275. "We escaped debt so why are we still spending like this?"

Ramit unpacks how to stop overspending, stay out of debt, and start building wealth as this couple confronts the spending habits they thought they had already fixed. Three years ago, Mason and Becca finally confronted a financial reality they had been avoiding. Despite good careers and the appearance of success, they had accumulated nearly $50,000 in credit card debt. They cut back hard, aggressively paid it down, sold their house, and moved to Florida. Now they have around $100,000 from the home sale sitting in savings, but they’re worried the same habits that got them into debt are starting to creep back in. They still don’t properly track their spending. Shopping, expensive date nights and a large “miscellaneous” category make it difficult to see where their money is actually going, while Mason experiments with day trading and considers ideas for generating passive income. On paper, they’re doing far better than they realize: they have around $204,000 invested, $124,000 in savings, and a net worth of roughly $326,000. But without changing how they spend and manage their money, Ramit sees a real risk of them falling back into debt. Ramit helps them figure out what comes after getting out of debt: how to stop mindless spending without giving up the things they love, save and invest intentionally, and start building real wealth. They rethink their plans for an $800,000 dream home, confront the scarcity they both grew up with, and discover how increasing their income and investing more could completely transform their financial future. In this episode, we uncover: How Mason and Becca built nearly $50,000 in credit card debt The conversation that finally forced them to change their spending Why they used a 401(k) loan to aggressively pay down debt How selling their house left them with around $100,000 in cash Why having that much money makes Becca anxious Why they’re scared of slipping back into their old spending habits How shopping, expensive date nights, and impulse purchases added up Why they still don’t properly track where their money goes How their $3,000 Disney annual passes fit into their Rich Life Why Ramit sees a real risk of them falling back into debt What Ramit sees in Mason’s day trading and passive income ideas Why their $326,000 net worth surprises them How Becca’s childhood shaped her belief that she would never be rich How Mason grew up seeing money as stress and struggle What they want their son to learn about money Why buying an $800,000 house would require major trade-offs How Ramit helps them rebuild their Conscious Spending Plan Why increasing their income becomes the biggest lever for their future How their retirement projection jumps from around $3.1M to $4.7M How they finally become completely debt-free Chapters: (00:00:00) Introduction (00:02:45) How they built nearly $50K in debt (00:06:39) Using a 401(k) loan to escape debt (00:08:53) Selling their house leaves them with $100,000 (00:11:15) “We just swiped the card” (00:14:37) Their old spending habits start creeping back (00:16:31) They disagree about buying another house (00:24:05) Ramit reviews their financial numbers (00:31:13) Ramit digs into their 71% fixed costs (00:37:30) Day trading and the dream of passive income (00:38:46) How Becca grew up around money (00:47:50) How Mason grew up around money (00:52:43) What they want to teach their son (00:56:41) Ramit starts rebuilding their financial plan (01:07:26) Redirecting their money toward investing (01:11:59) The reality of an $800,000 dream home (01:19:18) Why earning more becomes the priority (01:24:01) Their retirement could reach $4.7 million (01:32:15) Their house timeline changes completely (01:33:25) Mason and Becca become debt-free This episode is 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 https://facet.com/ramit to learn more about which membership option is best for you. Offer has been extended to 12/31/2026. #FacetAd Shopify | Start your free trial at https://shopify.com/ramit Wispr Flow | Try Wispr Flow for free at https://wisprflow.ai/ramit MasterClass | For unlimited access to every class and at least 15% off any annual membership, go to https://masterclass.com/ramit If you’re ready to stop putting off your money goals, Road to $100K gives you a step-by-step plan to reach your first $100,000, focus on what matters, and accelerate your timeline while building your Rich Life. Join Road to $100K at https://iwt.com/100K Connect with Ramit: • Get my new book, Money For Couples • Join my Rich Life: Road to $100K program • Download the Conscious Spending Plan • Listen to my book—now on Audible • Get my New York Times best-selling book • Get my no-numbers journal • Other episodes • Instagram • Twitter • YouTube Apply to be coached for free on this podcast at https://iwt.com/apply

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

• 0:00Speaker 00

  Vacation, debt, little purchases, odds and ends things, debt. We made debt normal.

• 0:04Speaker 01

  We should not be living this way.

• 0:07Ramit Sethi?

  How do you decide what you spend money on?

• 0:10Speaker 01

  Just buying things that we see that we want, going to Target, coming out, spending $200, $300 extravagant dinners. When we're done with that, let's go bar hopping and just running up bills.

• 0:21Ramit Sethi?

  You ended up with 100K in your bank account? Is that just sitting there right now?

• 0:25Speaker 01

  Yes.

• 0:26Ramit Sethi?

  What does that feel like?

• 0:27Speaker 01

  Very intimidating. I don't want to be tempted to spend it.

• 0:30Ramit Sethi?

  You're creating these behaviors to shield yourself from yourself?

• 0:34Speaker 01

  Yes. From the start, we had really bad money habits. We came from very similar upbringings.

• 0:40Ramit Sethi?

  Mom or dad ever tell you to save?

• 0:41Speaker 00

  Wasn't a lot of open discussion about finance.

• 0:44Speaker 01

  No advice at all. We don't know the right steps to not get back into that creep of just swiping the card.

• 0:52Ramit Sethi?

  To change your entire relationship with money, you would need to trust yourselves. Right now, you're a little wary of yourselves.

• 1:03Ramit Sethi?

  Imagine you woke up tomorrow morning and you had $100,000 extra in your bank account. How would you feel? Would you be happy? Or might you feel scared, even anxious, because you don't know what to do with the money? Mason and Becca, 34 and 32 years old, used to be in debt. They have diligently paid it off. They even sold their house. And now they have $100,000. But what are they supposed to do with it? Mason applied to be here on the podcast and he said, "We've spent the last three years buckling up and fixing past mistakes." Now that we've relocated to Florida and have $100,000 from our home sale, the challenge has shifted from paying off the past to protecting the future.

• 1:48Ramit Sethi?

  Let me take a look at their numbers. I'm going to pull up their conscious spending plan. Assets, $11,000. Investments, $204,000. Savings, $124,000. Debt, $13,600. Total net worth, $326,567. Fixed costs, 71%. That's too high. Investments, 2%. Savings, 13% and guilt-free spending, 14%. I have questions. This is actually quite interesting because you can tell that the day-to-day spending, the fixed costs, the savings, the investment, is out of alignment with their net worth. And so we need to fix this so that they don't simply depend on a windfall, but they fundamentally change the way they treat money.

• 2:33Ramit Sethi?

  That's what I'm going to try to do, speaking with Mason and Becca. Let's take a look at the application. So you wrote, "For a long time, we lacked a unified plan, which led to significant debt." Tell me more about that.

• 2:45Speaker 00

  So we've had a few years of debt that we've been working hard to pay off, and we're now toward the end of that. So it's not something that we will ever want to go back to since we're so close to the end of it, being completely green. And we don't know the other side of that.

• 3:03Ramit Sethi?

  Do you feel the same, Becca?

• 3:05Speaker 01

  Yes. I think we've been together for a very long time, since 20 years old. And we've, from the start, we had really, really bad money habits. We came from very similar upbringings of not having a surplus of money growing up. So I think when we started working and getting our career started, that money in our head was a reward for us to spend. And to get into really unreasonable expectations of what we should be having, which is what led to a lot of debt that we got into.

• 3:45Speaker 01

  It wasn't until about three years ago that we, I guess, got a little bit more critical thinking on, you know what? We should not be living this way. And we need to get a handle on how we're spending our money.

• 3:58Ramit Sethi?

  Take me back to that decision three years ago.

• 4:00Speaker 01

  Sure.

• 4:01Ramit Sethi?

  Where were you? What happened at that very moment?

• 4:04Speaker 01

  The conversation really came up because we wanted to move out of state. And we didn't think it was possible because we were like, we don't, we don't have enough money in the bank to be able to move. But then we started to question, why, why don't we have enough money? You know, our salaries look comfortable enough to be able to do something like that. Why are we not feeling that way? And that's when I think we really uncovered, I had credit card debt, he had credit card debt. And so when we looked at it together, we're like, we, we have to do something about this. If, if we don't want to be the same place that we are now in five years, we have to make a change.

• 4:47Speaker 01

  So it was really starting to go, we need to hold ourselves more accountable and find a better discipline for ourselves than just spending a ton of money and not having any plan, any budget for it.

• 4:59Ramit Sethi?

  Wow. How did that conversation and series of conversations feel?

• 5:03Speaker 00

  It was honest. It was very, it was very brutal. Yeah, very revealing. You took the lead and it was, it was a brutal conversation. It was a good conversation. It was no like arguments. It was just very factual. Like in hindsight, it was very much of a sit-down that you recommend.

• 5:18Ramit Sethi?

  Yeah.

• 5:18Speaker 00

  It was just our first one, so we didn't know the guidance. But it was very eye-opening with what we had, you know, what we, what we both owed. We put that together. We sat down, hashed out a plan and it, it came up, it came through.

• 5:31Speaker 01

  I, I think I felt a little bit of disappointment in ourselves because we, we have worked really hard and we grew a lot in our careers over time. And then realizing that we did not set ourselves up for success.

• 5:43Ramit Sethi?

  Yeah.

• 5:44Speaker 01

  So it was, and I think that was part of our avoidance for a long time is go like pretending like we are doing okay. We are setting ourselves up for success. Because I think on the outside looking in, we, we did look successful. We owned a home. We had, you know, our cars. You know, we, we were living the lifestyle that we wanted, but in our bank accounts, it wasn't reflecting that way.

• 6:07Ramit Sethi?

  Wow. I wish more people talk like this. It's quite amazing.

• 6:12Speaker 01

  We've become very self-aware within the past few years about this.

• 6:16Ramit Sethi?

  I like what you said about the fact that you had progressed in your careers. And you had the nice accoutrements of things. You had the cars and the house. And but when you look in the bank, when you literally say, what do we have? What do we have? It wasn't matching up to what your expectations were.

• 6:34Speaker 01

  Right.

• 6:34Ramit Sethi?

  I think that's really powerful. Okay. So you had this conversation. What'd you do next?

• 6:39Speaker 01

  We took out a 401K loan.

• 6:42Ramit Sethi?

  Huh?

• 6:43Speaker 01

  I know.

• 6:43Ramit Sethi?

  Okay.

• 6:44Speaker 01

  That's very controversial.

• 6:46Ramit Sethi?

  Hadn't found my book by then. Okay, fine. It's true.

• 6:47Speaker 01

  We did. Just to be honest, we took out a 401K loan. We basically put our credit cards away. We're like, we're not using them at all. And we very aggressively decided to pay it off. Now we're, we have probably close to $50,000 in credit card debt. We are down to 5,000 now.

• 7:05Ramit Sethi?

  Whoa. Amazing. How's that feel?

• 7:09Speaker 01

  Great.

• 7:10Speaker 00

  Feels good. That's what I'm saying. It feels really good to be so close to green.

• 7:14Ramit Sethi?

  Yeah.

• 7:14Speaker 00

  And nervous at the same time.

• 7:17Ramit Sethi?

  Nervous because what?

• 7:19Speaker 01

  We have never had the education or the tools to know how to not put ourselves there.

• 7:27Ramit Sethi?

  Yeah.

• 7:27Speaker 01

  I think both of our families very much normalize not having money. Being in debt is very normal and everybody is. So we don't know the right steps to not get back into that creep of just swiping the card and moving on with our day.

• 7:45Ramit Sethi?

  Okay. This is very helpful to know. Now, you took the hard look in the mirror and you said like, we got to change the way that we do. So you took the 401K loan, you started paying off the debt.

• 7:56Speaker 01

  Yes.

• 7:56Ramit Sethi?

  Did you know when the debt was going to be paid off? Did you calculate that?

• 8:00Speaker 01

  Yes. Yes. We had a plan. I think initially the 401K loan was for 18 months. We paid it off in 12.

• 8:07Ramit Sethi?

  You paid off the loan?

• 8:08Speaker 01

  Yes. The loan is gone. That is gone.

• 8:10Ramit Sethi?

  This is quite rare, by the way. So one of the reasons that nobody in the financial industry recommends people take a 401K loan is that people who take 401K loans often, sometimes usually have bad financial habits. So they take the loan, they don't change their habits, and then they never pay the loan back. So they basically screwed themselves today and tomorrow. So the fact that you paid it off is rare, very impressive. Don't do it again.

• 8:35Speaker 01

  We don't want to. We did not want to.

• 8:37Speaker 00

  I completely agree. It was, it was a good option at the time. I'm glad we got a chance to pay it off early.

• 8:42Ramit Sethi?

  If that is one of the top five financial mistakes you make, okay. Like you fixed it.

• 8:47Speaker 00

  Behind us.

• 8:47Ramit Sethi?

  It's behind you. Yes. Are you married?

• 8:49Speaker 01

  Yes.

• 8:50Ramit Sethi?

  Any kids?

• 8:51Speaker 01

  One kid.

• 8:51Ramit Sethi?

  How old?

• 8:52Speaker 01

  Six years old.

• 8:53Ramit Sethi?

  Six years old. Okay, got it. So you also sold your house, I understand?

• 8:57Speaker 01

  Yes.

• 8:58Ramit Sethi?

  Okay. How much did you buy it for? How much did you sell it for?

• 9:00Speaker 01

  We initially bought it for $169. We sold it for $289.

• 9:07Speaker 00

  $289.

• 9:08Speaker 01

  Yeah, $289.

• 9:09Ramit Sethi?

  And then, did you subtract out all the fees and transaction costs and stuff like that?

• 9:14Speaker 01

  Yes. So we ended up making about $113,000 off of the house.

• 9:18Ramit Sethi?

  Got it. Okay. All right. So you ended up with 100K in your bank account?

• 9:22Speaker 01

  Yes.

• 9:23Ramit Sethi?

  Is that just sitting there right now?

• 9:24Speaker 01

  Yes, in a HYSA.

• 9:26Ramit Sethi?

  Whoa. What's that feel like?

• 9:28Speaker 01

  Very intimidating.

• 9:30Ramit Sethi?

  Uh huh.

