Pod Insights Money For Couples with Ramit Sethi 194. “$0 savings, $0 investments. Is it too late for us?” (Part 2) About this episode On last week’s episode, we met 38-year-old LaKiesha and 45-year-old James, a couple struggling to get on the same page financially. With no savings, no investments, and deep-rooted money fears, they’re stuck in a cycle of mindless spending. Today, we’re digging back into their CSP—and the numbers are more shocking than they expected. Can they finally break old habits and build their Rich Life together?
This episode is brought to you by:
Rocket Money | Stop throwing your money away. Cancel unwanted subscriptions – and manage your expenses the easy way – by going to https://rocketmoney.com/ramit
Netsuite | Get visibility to everything in your business in one place. Sign up and defer payments, with no interest, for six months at https://iwt.com/netsuite
Thrive Market | Head to https://thrivemarket.com/RAMIT and get 30% off your first order—plus a FREE $60 gift!
Trust & Will | Secure your assets and protect your loved ones. Get 10% off plus free shipping on your estate plan documents by visiting https://trustandwill.com/ramit
Next Level Wardrobe | Take their free styling quiz and elevate your style at https://nextlevelwardrobe.com/ramit
Links mentioned in this episode
• Get my new book: Money for Couples
• Episode 193. “I’ve filed for bankruptcy twice. Will I ever stop spending?” (Part 1)
Connect with Ramit
• Get Money Coaching with Ramit
• Download the Conscious Spending Plan
• Listen to my book—now on Audible
• Get my New York Times best-selling book
• Get my no-numbers journal
• Other episodes
• Instagram
• Twitter
• YouTube
If you and your partner have a money issue and you want my help, I occasionally select a couple to work with, free of charge. Apply for my help here.
Produced by Crate Media.
Transcript 13,978 words · 4 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Ramit Sethi? Are you feeling stuck with your money? Have you told yourself, "I need to figure it out." But you haven't really done it? I understand that not everyone is going to sit down and read multiple books about money. I get that. That is why I created Rich Life: The Road to 100K. This is a step-by-step program that shows you how to build a money system that works. Like figuring out the date that you're going to have $100,000 invested, how to automate your money, and how to cut through the noise. Plus, you will get access to weekly live events and a community of like-minded people, plus a library of my best materials. This is the program that will finally help you get on track with your money,
0:43 Ramit Sethi? and you can join today at iwt.com/100k.
0:50 Ramit Sethi? Recently, my producer told me she's been struggling with sleep, so I asked our sponsor, Leesa, to send her a new mattress. And here's what she said. "I've struggled with insomnia for years. Now, every night when I get in bed, I'm instantly relaxed and asleep within minutes. The Leesa mattress is somehow soft and supportive at the same time. It's the most comfortable mattress I've ever slept on in my life." That's from our producer. Leesa makes premium, beautifully crafted mattresses designed specifically for how you sleep, whether it's on your stomach, side, or back. They make it easy to figure out which mattress is best for you. You just take their two-minute sleep quiz. And Leesa mattresses were named the best hybrid and best memory foam mattresses by the New York Times Wirecutter.
1:32 Ramit Sethi? And they come with free shipping, easy returns, and a 120-night sleep trial. Go to leesa.com for 25% off mattresses. Plus, get an extra $50 off with promo code LEESA, exclusive for my listeners. That's L-E-E-S-A dot com, promo code LEESA, for 25% off mattresses, plus an extra $50 off. And support our show and let them know we sent you after checkout. Leesa.com, promo code LEESA.
2:00 Ramit Sethi? On last week's episode, we met 38-year-old Lakeisha and 45-year-old James.
2:05 Speaker 02 We've talked about money, but it's some more from a lack of, right? I want to get on the other side of that.
2:11 Ramit Sethi? The couple recently moved in together and they're trying to get on the same page about their finances, but it's a challenge. I had a repossessed car, credit cards, and some loan.
2:20 Speaker 02 I have not considered my future self at all. In fact, I've pretty much set that person up for failure in a lot of ways.
2:30 Ramit Sethi? They have no savings, no investments, and they both struggle with the money messages they received growing up. I'm scared to do things, so I guess that's why I didn't accumulate a lot. Today, we're digging back into their conscious spending plan, or CSP. The numbers are shocking. We have to do something.
2:49 Speaker 02 Okay, guilt-free spending.
2:52 Ramit Sethi? I always got guilt about that. Are Lakeisha and James willing to change the way that they mindlessly spend money and get focused on their rich life? We want to be better for each other so we can have a better future. Now, let's get back to our conversation with Lakeisha and James.
3:16 Ramit Sethi? When we left Lakeisha and James last week, we had just learned they have zero savings, zero investments, and $190,000 of debt between the two of them. Let's dig back into the numbers, but we'll see if they're ready to make a change.
3:33 Speaker 02 If something were to happen, we have nothing. Like, we would have to borrow money in order to mitigate whatever that something is.
3:44 Ramit Sethi? And have you ever gotten in that situation, Lakeisha? Like, zero savings, maybe you had, you got sick, or you lost your job or anything like that?
3:51 Speaker 02 Fortunately, no, I have not.
3:54 Ramit Sethi? You're basically driving without a seatbelt, you know? Most of the time, you're gonna be fine. The one time... You're not, and it's over.
4:02 Speaker 03 Yeah.
4:02 Ramit Sethi? And nobody can tell you, no, I'm not a parent here to nag you, put your seatbelt on, build a savings account. I can't do it. Only you can. But when I see this, I feel extreme fear. I'm not afraid of a lot. I'm afraid of teenage girls because they're mean. And I'm afraid of big old insects, you know, that fly, maybe roller coasters, but I'm afraid of this.
4:26 Speaker 03 Yeah.
4:27 Ramit Sethi? Because I know what can happen. I know that you're skating really close to the edge, and if something bad happens, especially with kids, you're in a loop, and it is really hard to get out of it. So that's how I feel. Let's talk about the debt for you, Lakeisha. You have $165,000 of debt. What is that?
4:45 Speaker 02 Student loans.
4:47 Ramit Sethi? Couldn't discharge us in bankruptcy. Okay, we know that. Thanks, Republicans. Anyway, how much is your interest rate on 165K?
4:56 Speaker 02 I'm gonna be honest, I have no idea. I haven't even bothered to look. I'm in one of those income-based repayment plans. After seven more years, it'll all go away anyway, so.
5:07 Ramit Sethi? Oh, all right. That's actually really helpful to know. And that explains why you're paying almost nothing towards it.
5:13 Speaker 02 Yes.
5:14 Ramit Sethi? Thank God, because I was looking at these numbers like, what the hell is happening here?
5:20 Speaker 02 Yeah.
5:21 Ramit Sethi? Okay, good to know. Shall we continue moving along?
5:25 Speaker 02 Yes.
5:26 Ramit Sethi? Income. James, break it down for me. Let's get the combined monthly income.
5:32 Speaker 03 Gross monthly income combined is 12,453.
5:37 Ramit Sethi? James, did you know that you make $60,732 per year?
5:43 Speaker 03 That's horrible. Yes.
5:45 Ramit Sethi? That's an interesting response. We can work on that. And then, Lakeisha, did you know you make $88,704 a year?
5:52 Speaker 02 Yes.
5:53 Ramit Sethi? Okay, both of you knew your income. Great. Combined, you make 150K. That's kind of a lot, right? Yeah.
5:59 Speaker 02 I think it's good.
6:00 Ramit Sethi? Let's keep going. It doesn't look like either of you are doing too much pre-tax like 401k investments. Is that correct?
6:06 Speaker 02 That is correct. The place that I work for, they were just recently integrated. So it's going to be a new company where I have benefits. So now, starting 2025, we'll have 401k, have the option of getting the HSA. And so I wanted to max it out from the beginning. I told him as I was doing open enrollment, it was going to be like with insurance, taxes, everything. It was going to be like $900 out of my check. And he was, he was like, what? No, like, and so I still open the account, but I, I put it as zero because I was told from the person that I couldn't change that amount later. Can I just say I want to?
6:48 Speaker 02 And I had a conversation with James about that recently and he was like, let's wait.
6:57 Ramit Sethi? Let's wait till what? James, why did you react the way you did?
7:01 Speaker 03 Well, first of all, it's the amount that she was trying to put away. Um, and I would just, I would wait till later until we get out of this hole that we're in. It was basically the message I was trying to convey to her.
7:12 Ramit Sethi? Wait till what? James, you're 45 years old and you have zero savings and zero investments. How long you want to wait?
7:17 Speaker 03 I wasn't saying like, don't ever do it or let's wait forever. It was just a large chunk, but we, at that point, we were not living together yet as well. You know what I mean?
7:28 Ramit Sethi? Wasn't it her money?
7:29 Speaker 03 It was.
7:30 Ramit Sethi? So what does your opinion really matter about her money anyway?
7:33 Speaker 03 It sure don't. You're right.
7:34 Ramit Sethi? That's, that's correct. But do you, do you all understand the dynamic that's at play right here?
7:39 Speaker 02 I asked him, first of all, I even brought it to him and asked him what he thought about it instead of just doing it.
7:45 Ramit Sethi? Correct, like a child.
7:46 Speaker 02 Yep.
7:47 Ramit Sethi? And then James thrust into this role, which he shouldn't be in. James has $26,000 of debt and zero savings too. What's he talking about? And then he naturally just assumes the role. Oh, I think you should wait. What do you have to do with this decision? It's your money, Lakeisha. You don't even live together at that point. But both of you are playing this dynamic, parent, child. Makes no sense. It's keeping you in a poor financial situation. Do you understand this?
8:16 Speaker 03 Yes.
8:16 Speaker 02 Yes.
