling me that in, what you need to do is to be stricter and stick to your guns. Look at the body language, right? Look at that deep breath you're taking. Being strict and sticking to your guns, sounds like you at Costco with your husband begging you to get a smoker and you have to put up this wall and be like, no, no. It's almost like you're being attacked. Left punch, right punch. What if it felt easy? What would that look like?

• 1:11:59Speaker 01

  I would know that we have enough money to go out and have Jersey mics one Saturday a week when we're going grocery shopping.

• 1:12:08Ramit Sethi?

  Jeff, what would it look like and feel like if money was easy in your family?

• 1:12:12Speaker 02

  Being able to plan more with the girls rather than, you know, canceling all of our, our plans.

• 1:12:17Ramit Sethi?

  You should be able to have some fun, no doubt about that. I want you to, but that cannot be the primary thing that you are focusing on now. Cause nowhere in your descriptions, did you talk about, we should automatically save money. We should know our debt payoff date. Our money should be going to our debt aggressively. This is how many times a week we can eat out and both of us respect it.

• 1:12:39Ramit Sethi?

  It was just, I want to be able to spend more on stuff, which is the same thing that got you into this position in the first place.

• 1:12:45Speaker 02

  No, I agree. It's shifting that mindset is, is going to be hard, but it's not unattainable.

• 1:12:51Ramit Sethi?

  The stakes here are very high. If you're in your twenties and you accidentally don't pay a credit card bill one month and you rack up interest charges, it's not great, but you could fix it. You have time. When you get into your 40s, you need to be pretty dialed in. If they don't change this dynamic, they will be in severe debt, no housing options. It's quite ominous to look 15 years down and see where they might be. So my goal is to get them to break this habit and to build a vision together, which they're both bought in on. So I decided that I wanted to show them and to show you exactly what I would want. What would I do in their situation?

• 1:13:35Ramit Sethi?

  I'm taking a structured approach, doing three things. Number one, philosophy. Number two, develop money rules. Number three, actually make some changes and I'm going to do this fast. It would be super easy instead to just be like, okay, let's like fiddle around the edges and cut the amount down that you spend eating out. It's going to do nothing. I would rather elevate them and I hope, maybe they reach 50% of it, 40%, 60%, but I want to show them what excellence looks like. That's what I'm going to do. This is what I would do if I were in your situation. A philosophy around money. That means something like, in our family, we save at least 10% of our net pay. That's an example of a philosophy around money.

• 1:14:19Ramit Sethi?

  In our family, we have a no debt policy. That's another example. What is a philosophy with money that each of you want to begin, starting immediately?

• 1:14:30Speaker 02

  That we're debt-free.

• 1:14:31Ramit Sethi?

  We are a debt-free family. I like that. Are you willing to make changes in order to support that philosophy?

• 1:14:39Speaker 02

  Yes, I am.

• 1:14:40Ramit Sethi?

  Great. Michelle, are you willing to make changes to support that philosophy?

• 1:14:43Speaker 01

  Yes.

• 1:14:44Ramit Sethi?

  Great. What's your philosophy?

• 1:14:46Speaker 01

  In this family, we prioritize saving.

• 1:14:49Ramit Sethi?

  Love it. And what does that mean? Give me a number, a percentage. Typically, I say 5% to 10% of net pay.

• 1:14:56Speaker 01

  Let's go in the middle with 7%.

• 1:14:59Ramit Sethi?

  7%?

• 1:14:59Speaker 01

  In this family, we save 7% of net paid.

• 1:15:01Ramit Sethi?

  Beautiful. Next.

• 1:15:03Speaker 02

  In this family, we communicate about money.

• 1:15:07Ramit Sethi?

  I love that. You agree with that, Michelle?

• 1:15:10Speaker 01

  Yes.

• 1:15:11Ramit Sethi?

  Yes, that is powerful. We communicate. How often do we talk about money? Be specific.

• 1:15:16Speaker 02

  Once a week.

• 1:15:17Ramit Sethi?

  Love it. Once a week. What day? What time? I share my own misery because I had a Rich Life review. It was like at 6:00 PM on a weekday and like I kept on kicking the can down the road. My wife actually told me like, dude, let's be honest, you're writing a book on money for couples and you've missed the last two meetings. It was very embarrassing, but she was right. And I realized I was missing them because I was tired at the end of the day and other meetings started encroaching. So what I do, I took a hard look in the mirror. I looked at what was going on. I realized this needs to be a priority. I moved it to a 9:00 AM slot. So I'm not saying it has to be at 9:00 AM, but I'm saying don't give yourself a way to, don't set yourself up to fail.