• 9:31Speaker 01

  I made sure, you know, I don't even, I never even activated the card for that account because I don't want to be tempted to spend it.

• 9:39Ramit Sethi?

  So you're, you're kind of creating these behaviors to shield yourself from yourself?

• 9:44Speaker 01

  Correct.

• 9:45Ramit Sethi?

  Both of you?

• 9:45Speaker 01

  Yes.

• 9:47Speaker 00

  We both have access to that SoFi account. I'm not touching it.

• 9:49Speaker 01

  But yep, we're just not touching it.

• 9:51Ramit Sethi?

  Okay. Okay. I don't mind that. I don't mind it. I would like you to get to the point where you trust yourselves.

• 9:57Speaker 01

  Sure.

• 9:58Ramit Sethi?

  But I understand that right now, you're a little wary of yourselves.

• 10:02Speaker 01

  Yes.

• 10:04Ramit Sethi?

  Look, if you're sitting here saying, boo hoo, what am I going to do with an extra $100,000? I get that. But consider this, they make $150,000 or $60,000 a year. It is very reasonable for a couple making that much to eventually have $100,000 liquid. Just as it is going to be for you to have more money in a savings account and an investment account than you ever thought possible when you're following my system. So I want you to pay attention to this and not dismiss it. Because whether it's today, tomorrow, next year, or 10 years from now, you are going to have more money than you ever thought possible. And you may not realize it, but you are probably going to feel the same way about money then that you do now.

• 10:50Ramit Sethi?

  So pay attention because this is your future and you can apply what you learn today. I want to understand a little bit more about how money works in your relationship. Take me through how the money flows. Do you both work? Where does the money go? What happens?

• 11:05Speaker 01

  Sure, so we do both work. We've always just put our money together in one account historically, and all of our money just goes to all of our bills.

• 11:16Ramit Sethi?

  And how do you decide on what you spend money on? And I'm talking about for the entirety of your relationship, not just the last three years.

• 11:25Speaker 01

  We just swipe the card.

• 11:26Ramit Sethi?

  Okay, so groceries, eating out, trips?

• 11:31Speaker 01

  No budget. Yep, we don't talk about it, we just swipe.

• 11:34Speaker 00

  It's in there, we get it, we get it.

• 11:35Ramit Sethi?

  And then what happens once the bills come?

• 11:39Speaker 01

  Well, I think luckily, we've never been in a position where we don't have the money to pay our bills.

• 11:44Ramit Sethi?

  Well, you were in credit card debt.

• 11:46Speaker 01

  But it was never for bills.

• 11:48Ramit Sethi?

  Oh, what was it for?

• 11:49Speaker 01

  Very mindless spending.

• 11:51Ramit Sethi?

  What? That's bills.

• 11:53Speaker 00

  We made it bills. We made debt normal. So vacation debt, little purchases, odds and ends things, debt.

• 12:00Ramit Sethi?

  Okay.

• 12:00Speaker 00

  And it added up.

• 12:01Speaker 01

  And I guess that our habit was just paying the minimum payment. So in our head, we are paying it off.

• 12:07Ramit Sethi?

  Got it. And just so I understand, because do you see trips or groceries or whatever not as bills?

• 12:15Speaker 01

  I guess I don't.

• 12:16Ramit Sethi?

  Yeah, that's interesting.

• 12:18Speaker 01

  In my head, I think it's more mortgage, car payment, utilities.

• 12:23Ramit Sethi?

  Okay, interesting. I would say I see all of it as bills.

• 12:27Speaker 01

  Okay.

• 12:27Ramit Sethi?

  Mortgage, Fritos, any of it, right? Disneyland, it's all bills. Some of them are static, they're automatic. Some of them are variable because we're charging different amounts. But at the end of the month, they all transform like a fairy tale. They all end up being bills.

• 12:46Speaker 01

  Sure.

• 12:47Ramit Sethi?

  And then I gotta find a way to pay them off. Okay, so you essentially didn't track most of your spending except for the big ones? And was there ever disagreements about spending?

• 12:57Speaker 01

  I would say on a very minor level. You know, for me, like when we go grocery shopping, I'm a huge, let's find the best deals. I'm gonna coupon cut everything where he will just go without any thought to it and just buy whatever it is.

• 13:12Ramit Sethi?

  So in general, when we look at your entire relationship with money, would you say you are frugal, extravagant? Like, what do you focus on? What's your thing? Like, for example, I tend to spend money on convenience. That's like my thing. What is it for you?

• 13:30Speaker 01

  For me, it would be like clothing and beauty products and jewelry.

• 13:34Ramit Sethi?

  Got it, self-care.

• 13:36Speaker 01

  Yes.

• 13:36Ramit Sethi?

  Okay, cool. That's your money dial. Okay, Mason, what about for you?

• 13:41Speaker 00

  I do like to get out of the house. We work from home, so getting out and being able to go eat somewhere at some of the restaurants we have in our area, I like to do that. It's something that we can do all together. It's something specifically for my son, it's something specifically for her.

• 13:54Ramit Sethi?

  What would be an example? Because it's like going to the park or like going to Disney World for seven days?

• 14:00Speaker 00

  Definitely go to, we definitely do Disney World, so definitely a big fan of that.

• 14:03Ramit Sethi?

  How many times a year?

• 14:05Speaker 01

  We have annual passes.

• 14:06Speaker 00

  We go all the time.

• 14:07Ramit Sethi?

  How much is that these days?

• 14:09Speaker 01

  About $3,000.

• 14:10Speaker 00

  For all three of us to go.

• 14:11Ramit Sethi?

  Oh, total.

• 14:11Speaker 00

  All the time.

• 14:12Speaker 01

  Total.

• 14:12Ramit Sethi?

  Okay, $3,000, that is just the park passes?

• 14:16Speaker 01

  Correct.

• 14:17Ramit Sethi?

  Okay, do you do the thing where because you have annual passes, you go for like two hours and you're just like, alright.

• 14:22Speaker 00

  Absolutely, I get off work, do a ride.

• 14:23Speaker 01

  We get to fully enjoy it and not have to be exhausted at the end of the day.

• 14:27Ramit Sethi?

  Wow, okay. You mentioned that you are afraid of going back to mindless spending. Tell me a little bit more about that.

• 14:37Speaker 01

  We have really bad habits, just going to the mall, many shopping sprees, just buying things that we see that we want. Go into Target, going in there for no reason and coming out, spending $200, $300. Extravagant dinners for a date night and then, well, when we're done with that, let's go bar hopping and just running up bills, you know?

• 15:01Ramit Sethi?

  What like, what's an example of something you buy that's like kind of expensive and kind of mindless?

• 15:07Speaker 01

  Botox.

• 15:13Ramit Sethi?

  Okay. How much does that cost anyway?

• 15:16Speaker 01

  I don't get a ton, so maybe like $200.

• 15:19Ramit Sethi?

  $200 per what?

• 15:21Speaker 01

  Uh, three months.

• 15:22Ramit Sethi?

  For three months, okay, all right. Well, I mean, look, I never saw a line for botox in a CSP, but I love it. Why not? All right, you spend on the mall, spend on eating out. And just to give me a sense of like a date night, walk me through that.

• 15:38Speaker 01

  Sure, so have to hire a babysitter, so that's the first. You know, usually it's gonna be for a good five, six hours. We'll make a dinner reservation. Dinner is gonna cost $200, $250. You know, we're not ready to go home yet, so let's go somewhere else. Let's go try out this bar that we've been looking into. So we'll go there, get a few drinks, you know, maybe we'll go to another one. Or we'll go out with friends and meet up with them. And then that just gets way more expensive because we stay out later with them.

• 16:08Ramit Sethi?

  And then in your own relationship, the two of you, is one of you like, hey, we maybe shouldn't do that? Or are you the opposite where you're both like, yeah, I get it. Let's get that, you should get that. Are you hyping each other up?

• 16:22Speaker 01

  We each other on a lot when it comes to purchases.

• 16:25Ramit Sethi?

  Like just get it, like you like it, you should get it.

• 16:27Speaker 00

  I would agree with that. Yeah, you look, you look good in it.

• 16:30Speaker 01

  Both of us.

• 16:31Ramit Sethi?

  Got it. Can you think of a time where you were not on the same page about money?

• 16:36Speaker 00

  I think our timelines of maybe buying a house are different. We have sold a house, so now we have money from that. Do we want to buy a house immediately? Do we want to continue to rent to explore the area? We don't know. I'm on the latter side of that. I want to kind of wait and explore. You also want a house, because that's part of your rich life, and that's fine.

• 16:58Ramit Sethi?

  Okay.

• 16:58Speaker 00

  I like that.

• 16:59Ramit Sethi?

  Have you had a discussion about exact timelines?

• 17:03Speaker 01

  Initially, we were thinking when we moved to Florida, it was gonna be within a year. I think now that we're almost close to the year, we've set that expectation that it's not the right idea. I personally would like to do it within the next five years. He's more open-minded to it, just kind of based off of how our finances look.

• 17:22Ramit Sethi?

  Oh, good. Yeah, biggest purchase of your life. Finances should be

• 17:26Speaker 01

  Yes.

• 17:27Ramit Sethi?

  probably the number one, maybe the number two decision. Okay, good to know. What's the plan for the 100K?

• 17:34Speaker 01

  Initially, it was to buy a house. And then I think we realized that if we just put that down as down payment, we'd be back to not having any savings, so.

• 17:45Ramit Sethi?

  What? I thought that you're always supposed to buy a house immediately.

• 17:49Speaker 01

  Well, you know, that's what our Realtor was trying to get us to.

• 17:52Ramit Sethi?

  The Realtor!

• 17:54Speaker 01

  I know, they're not our friends.

• 17:55Ramit Sethi?

  They're not your friend. Your Realtor is like, they might be nice, they might buy you a nice lunch, but they are there to make a commission. I take a Realtor. That's how far I trust him.

• 18:06Speaker 01

  Yes.

• 18:06Ramit Sethi?

  They're there to do a job, you work for me, I'm gonna be polite to you, but that's about it. We're not gonna, you know, go watch a play together. All right, so you realized that.

• 18:15Speaker 01

  So now it's just sitting there and we really want to find out what we should do with it.

• 18:20Ramit Sethi?

  Okay, did you ever think you'd have $100,000 just sitting in your account?

• 18:23Speaker 01

  No, never.

• 18:25Speaker 00

  Not until way later after the house is paid off and way down the road. I thought it's gonna be much further down.

• 18:31Ramit Sethi?

  Like 20, 30 years from now?

• 18:33Speaker 00

  For sure. Now that we're out, we just don't know what the next step is for that. Because I agree, I think I want you to, I'd like to get you another house and into a backyard with a pool and all the things. But also, it could be like a good starting point for different financial aspects, different brokerage accounts or different avenues.

• 18:56Ramit Sethi?

  You mentioned something in the application about a business. Can you tell me about that?

• 19:00Speaker 00

  Yeah, I had an idea about starting an arcade. There was a small 800, 900 square foot, underutilized building at the complex that we're actually staying in. And so I pitched them and sent them a letter of intent to rent the space and introduce arcade.

• 19:16Ramit Sethi?

  Is it like an arcade with video games?

• 19:18Speaker 00

  Yeah, just video games with the tap pass.

• 19:21Ramit Sethi?

  Got it. What do you think of this?

• 19:23Speaker 01

  I think it was a good idea to help make some passive income because it could, the way that the idea was set up was to make it staffless in a very high-volume vacation area. So I was on board for the idea. But I think it's just throwing out the idea, man, I would love to get some passive income. So no plan with it.

• 19:44Ramit Sethi?

  I'm picking up a lot of clues that their relationship with money is not really that healthy. I'm hearing phrases like passive income, which can be a big sign of a dreamer. I don't like the phrase passive income because I know the truth about what it takes. This idea that's peddled online of you can just plop a quarter into some machine and it will just print out money passively for the rest of your life? Guys, it's bullshit. That's not how it works. In order to generate passive income, it takes a lot of work and a lot of time. And much of the time, it doesn't even work. If your goal is passive income, to me, it's an immediate red flag because it means you're trying to effectively get rich quick.

• 20:25Ramit Sethi?

  So as I'm getting these clues, I'm starting to wonder, are they actually in a healthy position or not? I'm actually really glad that we get a chance to talk because if you remember, they were worried they were going to slip back into debt. And based on what I'm hearing, I think that might actually be a realistic possibility unless they make a change. We're gonna look at the numbers right after this. Two misconceptions about Ramit Sethi. Number one, he doesn't like Italian food. That's not true. I like pizza. Number two, that I'm categorically against all financial advisors. Also untrue. I'm simply against paying a percentage of your portfolio to an advisor. I would rather you pay a simple, flat fee or an hourly rate.

• 21:09Ramit Sethi?

  That is where our friends at Facet come in. Facet charges a flat membership fee for financial planning, never a percentage of your assets. And you get access to a team of CFP professionals, always a CFP, always a fiduciary, who help you create a personalized financial plan that meets you where you are. They can help with big things like investments, moving across the country, saving for kids' college, traveling in retirement, estate planning, all of it. Your financial plan should match up with your rich life vision. And Facet can help make that possible without the exorbitant fees. As of the date of this recording, Facet is waiving the enrollment fee for new annual members. And for my audience, Facet is offering $300 into your brokerage account

• 21:53Ramit Sethi?

  if you invest and maintain $5,000 within your first 90 days. Head to facet.com/ramit to learn more about which membership option is best for you. Facet is an SEC-registered investment advisor. I'm not a member of Facet and have an incentive to endorse Facet as I have an ongoing fee-based contract for cash compensation based on this endorsement. All opinions are my own and not a guarantee of a similar outcome. When I was thinking about quitting my last job to do I Will Teach You To Be Rich full-time, I created a rule for myself. I couldn't go full-time with IWT until it earned at least as much as my monthly salary for three months in a row. And this really helped me take my business seriously.

• 22:38Ramit Sethi?

  Now, for new business owners, I recommend something similar. And as you are getting set up, I also recommend keeping things simple by using Shopify.

• 22:47Ramit Sethi?

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

• 23:30Ramit Sethi?