8:18 Ramit Sethi? Let me break down why the parent-child money dynamic is absolutely toxic to relationships. First, your partner's not a child, and you're not going to get them to act like an adult by treating them like a child. Number two, this dynamic is sexual kryptonite. Often, the parent figure feels repulsed as a result of taking on the authority role, and this is not good for any relationship. The good news is, there's a way to change the dynamic. When you treat an adult like an adult, you tell them what you expect and you set clear boundaries, you may be surprised how often they rise to the expectation. More on this in my new book, Money for Couples.
9:02 Ramit Sethi? We'll be right back after a short break.
9:05 Ramit Sethi? What happens if you're away from home and you need to see a doctor? My coworker, for example, needed to see a doctor ASAP while she was in another state, and she used our sponsor, Zocdoc. Here's what she said. "I searched by condition. I found someone local. It showed me people who had same-day appointments who also took my insurance. I found a great doctor who didn't make me wait, and it was a total relief, especially when I was away from home." If you need to find a good doctor fast, use this episode's sponsor, Zocdoc. Zocdoc lets you search and compare local, in-network doctors. Whether you're looking for primary care, dentistry, eye care, or anything else, you can easily search by specialty or symptoms, and you can book in-network appointments
9:48 Ramit Sethi? with more than 150,000 providers across all 50 states. Getting an actual appointment is easy. You just look through the real appointment openings, click what works for your schedule, and book it instantly. And what's great is their appointments happen fast, usually within 24 to 72 hours. No more waiting months and months to get the care that you need. Your health matters, and taking care of yourself should not be complicated. Find and book the right doctor with Zocdoc. Head to zocdoc.com/ramit to get started and check that appointment off your to-do list. That's z-o-c-d-o-c dot com slash ramit.
10:29 Ramit Sethi? I have a simple rule in my life. If it's not on my calendar, it doesn't exist. If it's important to me, I want to put it on my calendar. Work meetings, haircuts, dinners with friends, taking a trip. This calendar is shared so that other important people in my life can also get on the same page. Now, if you're trying to figure out your schedule for you and your kids, your family, that becomes even more complicated, which is why so many families love Skylight Calendar. Skylight Calendar is designed to bring families together for more time. It's an all-in-one digital smart calendar that syncs with Google Calendar, Apple Calendar, Outlook, etc., making it easier to instantly look at your day, week, or month plans.
11:11 Ramit Sethi? With Skylight Calendar, you can manage events, chores, and grocery lists by assigning colors for each of your family members, meaning no one can say they didn't know what they needed to do. My coworkers say it's a game changer for their families. Plus, it comes with a four-month 100% happiness guarantee. If you don't love it after four months, you can return it for a full refund, no questions asked. Families are better when they're working together. Right now, Skylight is offering our listeners $30 off their 15-inch calendars by going to myskylight.com/ramit. Go to myskylight.com/ramit for $30 off your 15-inch calendar. That's M-Y-S-K-Y-L-I-G-H-T.com/ramit.
11:56 Ramit Sethi? Welcome back. Let's keep going with their CSP. Let's continue moving along here. Let's look at your fixed costs. So what number do I typically recommend your fixed costs be?
12:07 Speaker 02 Between 50 and 60.
12:08 Ramit Sethi? Correct. James, did you know that?
12:11 Ramit Sethi? She did tell me, yes.
12:12 Ramit Sethi? Okay, great. So at 68, it's higher than it I would like to see it, but it's not like 89. All right, we got some, we got some stuff we can play with. Let's just work our way down and then we'll go into the line items. Investments, zero. So, you know, you all know the way you're going. If you currently change nothing, you will be living on like social security. You guys want to do that? No, it's not good.
12:38 Ramit Sethi? Savings are at zero, not good. And then this is really interesting. Your guilt free spending is thirty three percent. Now, I don't believe these numbers, but I do believe they are a lot. Do you track your guilt free spending carefully? Yes or no?
12:52 Speaker 02 No.
12:53 Speaker 03 No.
12:53 Speaker 02 No.
12:53 Ramit Sethi? All right. At the end of the month, is there any extra money?
12:57 Speaker 02 No.
12:57 Speaker 03 No.
12:58 Ramit Sethi? Okay, so it's going, it's going somewhere. What's it going towards? Amazon stuff? What else?
13:03 Speaker 02 Eating out.
13:04 Ramit Sethi? Eating out? Where you guys eat out?
13:05 Speaker 03 It depended on the week.
13:08 Speaker 02 We have pizza every Friday.
13:10 Ramit Sethi? Please don't say Domino's.
13:12 Speaker 02 No, no, no, no, no. There's a local place, Bob's Pizza. We try, like to try different pizza places every Friday, so.
13:19 Ramit Sethi? All right.
13:20 Speaker 02 When it's like we're in between paychecks, we'll, we'll go get a large pizza at Whole Foods.
13:26 Ramit Sethi? Hold on, was that supposed to be like, we're so frugal, we got a pizza from Whole Foods? The hell's happening right now? Okay, this is amazing. Let me just tell you, my family, when we were eating out, which was not that often, once every six weeks, we're going to the pizza place with a coupon. And Whole Foods, I never walked into Whole Foods till I went to college. I walked right back out. I'm like, this place isn't for me. But I'll, I'll come back here in about fifteen years. All right. Wow. We only get our pizza at Whole Foods. Amazing. Where, where else do you eat out? Pizza? What else?
14:03 Speaker 02 We said we were gonna start going to Longhorn once a month.
14:05 Ramit Sethi? That's interesting. So the two of you talked about it and said, we want to do this once a month. It's the first time I've heard of planning. I like that.
14:13 Speaker 03 On a Wednesday, we might go to Culvers. You know what I mean?
14:16 Ramit Sethi? What's that?
14:17 Speaker 02 Burger place.
14:18 Ramit Sethi? Okay, how much? Total bill? Bill, tip, tax, delivery, everything?
14:24 Speaker 03 We get the kids meal, so it's about twenty four dollars.
14:27 Ramit Sethi? Laughing and covering her mouth. Hold on, there's definitely a lie happening right now. Lakeisha?
14:31 Speaker 02 No, I just laughed because we, we definitely do get the kids meal. Like, all three of us will get a kids meal. Because it comes with a free custard. We try to think about money.
14:42 Ramit Sethi? Please don't do this right now. Please don't try to justify the financial part of it. We've gotten two days out of a seven day week and I'm getting your life history about Longhorns and the custard. Just tell me where you eat out. That's all I want to know.
14:57 Speaker 03 Okay, Culvers, Carol's Chicken. If it's all of us, man, we spending a good forty to fifty dollars, you know?
15:04 Ramit Sethi? This is for how many people?
15:06 Speaker 03 You know, if my daughter's here four and if she's not three, so three to four.
15:10 Ramit Sethi? That seems like, how are you only spending forty dollars for four people? Eating out, tax, tip, there's no way. Can we just re- reset because something is not right? I don't mind if you're overspending, I can help you with that, but I can't help if you guys are lying to me or if you're lying to yourself.
15:27 Speaker 03 If we're going to the restaurant for pizza, last week I spent a hundred forty something dollars.
15:32 Ramit Sethi? Okay, that's reasonable.
15:35 Speaker 02 On a weekly basis, I would say we probably spend at least two hundred and fifty dollars on eating out.
15:41 Ramit Sethi? How many times a week do you eat out?
15:43 Speaker 03 Three or four times a week.
15:45 Speaker 02 I was gonna say the exact same number, three to four times a week.
15:49 Ramit Sethi? Do a little exercise with me, okay? It's Sunday morning, we're gonna go through the entire week. Anybody eating out Sunday, I'm talking coffee, lunch, brunch?
15:59 Speaker 03 Sunday we eat breakfast at home.
16:00 Ramit Sethi? How many times you eat out on Sunday? Give me a number.
16:03 Speaker 03 Well, probably once, right?
16:04 Speaker 02 Once or twice because he always brings lunch home and then dinner. Depending on if we have groceries or not, we will eat out again on Sunday.
16:12 Ramit Sethi? Great, so is that two or three times on Sunday?
16:15 Speaker 02 At least two.
16:16 Ramit Sethi? Two times, great. Monday, what do we got?
16:20 Speaker 03 Uh, Monday, we don't usually eat out on Mondays.
16:23 Speaker 02 No.
16:24 Speaker 03 No.
16:24 Ramit Sethi? None?
16:25 Speaker 03 No.
16:25 Ramit Sethi? Coffee, uh, croissant, whatever, none of it? Okay, great, Tuesday?
16:31 Speaker 03 Tuesday, if we have leftovers, we eat that on Tuesdays. If we, probably, if we don't have leftovers, at least once.
16:40 Ramit Sethi? Let's say once. All right, Wednesday?
16:44 Speaker 02 I would say once.
16:45 Ramit Sethi? Okay, great, Thursday? Breakfast, lunch, dinner, snack?
16:48 Speaker 02 I would say zero, I would say zero.
16:51 Speaker 03 Friday, probably twice.
16:54 Ramit Sethi? Twice, all right. Saturday, Saturday, how much?
16:56 Speaker 03 Saturday, probably twice.
16:58 Ramit Sethi? Twice, anybody wanna say three times? Lakeisha, what's that big smile on your face?
17:03 Speaker 02 This is a pay week, maybe three taxes.
17:05 Ramit Sethi? Let's say three. All right. Now, I don't know if you've ever heard of Ramit Sethi's magic number of eating out. Have you ever heard this number?
17:13 Speaker 02 No.
17:14 Ramit Sethi? The number goes like this. Take whatever a couple tells you and triple it and you will get the real number. And guess what your number happens to be?
17:22 Speaker 03 Six.
17:23 Speaker 02 Nine?
17:24 Ramit Sethi? Nine. Exactly three times what you told me. What do you make of that? First of all, am I getting a round of applause for this? I freaking invented this. I'll take the win for myself. It's my podcast. That's pretty amazing, don't you think?