• 1:15:54Speaker 01

  I think we could commit to Sundays at 11 o'clock or after breakfast.

• 1:16:02Ramit Sethi?

  Sunday, 11:00 AM. Does that work for you, Jeff?

• 1:16:04Speaker 02

  Yeah, that works for me.

• 1:16:05Ramit Sethi?

  I honestly think you have an amazing philosophy here. We are debt-free. We prioritize saving 7% and we communicate about money once a week at Sunday at 11:00 AM. If you just did this, you could make radical changes with your money. I think you're doing amazing so far. That is a powerful philosophy. Now, you can have a philosophy and not yet be there. That's okay. In this family, we are debt-free. Well, you're not debt-free right now, but you can take steps to get there. That's cool. Why am I starting with a philosophy? And what the hell is a money philosophy? You know, a lot of us do not have a money philosophy and I can see it when I look at your spending because it's sloppy. It's spending money on pickles. Oh, I bought some corn and then I bought eight dogs. What? Makes no sense.

• 1:16:49Ramit Sethi?

  There's no cohesive philosophy. But when I see somebody's spending where they are spending a ton of money on traveling or on their car or on their house and they explain it to me, here's why. We love where we live. We have two kids. We want to have a big space to save. Amazing, you have a philosophy. What I want you to do is start off with your philosophy because it gives you a why. It makes it really easy to make decisions when if one partner or both say, hey, should we take this trip or should we buy this car? Whatever. You look at your philosophy, you go, is that important to us? Because in the moment, you're going to look at a shiny coat of paint. Oh, I love it. So cool. But actually, look at your philosophy. I once went on a tour of the expensive neighborhoods in LA. Okay? This is during COVID. There's nothing to do. We drove to Bel Air.

• 1:17:34Ramit Sethi?

  Beautiful houses, 20-bed, 20-bath. You can only see through the shrubs. I'm looking at it, I go, ooh, I could live here. Bel Air, so nice, such a rich life. And then I got home and I was like, what the? My philosophy is I love walkability. So for that moment, I was like enchanted by how cool these trees looked. I come home, I go, I don't really like that stuff. I don't want to live up there in the hills. No. Have a philosophy. Write it down. Next up, rules. What are your rules? The things that if you do these, they are going to make you successful. We always save 10% and we increase that number every 1% every December, et cetera, et cetera. Third and last, we go in and we fix the numbers. I think most people just skip right to the numbers. They do this all the time on this show. I go, hey, what's the problem?

• 1:18:19Ramit Sethi?

  They go, well, we should cut down on our cell phone. I go, don't drop your cell phone until you know why and what your rules are. Otherwise, you're just going to pick something that's going to save you $15 and then next month, you're going to go right back to it. You need to think methodically. If you're sitting around fiddling in a spreadsheet and you don't even know what the problem is, you have taken a very wrong turn. Join my Rich Life program. I'm gonna put the link, iwt.com/100k. Learn how to think like this or just watch this show and do it every single week. All right, back to the show. What kind of money rules can we create?

• 1:18:50Speaker 01

  We run the numbers before any purchase.

• 1:18:53Ramit Sethi?

  Okay, great. We run the numbers. What's next?

• 1:18:55Speaker 02

  Don't try to manipulate, Michelle.

• 1:18:57Ramit Sethi?

  That's a great one. I like that you're saying these out loud because you can actually print them out, put them on the fridge, make a little index card. And if something happens, one of you can pull it out. Hey, wait a minute. Are you violating rule number three? Ah, come on, we both agreed. It becomes a fun thing. Money should be fun, even if it's tough times. Great. What else? Hey, how about eating out?

• 1:19:15Speaker 02

  Reduce it down to no more than twice a month?

• 1:19:20Speaker 01

  I was going to say once a month with a limit of no more than $75.

• 1:19:24Ramit Sethi?

  $75 per month eating out. That includes coffee. That includes pizza. That includes gas station stops, whatever. All of the above. 75. So that's basically one meal.

• 1:19:35Speaker 01

  Yes.

• 1:19:36Ramit Sethi?

  And from looking at where you order, it's Jersey Mike's or Domino's type of place, right?

• 1:19:41Speaker 01

  Yeah.

• 1:19:42Ramit Sethi?

  Are we on board with that?

• 1:19:44Speaker 02

  Yeah.

• 1:19:45Ramit Sethi?

  Okay. Just to give you some perspective, do you know how much you spent on eating out this year? It's August.

• 1:19:50Speaker 02

  Well, I mean, considering that in that one month was $900, I'm thinking we're close to six grand.

