202. “She racked up $50K in debt — why should I trust her with money?”

Emma (39) and Dave (39) make $258,000 a year—but they’re stuck in a toxic money dynamic. She built a financial plan during maternity leave. He didn’t believe her. Now, they’re battling over trust, $50K in debt, and whether they can afford a $700K house. With conflicting money roles—she’s the anxious planner, he’s the passive skeptic—they can’t move forward. In this episode, Ramit breaks down their “chaser/avoider” dynamic, the emotional cost of skepticism, and how to finally create a shared vision. This episode is brought to you by: Stamps.com | Sign up at https://stamps.com/ramit for a special offer that includes a 4-week trial, plus free postage, and a free digital scale. Trust & Will | Protect what matters most in minutes at https://trustandwill.com/ramit and get 20% off plus free shipping. Fabric by Gerber Life | Join the thousands of parents who trust Fabric to protect their family. Apply today in just minutes at https://meetfabric.com/ramit. LMNT | Right now, LMNT is offering 8 single serving packets FREE with any LMNT order. This is a great way to try all 8 flavors. Get yours at https://drinklmnt.com/RAMIT DeleteMe | If you want to get your personal information removed from the web, go to https://joindeleteme.com/ramit for 20% off. Links mentioned in this episode • Order my new book: Money for Couples 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.

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

• 0:00Ramit 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,

• 0:43Ramit Sethi?

  and you can join today at iwt.com/100k.

• 0:50Ramit Sethi?

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• 1:32Ramit 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.

• 2:00Speaker 01

  I don't want to tell you what I did.

• 2:01Ramit Sethi?

  Tell me, come on.

• 2:02Speaker 02

  Emma believes she's the best with money, and I feel that she's not.

• 2:08Speaker 01

  Part of it was our wedding. I took a loan from my 401k just to make sure we had money.

• 2:14Ramit Sethi?

  What the [bleep]? You took out a loan to pay for your wedding? How much?

• 2:17Speaker 02

  I'm putting all this money in the savings, and you're still telling me it's not enough.

• 2:20Speaker 01

  I have this, like, small chunk of money that's, like, controlling what I can and can't do. Discretionary money stresses me.

• 2:26Speaker 02

  When we have these financial conversations, they typically don't end well. And I think I want to hear this from someone else.

• 2:33Speaker 01

  It encapsulates a lot of the conversations we have. I'm talking, Dave is listening, but he doesn't really believe in what I'm saying.

• 2:40Ramit Sethi?

  I don't think it's funny when one partner is skeptical of another. I actually think it's one of the most soul-crushing dynamics that exists in a relationship. And also, you have a narrative, "We don't have any money. We're not spending anything." Guys, if you don't effectively communicate, you can't make good decisions. You're going to slide into every financial decision of your life. I'm about to open Dave and Emma's Conscious Spending Plan, which breaks down their net worth, income, and where they spend their money. You can download and create your own Conscious Spending Plan at iwt.com/csp. That's a free download at iwt.com/csp. The applicant says, "I'm the driver/planner,

• 3:24Ramit Sethi?

  and I want us to combine and automate everything, but I'm also the overspender in debt." Interesting. He's the basic paycheck-to-paycheck and defines himself by what is in his checking account on a given day. Fixed expenses are really high, daycare times two, and debt. We're trying to buy a house, and we surround ourselves with rich things and people, but we can't seem to make an inch forward. We're actively trying to buy a house, but we're 50K in debt with 40K saved. So we're anxious about getting more into debt. I live in fear every day we will never be able to retire. And then, what? They make $280,000? All right, let's take a look.

• 4:07Ramit Sethi?

  Assets are $5,000, fine. Investments, $158,000, okay. Savings, $41,000 and debt, $53,000. Wait, what? The way they talk is so depressed. They're 39 years old and they have a net worth of $151,000. Okay. They have a very high income, 260,000 to 280,000. But it's interesting that their fixed costs are at 61%. So typically, when you have a high income, you will see that number naturally go down because you rarely see anybody spending $4,000 a month on groceries. Okay. Basically, this is the power of earning a high income.

• 4:52Ramit Sethi?