17:39 Speaker 02 Yeah, it is. It is.
17:41 Ramit Sethi? And are you a little surprised? You thought it was three times and it's nine times a week?
17:47 Speaker 02 I'm shocked. I am.
17:49 Ramit Sethi? So whatever number you told me, we spend 250 a week, you better triple that right away. Does this tell you, if we zoom out, about your entire financial picture?
17:58 Speaker 02 We don't know where our money is going.
18:00 Ramit Sethi? That's correct. What else?
18:02 Speaker 03 We need to plan.
18:03 Ramit Sethi? Yes, love that. But James, I love your answer, but I notice, again, you go towards the future. We need to change. We need... James, you're not going to change unless you actually can diagnose and analyze what is happening today. You cannot move forward unless you stick with the present and understand it. So give me that answer.
18:24 Speaker 03 We don't plan.
18:26 Ramit Sethi? We don't plan. Agreed. Would you say that you are impulsive with your spending?
18:31 Speaker 03 Yes.
18:32 Ramit Sethi? Okay, good. And do you have, like, some good stories that you tell yourselves about why we need to go out tonight?
18:39 Speaker 03 Of course. We're busy.
18:41 Ramit Sethi? You went into this whole thing about time management. I don't believe it. So do you see that if we ended the call right now, what do you think would happen with your money?
18:50 Speaker 03 It will continue to be the same old, same old.
18:53 Ramit Sethi? I agree. Lakeisha?
18:54 Speaker 02 We would continue to live in the way that we are and feel like... We don't know where it's going or why we don't have enough for our future selves.
19:05 Ramit Sethi? Yeah.
19:06 Speaker 02 When the answer is there.
19:07 Ramit Sethi? What is the answer?
19:08 Speaker 02 We're spending it now.
19:11 Ramit Sethi? Yeah. What are you spending it on?
19:13 Speaker 03 Things we don't need to.
19:14 Ramit Sethi? Yes, that's true, but I love that answer. I would say you're spending your money unconsciously. You're not spending it on your rich life. If I asked the two of you, what is your rich life? Would you have told me eating out nine times a week is in our rich life?
19:27 Speaker 03 No.
19:27 Speaker 02 No.
19:28 Speaker 03 Not so much.
19:29 Ramit Sethi? What would you have said instead as it relates to eating out?
19:32 Speaker 02 Getting a chef once a month.
19:34 Ramit Sethi? Okay, that would be nice. Probably not in the financial position to do that today. So what is your rich life today as it relates to eating out?
19:41 Speaker 03 Keeping it to maybe once or twice a month.
19:43 Speaker 02 If we could hold on to a specific place that we know we want to eat out at.
19:48 Ramit Sethi? Yeah.
19:49 Speaker 02 Then I think that would make it more meaningful.
19:52 Ramit Sethi? I like that. I like the idea of a meaningful meal together. If I were in your situation, I might say our rich life is having one day each month where we all go out as a family and have a great meal. And we all share a dessert together and we appreciate it. What do you notice about that?
20:18 Speaker 03 It's goal oriented.
20:19 Speaker 02 If we tried to go outside of that one time, it would make us go back to that. Like this isn't the one time that we're supposed to go. It would give us something to hold ourselves accountable to. And we're waiting in for that.
20:34 Ramit Sethi? Yeah, it's it's slowing down and creating the life you want. It's not life happening to you. Oh, we're busy, so we stopped at this place and all we got that thing. And it's around the family. So the whole thing about we're going to do one time with our family. That's so beautiful because it allows the family to talk about it. Maybe one of your kids gets to choose this month and the other gets to choose the next month. It becomes a whole thing. And the thing about sharing a dessert, like when I was a kid, we never got dessert. So forget about that. But okay, it's hard to go from 36 times to one time. We're going to have to talk about that. But the fact of being able to share this and appreciate it. This is what we can do right now. I hope that in the future.
21:20 Ramit Sethi? We can each have our own dessert. We can each do more. Basically, there's a way to create meaning out of restraint. You see that?
21:28 Speaker 03 Yeah.
21:28 Ramit Sethi? Yes. Do you ever say no to spending money?
21:31 Speaker 03 I feel guilty about it sometimes, so.
21:33 Ramit Sethi? Okay.
21:33 Speaker 03 I absolutely do, yeah.
21:36 Ramit Sethi? Okay, you say no, and then what do you do with the money that you didn't spend?
21:39 Speaker 03 Buy something else to spend.
21:40 Ramit Sethi? That's not great.
21:41 Speaker 03 I know, right?
21:43 Ramit Sethi? You feel guilty about spending it, but then you just spend it anyway? What's that about?
21:46 Speaker 03 I'll probably spend on something that I say I need. If we don't have nothing to eat in the house, I'll go get something to eat or something like that, or put gas in the car.
21:55 Ramit Sethi? Okay. Lakeisha, what about you?
21:56 Speaker 02 If I say no to spending, it's because it's not there. So you know how parents say, no, we don't have money for that or whatever? It will legit like, no, we really don't have it. So if I say no, it's because it's not there usually, as opposed to I don't want to spend in on whatever that thing is.
22:18 Ramit Sethi? Okay, so can I ask you again, like, when was the last time you told your daughter no when it came to spending money?
22:24 Speaker 02 She doesn't ask for things a lot. Like yesterday, when we went to Target, I feel like that's why I was more compelled to say okay. It was an $11 sweatshirt. It was cute. She doesn't ask for things a lot, so I said yes.
22:39 Ramit Sethi? Okay. What do you spend your money on, Lakeisha? Eighty-eight thousand bucks a year?
22:43 Speaker 02 Stuff. That's the best word I can think of to describe what I spend my money on, stuff.
22:48 Ramit Sethi? What? What are we talking about?
22:50 Speaker 02 I like buying things for the home a lot, so decor. And I love to DIY stuff, like make T-shirts or sew things. So I get, I have a lot of crashed items as well. That's what I like spending on.
23:10 Ramit Sethi? All right, shall we look at the fixed costs and go through the line items?
23:15 Speaker 02 Let's do it.
23:16 Ramit Sethi? All right, let's take a look. So your rent is 16% if we combine it. How are you splitting your money now that you are living together?
23:24 Speaker 03 So I give her, the $1,000 is what I give her towards your rent.
23:29 Ramit Sethi? Okay, and why is that?
23:32 Speaker 03 Well, it's a number she came up with, well, came up with together. Since she does make a little bit more than me, we thought that would be a fair amount.
23:40 Ramit Sethi? Wait, she makes more than you, but you're paying more for rent? How does that make sense?
23:44 Speaker 02 Let me tell you how this conversation went. I'm gonna tell you exactly how it went. He asked, what number would I like for him to contribute? And I said, how much can you? And he said, I don't know, I was thinking of what if I give you 500 each paycheck? And that could go towards rent? Or, you know, part on utilities or whatever? And then like, everything else we'll kind of figure out as time goes. Like, stuff like groceries and gas and stuff like that. So that's how that conversation went, like, almost verbatim.
24:19 Ramit Sethi? And do you all feel good about this?
24:22 Speaker 02 No. I'm good with the number. I don't feel good about how it happened because I feel like there was nothing we like did or looked at in order to come to that conclusion. It was just an abstract number.
24:36 Ramit Sethi? But that's like, that's the way that both of you are living your financial lives. Right?
24:41 Speaker 02 I don't want to.
24:42 Ramit Sethi? Oh, I agree. I don't want that either. I want to show you how to start using numbers effectively. But what you just did was such a common conversation that couples have. It's like, what do you want to do? Here's what I feel comfortable with. I'm like, feelings? Why the hell are we, why are we talking about feelings right now? I want to talk about cold, hard numbers. Talk to me about ratios. Talk to me about percentages. This is the stuff I need right now. And it's a lot of like, I don't know, how about you? This is so common. So let me show you a different way. Okay, I get it. When you move in with a partner and you try to divide costs for the first time, it can feel overwhelming, but it doesn't have to be.
25:24 Ramit Sethi? Up next, I'm gonna show Lakeisha and James what to consider when making this decision. We'll be back after a short break.
25:33 Ramit Sethi? I recently got a comment on my podcast asking if I really use the products that I say I do. And the answer is yes. If I tell you that I personally use and pay for a product or service, I do. That's why in so many Delete Me ads that I have hosted on this podcast, I tell you I pay for this myself. I do, and I have for years. I love this service. That's why I work with them, and that's why I want you to check them out too. Delete Me is a subscription service that removes your personal data from the internet. We're talking about things like your full name, email, phone number, address, even your parents' names, all found and removed. They've been the leading expert in personal information removal for the last 15 years.
26:18 Ramit Sethi? They were recently named Wirecutter's number one data removal service, and I personally use and pay for Delete Me, and I love it, and I know you will too. You'll get 20% off all consumer plans when you go to joindelete.me/ramit and use promo code RAMIT at checkout. That's joindelete.me/ramit, code RAMIT for 20% off.
26:46 Ramit Sethi? 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. 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,
27:29 Ramit Sethi? 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, if you want to be able to capture your own ideas...
27:42 Ramit Sethi? Just by talking Whisperflow is a no brainer. Get one month of Whisperflow Pro for free at whisperflow.ai/ramit. That's whisperflow.ai/ramit. W I S P R flow dot A I slash ramit. Or click the link in the description.
28:05 Ramit Sethi? Let's get back to the conversation now. Right now, if you break down your money, you have lots of ways to do it. You could just combine everything, which married couples often do. And I think in general, it's a good idea. You could split it 50 50, which would make no sense. But some people just think that 50 50 is fair. Or you could do it proportionally. Now proportionally actually works out really well because Lakeisha, you make 60% and he makes 40%. If you break down the numbers. So the way that that works is basically for any joint expenses, James pays 40% and Lakeisha pays 60%. How does everybody feel about that?