  Start your free trial at Shopify.com/ramit. Start your free trial at Shopify.com/ramit. I want to take a look at your numbers.

• 23:39Speaker 01

  Sure.

• 23:39Ramit Sethi?

  What was it like to do the conscious spending plan together?

• 23:42Speaker 01

  It was eye-opening. You know, I don't think we ever really sat down and looked at our numbers like that before.

• 23:49Ramit Sethi?

  Did you have any disagreements with each other?

• 23:52Speaker 01

  When we were talking about it, I did see him going, oh, well, that doesn't matter. And I had to remind him that, no, that is a monthly cost.

• 23:58Ramit Sethi?

  Oh, really? What's an example?

• 24:00Speaker 01

  Um, some of the subscriptions. So, for example, the annual pass we have to Disney. He's like, I mean, that, that doesn't have to go on there. And I had to remind him that that has, that is a monthly cost that we pay on every month.

• 24:14Ramit Sethi?

  That's right.

• 24:14Speaker 00

  It makes sense now that you've mentioned it. I was overlooking it and it's a 12-month-old interest purchase. And that makes, that makes it a cost.

• 24:21Speaker 01

  Yes.

• 24:22Ramit Sethi?

  Your instinctive reaction was that doesn't matter. Why, why was that your first reaction? Why wouldn't it matter?

• 24:28Speaker 00

  Because maybe I knew that it was going to be paid off. It was, the money is there in the account, so it's in my, in my mind, it's paid.

• 24:35Ramit Sethi?

  Hmm.

• 24:36Speaker 00

  And that's probably not the healthy way of looking at that. It's still being paid.

• 24:40Ramit Sethi?

  Yeah, that's not the right way to look at it. But I like how honest you're both being because you have these very interesting mental contortions that you use. And I'm not coming down on you at all, just, I think it's interesting to learn more about ourselves. So, for example, Becca, you go, originally you go, like, eating out is not a bill.

• 25:01Speaker 01

  Right.

• 25:02Ramit Sethi?

  It's a bill. And our $3,000 a year Disney payment doesn't count because we have the money. It counts. So, I want you to kind of start to shine a light, almost like you're putting on one of those headlamps.

• 25:16Speaker 00

  Right.

• 25:16Ramit Sethi?

  And you're just looking at our own beliefs. And sometimes you might interrogate your own beliefs.

• 25:21Speaker 01

  Mm-hmm.

• 25:22Ramit Sethi?

  Often, you interrogate your partner's beliefs because it's easier to see someone else's. But what I, what I want to model for you is that it doesn't have to be like, you're stupid or you're a bad person. It's just like, whoa, isn't that interesting? What do you mean by that? Oh, how come you think about it like that?

• 25:37Speaker 01

  Mm-hmm.

• 25:38Ramit Sethi?

  You're going to discover hundreds of these little contortions that you do as you start to embrace a new chapter of your money.

• 25:45Speaker 01

  Sure.

• 25:45Ramit Sethi?

  Okay? Let's take a look at the numbers. Mason, can you read off the word in bold and then the number next to it?

• 25:55Speaker 00

  Assets at $11,000. We have investments of $204,867,000. We have savings at $124,300. Debt, $13,600 for a total net worth of $326,567.

• 26:15Ramit Sethi?

  Okay. What do you think about those numbers?

• 26:17Speaker 00

  I know we've had debt kind of holding or kind of, kind of staying, but it's now such a low number.

• 26:22Ramit Sethi?

  Mm-hmm.

• 26:23Speaker 00

  I, I want to, I want to make it zero.

• 26:26Ramit Sethi?

  Okay.

• 26:26Speaker 00

  And keep it zero.

• 26:27Ramit Sethi?

  We could definitely make it zero. I mean, if you just look at the savings versus the debt, you could do that while we're sitting here.

• 26:33Speaker 01

  That's what we were discussing.

• 26:35Speaker 00

  Yeah.

• 26:36Speaker 01

  If we should just wipe it out at this point.

• 26:38Ramit Sethi?

  We can talk about that for sure. You will walk out of here having a clear decision on that, I promise you.

• 26:43Speaker 01

  Okay.

• 26:44Ramit Sethi?

  Okay. And Becca, what do you think about these numbers?

• 26:46Speaker 01

  I feel a lot better about it than what I did this time last year.

• 26:51Ramit Sethi?

  Ooh, why is that?

• 26:53Speaker 01

  Because we actually have a real savings at this point. Um, seeing our investments, so the actual, the 401K and the pension, the Roth that we have, makes me feel a lot more comfortable than where I thought we were because I wasn't looking at it. I didn't know how much we had in those accounts.

• 27:11Ramit Sethi?

  What did you think was in there?

• 27:12Speaker 01

  Probably about $60,000 is what I thought.

• 27:14Ramit Sethi?

  And it's $204,000.

• 27:16Speaker 01

  Yes.

• 27:18Ramit Sethi?

  It's, uh, we are so funny when it comes to money. We go most of our lives agonizing. You mentioned that you cut coupons at the grocery store. And I'm just imagining like, sitting there, like, looking on your app, going to the grocery store, like, oh, I saved $129 on green beans. And, and meanwhile, you have more than triple

• 27:40Speaker 01

  Yes.

• 27:41Ramit Sethi?

  the amount you thought in investments.

• 27:42Speaker 01

  Right.

• 27:43Ramit Sethi?

  So, this is good to know. It's good for you to see almost the hilarity of how we behave because that will help you change the way you behave. Your savings at $124,000, is that $100K from the house?

• 27:55Speaker 01

  The $100K is from the house. And then we've been consistently saving each month as well.

• 28:02Ramit Sethi?

  How long you been doing that?

• 28:03Speaker 01

  I started actually putting away savings into an HYSA two years ago.

• 28:09Ramit Sethi?

  Wow.

• 28:09Speaker 01

  And I'll do $1,000 a month.

• 28:11Ramit Sethi?

  How'd you decide on that amount?

• 28:13Speaker 01

  When we started paying off our debt and getting really into making sure we're not just overspending on mindless stuff. Um, I kind of looked at how much I was making compared to the bills we had at the time and went, okay, I can take $500 from each paycheck. And if it's just going out and not in my spending account, I know I can live without that money.

• 28:36Ramit Sethi?

  Nice.

• 28:36Speaker 01

  So, I've continued that. I would like to eventually do more than that then.

• 28:40Ramit Sethi?

  Good. That's the, that's a very healthy way to do it. It's like, I'm putting the money away.

• 28:44Speaker 01

  Yes.

• 28:45Ramit Sethi?

  I'm not even going to see it. And then, believe it or not, you live.

• 28:49Speaker 01

  I don't need it.

• 28:50Ramit Sethi?

  You don't need it. It is crazy. Very common when people are really tight. Maybe they have a lower income or their bills are high. They go, Ramit, this stuff is impractical. I can't even save $50 a month. I go, try it. Try it with 20. Just have it automatically set aside. You will not miss it.

• 29:06Speaker 01

  Right.

• 29:06Ramit Sethi?

  Great work. After two years, you have $24,000 saved. That's great. All right, let's keep going. Becca, can you read off your gross combined monthly income, please?

• 29:15Speaker 01

  Sure. $13,256.

• 29:18Ramit Sethi?

  Okay. For a household annual income of $159,000. Uh, let's look at the rest of the numbers here. Fixed costs, what's that percentage?

• 29:26Speaker 01

  71%.

• 29:28Ramit Sethi?

  What do you think about that?

• 29:28Speaker 01

  It needs to go lower.

• 29:30Ramit Sethi?

  Agreed. It's high. We'll go down to investments. What's the number?

• 29:34Speaker 00

  $200.

• 29:35Ramit Sethi?

  $200 or 2%.

• 29:37Speaker 01

  2%.

• 29:38Ramit Sethi?

  Savings? What number?

• 29:40Speaker 01

  13%.

• 29:41Ramit Sethi?

  That's pretty good. That's that $1,000.

• 29:44Speaker 01

  Yes.

• 29:44Ramit Sethi?

  And then you have an HSA.

• 29:46Speaker 01

  Yes.

• 29:46Ramit Sethi?

  Good. And you're putting $380 away. Out of curiosity, are you investing that money?

• 29:51Speaker 00

  I wanted to wait to come on the show and ask you what to do because they have to have over, anything over $1,000 can be invested.

• 29:58Ramit Sethi?

  Yeah.

• 29:58Speaker 00

  I'm there now.

• 29:59Ramit Sethi?

  Okay, we'll talk about that. Good, good. Health savings accounts are awesome accounts. I'm glad you have one. And then finally, guilt-free spending at 14% or $1,442. Is this accurate?

• 30:10Speaker 01

  Yes.

• 30:11Speaker 00

  I think it's just about. There's also a miscellaneous line that I think will cop, will, will, will take a lot of things out to.

• 30:16Ramit Sethi?

  Yeah.

• 30:16Speaker 01

  Right. I think combined between those two, I think that is very high.

• 30:20Ramit Sethi?

  And, um, your Disney stuff, where did you count that?

• 30:25Speaker 01

  In the subscriptions is where I put it. That looks really high, but that's part of where I put that.

• 30:30Ramit Sethi?

  Good, good, good, good. I'm glad you, that's exactly where it should go.

• 30:33Speaker 01

  Okay.

• 30:33Ramit Sethi?

  Totally. It must be important because you made it a fixed cost. So, I'm assuming you're going to do Disney every year.

• 30:38Speaker 01

  Ideally.

• 30:39Ramit Sethi?

  Okay, cool. Shall we dive into the fixed cost for a second?

• 30:43Speaker 01

  Sure.

• 30:43Ramit Sethi?

  So, we're at 71%. We like to see this number between 50% to 60%. Let's look at your rent, which is $2,550.

• 30:52Speaker 01

  Yes.

• 30:52Ramit Sethi?

  That's pretty good. That's good.

• 30:55Speaker 00

  It is. We, we found a good spot when we moved. It was also fully furnished, so we got to just move right in. It was a really good deal.

• 31:01Ramit Sethi?

  Dream.

• 31:01Speaker 00

  It was.

• 31:02Ramit Sethi?

  Listen up, America. We need more furnished apartments. People don't want to have to buy a bunch of furniture now. I love a furnished apartment. All right. Car payment, $765. One car payment?

• 31:11Speaker 01

  That's one car payment.

• 31:11Speaker 00

  What's the car? It's a Honda Pilot.

• 31:14Ramit Sethi?

  Good car. Good. $765 includes gas?

• 31:18Speaker 01

  Um, no.

• 31:19Speaker 00

  I would say it doesn't include gas. We also work from home, so traveling.

• 31:22Speaker 01

  Our gas costs are very low.

• 31:24Ramit Sethi?

  Pretty low.

• 31:24Speaker 01

  I would say maybe $100 a month.

• 31:26Ramit Sethi?

  All right, I'm going to add it here, okay?

• 31:27Speaker 00

  Okay.

• 31:28Ramit Sethi?

  Wait, so what else are you missing if you didn't include gas here? Because this is a big tip-off. If you didn't include gas, what else did you not include?

• 31:36Speaker 00

  Maintenance.

• 31:37Speaker 01

  The maintenance on it.

• 31:38Ramit Sethi?

  I'll make it $125. Besides the car, what else are you not including in this conscious spending plan?

• 31:44Speaker 01

  Honestly, I think I was thinking gas was under miscellaneous in my head.

• 31:47Ramit Sethi?

  Yeah, this is, see, this is what people do. They throw it in. They see the miscellaneous and they treat it like a junk drawer. Ah, it's covered in there. No. Miscellaneous is for the stuff you did not count, even though you tried to count everything else. Another mindset shift I want you to have, right? So let's just quickly run through this here. Groceries at 800, is that accurate?

• 32:08Speaker 01

  It is.

• 32:09Ramit Sethi?

  Okay. Clothes at 250, y'all got some nice clothes on. You telling me 200 bucks, 250 a month gets that? I don't know if I believe that.

• 32:19Speaker 00

  I don't buy often.

• 32:21Speaker 01

  I sell my clothes and

• 32:25Ramit Sethi?

  I sell this stuff too.

• 32:26Speaker 01

  Money to buy more clothes.

• 32:28Ramit Sethi?

  Come on, I know how much you get when you sell your clothes. It's like pennies on the dollar.

• 32:31Speaker 01

  It's not a ton.

• 32:32Ramit Sethi?

  All right.

• 32:33Speaker 01

  But

• 32:33Ramit Sethi?

  That doesn't

• 32:34Speaker 01

  I kind of help myself with that.

• 32:36Ramit Sethi?

  Yeah, all right. Let me ask you a question. When you had that conversation three years ago and you took a hard look in the mirror, what spending changes did you make?

• 32:47Speaker 01

  During that time where we were aggressively paying off the debt, we were not buying clothes. We were not going out on date nights. When we paid that off and we moved, we started creeping back up on some spending there because we felt a little bit more comfortable in doing that.

• 33:03Ramit Sethi?

  Okay, I don't mind a little bit of increased spending. I do mind it if it is mindless.

• 33:10Speaker 01

  Sure.

• 33:11Ramit Sethi?

  Where is it today?

• 33:12Speaker 01

  Better than it was, but there's still mindless spending.

• 33:16Ramit Sethi?

  Okay.

• 33:16Speaker 01

  100%.

• 33:17Ramit Sethi?

  Cool. Subscriptions are at 605. So we have the Disneyland. What else do we have?

• 33:23Speaker 01

  I also put in my son's extracurricular activities there. And then there's a meal service, Amazon.

• 33:32Speaker 00

  Prime, Audible.

• 33:33Speaker 01

  Audible.

• 33:34Speaker 00

  Spotify, some little odds and ends.

• 33:36Ramit Sethi?

  How much is the meal delivery?

• 33:37Speaker 01

  A hundred dollars.

• 33:38Speaker 00

  A hundred dollars a month.

• 33:39Ramit Sethi?

  Okay. And then miscellaneous, which is $1,005. So that's your catch all.

• 33:44Speaker 01

  Yes.

• 33:44Ramit Sethi?

  What do you think falls under that?

• 33:46Speaker 00

  The haircuts.