  When your income goes up, you're still buying roughly the same type of bread. So it's a little surprising to me that I see a 61% fixed cost. And I'm wondering, where are they spending their money? If we look at their housing, it's a little pricey. They can afford it, but it's a little pricey. Okay, fine. Then we add on insurance. We add on childcare. We add on a car payment. Now it really starts to add up. Now let me say this. It's okay to be at 61%, but it explains why I see words like stress and anxiety. You can see that they have added basically multiple line items, spending $1,000 a month. Okay. So I can understand where they're coming from. Let's take a look at the rest. Ah, here we go.

• 5:37Ramit Sethi?

  Investments, 3%. Their post-tax investments are $540 a month. They're probably putting something in pre-tax. Not bad. And I will say they have $158,000 invested. Fine. Savings, okay, are at 1%. They're saving $200 a month for a down payment on a house. And they have $41,000, which is like four, four and a half months of an emergency fund. If I'm making $270,000 a year, I want more than four months of an emergency fund. So it's interesting. And then finally, oh, what is this? Gilfrid's, what the [bleep]? Gilfrid's spending is at 33%? Okay. $5,000 a month?

• 6:22Ramit Sethi?

  So now I really got to speak to this couple to find out what's going on. What I see is a lot of stress, a lot of overwhelm. I see one partner who's anxious about money and chases the other who avoids it. Classic chaser-avoider dynamic. I also see that their income is quite high, but it's being spent in quite a peculiar way. What I also see here is that there's a lot of communication I need to dive into here because these numbers don't tell the full story. There's a lot going on and I don't quite understand it yet. So I'm looking forward to speaking to this couple.

• 6:56Speaker 01

  So Dave had been putting a ton of money into savings because we're saving to buy a house. And then he said, I'm going to stop for a while so I can kind of catch up. So now Dave, all of his extra money just goes into his checking account. And I am like, well, what's all that money doing? It's just sitting there. It's not in our savings account. It's not in an investment account. It's just kind of sitting there.

• 7:18Ramit Sethi?

  Okay, is the money still there?

• 7:21Speaker 02

  Yes.

• 7:22Ramit Sethi?

  All right. What's your perspective, Dave?

• 7:25Speaker 02

  So my perspective was that I stopped putting money into savings only because I was literally living with like, you know, I'd say a couple hundred dollars a week. And half of that goes to my, basically paying for gas because I do work very far away. So it felt like every single month I was falling short and kind of freaking out about not being able to pay the bills and all that stuff. So I was like, hey, I need to take a break.

• 7:50Speaker 01

  This is because of how much money Dave was putting into savings. And I said, we have the money. Don't put as much money in savings and you don't have to feel like that. So when he says, you know, I didn't have enough money. I said, you, we did. It was sitting right there. It's not like we didn't have it.

• 8:05Ramit Sethi?

  Emma, what are you feeling right now?

• 8:07Speaker 01

  Frustrated.

• 8:08Ramit Sethi?

  Okay. Dave, how were you feeling as you explained words like scraping by and freaking out?

• 8:15Speaker 02

  I'm annoyed. I was putting a lot into savings while someone else was putting the bare, bare minimum in my eyes.

• 8:26Ramit Sethi?

  Okay.

• 8:27Speaker 02

  So I'm sitting there struggling and yeah, the money is in savings. You can take it, but also we worked hard for those savings. We are planning to buy a house with those savings. I didn't want to have that kind of burden over my head anymore, but just kind of felt like I was working paycheck to paycheck.

• 8:44Ramit Sethi?

  Dave, it sounds like a lot deeper than annoyed.

• 8:48Speaker 02

  Maybe not heard sometimes, maybe misunderstood.

• 8:52Ramit Sethi?

  Okay. I appreciate that. The reason I asked was minutes into our conversation, I can already see a dynamic here. Do you all notice that dynamic?

• 9:04Speaker 02

  Yeah. I guess in our house, it seems as though sometimes Emma believes she's the best with money. And I feel that she's not. And I think we butt heads on that a little bit, but we use different language towards it. The language being, why don't we put money in a savings? Why aren't we starting this account? But I think there's some other issues behind that. Whereas sometimes I feel like, hey, if I'm the only one putting this huge chunk of money into our savings and you're still telling me we have all this debt and you're still telling me it's not enough.

• 9:45Speaker 02

  And I'm the bad guy. That's where I start getting a little annoyed and frustrated.

• 9:50Ramit Sethi?