• 1:19:56Ramit Sethi?

  Six grand. Let's take a look at Monarch. What's this number right here?

• 1:20:00Speaker 02

  $9,275. That was one heck of a burger.

• 1:20:04Ramit Sethi?

  We're not even at the end of the year yet. In this family, we eat out once a month for $75. I think it's incredibly powerful. I think it's amazing, actually. I'm really pleased. I think that's awesome. I actually think it gives you a lot to look forward to every month. All right, final thing we're going to do here. We've got some rules. We run the numbers before any purchase. We don't try to manipulate, Michelle. We limit eating out to $75 a month. All this feels good. We're going to now make some changes to the actual CSP. Jeff, it's up to you. I want you to get us below 60%.

• 1:20:38Speaker 02

  Our cell phone bill can come down.

• 1:20:40Ramit Sethi?

  To what?

• 1:20:41Speaker 02

  I think it was like $200 off of that.

• 1:20:44Ramit Sethi?

  What did it drop to?

• 1:20:45Speaker 02

  85.

• 1:20:46Ramit Sethi?

  Yeah. What's next?

• 1:20:48Speaker 02

  Subscriptions. Again, we've been working on that and I mean, I think we can take $50 off of that.

• 1:20:56Ramit Sethi?

  Watch the number. Went from 85% to 85%. No change. Got to think bigger, Jeff.

• 1:21:02Speaker 02

  Groceries. I think that's our next biggest expenditure. Yep. Michelle, they're looking at it. How can we bring that down to 15?

• 1:21:10Speaker 01

  I think we can do 15.

• 1:21:12Ramit Sethi?

  How often do you all shop out, go for grocery shopping?

• 1:21:16Speaker 02

  Once a week. We do Costco once a month, but then we do, once a week, we do Safeway, Winko and Walmart because we shop the ads and shop sales, shop clearance.

• 1:21:28Ramit Sethi?

  Do you shop to a number, Michelle?

• 1:21:30Speaker 01

  Right now, no.

• 1:21:32Ramit Sethi?

  Yeah, nobody does.

• 1:21:33Speaker 02

  We have been cutting back on what we used to spend.

• 1:21:37Ramit Sethi?

  Look, let me just be blunt. $2,000 a month is just too much for a couple that's in debt.

• 1:21:42Speaker 01

  Can we aim for 1,500?

• 1:21:44Ramit Sethi?

  Yes. Drops to 80%. Okay, that's a big difference. What else?

• 1:21:49Speaker 01

  The miscellaneous uncategorized spending?

• 1:21:52Ramit Sethi?

  Yes.

• 1:21:53Speaker 01

  $100?

• 1:21:54Ramit Sethi?

  Great. We took it down to 76%.

• 1:21:57Speaker 02

  What was a 300? Again, I don't see us spending $300 a month on the pets. I think we could drop that down to half, so 150.

• 1:22:06Ramit Sethi?

  Make it 200. I also think having eight pets is something you should think about.

• 1:22:11Speaker 02

  Our pets are our kids. We can't get rid of our kids, so we can't get rid of our pets.

• 1:22:14Ramit Sethi?

  Boy, you're talking to the wrong guy about that.

• 1:22:16Speaker 01

  And that's fine.

• 1:22:18Ramit Sethi?

  That's fine. We all have our own rich life. Fine. What else? I want to show you something. We need to not get stuck. We need to keep moving. Savings account. I just want to point out, you currently have $571 in savings. If one of you gets in an accident or there's a, some kind of repair that needs to happen, there is no place for the money to come from. You will simply rack up more debt and you'll just end up in the same place you've been for the last two decades. Therefore, we need to move money to savings. So right now, you have $150 going, which is good. Let's add $750 because that was about 7%. $750 just automatically going into your savings account, never to be touched, except

• 1:23:02Ramit Sethi?

  in an emergency. That's great. You still have $1,752 for guilt-free spending? That's too much.

• 1:23:10Speaker 01

  Yeah.

• 1:23:11Ramit Sethi?

  You know, I, we calculated some of your math and by the time you retire, Michelle, on the current trajectory you're on, you'll have about $117,000 in retirement. What do you think about that?

• 1:23:22Speaker 01

  I know that's not enough.

• 1:23:24Ramit Sethi?

  Yeah, that would give you about $4,700 a year.

• 1:23:28Speaker 01

  Yeah.

• 1:23:28Ramit Sethi?

  I mean, you two would be living on social security, no house. What do you think would happen?

• 1:23:33Speaker 02

  End up living with their kids.

• 1:23:35Ramit Sethi?