• 33:47Speaker 01

  Right.

• 33:48Ramit Sethi?

  I agree. I think any self-care is probably in here. And I think that would be hair, massage, nails, trainer, whatever it may be. There's a lot of stuff that I think falls in here. I suspect it's probably higher than $1,000. What do you think?

• 34:04Speaker 01

  Depends on the month, I think it can be.

• 34:05Speaker 00

  I don't know. We were trying really hard to pick out like what else that could include.

• 34:09Ramit Sethi?

  Do you track your spending?

• 34:11Speaker 01

  No.

• 34:12Ramit Sethi?

  No, okay. Did you track it when you were paying the debt down?

• 34:16Speaker 01

  We still weren't tracking it very well.

• 34:18Ramit Sethi?

  Wow.

• 34:19Speaker 01

  We were just not doing stuff.

• 34:21Ramit Sethi?

  I think I understand your numbers now. I have some other questions I want to ask you. There was a note in your conscious spending plan next to the investments that said, day trading pre-market. What does that mean?

• 34:34Speaker 00

  So that is me. I do have a brokerage account. I do trade out of it. I do trade small account. It's under a thousand dollars. While I don't want to lose it or day trade it away, it's all I will have to use for this account.

• 34:51Ramit Sethi?

  1,000.

• 34:52Speaker 00

  I started with a thousand dollars, yeah.

• 34:53Ramit Sethi?

  What is it now?

• 34:54Speaker 00

  600. So not, not doing, not doing hot.

• 34:56Ramit Sethi?

  Okay.

• 34:56Speaker 00

  But it's also a learning, but this is all of the year into the, plan or the strategy.

• 35:01Ramit Sethi?

  Got it. Did the two of you talk about this?

• 35:04Speaker 01

  Yes.

• 35:05Ramit Sethi?

  What did you say?

• 35:05Speaker 01

  I'm aware. I was open to him trying it out. You know, I think in my head was, you know, if it's something he could learn and be able to be successful at it, I don't see the issue in it.

• 35:15Ramit Sethi?

  Got it. And what if it went to zero? What would you do?

• 35:20Speaker 00

  If it went to zero, I would no longer be able to trade for that timeframe. I try to keep it from January to December.

• 35:27Ramit Sethi?

  And after that, what would you do?

• 35:29Speaker 00

  I guess reassess how was my skill? If I took it to zero, not great.

• 35:34Speaker 00

  Maybe I should stop.

• 35:35Ramit Sethi?

  Pretty honest. All right. Okay, got it. You have to pay attention to what people say and how they say it. Because when I'm looking at the numbers, they look okay. Couple, I'm talking to them, they seem great. But then I start hearing little phrases that are making my antenna go up. Like Mason goes, yeah, I don't buy much, but when I do, it's on sale. Like, hmm, filing that away. Becca goes, I like to go shopping. I sort of swipe, we don't really think about it at all. Hmm, filing that away. My question is, where did this money behavior come from? Right after this, we're going to find out. My team at IWT is fully remote and I love that. Because of that, we're constantly sending messages through Slack, through Google Drive, through all kinds of different technologies.

• 36:21Ramit Sethi?

  And that's why my team is such a big fan of Whisperflow. Whisperflow turns the way you naturally talk into clean, ready to send text in any app on any device. I'm talking about Slack, Gmail, Notion, iMessage, even ChatGPT and Claude on Mac, Windows and Android. With Whisperflow, you just hit a hotkey, speak, and the text appears way faster than typing it. Plus, it's smart, it's adaptive, so you don't send a block of huge incoherent text. And unlike other dictation apps, it corrects mistakes. It gets names right the first time. And it can format bullet points and lists on the fly. I find that particularly useful. So if you send tons of emails and messages every day,

• 37:04Ramit Sethi?

  if you want to be able to capture your own ideas just by talking, Whisperflow is a no-brainer. Get one month of Whisperflow Pro for free at wisprflow.ai/ramit. That's wisprflow.ai/ramit. W I S P R flow.ai/ramit. Or click the link in the description. One of my rich life rules is that I am happy to pay to learn from the best. That's why I have personally paid for MasterClass, this episode's sponsor. One class I really enjoyed taking was Prepare to be Unprepared with Amy Poehler. I'm always interested in trying to improve my speaking skills.

• 37:46Ramit Sethi?

  This was a great class where I learned a ton about the rules of improv and how to apply that to my life so I can be more adaptable on the fly. I use a lot of these principles actually when I'm talking on my podcast. Unlike other platforms, MasterClass puts you in the room with the people who defined their fields. They're not just experts, they are the best in the world. MasterClass has plans starting at $10 a month, giving you unlimited access to over 200 classes, topped by the world's best business leaders, writers, chefs, and even me, talking about financial wellness. There's no risk to joining. Every new membership comes with a 30-day money-back guarantee, so you can try it out before you commit. MasterClass keeps adding new classes, so there's never been a better time to get in.

• 38:31Ramit Sethi?

  Right now, as a listener of this show, you get at least 15% off any annual membership at masterclass.com/ramit. That's 15% at masterclass.com/ramit. Head to masterclass.com/ramit to see the latest offer. Let me understand how you both built your relationship with money. Becca, what do you remember your family saying about money when you were young?

• 38:57Speaker 01

  I had separated parents and they didn't talk a lot about money, but I could tell, even as a kid, we didn't have a ton of money. We, we got our necessities, not a lot of our wants. And I remember, you know, my dad, we'll go to our dad and say, hey, I want this. He goes, I give your mom enough money each month, she can get that. So we asked my mom and she goes, that money went to bills, I don't have money for that. So I knew we didn't have money. But there was really no discussion outside of that about money.

• 39:32Ramit Sethi?

  What do you take away from dad tossing the ball to mom? Mom telling you that the bill, what do you make of that?

• 39:40Speaker 01

  That neither one of them wanted to take responsibility for it.

• 39:45Ramit Sethi?

  And you mentioned that everybody in your life has normalized having debt.

• 39:51Speaker 01

  Yes.

• 39:52Ramit Sethi?

  Tell me about that.

• 39:52Speaker 01

  Yeah, I, I did not grow up in an environment that was wealthy by any means. I think everyone normalized that because that's how they got by.

• 40:01Ramit Sethi?

  What did they say?

• 40:03Speaker 01

  You know, that we, we work hard, but sometimes we don't have enough money to make ends meet. So we put it on a credit card. So it just, it was very normalized in my environment to not have a lot of money.

• 40:16Ramit Sethi?

  Got it, got it. Okay. So let's fast forward to you getting a little bit older. You're a teenager. Did your relationship with money change at all?

• 40:25Speaker 01

  When I was 16, I got a job. And I think that was the first time in my life I was ever actually able to get things that I wanted. Because I was able to start buying them. But I, I was fairly responsible with it back then. I saved half of my paycheck up until I was 18. So I bought my own car. I was able to pay for two years of my college with it. I think the issue was I turned 18 and went wild and didn't try to uphold what I was doing with saving money.

• 40:57Ramit Sethi?

  So you were saving from 16 to 18? Where'd you learn that?

• 41:02Speaker 01

  I don't know, actually. I, you know, I went and opened up a bank account and maybe the lady there told me that was a good idea. I have no idea.

• 41:11Ramit Sethi?

  That's interesting. Mom or dad ever tell you to save?

• 41:14Speaker 01

  No.

• 41:14Ramit Sethi?

  Do they ever talk about investing, debt, any of that?

• 41:17Speaker 01

  No, no advice at all.

• 41:20Ramit Sethi?

  You said at 18, you started spending your money. You called it going wild.

• 41:23Speaker 01

  Yes.

• 41:24Ramit Sethi?

  What'd you spend it on?

• 41:25Speaker 01

  Parties, trying not to live at home. So apartments, just utilized everything I could just to not go back home.

• 41:37Ramit Sethi?

  Got it. Credit cards?

• 41:39Speaker 01

  I did start those when I was probably about 21.

• 41:42Ramit Sethi?

  Okay. Did you finish college?

• 41:45Speaker 01

  I did not.

• 41:45Ramit Sethi?

  Okay. So what happened after you left college?

• 41:49Speaker 01

  I started working full-time and I got an apartment and just started paying my bills.

• 41:54Ramit Sethi?

  Did you save anything?

• 41:54Speaker 01

  No.

• 41:56Ramit Sethi?

  How'd you go from 16, saving to not saving?

• 42:00Speaker 01

  I think in my head, I had time. I was, you know, I can spend this money now because I have so much time.

• 42:07Ramit Sethi?

  So I'm young, I'm going out. I'll deal with the saving stuff later.

• 42:11Speaker 01

  Right.

• 42:11Ramit Sethi?

  Okay. Did you have anybody in your group of friends that was financially savvy?

• 42:19Speaker 01

  I don't think we did until our late twenties. And I think that actually was what got my mind started going, oh, these people are my age, they're doing well with money. They know what they're doing. Why am I not doing that?

• 42:35Ramit Sethi?

  How did you know that they were doing well?

• 42:36Speaker 01

  We would talk about it.

• 42:37Ramit Sethi?

  Really?

• 42:37Speaker 01

  Yeah.

• 42:38Ramit Sethi?

  This is both of you? Okay, so these are friends, what'd you say to them?

• 42:43Speaker 01

  Well, I would ask them advice. You know, we would get into conversations and ask what they were doing or how they did it. And they'd talk about saving money. They'd talk about how they would split up their bills with their spouse and talk about, you know, not doing the mindless spending that we do. So.

• 43:04Ramit Sethi?

  Quite interesting hearing your journey. Did you grow up religious?

• 43:08Speaker 01

  I did.

• 43:09Ramit Sethi?

  Still religious?

• 43:10Speaker 01

  No.

• 43:11Ramit Sethi?

  I see. At what age did you maybe step out of religion?

• 43:16Speaker 01

  About 26.

• 43:19Ramit Sethi?

  What was going on then?

• 43:20Speaker 01

  I just started going on a deep dive of really looking into what I grew up thinking and realizing I don't agree with that anymore.

• 43:31Ramit Sethi?

  I see. And as part of that journey, what other parts of your life did you reexamine?

• 43:39Speaker 01

  I became a whole different person, I feel like, in that timeframe. I just started realizing the person I was was not who I wanted to be. And I think this financial piece kind of came with it too.

• 43:52Speaker 01

  Because it really made me realize who do I want to be? And where do I want to go? And not living a life that other people told me I had to live.

• 44:02Ramit Sethi?

  Tell me more, I'm very fascinated.

• 44:04Speaker 01

  Sure. You know, I think, you know, growing up religious and then I think just kind of the environment I grew up into, like with my mom, like you work really hard, but you really have nothing to pay off for it. She doesn't take big chances on anything in her mind. I'm supposed to work 40 hours a week, go home, not do anything else. And I realized like I was missing something in my life. And it's because I was mirroring the way that she lived her life. And that's not how I wanted to live it. You know, I think there was a lot of judgment from her or even people that we grew up with in a religious standpoint and church and everything. And I really started to realize like their opinions did not matter of me.

• 44:47Speaker 01

  And to make me happy, I need to start living the life that I truly want to live instead.

• 44:52Ramit Sethi?

  And you were married at this point?

• 44:54Speaker 01

  We were, yeah.

• 44:55Ramit Sethi?

  I'm gonna come to you, Mason, but were you religious as well? Did you grow up religious?

• 44:58Speaker 01

  We met at church.

• 45:01Ramit Sethi?

  And are you still religious?

• 45:02Speaker 00

  I'm not.

• 45:03Ramit Sethi?

  Same time period where you had this realization?

• 45:05Speaker 00

  Maybe a little bit earlier, but generally.

• 45:08Ramit Sethi?

  Wow. This is very rare. Like, it's not rare for people to, you know, change their views on religion, but in a married couple that met at church, to go through the journey together. And it's no surprise, that's why I kind of got a clue that there may have been something going on with religion. Because to change your entire relationship with money in your twenties by asking friends and listening, suggests there's something else going on. Wow. What money messages that you grew up with? Do you think you are still bringing to this relationship today?

• 45:46Speaker 01

  I think I, for so long, just thought I wasn't going to be rich. I thought that was just reality. I thought everybody's poor because everybody around me is poor. So I think I haven't found that confidence yet to know that I don't have to be that way.

• 46:05Ramit Sethi?

  Wow. It's interesting. It kind of shows up in your conscious spending plan. The spending on certain things without tracking it carefully, that is indicative of somebody who's like, yeah, I'm not gonna be wealthy. Little old me. But actually, you very well could be.

• 46:24Speaker 01

  Yes.

• 46:26Ramit Sethi?

  When I think about how Becca grew up with money, I think about like a sponge. Just someone absorbing the lessons learned, but not really knowing how to make sense of what's going on. When you're a child, you don't understand how money works. And for so many guests, including Becca, their parents don't tell them anything about money. Oh, sure, they might leak out stress and anxiety, but they're rarely talking about savings and investing in different tax vehicles. No, it's just like, we don't have money. So what are we to make of that as children? Many of us are consumed with scarcity. Many of us might save a little bit of money and then spend it all in a single night or in a month. Becca did something interesting. She became pretty responsible with her savings. She saved half of her money.

• 47:10Ramit Sethi?

  And when I asked her, where'd you get that idea from? I don't know, maybe the lady at the bank. And then she goes on just a couple of years later to spend all of it. I am begging all the parents who watch this show, stop trying to protect your children with money. You are not protecting them by not talking about money. Money is not something that is an evil monster. It's actually something you need to engage with and discuss, even if you have made mistakes in your own life. I wish Becca had been better trained with money. It would have put her in a completely different place. But to her credit, she has found that place pretty much on her own. Tell me about how you grew up with money. What do you remember your family saying, Mason, about money?

• 47:54Speaker 00

  Good question. I mean, I also came from a family of divorced parents. So money was always tied on both sides. I don't remember openly having money discussions about this. But as a kid, you just noticed things. So you noticed the car changes or the furniture going away or, you know, garage sales and moving all the time. And you realize these things. So money messages and like things from, from how I grew up, it was all like self-taught. And that's not, it wasn't great. I didn't have great habits and saving or spending until I got into a serious relationship with her. And that made me want to change all of that.