  Okay. I'll just tell you what I observed. In five minutes, I asked you, can you tell me a time where you didn't see eye to eye on money? There was this thing about the savings account. Both sides very frustrated, immediate frustration, both sides defensive. Do you all see the dynamic that I see?

• 10:11Speaker 02

  Yeah, I can hear that.

• 10:13Ramit Sethi?

  Okay. You all ever feel joy around money?

• 10:17Speaker 02

  Of course.

• 10:18Speaker 01

  I guess like when I get my bonus, I'm like, oh, that feels good.

• 10:22Ramit Sethi?

  How long does it last?

• 10:24Speaker 01

  Not long.

• 10:26Ramit Sethi?

  Like 10 seconds? What are we talking about?

• 10:28Speaker 01

  Yeah, until I put it towards another bill.

• 10:30Ramit Sethi?

  10 seconds of joy per year? All right. Do you all think it's possible to not feel stressed about money?

• 10:37Speaker 01

  I hope so.

• 10:39Ramit Sethi?

  I'll take that as a no.

• 10:40Speaker 02

  Yeah, I do.

• 10:41Ramit Sethi?

  Okay, Dave says yes. Emma, how would you do it?

• 10:45Speaker 01

  By not having debt. That would be a first step.

• 10:49Ramit Sethi?

  Okay, so like if you pay off your debt, let's just wave a magic wand and tomorrow you're debt free. Would you be stress free?

• 10:55Speaker 01

  Not stress free, but a lot less stressed.

• 10:58Ramit Sethi?

  Okay, is it possible for you to feel good?

• 11:01Speaker 01

  Yes.

• 11:01Ramit Sethi?

  How would you do it?

• 11:03Speaker 01

  By paying off debt and having a plan that we're actioning on and allows us to do the things that we want to do.

• 11:10Ramit Sethi?

  Sounds pretty good to me. I agree with that. Dave, would you agree with that?

• 11:14Speaker 02

  I agree with that.

• 11:15Ramit Sethi?

  Okay.

• 11:17Ramit Sethi?

  We're all on the same page about that. That's good.

• 11:19Speaker 01

  Yay.

• 11:20Ramit Sethi?

  Okay, so the question for today is what has stopped you from paying off your debt and from coming up with a plan?

• 11:27Speaker 02

  We both work very hard and she does spend a nice percentage of her checks just paying off her debt. And she's been doing it for years and she's almost there. I'm very proud of her for doing that.

• 11:40Ramit Sethi?

  Did you know Dave felt that way?

• 11:42Speaker 01

  I think more recently, when I've just showed him more, I've brought him into exactly what the debt is and how much I pay. So I feel like he's a little bit more aware of it now.

• 11:51Ramit Sethi?

  That's cool. I like that a lot. Sometimes we do things with really positive intentions, really positive outcomes, and we just don't tell our partner. And they don't, how, how can they know if we don't tell them? I think it's really cool that you shared that with Dave so that he is in the loop about it. How often do you talk about money together?

• 12:14Speaker 02

  Maybe once a month.

• 12:16Ramit Sethi?

  What do you talk about in those conversations?

• 12:18Speaker 02

  These conversations are more towards retirement, even though we still need to buy a house.

• 12:25Ramit Sethi?

  You're both 39 years old. Why have you suddenly started talking about retirement?

• 12:28Speaker 01

  I am a long-term planner and I know what we do now is going to help drive what we're doing when we retire. And I know that we need to make movement now to do that.

• 12:38Ramit Sethi?

  Dave, what do you think about retirement?

• 12:40Speaker 02

  It's not something I really thought about at all until Emma brought it up. My focus was make as much money now as you can. I'm not really financial savvy. I know 401Ks, but like, you know, other accounts like a Roth IRA, like how the rich stay rich, like that whole formula, that's foreign to me.

• 12:59Ramit Sethi?

  I can help you. I can tell you how I've built wealth and how a lot of people I know have done it. Do you feel like you are the driver of your money? Or do you feel like you're a passenger?

• 13:09Speaker 02

  Yeah, I feel more like a passenger.

• 13:11Ramit Sethi?

  Okay, I agree. I think that's pretty honest. And Emma, would you say you're a driver or passenger?

• 13:17Speaker 01

  I'm a driver in some terms, like all of this stuff I allocate to 401K and our medical and the kids savings. So like, I am in control of like that. But then when it comes to like the discretionary money, I feel like a passenger because it's like I have this like small chunk of money that's like controlling what I can and can't do. And so like that discretionary money stresses me.