  Yes. That is the track that you are on. Right now. That is the track. Nothing we have done has changed that. Jeff, it looks like you're having a moment of realization. Am I reading that right?

• 1:23:46Speaker 02

  But I'm just, yeah, is we're still not, we're overspending and under earning.

• 1:23:52Ramit Sethi?

  Yes. When are you going to be debt free? Do you know?

• 1:23:55Speaker 01

  Like seven years for the credit card, I at least I didn't even put in student loans.

• 1:24:00Ramit Sethi?

  Need to pay that off faster. Let me show you. You have seventeen hundred and fifty-two dollars. That's just not going to work anymore. We need to put an extra payment towards your debt. I, if I were me, an extra five hundred and I might put five hundred in investments because you need to invest. You see how I'm starting to split this money?

• 1:24:18Speaker 01

  Yes.

• 1:24:19Ramit Sethi?

  You'll actually feel incredibly empowered when you do this. And then the two of you can decide in your Sunday eleven AM meetings. Hey, I think we have an extra hundred bucks. Where should we put it? I think it should go to investments. I think it should go to debt. Well, tell me a little bit about why you think that, because I'll tell you a little bit about why I think that, and then let's come to a decision. That's how healthy money conversations happen.

• 1:24:44Speaker 02

  And I think we had that conversation too, and that's what pushed, she pushed me to look for a new job that makes more. I've been in the same job for thirteen years.

• 1:24:53Ramit Sethi?

  I would love that. Could you do that?

• 1:24:56Speaker 02

  Yeah. Um, with my skills right now, I was looking, we were looking at the one hundred and thirty thousand comparison of ninety I'm making now.

• 1:25:05Ramit Sethi?

  That would be game changing.

• 1:25:07Speaker 02

  And Michelle is looking, yeah, Michelle is also looking at something that would double her take home now.

• 1:25:13Ramit Sethi?

  If one of you does that, it will be transformational. If two of you do that and you follow a plan like this, it will be earth shattering for the trajectory of you and for your kids. Earth shattering. It is simply the biggest possible thing you could do. Second to following this plan.

• 1:25:34Ramit Sethi?

  But if you do not follow this plan and you go and make an extra fifty or a hundred K, it doesn't matter because you'll just spend it all. The plan is what matters. The connection between the two of you is what makes it possible.

• 1:25:47Speaker 02

  I think we have a solid game plan and solid, solid list of rules that we can follow without, you know, feeling that it's it's ticking away.

• 1:25:57Ramit Sethi?

  Great.

• 1:25:57Speaker 01

  In order for this to work, I need to ask for help. I need to shrug off the eldest grandchild, granddaughter, daughter persona and involve Jeff in the conversation and the planning. And it is, um, path forward actually is possible. And it doesn't seem as insane or scary as I thought.

• 1:26:22Ramit Sethi?

  Yes. If you could go back in time and see Michelle in two thousand and ten, what would you tell her?

• 1:26:28Speaker 01

  I would tell her that she needs to get Jeff more involved. Um, she needs to share the responsibility and make sure she's not the only one that knows what bills there are and what needs to be paid. So she's not the only one that's worrying about it at night.

• 1:26:46Ramit Sethi?

  Nice. And what if that Michelle from two thousand and ten said, yeah, but it's easier for me to do it because I don't trust Jeff?

• 1:26:53Speaker 01

  It's not going to be easier in fifteen years. It's going to be more stressful. And it's better to build that habit now than go through fifteen years of worrying about going up to the register and whether your card's going to clear.

• 1:27:11Ramit Sethi?

  That's honest. I really appreciate that. Do you think you would give yourself the same advice today?

• 1:27:17Speaker 01

  Yeah. I recognize that Jeff needs to be a part of it.

• 1:27:24Speaker 01

  It's hard to let go because I want to control. Um, and I want to know that things are going to be okay, but I recognize that it needs to happen.

• 1:27:34Ramit Sethi?

  Cool. I always believe that people can change. And I think there will be some change here with Michelle and Jeff. I think that Michelle hopefully feels validated that there are some real issues here. And I hope that she feels challenged and encouraged that she can learn more and develop her skill.

• 1:27:58Ramit Sethi?

  I hope that Jeff follows through. I really want him to speak to some medical professionals and see what, if anything, might be available to him. I think that once you have a relationship dynamic that has solidified, concretized, it's really, really challenging. So I'm wishing them the best. I know change is possible at all levels, all ages, all scenarios. It just becomes harder over time. I want to give a huge thank you to our partners at Monarch. You are now making it possible for us to take the CSP and for me to dive in to the transaction level.