• 48:37Ramit Sethi?

  Furniture going away. What's that about?

• 48:40Speaker 00

  Yeah, I had, I got to see my dad struggle through the divorce. There was a lot of changes to the house and selling that. And what we would come over and visit and sleep on and stay on, almost being on the like verge of like cards being like canceled or bankruptcy or losing a house and like things that you will see. That was all normalized to me. And I don't think I ever want to be in that position or show that I'm in that position to our son.

• 49:12Ramit Sethi?

  So if I can read between the lines, tell me if this is accurate. Your parents separated, what age were you?

• 49:20Speaker 00

  12.

• 49:21Ramit Sethi?

  Okay, that's a tough age. And it sounds like your dad had to downsize. You go to his place, it's probably smaller, not as much furniture.

• 49:30Speaker 00

  Sure.

• 49:31Ramit Sethi?

  Not as comfortable.

• 49:31Speaker 00

  100%.

• 49:32Ramit Sethi?

  What did you feel at that moment as a 12-year-old? You're pretty smart at 12.

• 49:36Speaker 00

  You know, you get to grow up fast, which, you know, you learn to try to do the next steps of, do I have to start helping my sisters? Do I have to start dropping extracurriculars and sports and things? Yeah, it was a big drawback.

• 49:51Ramit Sethi?

  Right. And did you start hearing more about money at that point? Because presumably money's got to be tighter for both parents.

• 49:59Speaker 00

  Again, it wasn't a lot of open discussion about finance. One thing I do distinctly notice or remember is like my mother constantly checking the books and like having pages and pages of bills and scrolling through them and filling out all these things. And that, to me, was how bills were handled. You struggle over them and you stress over them and then the next month you do it again.

• 50:23Ramit Sethi?

  Yeah, that's pretty clear. I think a lot of people believe that. You struggle, and who struggles? Mom struggles.

• 50:29Speaker 00

  Sure, she struggled.

• 50:33Speaker 00

  She also went back to school and put herself through school with three kids and got in a better spot. So like I learned that you can get out of those certain scenarios. I also watched my dad not do that and slide different directions.

• 50:46Ramit Sethi?

  Really? What was your takeaway from that differential?

• 50:50Speaker 00

  My takeaway was you can work hard and get out of where you are. And that's what my mother did, so that was the work ethic I learned.

• 51:00Ramit Sethi?

  Okay. Do the two of you as a couple have role models? Folks that you look to, you get inspired by when it comes to money, when it comes to parenting, when it comes to relationships? I'm seeing a kind of a quiet realization on both of your faces right now.

• 51:18Speaker 01

  I don't think I have one.

• 51:20Ramit Sethi?

  Wow. That's honest. I actually think that it explains a lot. And if anything, if I were in your position, I'm thinking like, wow, I'm proud of how far we have come, the transition we've made as a couple, because we don't really have anybody who's guiding us. We had to figure this stuff out on our own. So I think that's quite powerful. You could turn that narrative into like, oh, my God, this sucks. We don't have anybody around us. Or wow, look how far we've come despite it. And now that we realize that our next goal is to find a couple who we really respect.

• 51:58Speaker 01

  Right.

• 51:59Ramit Sethi?

  Who want to learn from.

• 51:59Speaker 01

  Sure.

• 52:00Ramit Sethi?

  Take that mindset you've already got. Make it bigger and more explicit.

• 52:04Speaker 00

  Okay.

• 52:05Ramit Sethi?

  Mason and Becca both grew up with money scarcity. And interestingly, when people grow up with scarcity, I find that they can go one of two directions. One, they can become even more scarce about money. Protective, worried, anxious. Or the other direction, they basically spend it all. Because they go, finally, I have some money and I'm gonna spend it. The key is, you cannot predict which direction they are gonna go. And with Mason and Becca, when they met, especially for the early part of their relationship, they both decided to go the spending route. What kind of financial future do you want for your son?

• 52:46Speaker 01

  I want him to be able to be successful in money management from day one, when he becomes an adult. But I don't want him to have to go through what we did, which was living very paycheck to paycheck. I would like to be able to set him up and be comfortable.

• 53:09Ramit Sethi?

  What if he turned 18 and he opens up his checking account and there's $100,000 in it? What would you teach him to do?

• 53:15Speaker 01

  All my hope would be to invest it, to be able to really think about how he could really utilize that money for his future, instead of just mindlessly spending it.

• 53:28Ramit Sethi?

  Well, we have a great opportunity because his parents happen to have $100,000.

• 53:32Speaker 01

  Yes.

• 53:32Ramit Sethi?

  And to your credit, you are not immediately spending it.

• 53:36Speaker 01

  Right.

• 53:36Ramit Sethi?

  I really respect that you have put it aside while you learn, so that you use it thoughtfully.

• 53:42Speaker 01

  Sure.

• 53:43Ramit Sethi?

  I want to talk about what you want to do with your money. Yes, the 100K, that too, but just in general, what kind of life do you want to live?

• 53:52Speaker 01

  Dream home, several vacations a year, have family vacations and then one-on-one vacations, you know, date nights often, being able to maintain our social life without feeling stretched then for that. Being able to go shopping and not feel like we're overspending in that amount. But overall, too, just not have the anxiety that I have every single day.

• 54:23Ramit Sethi?

  Still haven't?

• 54:24Speaker 01

  I do.

• 54:24Ramit Sethi?

  Okay. Mason, how about you?

• 54:27Speaker 00

  Definitely owning a home and with some of your requests, a pool. I think that's gotta be there, you know? Not worrying about the spending because it's something that I can afford. Maybe it is, maybe not the nicest things that are out there, but definitely nicer. I want to set up my son to mirror how we are with our money, once we get in a good spot. And so far, we're really close to that good spot.

• 54:57Ramit Sethi?

  Okay, nice. I don't know the exact number here, but for the type of lifestyle that the two of you talked about, what kind of income do you think you would need to comfortably be able to do that?

• 55:08Speaker 01

  $250,000 at least.

• 55:10Speaker 00

  $250,000, maybe $300,000. I think that'd be a good, great goal.

• 55:13Ramit Sethi?

  Yeah. The type of lifestyle you're talking about is probably $300,000, $350,000 a year in your area.

• 55:19Speaker 01

  Okay.

• 55:20Ramit Sethi?

  So at $350,000, you're making $160K right now. What does it tell you?

• 55:25Speaker 01

  We need to make more.

• 55:27Ramit Sethi?

  If you want to live that life.

• 55:28Speaker 01

  Yes.

• 55:28Ramit Sethi?

  You would need to increase your income. I agree. Do you need to do that tomorrow?

• 55:33Speaker 01

  No.

• 55:35Ramit Sethi?

  No. So you got time, plenty. Think of how much you've changed in the last five years. Oh, my God. If you continue that stretch, you have time. Then the question becomes, hey, if we want to live a lifestyle that's gonna take X years, it's gonna require us doubling, tripling, whatever our salary, which is obviously a lot of work and good luck, do we want all of those things? What do you think?

• 56:01Speaker 01

  I would.

• 56:01Ramit Sethi?

  Okay.

• 56:03Speaker 00

  If we had the means, of course, I would love to.

• 56:05Ramit Sethi?

  But I'm saying, it takes a lot of work.

• 56:08Speaker 01

  I'm fine with that.

• 56:09Ramit Sethi?

  Okay.

• 56:10Speaker 01

  I think we're great hard workers, you know? I think it's just not always knowing where to go.

• 56:16Ramit Sethi?

  Nice.

• 56:17Speaker 01

  From here. We'll work very hard to get to what we want. And we always have.

• 56:22Ramit Sethi?

  I believe that. I love that. That's a very interesting answer. I don't hear that as often as you would think. Yes, I do. I want that.

• 56:28Speaker 01

  Yeah.

• 56:29Ramit Sethi?

  And I'm willing to work.

• 56:29Speaker 01

  I already have plans to up my career, so I know I can get to those goals that I want to do.

• 56:36Ramit Sethi?

  Great. What do you do for a living?

• 56:38Speaker 01

  I'm an HR manager.

• 56:40Ramit Sethi?

  Great. And Mason?

• 56:42Speaker 00

  I work customer service for an energy company.

• 56:44Ramit Sethi?

  Great. Okay. I want to help you position yourselves with your money for building real wealth, right? So that you can live the type of rich life that you envision. And part of this is gonna be changing your mindset, but we actually have to do the numbers as well. So I would like to try to get these fixed costs down. If we can get them down, then we can redirect more of that money towards investments, savings, et cetera.

• 57:09Speaker 01

  Definitely.

• 57:10Speaker 00

  Sure.

• 57:10Speaker 01

  That's why we thought about knocking out that debt, because we're aggressively paying it.

• 57:15Ramit Sethi?

  Yeah.

• 57:16Speaker 01

  So it's $588 a month.

• 57:17Ramit Sethi?

  Should we just assume you're gonna pay it off today?

• 57:20Speaker 01

  Sure.

• 57:20Ramit Sethi?

  Okay, so if you paid it off with money from your savings, that'll be $13,600, which is negligible, because you have $124,000 in savings. You paid it off. That makes this monthly debt payment, what?

• 57:34Speaker 01

  Zero.

• 57:34Ramit Sethi?

  Zero. Watch what happens to the CSP. Whoa. It just went from 73 to 66%.

• 57:41Speaker 01

  Yeah.

• 57:42Ramit Sethi?

  Big jump.

• 57:43Speaker 01

  Love that.

• 57:44Ramit Sethi?

  So paid off.

• 57:45Speaker 01

  Yeah.

• 57:45Ramit Sethi?

  Fine. Great. I'm kind of like jokingly being a bit flippant about it, but let me tell you why, so you know why. You have $124,000 in savings, liquid savings. That means you have more than 12 months. You're done. Your emergency fund is filled up. You're good. So yes, I would like for you to save for more stuff, because you like to spend money on trips and stuff like that. So we'll do that. But y'all do not need to be putting more money in your emergency fund, which is?

• 58:14Speaker 01

  $1,000.

• 58:15Ramit Sethi?

  $1,000 a month. So look at how it's cascading. You paid off the debt. You paid off the debt because you have enough in your emergency fund. Now you don't have to pay any debt. Now you don't have to put money to your emergency fund. It starts to really work together like a puzzle.

• 58:29Speaker 01

  Sure.

• 58:30Ramit Sethi?

  Okay? What else should we do here?

• 58:32Speaker 01

  The miscellaneous.

• 58:33Ramit Sethi?

  Yeah.

• 58:33Speaker 01

  Needs to go.

• 58:35Ramit Sethi?

  Yeah. It can't go all the way.

• 58:37Speaker 01

  Sure.

• 58:37Ramit Sethi?

  But it probably needs to get under control. How would you get it under control?

• 58:43Speaker 01

  One, I think we need to actually look at what we're spending.

• 58:46Ramit Sethi?

  Yes.

• 58:47Speaker 01

  And really finding those hidden costs that we probably didn't think about.

• 58:50Ramit Sethi?

  Yes.

• 58:50Speaker 01

  And then looking at certain things that we're doing, and do we actually need it?

• 58:56Ramit Sethi?

  So let's pick an example. What is a very likely sizable cost that you're not thinking of here?

• 59:02Speaker 01

  Like the hair, hair costs.

• 59:05Ramit Sethi?

  How much, just like, let's approximate. How many times a month or year do you get a haircut?

• 59:10Speaker 01

  I will go get my hair done about every six weeks.

• 59:13Ramit Sethi?

  Every six weeks? And that's like, whatever relating to haircut, color, style, all that?

• 59:17Speaker 01

  Yeah.

• 59:18Ramit Sethi?

  Okay, every six weeks. How about for you, Mason?

• 59:20Speaker 00

  If I can, every two weeks, me and my son, that's about $65, so we can call it $120.

• 59:25Ramit Sethi?

  $120? Okay, got it. And then how about for you?

• 59:28Speaker 01

  About $300 every six weeks.

• 59:31Ramit Sethi?

  Got it. Okay. So we're talking thousands of dollars per year, right? It's a lot.

• 59:36Speaker 01

  Yep.

• 59:37Ramit Sethi?

  Knowing that worth it.

• 59:39Speaker 01

  Yep.

• 59:40Ramit Sethi?

  Knowing how much you spend on bell peppers.

• 59:42Speaker 01

  Yep.

• 59:43Ramit Sethi?

  Whatever. It rolls into the groceries.

• 59:45Speaker 01

  Sure.

• 59:45Speaker 00

  Sure.

• 59:46Ramit Sethi?

  Okay? So yeah, I can tell you have thousands and thousands of unaccounted for dollars. Yes. Get that tracking. So you might be like, hey, hair is important to me. Every six weeks. Cool. But then what are we not doing? Maybe it means we're not doing as frequent of a date night.

• 1:00:02Speaker 01

  Sure.

• 1:00:03Ramit Sethi?

  It's up to you.

• 1:00:04Speaker 00

  What is the like, actual function of that? Do you set aside from a paycheck, you deposit $100 into a separate account, and then that's now groceries account, and $100 on something else, and now that's clothes?

• 1:00:16Ramit Sethi?

  Good question. So the automation part and the CSP work really nicely together. Here's the way I do it. So we know how much we have set aside for groceries every month. Okay? Let's just say for easy math, it's 500 bucks. We don't need a grocery account. We just have the money in our paycheck, which goes to our checking, which then the money is automatically dispersed. We know that when we go to the grocery store, we're swiping on our credit card. And that credit card gets paid off by the checking. So we make sure that we have enough money in that checking account to cover the groceries and other bills. So you work backwards. How much are we gonna be spending every month? Those things are mostly coming out of checking.

• 1:01:01Ramit Sethi?

  Let's make sure that we have enough in checking.

• 1:01:03Speaker 00

  Bringing focus to it would help a lot.

• 1:01:05Ramit Sethi?

  Yeah. I think right now, what I'm hearing, it's better than it used to be for the two of you.

• 1:01:10Speaker 01

  Yeah.

• 1:01:10Ramit Sethi?