28:45 Speaker 02 Yes. I feel great about that.
28:47 Ramit Sethi? Okay, let's make a couple of changes here. So let's take your rent. And that would mean you, Lakeisha, pay 10 50. And let's just watch what happens here. That means James, you pay 700. Wow, big changes happening already. So already what we can see is that the, look at the fixed costs for each person. They went 57% for James, but now Lakeisha is at 75%. Lakeisha, what were you doing before James was contributing to the rent?
29:18 Speaker 02 Drowning.
29:19 Ramit Sethi? Yeah.
29:20 Speaker 02 I filled this out alone months ago and sent it to him. My CSP, I think my number for fixed cost was in the 90s.
29:30 Ramit Sethi? You're spending too much. We're about to see that. Are you only spending $400 a month on groceries?
29:36 Ramit Sethi? This is way lower than I normally see, especially for a family with kids, right? Okay. Normally, I would see like 800 to 1,200 bucks.
29:44 Speaker 02 Oh, no, we're definitely not spending that much. I am a coupon shopper. Our total at the grocery store yesterday went from 231 to 190 after coupons.
29:57 Ramit Sethi? I don't think that groceries are gonna stay at 400. I don't think it's possible. Candidly, I'd like to adjust up because I hear a couple of times that two of you mentioned like, "We didn't have food, so we went out." Like, that's just not acceptable. It's not. When you have high fixed costs, there will never be a day where you quote "run out of food" and go and have to get restaurant food. It just makes no sense. Especially not making $150,000 joint. So, one of the things I talk about in my book, Money for Couples, I want to show you. It's coming out, is creating a family culture. In our family, we... dot, dot, dot.
30:40 Ramit Sethi? For example, in our family, we have a no debt policy. That's part of our culture. What would it be for you? Our family only eats out once a month. I love that. But give it to me with a little bit more meaning behind it. Because right now, it feels like a little bit dreary. Give it to me that in a way that's meaningful for your family. Our family only eats out once a month.
31:04 Ramit Sethi? I like it. It was theatrical, but give me something else. Lakeisha, you want to help him out?
31:07 Speaker 02 In our family, if we can't pay for it outright, we don't buy it.
31:13 Ramit Sethi? That's good.
31:13 Speaker 02 And it's not something we're doing.
31:15 Ramit Sethi? Okay, can we stick with the dining thing? I just want to show you an example of actually making something fun and not dreary. So it'd be like, "In our family, it's special family dinner once a month. We rotate who chooses, and we all share one dessert, which we appreciate." That's how I would say it, but your family's got your own culture, so you'd say something a little different.
31:41 Speaker 02 Yeah, I got it. In our family, we have one evening that we are all together, and we share a meal and a dessert and conversation.
31:56 Ramit Sethi? Love it. Beautiful. That's a rich life. I love that. Let's keep going. I'm moving your groceries up to 800 because you're gonna need groceries. There's a line on here, row 20 now. I believe I invented the conscious spending plan, and I don't recall putting in a line, row 20, called cigars and alcohol. What the [bleep] is this?
32:16 Speaker 03 That was [bleep] it then.
32:19 Ramit Sethi? 200 bucks from one person and 250 from another? Is this a joke?
32:23 Speaker 03 I think that's a roundabout amount.
32:28 Ramit Sethi? Oh, is it higher?
32:29 Speaker 03 No. I definitely have not spent as much as I usually would spend on cigars.
32:35 Ramit Sethi? How much do you usually spend?
32:36 Speaker 03 Six months ago, I was at probably at least $300 a month for cigars. But it's just cigars. With alcohol, I would say probably about $400 a month.
32:47 Ramit Sethi? Okay. What are you drinking?
32:49 Speaker 03 Bourbon.
32:49 Ramit Sethi? All right. And Lakeisha's over here smiling like I'm not gonna call on her next. Lakeisha?
32:56 Ramit Sethi? What about you?
32:57 Speaker 02 I like wine.
32:59 Ramit Sethi? Are you in the cigars thing too? Nope, that's all. So what do y'all think? I mean, I know what you think is like, Ramit's about to come down and drop the [bleep] hammer. If you wanna do it, you could do it. Can I be very honest with both of you right now? I think you came to me because you want help, and I respect you. I respect your time, and I am going to raise my expectations for both of you. Okay? You have $0 in savings. You have kids. You have $0 in investments. Right now, you're at 73% on your fixed costs. There's just no world where it's okay and where I'm gonna buy any of these stories about, "We're actually doing better. I just need to be more conscious." This is all BS, and you know it.
33:42 Ramit Sethi? The thing is, you want me to make the change for you. You want me to come in here and be like, "Stop it, guys." And then you can be like, "I know, we should try better. We have been trying better." I'm not gonna play that game. That's what both of you want. I'm not gonna do it. If you wanna keep doing it, you could do it. It's your money, it's your rich life. The fact is, you have no savings and no investment. One illness, one problem with your kids, one car accident, and you are out of the game. And at thirty-eight and forty-five, there's very hard to get back in it. So I guess what I'm asking you is, are you ready to take this seriously? What do you wanna do?
34:18 Speaker 02 I wanna do the best, and we're not doing our best.
34:21 Ramit Sethi? All right, let's do it then. But it's gonna be you doing it, not me. So here's what I'm doing. I'm turning over control of the CSPDU. Your goal is to get this number down to sixty percent. Tell me how you wanna do it. I'll make any changes you tell me. I'm just the executor. But the only rule is, you have to each do one thing and toss the ball back to each other. Go ahead.
34:40 Speaker 03 I guess in line for cigars and alcohol, we can change it to a hundred dollars each.
34:46 Ramit Sethi? Okay, can I ask you a question? James, do you think you should be spending money on alcohol and cigars when you are in twenty-six thousand dollars of debt?
34:52 Speaker 03 No, so, okay, so, no. Okay.
34:56 Ramit Sethi? What's happening right now? You're a grown man, why do I have to tell you this? You already know it. Is it that you are waiting like your dad looked over your shoulder? And he was like, are you sure you need that? And you allowed yourself to be put in that child position that you're now waiting for me to do that?
35:10 Speaker 03 When we talked, you said that, you know, sometimes you feel like that if I work hard, if I do this, I deserve at least one cigar every other day or something like that. So that's what's in my mind.
35:25 Ramit Sethi? Has that approach worked for you?
35:27 Speaker 03 It has not, no.
35:28 Ramit Sethi? So do you wanna keep the same approach and hope that it magically changes? No. I think before we go into all these numbers, you all need to decide, like, how do we wanna show up right now? Like, imagine here I am, like, trying to run track or something. I'm running the four hundred. And every time I go out there, I'm like, oh, I'm so tired. Like, life sucks, it's so hot, my shoelaces. And I just keep losing. And then my coach pulls me aside and says, listen, you actually have pretty good skills, but how have you been showing up? I'm like, I'm kind of a downer. I'm always like complaining. And he goes, how do you want to show up? How would I, how would I answer it?
36:06 Speaker 02 You wanna show up to win?
36:08 Ramit Sethi? Show up to win? What's my attitude gonna be like? Let's do this. Let's do this, that's right.
36:13 Speaker 02 Motivated.
36:14 Ramit Sethi? Exactly, and all the stories I used to tell myself, "If only this one guy wasn't here," I'm with, those stories are gone. I got a new story for myself, I deserve to win. So how do you guys wanna show up as we're about to get into this CSP?
36:26 Speaker 02 Motivated, pumped.
36:27 Ramit Sethi? Motivated. Love it, let's do it, here we go. James first, what do you wanna do? Take out the alcohol, the cigars. Alright, take it out. I'm zeroing out alcohol and cigars, I want you to look at this number as I go down the list. This is your fixed cost number, it's a 73%, our goal is to get it to 60. Here we go. Cigars, zero, and zero. What do we see that number changed to?
36:54 Speaker 02 67%.
36:55 Ramit Sethi? 67%. Alright, we're going in the right direction, what else?
37:00 Speaker 02 I would like to change the child support college students to zero for right now.
37:06 Ramit Sethi? Explain this to me, what is this category?
37:08 Speaker 02 I was sending my niece and my daughter $50 every two weeks. But they're both employed, they don't necessarily need it, they never asked for it, I just wanted to do something.
37:21 Ramit Sethi? Love it.
37:21 Speaker 02 So that's what I was doing.
37:22 Ramit Sethi? I love, I love your niece and kids and everything, give them a big hug next time you see them, but the checks have stopped. Alright, 200 bucks, that's zero. And what's this child support for 600, that's James, right? Yeah, that's legal, I have to pay that. We're keeping that, okay, great, let's keep it. The number is 65%, oh my god. We're making better progress than I thought. Toss the ball back, Lakeisha, toss it to him. I guess miscellaneous can change to $100 for each. I like that, can I tell you what is in that category? So I include miscellaneous, it's 15% of all your other stuff.
38:01 Ramit Sethi? I found another magic number, which is 15% is typically how much people don't think about for their fixed costs. That would be things like, something breaks in your house, or a car repaired you didn't plan for, so I add in 15%. Now, here's the thing. When you have a very financially healthy position, you should actually be putting that money aside. And then at the end of the year, you can make a little rule. Oh, we didn't spend it. Let's invest most of it, spend it, whatever. The fact is, you can't have $793 a month in miscellaneous costs. It's just out of control for your abilities right now. That means you've got to be tighter, more intentional. Okay, so we're going to reduce it.
38:45 Ramit Sethi? But what are the implications for the two of you?
38:49 Speaker 02 If we reduce it, then to your point, we need to, when you scroll down, then we need to plan for those miscellaneous things happening and being more proactive instead of reactive.
39:03 Ramit Sethi? That's exactly right. Boom, you nailed it. So let's do it. Watch what happens to the number. It's going to be quite amazing. We're changing the $300 to $100 miscellaneous. And we're changing the $493 to 100. What's that number? Wow.