• 1:28:37Ramit Sethi?

  So many awesome insights here. Here, we find that this couple spent nine thousand dollars this year eating out. That's actually immensely shocking and useful to know. You can do the same thing using Monarch.

• 1:28:51Speaker 01

  Hey, Ramit. So first, I want to thank you and the entire team for the opportunity and for taking the time to work through all of this with us. It was extremely helpful and honestly, it was a conversation we really needed to have. My biggest takeaway was that I need to learn to speak up more when it comes to finances. And it's okay for me to push Jeff to be more involved instead of feeling like I have to carry it all for myself. I also realized we're not our parents. We're not in the same financial situation they were in, and we don't have to carry the same beliefs or issues with money. We have the ability to save, invest, get out of debt and build something different for our family. We're not trapped. We did end up making a few adjustments to the budget to make it more realistic, but we do have a concrete plan now.

• 1:29:37Speaker 01

  We are on track to have one of our debts paid off fully within the next three months and then have the goal of having our personal loan taken care of within the next sixteen. Um, and then as things get paid off, we're going to roll that into other debts to get those paid off faster. We've also agreed that when and if our salaries increase, we're not going to let our lifestyles automatically increase with them. We want to put that extra money towards savings and investments instead. And I guess last thing, if there's anybody watching who thinks saving isn't for me or investing is only for rich people, I want you to know that it is for you. You don't have to make millions of dollars. You can start where you are with what you have and build from there, even if it's just ten dollars.

• 1:30:21Speaker 01

  And I think that's probably the biggest thing I'm walking away with, feeling like we can actually do this. Thanks again.

• 1:30:28Speaker 02

  So right off the bat, but one of the surprises was not knowing where our money was going, how it was being spent, just because I was afraid. I was, I had anxiety over spending and just relied on Michelle to, to do all the burden to, you know, to deal with the impact of my spending. And a lot of times, you know, you know, how she felt and putting her in a position of where she had to be the parent because of my impulse buying and lack of long-term thinking. My biggest takeaway, I need to change my behavior so we can change the way we approach money together. Having that conversation, regardless of it makes me anxious or not, learning more about financial planning.

• 1:31:11Speaker 02

  And it also means communicating more openly about what we want for our future to look like. Specific changes, as we discussed, we, you know, started, we scheduled that that, you know, the Sundays meetings to, to set up goals. So look at our monthly plan. We looked it over and our short-term debt management, we were able to restructure and pay off a large loan within sixteen, you know, within the next three months. And then take that and then put it towards one of the bigger bills. Treating that money as if we never had it because it's going to pay our bills. I believe that's our, our biggest is just being able to sit down and talk to each other openly and having that conversation that we've been avoiding just because we were afraid.

• 1:31:57Speaker 02

  And the goal is again, is to break that cycle, talk to our kids about debt management, about not getting into debt, plan for your future.

• 1:32:06Speaker 02

  Again, we're not our parents. We want to be better. We want to show our kids what it means to be financially responsible.

• 1:32:16Speaker 01

  Hey, Ramit team, you guys wanted to know what the biggest things that stuck with us since we talked about a month ago? Um, and for me, it's that it's okay to speak up about everything. I don't have to quietly take responsibility of things and really shouldn't avoid the conversations just because I think they're going to be uncomfortable.

• 1:32:33Speaker 02

  For me, it was asking more questions, taking ownership of our finances and knowing that we're a team. And not letting Michelle just take the burden of it all and expect that it's just going to be magic.

• 1:32:45Speaker 01

  I have also learned that sometimes you just have to pull the trigger. The plan's never going to be perfect the first time and that's okay, but spending forever trying to get the details right isn't the way to go. The only way to know if it's going to work is to try it.

• 1:32:59Speaker 02

  So this, the way we did this this month was to take our paychecks and automatically move it to retirement savings and extra debt payments so we can get that down. This is happens before we even get to touch it.

• 1:33:12Speaker 01

  Yep. And we also have a new income stream that's going to be starting soon and we've already decided where that money is going. We're also trying to use our banking accounts a little more intentionally. We've got one for bills, one for groceries and one for everything else we might have forgotten about.

• 1:33:27Speaker 02

  And we know this is our first month and we know it's going to be trial and error, but that's the nice thing. It's, we learn as we go. Uh, and we can use it, you know, what didn't work this month, we could try it out next month.

• 1:33:37Speaker 01

  Yep. So you know what? Thank you again for the opportunity and the direction you gave us. It's really helped. And I think we both feel like there's big things ahead of us. Thank you, guys.