  You should just swipe. But now, to get to the next level, you have to first identify all the major categories. And then second, you have to actually put numbers around them. And those numbers are your fingerprint. It tells me what's important to you. So like, right now, when I look at this, your fixed costs look a bit generic. They look like everybody else. But actually, like, when I see you all walk in here and you look very nice, I go, oh, they like clothes. Clothes should be dialed in. Self-care should be dialed. That's actually nothing to apologize for. If you saw ours, you could instantly tell what kind of people we are. We love traveling. We don't care about a car. You would instantly be able to tell.

• 1:01:51Ramit Sethi?

  I want that level of bespoke nature for your CSP.

• 1:01:56Speaker 01

  Okay.

• 1:01:56Ramit Sethi?

  Okay? All right. You said you want to bring the number down. Let's approximate it. So right now, your miscellaneous is $917 a month. I feel that's pretty high. What would you like to bring that number down to?

• 1:02:10Speaker 01

  I'll say 500.

• 1:02:11Ramit Sethi?

  Okay, we're gonna just eliminate this. You're at 523, you're down to 63%.

• 1:02:17Speaker 01

  Nice.

• 1:02:18Speaker 00

  Closer.

• 1:02:19Speaker 01

  I think we could get the groceries down.

• 1:02:23Ramit Sethi?

  Shall we bring it down 100? I don't want to be too crazy.

• 1:02:26Speaker 00

  Sure. I think a hundred dollars, I think would be a good start and you could always adjust that down.

• 1:02:29Ramit Sethi?

  Agreed.

• 1:02:30Speaker 01

  Cause we have a mail service too, so I really think we could bring it down to 600.

• 1:02:34Speaker 00

  Yeah, that's cut our lunches.

• 1:02:35Ramit Sethi?

  Shall we?

• 1:02:36Speaker 01

  Yes.

• 1:02:36Ramit Sethi?

  Okay, I love the aggression. This is, this is the energy I like to see. Okay, let's look. Whoa, we're at 61%.

• 1:02:43Speaker 00

  We're close.

• 1:02:43Ramit Sethi?

  Honestly, amazing. Do you want to just get to 60?

• 1:02:46Speaker 01

  Yes.

• 1:02:46Speaker 00

  I do.

• 1:02:47Ramit Sethi?

  I'll make a couple of suggestions from what you told me.

• 1:02:48Speaker 01

  Okay.

• 1:02:49Ramit Sethi?

  You told me about your subscriptions. You have the Disney thing, it sounds like that's important to you. Let's keep it. But you mentioned like Audible, Amazon, da, da, da, da, da. Could there be one where you just go like, hey, we got plenty of others, not for us?

• 1:03:03Speaker 01

  I think so.

• 1:03:04Speaker 00

  I totally think so.

• 1:03:05Speaker 01

  I think Audible can definitely go out.

• 1:03:07Speaker 00

  I think we can easily cut down like 40 bucks, 50 bucks on that.

• 1:03:10Ramit Sethi?

  Okay, let's take it to 125. Okay.

• 1:03:14Speaker 01

  There we go.

• 1:03:15Ramit Sethi?

  All right, round of applause here. This is actually amazing. What's most amazing to me is not just the numbers, it is the approach that you're both taking. Like, you know how you told me you hype each other up to spend? I'm actually seeing you do the same thing, but in the opposite direction. You're aligned. This is the energy you bring that a wealthy couple brings together. It's not you against me, it's this is what we want for our life. Let's figure it out together. You are a true team.

• 1:03:42Speaker 01

  That's what we always strive to be, so.

• 1:03:45Ramit Sethi?

  I love it. Okay, so according to this, you have $2,634 a month or 25% of take home pay that you could currently spend on guilt free spending. Now, I typically recommend 20 to 35%. I'm gonna tell you why I think you should be somewhat towards the lower end of that.

• 1:04:07Ramit Sethi?

  I think that in the last five years, you have displayed a very rare ability to completely change the trajectory of your lives, money and otherwise. And to me, when someone has that skill, I'm like, let's go, let's double down, let's triple down. Because you can clearly do it, you clearly want a big, rich life. And the age you are now, young, upwardly mobile with your income, I'm like, take advantage of it. Later in life, you may have more heavier burdens, expenses, things may come up, family, et cetera. But right now, it's like a golden age. So for me, whenever I see the golden age, I double down.

• 1:04:50Ramit Sethi?

  Yes, I still go out and I have a nice time, but I take my money and I invest it. So you have $2,634 extra per month. And we know that it's a bit high right now to just be getting spent on stuff. So where would you reallocate this money for your rich life goals?

• 1:05:09Speaker 01

  Investments.

• 1:05:11Ramit Sethi?

  Let's pick an amount and see what happens.

• 1:05:12Speaker 01

  A thousand dollars.

• 1:05:13Ramit Sethi?

  Okay, a thousand dollars a month, I'm gonna put it right here under stocks. A thousand dollars takes your number from 2% investments to 11%. This is post tax. And let's go down and look at your guilt free spending. You're now at what number?

• 1:05:27Speaker 01

  15.

• 1:05:28Ramit Sethi?

  15%. That's, that's pretty healthy. I'll tell you why. Especially because you like nice things. Well, y'all are spending $3,000 a year on Disney. So that is, we can call that guilt free spending. That's like, pretty nice.

• 1:05:41Speaker 01

  Sure.

• 1:05:42Ramit Sethi?

  So if I'm in your position, I'm going like, hmm, I sure would like to be able to do, let's just say, four date nights a month. How come we can't? Why? Because we decided as a couple, we're going to cut down the amount of date nights and instead be able to go to Disney all the time. That's how we think about it. Nobody's chopping my arm off, nobody's forcing me to not have date nights. We chose.

• 1:06:03Speaker 00

  Yeah.

• 1:06:04Ramit Sethi?

  And this is what we decided as a couple.

• 1:06:05Speaker 01

  Sure.

• 1:06:06Ramit Sethi?

  And if at the end of the year, you go, we want to change our decision? There you go, don't get the Disney pass. Cool?

• 1:06:11Speaker 01

  Makes total sense.

• 1:06:12Ramit Sethi?

  Okay. I like seeing people take ownership of their decisions. I like that. And I can tell that you two are into that.

• 1:06:19Speaker 01

  Yes.

• 1:06:20Ramit Sethi?

  Can we talk about your health savings account for a second? How much do you have in that account?

• 1:06:24Speaker 00

  Just about $3,000.

• 1:06:25Ramit Sethi?

  $3,000. And how long have you had the HSA?

• 1:06:28Speaker 00

  Oh man, probably seven or eight years. But the thing is, I've always used it as just literally health money. So I don't, I didn't let it invest, I didn't let it grow. I didn't learn about those options until six months to a year ago.

• 1:06:40Ramit Sethi?

  It's a bit obscure, but it is an amazing account. Do you think that you will use the money in that health savings account for health related expenses?

• 1:06:51Speaker 01

  Occasionally, I don't think that amount.

• 1:06:53Speaker 00

  Yeah, I now don't want to. Because our, I mean, our health and costs are only going to be more expensive later in life.

• 1:07:00Ramit Sethi?

  Okay.

• 1:07:00Speaker 00

  So if I actually have a after tax or tax advantaged account to pull from.

• 1:07:07Ramit Sethi?

  Yep.

• 1:07:07Speaker 00

  Separate from retirement, separate from social security, I'd like to do that.

• 1:07:10Ramit Sethi?

  I love it. You could invest that money in typical low cost index funds.

• 1:07:17Speaker 00

  Okay.

• 1:07:17Ramit Sethi?

  It's quite amazing. You get a triple tax advantage and then you can use that later in life. You can cash it out if you want to use it in a year, whatever you want. It's incredible.

• 1:07:27Speaker 00

  I kinda want to up that to the maximum.

• 1:07:28Ramit Sethi?

  Very good. That's what I would do. So let's do this, let's take the 380. I'm gonna just move this entire, I'm just gonna zero this out here and I'm gonna add 380 here because that HSA, we're gonna consider it an investment.

• 1:07:43Speaker 00

  Sure.

• 1:07:43Speaker 01

  Okay.

• 1:07:44Ramit Sethi?

  You're now investing $1,580 a month plus $845 a month. So you're in the 2,700, 800 range per month. That's pretty good. We have a thousand dollars a month going to an emergency fund, we don't need that. But I do think you need savings to be built up for certain things.

• 1:08:06Speaker 01

  Sure.

• 1:08:06Ramit Sethi?

  What are the big expenses that you foresee coming up?

• 1:08:12Speaker 00

  The car payment is actually a lease.

• 1:08:15Ramit Sethi?

  Ah.

• 1:08:15Speaker 00

  So we like the Honda though, we like the car.

• 1:08:18Speaker 01

  I want to keep it.

• 1:08:19Speaker 00

  So we kinda want to keep it.

• 1:08:20Ramit Sethi?

  You want to buy, buy out the lease?

• 1:08:22Speaker 01

  Yes.

• 1:08:22Speaker 00

  Probably.

• 1:08:22Ramit Sethi?

  How much?

• 1:08:23Speaker 00

  I think at the end of that, it's gonna be about 25,000.

• 1:08:26Ramit Sethi?

  I would create a savings account called lease buyout.

• 1:08:30Speaker 01

  Okay.

• 1:08:30Ramit Sethi?

  And if you decide to buy it, you go right into that account. And there you go.

• 1:08:35Speaker 01

  Nice, I like it.

• 1:08:36Speaker 00

  I do like that.

• 1:08:37Speaker 01

  Sure.

• 1:08:37Ramit Sethi?

  That's how you do it for all major purchases. And this is where you get to take control. If you go, we want to go, what's a dream vacation spot you want to go to?

• 1:08:45Speaker 01

  Bali.

• 1:08:46Ramit Sethi?

  Beautiful.

• 1:08:47Speaker 00

  Bali.

• 1:08:47Ramit Sethi?

  Bali. So like, you do the calculation, you go, all right, we want to take this trip, it's gonna be like 10,000. Right now, we can afford to put X hundred dollars a month, so it's gonna take us a year and a half. And then you go like, I don't want to wait a year and a half. So what are our options? We could cut spending elsewhere, redirect to here. We could shrink the trip down. So instead of 10,000, it's 5,000. Or we can just extend the time period and settle for 18 months, 24 months. What we don't do is just swipe it and then deal with it later.

• 1:09:18Speaker 01

  Right.

• 1:09:18Ramit Sethi?

  We, as a couple, we never do that. That's the kind of energy you bring, right? For sure. All right. 18,000, we are now calling this car buyout. And then, don't you need more money for something? Didn't you talk about a house? Yeah, where's that?

• 1:09:36Speaker 01

  Not in there.

• 1:09:37Ramit Sethi?

  What does that tell you?

• 1:09:38Speaker 01

  We need to do something about it.

• 1:09:40Ramit Sethi?

  Okay. So what are your options? Let's be super creative before we start putting money aside. Your options are what?

• 1:09:46Speaker 01

  Either save for it or get a huge loan for it.

• 1:09:50Ramit Sethi?

  Even if you got a huge loan, you would still have to put down tens of thousands of dollars.

• 1:09:55Speaker 00

  Yeah. Is there an option to, I don't know, save over years and years and outright buy?

• 1:10:02Ramit Sethi?

  That's another option. I like that. Good.

• 1:10:05Speaker 00

  Not buy?

• 1:10:06Speaker 01

  Not buy it?

• 1:10:07Ramit Sethi?

  That's an option.

• 1:10:08Speaker 00

  Because that also gives you a lot of freedom to choose and explore different places and areas.

• 1:10:11Ramit Sethi?

  Again, we don't have to commit to any of these, I just want to put all the options out on the table. I love the vision. But because at least one of them is a dreamer, I need to ground this rich life vision and create a plan where they can make concrete trade offs. Like you can't have it all. On their income today, they cannot take four vacations, they cannot go to Disneyland, they cannot have all these clothes and eat out. They've got to prioritize, especially with big purchases like a house. When I say prioritize, I mean, some of the things they may want to do right now. They're like, this is important to us, we're gonna do it right now. Other things they may say, we can delay that for 18 months or even five years, 10 years.

• 1:10:55Ramit Sethi?

  Some of the things they may realize, when I'm looking at the numbers, that's actually not that important to us. So kick it off the vision. That is how you go from fantasy to an actual plan. And that is what helps bring a dreamer down to reality. If I just let them fantasize about what their rich life is without an actual plan, they would walk out of here and go right back to the way they used to be. So the rich life that you told me was a powerful vision. House with a pool, multiple vacations, date night, self-care. We have a very functioning CSP for your baseline. You're saving a bunch of money, you're investing a good amount of money. You have some money left over.

• 1:11:39Ramit Sethi?

  Now we gotta make some trade offs. So I want you to tell me what changes you would like to make. Because as it stands, there's no house.

• 1:11:47Speaker 01

  Right.

• 1:11:48Ramit Sethi?

  There's no vacation.

• 1:11:50Speaker 01

  I mean, I think we can definitely cut down the guilt free spending. We can, we did it before, we made sacrifices in what we were spending. So if we want to save up for the house, we can do that.

• 1:12:01Ramit Sethi?

  Tell me how much.

• 1:12:02Speaker 01

  I think if we were going full rich life, I'd probably go more like a 800,000 dollar house.

• 1:12:09Ramit Sethi?

  Where would the money come from?

• 1:12:10Speaker 01

  It's a great question.

• 1:12:11Speaker 00

  Right now, it would be draining savings, maybe doing some kind of loan, something off of current retirement, which I don't want to touch anymore.

• 1:12:21Ramit Sethi?

  Okay.

• 1:12:22Speaker 01

  That's the main reason why we paused on getting a house now, because I don't want to drain my savings.

• 1:12:28Ramit Sethi?

  Okay.

• 1:12:28Speaker 00

  And don't want to be house poor, for sure.

• 1:12:29Ramit Sethi?

  You don't want to be house poor. I love seeing that in your application.

• 1:12:32Speaker 01

  Yes.

• 1:12:32Ramit Sethi?

  Great. Okay, so would, so you don't want to use 110,000 of your savings for a down payment?