39:18 Speaker 02 59%.
39:19 Ramit Sethi? 59%. 59%. Give yourselves a round of applause. That's really good. Well done. Honestly, I'm amazed. This is incredible. Keep in mind, we have increased your grocery spend. Wow. By a lot, by double. That's amazing. Now, let me ask you this. Who cooks at home?
39:36 Speaker 02 If food gets cooked, I usually cook it.
39:39 Ramit Sethi? Wow, wow. Okay, how often does food get cooked?
39:42 Speaker 02 Probably three to four times a week.
39:45 Ramit Sethi? That actually seems to me like a pretty big deal. Because let's just say, let's round down on this one. Let's say it gets cooked twice a week. So let's say one night, everybody comes home, they're tired, and there's no food cooked. What's everybody going to end up doing immediately?
39:58 Speaker 02 If we're spending this much on groceries, there's going to always be food here. And me personally, if there's food here, I'm going to make something. I'm not going to buy something. It's going to be by the time I place an order and go pick up or before it's delivered, I could have made something already. So if there's food here, then I'm going to go to see what I could throw together.
40:22 Ramit Sethi? I kind of love your answer, and I love the attitude you had when you answered that. Just like, I'm gonna make it. When there's food here, I'm known for it. That's amazing.
40:34 Ramit Sethi? That's the attitude that I want to bring to the money. I'll tell you my example. When there's extra money, I'm going to invest it. I'm known for investing extra money. That's like, we can bring that same attitude to different parts of our life. So I just wanted to point out, I'm struck by how awesome that attitude was right there. And that energy, so you have it in you. I just want to see us bring it to other parts of life. Anything else on fixed costs? We've got this phone bill. Who's, y'all paying for your kids' phone bills here?
41:06 Speaker 02 I am, yeah. So there's four lines. My line, my two daughters and my niece. So I raised my niece from like 7th grade through high school.
41:14 Ramit Sethi? That's awesome. Do you want to keep paying for her phone?
41:18 Speaker 02 Yes, I do.
41:19 Ramit Sethi? Okay, fine. James, what about you? 125 a month, what's that?
41:23 Speaker 03 Uh, there's just me. I got this phone on there right now, paying on this phone.
41:27 Ramit Sethi? Subscriptions are at 110. Any duplicates you all can cancel since you're living together?
41:32 Speaker 03 Absolutely. We could definitely do that.
41:35 Ramit Sethi? Let's make a change right now. How much?
41:37 Speaker 02 What's your gym membership?
41:39 Speaker 03 33 a month. And so I have like Peacock and things like that, but I can get rid of that. So for mine, you probably can just change that to 33 for my gym membership.
41:50 Ramit Sethi? 33, love it. And for you, Lakeisha?
41:54 Speaker 02 I think you should leave it at 60.
41:56 Ramit Sethi? All right, fine. So you have 58%, which is within the 50 to 60% for fixed costs. I think that part is good. But now we need to get pretty aggressive because you are 38 and 45. You have zero savings and zero investments. You all can live a rich life, but it's up to you how hard you want to push it. And I want to show you an example so you really start to understand the numbers here. Lakeisha and James have said they want to plan to move forward, which I love to hear. And that's what I'm about to give them. But as you heard James say earlier, he's scared when it comes to investing. And this is common for people who don't understand how investing works.
42:40 Ramit Sethi? I'm about to show them how easy investing can be and how impactful it can be. We'll get to that after a quick pause to support our sponsors.
42:50 Ramit Sethi? This episode of Money for Couples is brought to you by Wild Grain. Now, my wife and I were recently in Paris and they take their pastries very seriously. I'm back now from Paris and I can't just walk down the block to visit that bakery, but I can do the next best thing, which is to bake some pastries at home in 25 minutes or less with Wild Grain. Wild Grain is the first bake-from-frozen subscription box for sourdough breads, artisanal pastries, and fresh pastas. Plus, the Wild Grain boxes are fully customizable. They've got a variety box, they have a gluten-free box, vegan box, and a new protein box. One of my coworkers recently got a box delivered from Wild Grain with croissants,
43:31 Ramit Sethi? sourdough bread, gluten-free chocolate chip cookies, butternut squash ravioli, and more. She told me, "Everybody loved them and the house smelled amazing." Imagine having fresh bakery-quality bread, pastries, and pasta at home without any trips to the store. And don't just take my word for it, they have over 40,000 5-star reviews and they've been voted the best food subscription box by USA Today three years in a row. For a limited time, Wild Grain is offering our listeners $30 off your first box plus free croissants for life when you go to wildgrain.com/ramit to start your subscription today. That's $30 off your first box and free croissants for life when you visit wildgrain.com/ramit
44:15 Ramit Sethi? or use promo code RAMIT at checkout.
44:20 Ramit Sethi? Let's get back to the conversation. Pick a number. How much do you all think that you should invest every month?
44:27 Speaker 02 20% of our income.
44:28 Ramit Sethi? Okay, cool. So 20% of your, shall we say, gross income or net income?
44:34 Speaker 02 Gross.
44:35 Ramit Sethi? Gross, okay, love it. Wow, aggressive. So that's $1,478 a month for you, Lakeisha. So let's just put it right here. Okay, wow, good. That's 27% of net or 20% of gross? Cool. What about for you, James? Pick a number.
44:54 Ramit Sethi? I guess I'm at 20% of gross.
44:58 Ramit Sethi? All right, let's go ahead and do the same thing just to see what happens. That's gonna be about a thousand bucks a month. All right, so right now, you basically dropped your amount that you can spend a lot every month. Your guilt-free spending.
45:13 Ramit Sethi? You actually don't have that much money left over. So the more we put here in your savings, you know where that money's coming from?
45:22 Speaker 02 Money we spend now.
45:23 Ramit Sethi? The money you spend eating out and what else?
45:26 Speaker 02 Shopping.
45:27 Ramit Sethi? Yeah, you all can save money. I'll show you how much you're gonna have, but that money comes from somewhere. And it would come from eating out and shopping. Is that a surprise to you? Or is that something you expected?
45:39 Speaker 02 No.
45:40 Speaker 03 I know that it's gonna take some type of sacrifice to get to where we need to get to.
45:43 Ramit Sethi? I like that. How come you haven't done it before?
45:46 Speaker 03 It goes back to a lot of the things. Like you said, we wasn't thinking about our future selves. Not only that, but since we've met each other, I think we wanna be better for each other so we can have a better future.
45:56 Ramit Sethi? I like that. What do you think, Lakeisha?
45:59 Speaker 02 It just feels different to be doing this with someone else that has the same thing goal in mind. That's what makes this feel different. So you don't feel like you're sacrificing alone.
46:11 Ramit Sethi? It's really difficult to be the only person in a relationship who's carrying the weight. And sometimes your partner is unengaged, or sometimes they're actively working against you. You know, it's like, I'm trying to save money and then my partner's like, hey, come on, it's Friday, let's go out. How are you supposed to deal with that? It's like constant temptation in the house. But on the other hand, if the two of you have a bigger vision than what are we doing this week, it becomes very powerful. So let's take a look at the compound interest, how much you're gonna have. Right now, you have zero. Your annual addition, if we were to do just the number we picked out, it's an aggressive goal, but let's just see what happens. Twenty-nine thousand, seven hundred and thirty-six dollars a year. Years to grow, how many years should we say?
46:56 Speaker 02 Twenty-five.
46:57 Ramit Sethi? James, you're forty-five, right?
47:00 Speaker 03 Yes.
47:00 Ramit Sethi? Let's say twenty-first, and then we can see what happens if we wait five more years.
47:04 Speaker 02 Okay.
47:04 Ramit Sethi? Interest rate is seven percent. Let's just go ahead. Anybody wanna guess how much you're gonna have?
47:09 Speaker 02 One point three million.
47:11 Ramit Sethi? Okay, James?
47:12 Speaker 03 Let's go with one million.
47:14 Ramit Sethi? One point three million, damn! Lakeisha, that was an excellent guess! Okay, so what does one point three million mean to you?
47:26 Speaker 03 I won't be broke when I retire. And not only won't be broke, I just will be able to enjoy retiring.
47:31 Ramit Sethi? How much will you be able to enjoy retirement? Like, give me a number. How much will you be living on?
47:36 Speaker 03 Maybe 65K, maybe?
47:39 Ramit Sethi? Alright, not a bad guess. So, we're gonna use something called the 4% rule. It's not perfect, it's good back of the napkin. We're gonna take that number, multiply it by .04. That means you'll have about $52,000 per year. There might be some benefits, you might have some social security. I think that's for sure. And, y'all own a rent? Rent. Okay, so you're gonna have housing costs at that time, and they will likely continue going up, we'll see. So how do y'all feel about living on $52,000 a year?
48:08 Speaker 02 No.
48:09 Speaker 03 That's not gonna get it.
48:10 Ramit Sethi? That's not gonna do it? Oh! What about Longhorns? You see, the choices we make today directly affect what we do tomorrow. So if you really consider it, you break it down, the nine meals a week out, literally costing tens and tens of thousands of dollars. Now, if you can afford it, I got no problem. You love good food, I love it too. But the problem is, right now, you're not on a sustainable path. And this assumes, nothing bad happens. No layoffs, no injuries, not... Everything's perfect. Let's keep looking. There's another thing I wanna point out, if we wait 25 years, because something really powerful happens then. Well, James might have to work long. I would hate to put that, James, in that position, but let's just take a look.
48:53 Ramit Sethi? At 25 years, instead of 1.3 million, you're at 2 million.
48:57 Speaker 02 What?
48:58 Ramit Sethi? That's crazy, right?
48:59 Speaker 02 I understand compound interest, but I did not think it would go up that much, just for five years.