• 1:12:39Speaker 01

  Right.

• 1:12:40Ramit Sethi?

  Do you want to use part of it?

• 1:12:41Speaker 01

  I'd like to see what other options we could do when it comes to maybe investments. Is there anything we could ever do to get the down payment there?

• 1:12:49Ramit Sethi?

  You know, if you, so when my wife and I were in our mid 30s, we asked each other, do we plan to buy a house anytime soon? The answer was no, we didn't want to. So I had some money for a down payment, invested it.

• 1:13:04Speaker 01

  Okay.

• 1:13:04Ramit Sethi?

  And just said, look, we're not gonna get a house in the next five years, probably not 10 years. So let the money grow. And if one day we decide to buy a house, we will have more, we can either get a nicer house or put a bigger down payment down.

• 1:13:16Speaker 01

  I would feel fine with that. You know, I think. Realizing now house costs and what that really looks like. I think a five year goal would be a really good pinpoint.

• 1:13:27Ramit Sethi?

  Minimum goal.

• 1:13:28Speaker 01

  Minimum, yes.

• 1:13:29Ramit Sethi?

  Okay, so where would the money come from for the down payment?

• 1:13:32Speaker 01

  We could take more money out of the guilt free spending.

• 1:13:36Ramit Sethi?

  Let's say you could take 500 bucks out?

• 1:13:38Speaker 01

  Yes.

• 1:13:38Ramit Sethi?

  All right, and we could put it in investments and we will call this house.

• 1:13:44Speaker 00

  Does there need to be a specific account or a separate account for something for my son?

• 1:13:50Ramit Sethi?

  If you had to choose which one is more important, buying the house? Or putting money aside for your son, which would it be?

• 1:13:58Speaker 00

  I personally think the set aside account.

• 1:14:01Ramit Sethi?

  Both?

• 1:14:02Speaker 01

  I agree.

• 1:14:03Ramit Sethi?

  So if that's the case, then we are now making trade offs because we can't have it all.

• 1:14:08Speaker 01

  Right.

• 1:14:09Ramit Sethi?

  Right now, so that house might not work. You might put the money aside for him instead.

• 1:14:16Speaker 01

  Right.

• 1:14:16Speaker 00

  Or or split the difference, is there a way of doing? 800 towards an account for us and 200 for some have custodial or specific Roth.

• 1:14:25Ramit Sethi?

  You could, you could. How do you know if you can afford to save for your son?

• 1:14:33Speaker 00

  It's a provocative question, right?

• 1:14:35Ramit Sethi?

  Because I think from your reaction, you've never thought about that. You just assumed this is what we do.

• 1:14:41Speaker 01

  Yes.

• 1:14:42Ramit Sethi?

  But how many other things have you deconstructed? Like, maybe we do, maybe not. What's going on underneath? So let's walk through it for a second. Most parents, they want to do something for their kids, obviously financially. I get a ton of panicked messages every week on my Instagram DMs. Hey, Ramit, love your stuff. I'm 38 years old. We just had a son. He's one and a half. What account should I have for him? Is a 529 the right one? And they're just like frazzled. And I go, hey, congratulations. And before we talk about your son or your daughter, tell me about your finances. And you know what they always say? Well, um, you know, like, I actually like started pretty late, so I don't really have much.

• 1:15:27Ramit Sethi?

  And what they're doing in essence is saying, I've lost the game of money for myself, but I won't allow that to happen for my son. Any of this sound familiar?

• 1:15:40Speaker 01

  I think that's very accurate.

• 1:15:42Speaker 00

  So super.

• 1:15:43Speaker 01

  You know, I think we're really big on not him not having to live the life that we did.

• 1:15:49Ramit Sethi?

  Can I tell you what I see? I see a couple that takes their kid to Disneyland a lot. So already you have put your son in a different position than you both ever were already. In addition, if you are talking to your son about money, if you are sharing things like saving, investing, hey, we flew across the country to learn more about money because it's important to both of us and we want you to understand it. Help us pay this bill, click this link. We're gonna go to the grocery store. We only have 10 bucks and we need to get these three things. Can you help me do it? He is going to grow up with 100 times more knowledge than either of you ever did.

• 1:16:32Ramit Sethi?

  So I don't see a risk of him growing up like you. I would take that fear and set it aside. Y'all already won that battle. Okay?

• 1:16:42Speaker 01

  Sure.

• 1:16:43Ramit Sethi?

  Now, do you need to give him a bunch of money? I don't know, maybe. If you want to, we can find it. But I also want you all to think about your overall vision.

• 1:16:56Speaker 00

  Yeah.

• 1:16:56Ramit Sethi?

  It'll be nice to hand him $50,000. Fine, I don't mind that. Maybe we can make it happen. But when I think about like generational wealth and stuff like that, like my parents, they didn't give us a check. They didn't have it. But they taught us what investing is. They helped me open up a custodial account, encouraged me to get jobs, say, let me play, do all this stuff. And so they gave me way more than any check ever could. They gave me knowledge and my siblings as well, so that we knew what good money management is.

• 1:17:27Speaker 00

  Oh, I like those lessons way better. Yeah, I, I don't, I don't know many 18 year olds that would be responsible if you handed them a $50,000 check.

• 1:17:33Ramit Sethi?

  No way, no way. But they might know philosophy that their parents have. Like in our household, we are a no debt household. That's a philosophy, you could choose it or not. Once a month, we all sit down and we do a formal presentation where we talk about money lessons learned and what we're gonna do and what we're not gonna do. You could learn that. And and he could walk away with those lessons, which are worth infinitely more than any amount of check you could write him.

• 1:17:58Speaker 01

  Sure. Saving for a house could benefit all three of us the end of the day, you know? And as we grow in our careers and make more money, there's still that opportunity to save for him.

• 1:18:10Ramit Sethi?

  Yes, totally. That's a good way of looking at it. You don't have to make decisions for the rest of your lives today, just for today. And then any upside, you can always adjust where your money goes. Yeah, I would like for you to get to the point where you got so much money in investments, et cetera, that you're like, well, I already hit those goals. Extra, let's put it aside for him now. That's the way you think about it. Your son has time, you have far less. He could take a loan out. It's not the worst thing in the world. Y'all cannot take a loan out for retirement. So we got to prioritize the two of you first. Okay, we've decided for now, it sounds like no money for him.

• 1:18:48Speaker 01

  Okay.

• 1:18:48Ramit Sethi?

  Put the money towards the house. So we're at 500 bucks a month, which will be $6,000 a year, which over five years will be 30K. But it will grow a little bit, probably because of investments. So maybe it turns into, I can't do the math off the top of my head, 50K, whatever. What do you think?

• 1:19:10Speaker 00

  Still not enough, I think, for the house and lifestyle that you've or that we've chosen.

• 1:19:14Ramit Sethi?

  Correct, so what would you do about that?

• 1:19:16Speaker 01

  Figure out how to save some more.

• 1:19:18Ramit Sethi?

  Yeah.

• 1:19:19Speaker 00

  Save more, make more.

• 1:19:20Ramit Sethi?

  Make more. Let's talk about that for a second because I think there's a limit now. We're kind of reaching it and I think it's starting to get a bit unrealistic. I don't really think the two of you can function the way you want to on $1,000 a month of guilt free spending. Because all the money is pretty much spoken for.

• 1:19:36Speaker 01

  Right.

• 1:19:36Ramit Sethi?

  So there's only one real area to focus on, which is what?

• 1:19:40Speaker 00

  Income?

• 1:19:40Ramit Sethi?

  Income. So can we talk about this for a second? Remember the lifestyle you told me how much you'd approximately need to make? Like, what did we say, 300, 350, something like that? Yeah, how can you get there?

• 1:19:54Speaker 01

  My goal is to excel in my career. I was looking at going back to school

• 1:20:02Speaker 01

  to get some higher level of roles than I am right now.

• 1:20:05Ramit Sethi?

  Okay, how about for you?

• 1:20:06Speaker 00

  My company is pretty stock standard, 3% year over year, every year, so.

• 1:20:12Ramit Sethi?

  Got it, okay, okay.

• 1:20:13Speaker 00

  I think I do have some opportunities when they do open up as far as different kinds of supervisor roles. There's also sales positions that while I'm not immediately equipped for, I'm not against learning. So I think there are opportunities moving up within the corporate ladder.

• 1:20:28Ramit Sethi?

  Here's a couple of things I want to draw your attention towards. Because now that we've got a CSP that is somewhat standardized, rationalized, now I'm thinking about what kind of lifestyle you're gonna have ongoing. What do you think would be the worst case for the two of you? Worst case? You walk out of here, you got this plan, and then what derails it?

• 1:20:54Speaker 01

  Not following it.

• 1:20:55Ramit Sethi?

  Yep.

• 1:20:56Speaker 01

  And just going back to our bad habits of spending.

• 1:20:59Ramit Sethi?

  Just spending, swiping without tracking it, yep. What else?

• 1:21:02Speaker 00

  Like a job loss.

• 1:21:04Ramit Sethi?

  Yep, that would be huge. That would be tough. You could sustain it for for a long time, I will say, with your savings. That's really nice to have that. You could sustain that, but that would potentially derail you.

• 1:21:15Speaker 01

  Sure.

• 1:21:16Ramit Sethi?

  So when I hear you describe your money, especially where you came from, there are a few red flags I want to draw your attention towards. So the non-tracking was just like, okay, we swiped. I feel you have a pretty good handle on that now, but I do think the miscellaneous thing is a bit of a red flag and you have to get control of that. Each of you's got to own a couple of numbers and you both report on those at a monthly money meeting. Like, it should be a formal thing, like you do it at work. Take it seriously. The other thing is I hear a bit of dreamer tendency, I think from you, Mason. You agree?

• 1:21:51Speaker 00

  Oh, I totally agree. So on the plane right over here.

• 1:21:54Ramit Sethi?

  Yeah.

• 1:21:54Speaker 00

  Becca was reading your book and calling me a dreamer. And I agree with this.

• 1:21:59Ramit Sethi?

  Why, you're reading Money for Couples?

• 1:22:01Speaker 01

  I've started reading it.

• 1:22:02Ramit Sethi?

  Okay, why did you say that?

• 1:22:04Speaker 01

  Because he is, he very much just talks about things he knows, like in his head, like, I would love to get here, but there's no action to it.

• 1:22:14Ramit Sethi?

  What's an example?

• 1:22:15Speaker 01

  I would say one, like, he dreams all the time about starting businesses, all the time. He comes up with all these ideas and he'll ruminate on it for months and then nothing happens.

• 1:22:26Ramit Sethi?

  What do you think about that?

• 1:22:27Speaker 00

  Accurate. I mean, it's, it's, it's something I would like to start. I don't think I always want to work for a corporate ladder, but

• 1:22:34Speaker 00

  getting to the next point and either owning a small business or investments or starting to pay for themselves, I don't know that. It's very unknown for me.

• 1:22:42Ramit Sethi?

  Yeah, yeah. Dreamer tendencies are very dangerous because they kind of exist in la la land and it's because often they are subsidized by somebody else. In this case, you're, you're an interesting dreamer because you've transitioned to making some concrete plans. You've changed your spending behavior. So I would say you're like a dreamer, but dreamer adjacent. You're willing to change. It's very rare.

• 1:23:05Speaker 00

  I like that.

• 1:23:05Ramit Sethi?

  Okay? But you cannot be a dreamer if you want to live the kind of rich life the two of you describe. It simply can't happen. So I, I hear things in your application about a solar business. I hear about the arcade, day trading, all of them fit the dreamer dynamic. And that is a huge red flag. Because one, it's hard for you because you go, you're spending months coming up with these ideas. But two, it's hard for the two of you. Because the place you're going, where you've described with vacations and house and this and that, you actually both need to be rowing exactly the same direction. There cannot be any misalignment. Power couple, that's what you need to be.

• 1:23:47Ramit Sethi?

  So if one of you is dragging behind, that's a problem. If one of you is rowing the opposite direction, impossible to get where you're going. You see what I mean?

• 1:23:57Speaker 00

  Totally.

• 1:23:58Ramit Sethi?

  Okay, wow. I don't get the chance to talk to dreamers a lot because they don't come on the show.

• 1:24:04Ramit Sethi?

  So I feel very honored right now. Can I give you some projections from your retirement? We have some projections, just so you understand what the numbers look like. So when you walked in here, do you know how much you would have in retirement?

• 1:24:17Speaker 01

  From what I did calculate, I think it was around like 1.5 million.

• 1:24:22Ramit Sethi?

  1.5 million total?

• 1:24:23Speaker 01

  Yes, well, I don't think that included the pension, right?

• 1:24:27Speaker 00

  Yeah.

• 1:24:27Ramit Sethi?

  Oh, you have a pension?

• 1:24:28Speaker 01

  He has a pension.

• 1:24:29Ramit Sethi?

  What? How much?

• 1:24:31Speaker 00

  I think it's supposed to be like $800,000.

• 1:24:34Ramit Sethi?

  Eight hundred thousand dollars? How the did I not know about this?

• 1:24:37Speaker 00

  If I was to retire with the company.

• 1:24:39Ramit Sethi?

  Oh, okay.

• 1:24:40Speaker 00

  And then you have either a lump sum or a payout or.

• 1:24:43Ramit Sethi?

  I love finding eight hundred thousand dollars in the couch cushions. All right. Well, putting aside the pension, we calculate that you would have about 3.1 million dollars when Mason turns 65. So 3.1 million, a lot of money. That's about 126,000 dollars of safe withdrawal income that you could make per year.

• 1:25:07Speaker 01

  It's a lot more comforting than I thought it would be.

• 1:25:12Ramit Sethi?

  I like it. 126 is good, but you wouldn't own a house. And so, but on the other hand, you wouldn't need to invest anymore. You wouldn't really need to save anymore. So those costs would go down. You'd have social security in addition to that. It's not bad, honestly. It's not bad. The new strategy that we did where we cut some of your spending, got more aggressive on investments, that would yield you 4.7 million dollars. It's a big difference from a few small changes. And the safe withdrawal income is 188,000 dollars a year, more than you earn today.

• 1:25:56Speaker 01

  Yeah.

• 1:25:56Speaker 00

  Yeah. Yeah, definitely, definitely a better goal.

• 1:25:59Speaker 01

  More comfortable for our lifestyle. I think so.

• 1:26:02Ramit Sethi?

  Yeah. What do you think? What's going through your head now about the decisions regarding vacations, saving for your son and a house? When you hear these numbers?

• 1:26:12Speaker 01

  There's a good chance in that this time period, we want to up our lifestyle and then that won't be enough.

• 1:26:19Ramit Sethi?

  Agree. If I'm you, I'm trying to live a cooler lifestyle. I'm not trying to stay at this level or worse, go down. No way.

• 1:26:28Speaker 01

  Yeah.

• 1:26:28Ramit Sethi?

  Okay. You don't want to go down. You don't even want to stay here, stable. You want to elevate your lifestyle. Okay, so how are you going to do it?

• 1:26:36Speaker 01

  Make more money.

• 1:26:38Ramit Sethi?

  Yes?

• 1:26:38Speaker 01

  Yes.

• 1:26:39Ramit Sethi?

  How will you do it specifically? So you've mentioned, Becca, going back to school.

• 1:26:42Speaker 01

  Yes.

• 1:26:43Ramit Sethi?

  How much more are you going to make?

• 1:26:44Speaker 01

  From my projection, I could eventually get up to 245,000 a year.

• 1:26:49Ramit Sethi?

  Really?

• 1:26:50Speaker 01

  Yep, with certain levels of roles. If I stayed with the same company.

• 1:26:54Ramit Sethi?

  No kidding. What's the job title that makes that much?

• 1:26:56Speaker 01

  VP of HR.

• 1:26:57Ramit Sethi?

  Is it required that you have the degree?

• 1:27:00Speaker 01

  Not necessarily with this company. If I ever wanted to look at other companies, though, it would make me a lot more competitive.

• 1:27:08Ramit Sethi?

  Okay, all right. Noted. What about for you, Mason?

• 1:27:11Speaker 00

  Right now, I'm comfortable in the position I'm in, but I know it doesn't. It's not as fulfilling. It's not, it's not going to give me the pay scale that I would like. You could absolutely put energy into climbing to corporate ladder. I like my coworkers, my upper management team. I can join them. Being the dreamer, I also like the idea of a potential day trading opportunity. I have seen someone make my salary in a day. I've also seen a ton of people opening businesses.

• 1:27:42Ramit Sethi?

  Yeah.

• 1:27:43Speaker 00

  And those owners start somewhere.

• 1:27:44Ramit Sethi?

  Yeah.

• 1:27:45Speaker 00

  So I don't know. I think those, I like the opportunities. I always see the successful side of it.

• 1:27:50Ramit Sethi?

  Well, that's by design. You see it's successful because the ones who lose their money disappear.

• 1:27:57Ramit Sethi?

  That's survivorship bias. Okay, let me give you a little bit of stuff you can find in chapter six of my book, where I talk about day traders, et cetera. They almost all lose their money, like almost all of them. And I'm talking in the 98 plus percent range. So you are seeing some of the folks, kind of like seeing Michael Jordan playing basketball, being like, oh, I'd like to be like him. Well, yeah, me too, but I'm not. And so we're seeing these freak aberrations and day trading sadly has a lot of lies. Because almost everybody loses money, they, it's notorious that they will go and erase their previous bets. They don't show you the things they've done. It's basically gambling. It is.

• 1:28:39Ramit Sethi?

  So I don't mind that you had, you know, 500 bucks or something that you're playing with. I think people can have a little bit of fun with their money. It could be self-care. It could be freaking day trading. The problem is that people who do that, they usually do not have containment. They go 500, then turns to 1,000, turns into recurring, turns into 5,000. And they really believe if I get this strategy, I'll do it. You will lose your money is simply a matter of time. If the two of you want to live a rich life, then you all need to focus on increasing your income, like directly and dramatically. It is a priority because you can't get the other things you want. There's no real way to get the house right now, based on the income you have.

• 1:29:20Speaker 01

  Sure.

• 1:29:20Speaker 00

  Sure.

• 1:29:21Ramit Sethi?

  So the income's got to go way up.

• 1:29:23Speaker 00

  I can definitely work with my management team and letting them know that I'm interested in the next position. There was another opportunity for a supervisor role that came up. Hours didn't work and the timeframe didn't work for me, so I couldn't take it. But they do come up. And instead of watching the opportunity pass by, I can take it.

• 1:29:38Ramit Sethi?

  I like that. And whether it is at this company, hopefully it is, or another company, the two of you having a mission, which is like, hey, we want to live this awesome life, but we never want to go back to where we were. Never. I don't want to wait 30 years to be living this. So what do we need to do? The only thing now beyond following through that matters is income.

• 1:29:59Speaker 01

  Yes.

• 1:29:59Speaker 00

  Sure.

• 1:30:00Ramit Sethi?

  It's got to go up. And if it's me, I'm taking any dreamer stuff and I'm putting it aside. Keep doubling down on what works until you have literally scraped the meat off the bone, which means you basically are CEO. And if at a certain point you got so much money and so much free time, you go, I really want to start a business. Okay, try it then. But right now, I just see way too much upside in your careers.

• 1:30:23Speaker 00

  Sure.

• 1:30:24Speaker 01

  I think that's very accurate, for sure.

• 1:30:27Ramit Sethi?

  I'll just show you something. I'm going to put your CSP up on screen. What might we increase your income to, let's say, five years from now?

• 1:30:33Speaker 01

  Hopefully it would be at 10,000 a month.

• 1:30:36Ramit Sethi?

  Double.

• 1:30:37Speaker 01

  Yes.

• 1:30:38Ramit Sethi?

  Amazing. Watch what happens to the rest of your numbers. You're at 60% fixed costs. What just happened?

• 1:30:44Speaker 01

  Went down a lot.

• 1:30:45Ramit Sethi?

  Fixed costs dropped to 43%. If we go all the way down, you have $5,000 a month. Five years from now, you will have hundreds of thousands of dollars invested. You'll have a fat savings account. You will have gone to Disney. You'll have taken a couple of vacations. Great. And you will be able to start putting money aside for a house.

• 1:31:07Speaker 01

  Yep.

• 1:31:08Ramit Sethi?

  Et cetera. Want to do yours, Mason? Five years from now, ballpark it.

• 1:31:11Speaker 00

  Realistically, probably like 65.

• 1:31:14Ramit Sethi?

  Love it. That sounds reasonable. You're at 4,800, we're going to 6,500. If you stayed in the same place, you're at 39% fixed cost. Could you guys stay in the same place for five years?

• 1:31:27Speaker 00

  Could we? Sure. Do we want to?

• 1:31:30Speaker 01

  Probably not.

• 1:31:30Speaker 00

  I think there are better opportunities.

• 1:31:32Ramit Sethi?

  Fair enough.

• 1:31:32Speaker 01

  Yep.

• 1:31:33Speaker 00

  Without, without varying that number too much. I mean, maybe by four or 500 bucks.

• 1:31:37Ramit Sethi?

  I don't think you need to have fixed costs at 39%. I frankly think that's ridiculous.

• 1:31:41Speaker 01

  Right.

• 1:31:41Ramit Sethi?

  And I think if you're making this kind of money, which is a huge amount of money, you probably want to be spending more than 25, 50 a month. Fine.

• 1:31:47Speaker 00

  Sure.

• 1:31:48Ramit Sethi?

  But if I'm you and I'm like, hey, I want this curve, steady growth, that's going to go up and up and up and up. And I do not want to go up and down and up and down in debt. Then I'm like, cool. Once we get a big raise, let's build up our savings for a few months. And then once we hit these milestones, then we will increase our rent just a little bit and take the extra and put it aside for buying a house. So you're living for today and for a bigger tomorrow.

• 1:32:17Speaker 01

  Yep.

• 1:32:17Speaker 00

  I like that.

• 1:32:17Speaker 01

  I love that.

• 1:32:18Ramit Sethi?

  When you first came in, there was a timeline difference on buying a house. It was a year, it was two to three years or five years. What do we know now about your timeline?

• 1:32:29Speaker 01

  A 10-year timeline seems a little bit more doable.

• 1:32:32Ramit Sethi?

  Yeah.

• 1:32:32Speaker 01

  For a dream home.

• 1:32:34Ramit Sethi?

  Good. So no sooner than 10 years. You'd be, what, in your early 40s?

• 1:32:40Speaker 01

  Yep.

• 1:32:41Ramit Sethi?

  What's the problem? Freaking great. I rent. I'm in my early 40s and if I wanted to go buy a house, I would not feel like I missed anything.

• 1:32:47Speaker 01

  Sure.

• 1:32:48Ramit Sethi?

  But you can't wait until you're 42 to start saving for a house. So what's the key?

• 1:32:54Speaker 01

  Let's start saving now.

• 1:32:55Ramit Sethi?

  Yeah. What could you do specifically to build a healthier mindset with money? Not to let the old mindset that you grew up with control you?

• 1:33:05Speaker 01

  Start better habits and unlearning those mindsets that we have.

• 1:33:10Ramit Sethi?

  How?

• 1:33:12Speaker 01

  I think for me, actually, having the confidence to know that I actually don't have to live that way and that I can be rich.

• 1:33:21Ramit Sethi?

  You are going to be rich. We already saw the numbers.

• 1:33:24Speaker 01

  I am going to be rich.

• 1:33:26Ramit Sethi?

  Yeah, I actually think you all are living.

• 1:33:27Speaker 01

  Don't doubt ourselves.

• 1:33:28Ramit Sethi?

  Yeah. Aren't you living a rich life today, now that I think about it? After today, by the end of today, you're debt-free.

• 1:33:34Speaker 01

  Yeah.

• 1:33:35Ramit Sethi?

  Do you all realize that?

• 1:33:36Speaker 00

  Yeah, no, that's, we, we were tumbling the idea back and forth up into the show. We're just like, let's not do it yet. Let's ask for me, let's see what's going on.

• 1:33:44Speaker 01

  That's exciting. We've not been debt-free since I was a teenager.

• 1:33:49Ramit Sethi?

  Okay, round of applause. It's like.

• 1:33:52Ramit Sethi?

  Will you send me your screenshot when you pay the debt off?

• 1:33:55Speaker 03

  Yeah.

• 1:33:55Ramit Sethi?

  Like, that's amazing. And you do that and like celebrate it, you know, we're never going back here. And whatever celebration is meaningful to you, you just turned a major corner. Also, I love that it didn't happen by accident. You made a lot of lifestyle changes, too. And the crowning moment is when you bring your son in on it. And you start repeating it. You basically are building family values. That's when you know you have true wealth, true rich life. Oh, my God, just got a text. Student loan is officially paid off. Zero dollars left, paid in full. Amazing work. I have a lot of confidence in Mason and Becca.

• 1:34:37Ramit Sethi?

  The fact that they have demonstrated excellence with their money for the last few years tells me that they have a very, very good shot at making amazing, major changes with their finances. Honestly, they are a high performing couple that simply did not have access to people teaching them about money. And the fact that they came out here, raised their hand to ask for help, that tells me they're going to be very successful. I already know they're going to pay off their debt because they just did it. So boom, they are now a debt free couple. Their identity has changed within minutes. I think they're going to start investing more. I think they're going to start saving more. I do think they're probably going to constantly entertain the idea of buying a house. But I hope they continue making clear trade offs with their finances.

• 1:35:20Ramit Sethi?

  Because if they just save and invest aggressively for a few years, they will be in an amazing financial position. And now, let's take a look at their follow ups.

• 1:35:30Speaker 00

  Hey, Ramit, thanks for having us on the show. It was a really great experience. Biggest surprises, you know, biggest surprises for us is we were in a decent spot financially. We're in a better spot than we we thought with the conscious spending plan. We just have to sort out and had to sort out where we're going to fit the pieces in our financial puzzle.

• 1:35:47Speaker 03

  Yeah, and our biggest takeaway, we're all really positive for us. We talked after Arc Family and really realized that we are living a version of a rich life currently, especially when we can hear ourselves from this time last year to now. We've really hit some of our money goals, as well as some of our goals of where we want to be with our money. And that we're going to continue to reach additional goals that we see for our vision in our rich life.

• 1:36:11Speaker 00

  Now, some of the specific changes. You know, we walked out of the studio and immediately paid off our debt, like we said.

• 1:36:18Speaker 03

  Immediately debt free.

• 1:36:19Speaker 00

  Immediately debt free, it's a great feeling. Also, we've created accounts. I've started and maxed out a Roth. I also have created a brokerage accounts to do monthly investments and to continue to grow that for our future.

• 1:36:33Speaker 03

  Yes, and we've also decided to start meeting weekly about money. This is really just gain some more confidence in communicating about it and also really seeing where our miscellaneous spending is going and ensuring our guilt free spending is more mindful versus mindless.

• 1:36:48Speaker 00

  Thanks a lot. My, hey, Ramit. So it's been three weeks since our podcast. We wanted to do a follow up. One of my biggest takeaways is something that you said is your household is a note debt household. And I would like to make that ours now that we are officially debt free.

• 1:37:05Speaker 03

  Yep, and my biggest takeaway is definitely not getting back into that debt and getting back into those bad habits and really starting to make really good habits for us and spending our money smartly, investing our money and putting our money to work.

• 1:37:21Speaker 00

  One of the biggest changes that I've done is, of course, contributing to the Roth, to max that out, as well as putting several thousand dollars into a brokerage account for investments. And I have an automated plan of deposits going toward that every month now.

• 1:37:36Speaker 03

  And we've been having a lot of really good, confident conversations about money, really being positive and it's not a bad thing for us anymore. I think it's more exciting for us now when we are talking about our money. And still really looking at how we're spending it, what changes we need to make and how we can still use it and have fun.

• 1:37:59Speaker 00

  So, thanks a lot, we really appreciate it. Bye.

• 1:38:02Ramit Sethi?

  If you want to know the exact month and year that you will have $100,000 in your investment portfolio, sign up for my new program, Road to 100K. I'll help you hit that number fast. Go to iwt.com/100k to sign up.