49:06 Ramit Sethi? Oh, you don't think so? You wanna see what happens at 30? Watch this, this is just five more years. 3 million. Do you understand that it took roughly 18 or so years to get to a million? Then it took a few more years to get to 2 million, then five years to get to 3 million? What does this tell you?
49:22 Speaker 02 We can't do anything about the past, the time sign, but we should've started years ago.
49:27 Ramit Sethi? Yes, and? What should we talk about right now?
49:30 Speaker 02 We need to start today.
49:31 Ramit Sethi? Exactly.
49:32 Speaker 02 Like, today.
49:33 Ramit Sethi? Exactly, do you see why I was so alarmed at this? $900, like, oh, let's talk about it, let me ask for permission? Why put yourself in that role? Asking somebody who candidly does not know about investing, you've got to decide each of you for yourself, what kind of life you're going to live. We could talk about the marriage and like marriage, staying together, living together, all that stuff. But regardless, each of you is getting older. You have to take action regardless of what the other person does. Do you see that directly in the math?
50:04 Speaker 02 Yes.
50:04 Ramit Sethi? Lakeisha, you see it. James, what's going on with you? What are you feeling right now? I just want to check in with you. The numbers are shocking. We have to do something. That's a good answer. We have to do something. I love that. We have to make a change. Now, I want to point out, I want to caveat some of this because if you all were investing $29,000 a year for 25 years, you could get to 2 million bucks. And if we take that number and run the 4% on that, that's $80,500 a year. That's good. That's nice. Solid. That's accounting for inflation, by the way. Plus, we add on power much for social security. That's nice.
50:49 Ramit Sethi? Okay, cool. The problem is you really can't afford to invest $30,000 a year. Do you know why?
50:56 Speaker 02 Why?
50:56 Ramit Sethi? Anybody tell me what's completely blank on this CSP?
50:59 Speaker 02 Savings.
51:00 Ramit Sethi? Yeah. What's savings for?
51:02 Speaker 02 Emergencies.
51:03 Ramit Sethi? Uh huh. And right now, you have no emergency fund.
51:06 Speaker 02 Yeah.
51:07 Ramit Sethi? You also have no money set aside for a new car, a vacation, somebody graduating, none of it. So we need to build that money up and we need to do it fast. Because if one of you gets in financial trouble, you are in really, really bad trouble. So we have a limited amount of money here. How do I want to allocate it?
51:28 Speaker 02 Maybe if we did 20% net as opposed to gross?
51:32 Ramit Sethi? What's my recommendation for the conscious spending plan for savings? It's 5 to 10%.
51:37 Speaker 02 Okay.
51:37 Ramit Sethi? Why don't we start there? Notice I just typed in 500 just to see. That's 13% of James's net income. So that's too high. So James can afford to do like 200 bucks a month. Do you all see why I was so alarmed with the cigars and alcohol? And like the negotiation? It's like, what are we even talking about? We have nothing in savings. We can't be talking about cigars. What this shows is that, James, you currently have $517 per month to spend guilt-free spending. And Lakeisha, you have $385 per month to spend guilt-free spending. Now, what do you think of these numbers?
52:16 Speaker 03 Um, that's better than probably what we were doing.
52:19 Ramit Sethi? No, you were spending thousands per month.
52:22 Speaker 03 Right, so that's way better, yeah.
52:24 Ramit Sethi? Let's stop using better and worse. Okay, let's stop putting moral judgments on spending money. That's an old way of thinking. Because, think about it, what you're saying, James, and Lakeisha, you've also said this. You've, you've both kind of said like, "I've been bad." Have you noticed that? As in, spending money is bad? That's something that, like, people tell their kids. "That's bad, don't put that back." The thing is, you both have said like, "I've been bad." But you're spending all your money. You're literally spending more than you make. You're spending thousands eating out. So, it's not even working by telling yourselves, "I've been bad." Let's stop talking about money like that, and let's instead start talking about, what is our rich life? So, no more good and bad. Spending more or less has nothing to do with that.
53:08 Ramit Sethi? It's all about, here are the numbers. How do we want to allocate our money within those numbers? Lakeisha, what does it feel like to see that you have $385 a month to spend guilt-free?
53:18 Speaker 02 Well, the amount doesn't feel good. It feels good to know that that's what I'm working with, and that's what I can work out of. It's almost like an allowance. When you were a child and you had allowance, once you spent it, that was it. You didn't have a credit card or anything to fall back on. Once it was gone, it was gone. So, if I feel like that's my allowance, then I know that. I have a number that I can go back to, as opposed to thinking that this whole check is at my disposal. I could do with it what I want.
53:51 Ramit Sethi? I think it's good to set boundaries for yourself, and I think at this stage, it's good to have these bumper lanes. You need some guidance right now. Because, obviously, just having that entire check just sit in your checking account is not working for you.
54:05 Speaker 02 Yeah.
54:06 Ramit Sethi? How are you gonna deal with the eating out? If the two of you only have, like, $500 and $300 a month?
54:14 Speaker 03 We definitely gotta reduce that.
54:16 Ramit Sethi? Do you all see how it works together? Yeah. You can't actually go out to eat nine times a week anymore, or thirty-six times a month. It's kind of funny when you put it that way, right? It's like you were eating out more than once per day. So there's just no money for it. You don't have to try, there's just no money for it.
54:35 Ramit Sethi? That's it. The money's gone. It's moved to a savings account. It's gone to an investment account. It's just not there anymore. So now what happens if somebody's tired on a Thursday night? And they're like, I don't want to eat this raw celery. Let's go to Ben's Pizza. What are you all gonna say?
54:50 Speaker 03 Nope.
54:51 Ramit Sethi? No. And then what if one person goes, I'll pick it up?
54:53 Speaker 02 If I don't have room out of my 387, then I'm not gonna do it.
54:59 Ramit Sethi? Yeah. All right, I like it. That was a pretty good answer. I like that. I think probably just watch out for becoming the police of the other person's finances, right? You don't want that. I think you probably need to recalibrate your relationship. You know, I talk a lot about money dynamics in Money for Couples. And parent-child is one that we notice here. And that's gonna have to be changed. Like even asking for permission for your own 401K, it just like makes no sense. Looking over someone's shoulder and saying like, do you need that? That also makes no sense. It also strips the other person of their own individuality. We don't want that. We need each of you to stand up on your own before you can effectively be a team.
55:44 Ramit Sethi? So have you thought about that? Have you thought about the role of money in your relationship moving forward?
55:51 Speaker 03 That's one of the biggest reasons we wanted to get on with you.
55:54 Speaker 02 I'm so inexperienced with dealing with, or even having a role of money in a relationship. And he has had some bad experience. And so I feel like, given those perspectives, we knew that we needed help outside of ourselves.
56:13 Ramit Sethi? I'm so glad you reached out. Here's my observation. I think that because I look at the two of you at thirty-eight and forty-five, with no savings and no investments, it's clear that there's a lot of love. And I love the compromises that the two of you are talking about. I love that I'm challenging, I'm pushing you. On the eating out and the cigars and the rolls and you're with me. You're staying with me. This is hard stuff. You're staying with me. I appreciate that. If I were in your shoes, what I would want to see for both of you would be for each of you to become financially skilled before you were to move forward and combine anything. That would be my own personal opinion. Why do I say that?
56:58 Ramit Sethi? Because right now, your finances are not in great shape. You've started, hopefully, this proportional combination, which I think will be much more fair for joint expenses. But if you were to get married and combine everything, I think it would probably be a bad situation right now. Do you agree?
57:13 Speaker 02 I would agree 100%.
57:15 Ramit Sethi? And James?
57:16 Speaker 02 Yes.
57:17 Ramit Sethi? Oh, amazing. Okay, we're all on the same page. That is because each of you doesn't yet individually have the skills to manage money. As you start this journey, you're going to realize some things are going to come up. Like, oh, my gosh, like, one of us is sticking to the plan and the other one is looser. How are we going to navigate that? One of us can't get things paid on time, the other can, et cetera, et cetera. And that's okay. Not everyone's going to be perfect the first time. But you've got to get on solid foundation. And I would be specific. I would say, look, before we get married, I want each of us to have X thousand dollars in our savings account. Like, I want X thousand dollars in our investment account. Pick a number that's reasonable based on what we have decided here. It shows a commitment to excellence.
58:01 Ramit Sethi? And I don't know about you, like, I want excellence for myself. My wife wants it. We want it for each other. To have savings and investments seems pretty straightforward. It doesn't seem too crazy to me. What do you all think?
58:13 Speaker 02 I agree.
58:14 Speaker 03 Yeah.
58:15 Ramit Sethi? I want to revisit something Lakeisha said in the previous episode, which is important to acknowledge now, knowing that the two of them are creating a new path. Lakeisha said that she has wanted to fire her therapist for over a year, but she hasn't done it. I want to know why she's dragged out this decision that is seemingly straightforward.
58:41 Ramit Sethi? Can we talk about this therapist for a second? Lakeisha, is this a different therapist than James?
58:45 Speaker 02 Yes, different therapist.
58:46 Ramit Sethi? And you want to fire them? How come you haven't?
58:49 Speaker 02 I don't know. I've been working with her for a while and so I just feel weird.
58:55 Ramit Sethi? Okay, so it's just like an uncomfortable conversation?
58:58 Speaker 02 It is. It's uncomfortable conversation. To be honest with you, until you said it, I never thought about just sending an email saying like, "Hey, I don't want to do this anymore," or "I'm firing you." I don't even know how to begin having that conversation, to be honest.
59:10 Ramit Sethi? I don't mind that, but can I ask you, like, how do you think your inability to switch therapists is affecting your finances?
59:19 Speaker 02 I have no idea. I never even thought of it. I never made a connection between the two at all.
59:25 Ramit Sethi? What do you think it means that you cannot fire a free therapist, free to you? What does it mean? What does it say about you?
59:33 Speaker 02 I avoid conflict.
59:34 Ramit Sethi? Yes, you avoid conflict. And so how do you avoid conflict with your money?
59:39 Speaker 02 File for bankruptcy.
59:41 Ramit Sethi? Yeah?
59:41 Speaker 02 Which I've done.
59:42 Ramit Sethi? Which you've done? Didn't change anything with your spending, did it?
59:46 Speaker 02 No.
59:46 Ramit Sethi? You avoid being decisive with your money. Instead, you try to get buy-in from everybody and ask people who should have no business telling you what to do with your money, you ask them for their advice? Right?
59:57 Speaker 02 Yeah.
59:58 Ramit Sethi? Conflict, avoid it at all costs. And when I say "all costs," I mean literally it's costing you hundreds of thousands of dollars. Same thing. Inability to be decisive, to make a decision for your own well-being, for your own mental health, is the same way you are not prioritizing your own financial well-being. This is why having uncomfortable conversations is not an optional skill. It is required in this world, required. You can't get by. You can't be successful if you can't have uncomfortable conversations. You can try to say, "Can I get out of it?" Which you have, okay. Any surprises about that conversation we just had about your therapist?
1:00:37 Speaker 02 Never made a connection between the avoidant behavior there and here.
1:00:43 Ramit Sethi? Yes, a lot. And I actually think a really good therapist will help you make those connections. I don't know this therapist. I'm not qualified to make a judgment about them, but sometimes people are great. They're just not a good fit for you. I've had that. I've probably had people who said like, "Rameed seems like he knows what he's talking about, but I just don't like the guy." That's okay. There's lots of other likable people out there, but I want you to put yourself first. Your financial health, mental health, relationship health. You can kind of see that it's not all firing on all cylinders because I can see it on the CSP. Now, we got to talk about the bankruptcy. We've mentioned Lakeisha's bankruptcy a few times now, but we haven't gotten into detail.
1:01:28 Ramit Sethi? Now that we've identified that Lakeisha avoids conflict, I want to talk about how she made the decision to file for bankruptcy. What happened? You charged a bunch of stuff up?
1:01:40 Speaker 02 Yes, basically had a lot of different debt, credit cards, loans, all of it. And I did this money coaching program.
1:01:52 Ramit Sethi? Hold on, it wasn't IWT.com/moneycoaching?
1:01:55 Speaker 02 No, no, no, it was not.
1:01:57 Ramit Sethi? Money Coaching by Ramit Sethi?
1:01:58 Speaker 02 No.
1:02:00 Ramit Sethi? Who was it by?
1:02:01 Speaker 02 I hate to put them out there like this. It's called Thriving.
1:02:04 Ramit Sethi? Let's just look at their website together. Wow, that's a friendly looking man on there. "Financial Advice With Purpose. We Believe Everyone Deserves A Financial Plan." Oh, [bleep]. All right, hold on. First thing we want to look at is our solutions. Uh-oh. Uh-oh, I see a word that's a big red flag. On the right, it says, "Explore Multi-Year Guarantee Annuities." Oh, [bleep]. Let's just click over to annuities, which are kryptonite for most people. Not all, but most. What is an annuity? Blah, blah, blah. Variable annuity? You're [bleep]. Right here, I would be like, I'm out. I don't want to talk to somebody selling a variable annuity because it's a investment. It's horrible. The only person that benefits from this is the salesperson.
1:02:48 Ramit Sethi? All right, I'm gonna look at this later, okay? So what? This was offered for free through your workplace?
1:02:54 Speaker 02 Not through my workplace. I think it was something that maybe was like an ad or something that popped up when I was scrolling on Instagram or something.
1:03:01 Ramit Sethi? Did you get taken to this page, which is the biggest red flag of all? Look at the insurance page.
1:03:05 Speaker 02 No.
1:03:06 Ramit Sethi? No.
1:03:06 Speaker 02 Whole life.
1:03:07 Ramit Sethi? Universal and variable. There's so many red flags on this page. But again, how would the average person know? They don't know what these red flags are. They go, sounds good to me. All right, so you signed up with them and they told you what? Declare bankruptcy?
1:03:21 Speaker 02 And talking about debt and where my money was going. I feel like in a lot of ways, it was like, okay, so what can you do to change this? Basically, like, what can you do to get out of this situation?
1:03:35 Ramit Sethi? Hold on, who said that? They said that to you or you said that to them?
1:03:38 Speaker 02 No, they said that to me. And I said, I don't know. That's pretty much like why I'm here. I'm trying to figure it out. And I did not see a path forward as a result of that conversation to pay off the debt. When I said bankruptcy, the person said, well, I don't see what other choices you have. And shortly after that conversation, I filed.
1:04:03 Ramit Sethi? Do you remember how much debt you had at the time?
1:04:05 Speaker 02 Somewhere between 20,000 and 30,000.
1:04:07 Ramit Sethi? You had $30,000 in debt and you declared bankruptcy? And was it accepted?
1:04:12 Speaker 02 Yes.
1:04:13 Ramit Sethi? 30K? We could knock that out so fast. Do you realize that now?
1:04:18 Speaker 02 Yes. I realized it while we were going through it. I even said to James, like, I was like, I don't even know why I did this. From the moment I filed and started the process to it actually being discharged, it was months in between. And so, and multiple times, I felt silly about doing it.
1:04:36 Ramit Sethi? Why didn't you speak up? Do you know why?
1:04:38 Speaker 02 I had already started it. I, I, avoiding conflict, didn't want to.
1:04:43 Ramit Sethi? Yes, yes. Wait, stay there with me. Avoiding conflict, putting some sales rep ahead of your own self. Do you see that?
1:04:54 Speaker 02 I do.
1:04:54 Ramit Sethi? Do you see how that has affected you to the tune of hundreds of thousands of dollars? And it is intertwined with the inability to get rid of this therapist, which could be knocked out by tonight, which has affected so many other things, including your own investments. Do you see that?
1:05:11 Speaker 02 Yes.
1:05:12 Ramit Sethi? What is your conclusion from that?
1:05:14 Speaker 02 I need to face conflict and learn how to have difficult conversations.
1:05:21 Ramit Sethi? Yes. And what about yourself and your finances?
1:05:25 Speaker 02 That I have to face it. I can't avoid it. I can't run from it. I have to deal with my finances head on.
1:05:33 Ramit Sethi? Yeah, I agree. If I asked your kids what they have learned about money from their mom, what would they say?
1:05:41 Speaker 02 Two things come to mind, which are both not great. How to spend it or nothing.
1:05:49 Ramit Sethi? And let's say I ask them, what do you mean how to spend it? What would they say?
1:05:53 Speaker 02 They both think that I shop a lot. So if you want something, buy it. I do think that they think and feel like I work hard. So work hard, get money, and then spend it on the things you like and want to do. I think that they feel like that's how I live and treat money.
1:06:12 Ramit Sethi? Do they know that you have no savings and no investments?
1:06:15 Speaker 02 No.
1:06:16 Ramit Sethi? What do you think they're gonna think when they hear this?
1:06:20 Speaker 02 They're probably going to be surprised. Fortunately and unfortunately, I do feel like for my youngest daughter, he might feel a sense of urgency as it relates to having to rely on like a scholarship or something to go to college. Luckily, my oldest daughter, she was able to get a full ride. So I think in a lot of ways, they will feel like there's no safety net. They gotta figure it out.
1:06:46 Ramit Sethi? I think that's true. Do you accept that? There is no safety net for them.
1:06:50 Speaker 02 No, I don't want it to be like that. I didn't have one. I don't want that for them.
1:06:54 Ramit Sethi? But that is the case. That is reality right now. And if we're talking about investing aggressively and saving, there is not a safety net for your 14-year-old or 11-year-old in the near future. It's just not there. I'm sharing this because I often say, in order to live a rich life, you have to be honest, honest with yourself and honest with the people around you. This is avoiding the tough conversations, in your case, with yourself. Can you accept that there will be no safety net for them?
1:07:27 Speaker 02 No.
1:07:28 Ramit Sethi? Okay, then what are you willing to do about it?
1:07:31 Speaker 02 Whatever I need to. Just like I would do whatever I need to do right now, today for them. I have to do that for the future, for them in the future, as opposed to just today.
1:07:47 Ramit Sethi? 24 hours ago, you spent 50 unnecessary dollars at Target.
1:07:51 Speaker 02 Yep.
1:07:51 Ramit Sethi? So I hear you saying it, but I don't see the behavior matching it. What could you do to have your behavior match the very powerful message you just shared with me about willing to do anything for your kids?
1:08:06 Speaker 02 Change my behavior and be transparent about those changes.
1:08:10 Ramit Sethi? Love it.
1:08:11 Speaker 02 With them.
1:08:12 Ramit Sethi? What about the shopping?
1:08:13 Speaker 02 Stop. I don't need any more clothes. Like even what I bought yesterday, I don't need that.
1:08:18 Ramit Sethi? What are you gonna do with those?
1:08:20 Speaker 02 I don't even know.
1:08:21 Ramit Sethi? No, like what are you gonna do with it?
1:08:23 Speaker 02 I could return it.
1:08:24 Ramit Sethi? Are you? Wow, this is interesting.
1:08:27 Speaker 02 No, I'm just thinking. I guess because I, in my mind, I thought if I returned it, I would get, what, 25 bucks back? Where would I put that? In the grand scheme of things, what would that help? And I don't know the answer to that question.
1:08:42 Ramit Sethi? How would I approach it?
1:08:43 Speaker 02 Unless put it in your investment account.
1:08:45 Ramit Sethi? Yeah, I would have a rule. When I have unexpected money, here's how the money flows. And because I'm behind on investing, I would put the majority of it towards investing. I'll put the second part of it towards savings. And I might keep, you know, 5% for guilt free spending. But I don't have time for uncertainty. I don't have time to be indecisive. And 25 bucks actually starts to add up to a lot. Considering the amount of clothes you've talked about, I'm candidly shocked that you're not willing to be decisive about returning clothes that you bought last night. James, any thoughts?
1:09:22 Speaker 03 No, I totally agree with you.
1:09:24 Ramit Sethi? This is where a partner can be really strong. Where a partner can say, you know what? I see you. I know that's hard for you. I think $25 goes a long way. And I'm inspired by seeing you take these small steps. Gosh, you're getting me to think about taking small steps with my money. Maybe I can return something from my closet. Do you see how partners can make each other bigger and better? That's pretty cool. It's a cool opportunity. One partner's struggling, the other steps up. Hey, I love you. You could do this. We got a vision together.
1:09:53 Speaker 03 Absolutely.
1:09:54 Ramit Sethi? What do you think, Lakeisha?
1:09:56 Speaker 02 Honestly, I know I do want to return it, like tonight. Go back to Target.
1:10:01 Ramit Sethi? Oh, yeah.
1:10:02 Speaker 02 Here you go.
1:10:03 Ramit Sethi? Maybe send James in.
1:10:04 Speaker 02 Yeah, I'll send him with three seats, but yeah, I feel that.
1:10:09 Ramit Sethi? James, what would your kid say about you as it relates to money? What lessons have they learned?
1:10:14 Speaker 03 Maybe since she doesn't live with me, she sees me spend on her. You know what I mean? When she's with me and when she asks me for things. So maybe, maybe I need to change and tell her no.
1:10:27 Ramit Sethi? When was the last time you told her no?
1:10:29 Speaker 03 I told her no last week. Matter of fact, just here, maybe Friday, she had called me and asked me for some money. It was more of, I just sent your mom some child support, so I might give you your money, so.
1:10:41 Ramit Sethi? Can I make a suggestion?
1:10:43 Speaker 03 Yes.
1:10:43 Ramit Sethi? Maybe there's a better way of talking to her about money.
1:10:47 Ramit Sethi? Cause, you know, I just sent your mom child support, so the answer is no.
1:10:53 Ramit Sethi? I mean, I think there's probably a better way. What do you say?
1:10:58 Speaker 03 Absolutely. Absolutely.
1:11:00 Ramit Sethi? Like, we're talking about an 11-year-old, right? She's pretty old, she's pretty smart, she's picking up on that. Let's say she keeps going, she ends up talking to me in 20 years, and what's she gonna tell me? What's her relationship with money gonna be?
1:11:12 Speaker 03 Oh, wow. Spend.
1:11:15 Ramit Sethi? Really?
1:11:16 Speaker 03 Yes.
1:11:17 Ramit Sethi? And then?
1:11:18 Speaker 03 That'll be my fault. She'll be talking about, just like we talked about some of the things that happened with us, our parents, she's gonna be talking about it with us.
1:11:26 Ramit Sethi? That's right.
1:11:27 Speaker 03 Absolutely.
1:11:27 Ramit Sethi? She's gonna be talking about you. I can't wait till I speak to one of the kids of one of my guests. Okay? That's gonna be the day that I really, I feel proud. But I'll tell you something, you have the chance to change that.
1:11:42 Speaker 03 Yes.
1:11:42 Ramit Sethi? Right now, though, don't treat her like 11-year-old is little. They're not. 11-year-old is really smart. How do you wanna show up when it comes to money and your daughter? Like, she calls you, she asks for something, and you say what you previously said? I think there's a better way. How do you wanna show up with her?
1:11:58 Speaker 03 One, ask her what does she need it for?
1:12:01 Ramit Sethi? Nice.
1:12:02 Speaker 03 And then just try to get her to think about, you know, do you really need that? Not only that, but teach her how to save some money. And I think that's one of the biggest parts.
1:12:14 Ramit Sethi? How are you gonna do that? Do I need to pop up the CSP on the screen right now, again?
1:12:18 Speaker 03 No.
1:12:20 Ramit Sethi? Because what am I gonna see if I look at your savings?
1:12:22 Speaker 03 Zero. Right, so I have to show her.
1:12:24 Ramit Sethi? Yes. How are you gonna show her?
1:12:27 Speaker 03 Messed up, saved up money.
1:12:28 Ramit Sethi? Hell, yes. And tell her. So this is how it goes. Next time she calls you, what does an 11-year-old ask for, anyway? I don't even know.
1:12:35 Speaker 03 Everything, Roblox, cards, all type of things.
1:12:40 Ramit Sethi? First of all, I wish I hadn't asked that question because I'm getting get like 5,000 people commenting and telling me, oh, my God, Ramit's so out of touch. I don't wanna know what 11-year-olds want. Don't email me, don't comment, don't message. I wish I never said this. Anyway, here we are. She texts you, she calls you, Dad, give me this gift certificate for whatever. You say, you know what? I'm so glad you asked because I had this conversation the other day that I've been wanting to tell you about. Right there, I'm gonna pause. What have you already seen in my response to her?
1:13:18 Speaker 03 Taking the opportunity to teach her the value of money.
1:13:21 Ramit Sethi? Yeah. And actually, just like excitement, right? I'm so glad you asked.
1:13:26 Speaker 03 Yeah.
1:13:27 Ramit Sethi? Because I had this thing that happened and I've been wanting to talk to you about it. Oh my God, amazing. Okay, great. So then you say, you know, I realized I haven't been as responsible as I could be with my money. And here I am, I wanna teach you lessons, but I'm learning my own lessons.
1:13:45 Speaker 03 Yeah.
1:13:45 Ramit Sethi? I took an honest look in the mirror and I realized, what? Finish the sentence for me.
1:13:50 Speaker 03 That I need to do better with my money.
1:13:54 Ramit Sethi? I haven't saved as much as I want. So I'm going to be saving money for myself. I'm building my own discipline, just like I want you to do. Every month, I'm putting money aside for my own savings, for my own investments. At this point, she's like, okay, what do I care? Like, do I get my gift certificate or not?
1:14:17 Speaker 03 Yeah.
1:14:18 Ramit Sethi? And then you say to her, I love you. You know I wanna get you everything in the world, but it's not possible. Right now, I have to prioritize my savings. So unfortunately, I can't get you that game. But I love you. What do you think about that?
1:14:34 Speaker 03 It's pretty good. I think that's definitely something that I'm gonna have to do.
1:14:40 Ramit Sethi? And make it your own. Change it to what feels right for you. But just like the key points of that was like, oh, I'm so glad, I'm so excited you brought that up. Right? Totally different way of reacting.
1:14:51 Speaker 03 Yeah.
1:14:52 Ramit Sethi? Sharing a lot of kind of vulnerable stuff. Like, when was the last time you told her as a dad, I haven't done the best I could? That's kinda new, right?
1:15:02 Speaker 03 Yeah.
1:15:02 Ramit Sethi? I don't know, I don't even like, I found that really hard to admit until my 30s. That like, I had these things that I was struggling with, that I wasn't perfect at. And to admit that to a kid is like 100 times harder. Any parent knows that. But you can do it, cuz you've, you've done it all night long tonight with me. But it's so much more powerful to admit it to a kid. Cuz kids never hear their parents say, I messed up. I'm sorry, I'm working on improving myself. Holy ****, a kid is sitting there like. They're gonna hang up and they're gonna remember that call for the rest of their lives. I have to say, I'm impressed with the progress Lakisha and James made in the short time we spent together.
1:15:44 Ramit Sethi? They had breakthroughs around their past and how those experiences have shaped their behavior with money today. Most importantly, they realized that some of these deeply rooted behaviors around money aren't even serving them. And even though we've mapped out a plan to help them build up their savings and create a healthy retirement, I want to remind you that it's easy to make a plan, but the magic is in actually doing it. I've given Lakisha and James some new tools to build their rich life, but the rest is up to them. I have a lot of confidence in them. Lakisha and James, I believe you can do it, and I want to wish you the best. Let's listen now to James's follow-up video.
1:16:26 Speaker 03 I think one of the biggest surprises out of the conversation was the fact that Keesha and I had some type of parent and child dynamic going on when it comes to our finances, and I didn't like that. That's not the type of guy I am. So we're working on that. I think one of the biggest takeaways is the fact that even through the fact that I was embarrassed about my situation, Rameen let us know that it's actually a possibility that we actually can get out of the situation just a little hard work. And so I'm working on that. It's definitely a challenge, not only a challenge, but it's also a work in progress.
1:17:04 Speaker 03 The specific changes we have made this weekend, I canceled on the lion's share of the subscriptions that I had. That was tough because I showed like watching my videos and things of that nature. So we're working on it. Hopefully, it will be one of your biggest success stories. And that is a goal of mine, that the next time we talk to James and Keesha, we'll be in a lot better place.
1:17:33 Speaker 03 And now, Lakisha's follow up.
1:17:36 Speaker 02 My biggest surprise was just that the connection that was made between my spending habits and that of my mother's, I never ever thought that there was a connection between my spending and her spending. So to make that connection and bring it to my attention was pretty crazy. Some takeaways that I had, one was the fact that we were eating out as much as we were. I did not consider that. And then one that actually leads into one of the changes that we have made since is not eating out as much. So we actually spent a little bit more on the grocery bill and have made all meals at home as a result and will continue to do
1:18:18 Speaker 02 so. We've already planned the one eating out meal and when that's going to be. And looking forward to spending that time with family as my daughter and my niece be home for the holidays and from college. And so looking forward to sharing that meal and experience with them. Thank you so much for your help. Appreciate it.
Previous 193. “I’ve filed for bankruptcy twice. Will I ever stop spending?” (Part 1) Next 195. “Her socks have holes but she's too cheap to buy new ones” Page updated November 4, 2026 · transcript and summary are machine-generated