• 13:40Ramit Sethi?

  I've been there, so I get that. But maybe we can take a look at it and help you feel a little bit more in control. Also, sometimes we just have to accept this is the phase of life we are in. I understand you have a house that's a little small for your family right now. And sometimes we can make changes and sometimes we can be like, okay, this is reality for XYZ future. Let's figure out a way to accept it. Just moments into this conversation, you can feel the tension. On one side, Dave is frustrated. He thinks he's the only one putting significant contributions towards their savings goals. And on the other, Emma's frustration is boiling over as she struggles with the lack

• 14:22Ramit Sethi?

  of a clear plan for their debt and how to start thinking about the future. And did you hear what Dave said about Emma's relationship with money? He said, Emma believes she's the best with money and I believe she's not. That's quite a striking statement. And what's even more interesting is that Dave describes himself as quote, "not financially savvy." So if you're not financially savvy, are you really in the position to be judging who's good with money and who's not? Well, we're going to dive into the complexities of their money dynamic after this short break.

• 15:00Ramit Sethi?

  There are so many similarities between personal finance and fitness. They both involve following a plan. They both involve being intentional and changing your internal psychology. And actually, I find that a lot of people, once they get good at money, they actually transfer that to their own personal fitness. Now, part of fitness is also what you eat. And to be able to have any tools that make this easier for you is a huge win in my book. So I'd like to introduce you to Factor, which lets you eat delicious nutrient-dense meals without all the hassle. Factor is a meal service that delivers fully-prepared, ready-to-eat meals directly to your door. And they have a lot of variety.

• 15:42Ramit Sethi?

  They have over 100 rotating weekly meals, including high-protein options, keto, GLP-1 friendly. They even have a Muscle Pro Collection for strength and workout recovery. Factor meals include lean proteins, colorful veggies, and healthy fats. Plus, they are never frozen and they are ready to eat in under two minutes. This is an easy way to try introducing systems into your health, specifically the way you eat. And if I needed healthy, ready-made meals, this is what I would use. Head to factormeals.com/ramit50off and use code RAMIT50OFF to get 50% off and free daily greens per box with new subscription only, while supplies last until September 27, 2026. See website for more details.

• 16:28Ramit Sethi?

  One of my friends recently had to call her phone provider to ask a simple question about her account. It took her over 30 minutes to finally get connected to someone. Answering the question only took like 45 seconds. If you run a business, do not do this to your customers. Instead, I recommend you use 11 Agents by 11 Labs and make their experience great from the very beginning. 11 Agents is a platform for AI voice and chat agents that can actually listen, understand, and resolve customer issues. They handle the simple stuff like looking up customer accounts, processing requests, and they know when to hand off complex tasks to a person. Their agents use the same AI tech as 11 Labs, the company known for realistic voice and audio models in over 70 languages.

• 17:11Ramit Sethi?

  So if you've ever heard an AI voice that sounds real and natural, there's a good chance it's from 11 Labs. My team and I actually use 11 Labs. And if I needed AI voice and chat agents, I would use 11 Agents. If you're looking to improve your customer service experience, check out 11 Agents. If you run a business or handle customer operations across support, sales, or marketing, you can start with a demo at 11labs.io/ramit. See how 11 Agents can fit into your workflows and help build experiences that your customers will actually love. 11labs.io/ramit. That's E-L-E-V-E-N-L-A-B-S dot I-O slash ramit.

• 17:56Ramit Sethi?

  Now, back to the show. Who was the first one who started this conversation about saving?

• 18:03Speaker 02

  Emma. We were saving for a house. You wanted to start talking about putting savings away. And you had asked me, hey, can you do this amount a week? And I said, yes. And then I did it, and here we are.

• 18:16Ramit Sethi?

  How did it come up?

• 18:18Speaker 01

  I had just read your book about automating what's going where and all that jazz. And I was working on it on my side. And I had asked Dave, can you automate into savings? So we know exactly how much is going in there.

• 18:32Ramit Sethi?

  Okay, and Dave said yes? And that was it?

• 18:36Speaker 01

  Yeah, there was a lot more in my brain going on, right? But that was like Dave's piece to the puzzle.

• 18:41Ramit Sethi?

  You mean the part that you shared with him? Already in your first substantive conversation about money, what dynamic did we see? We saw one person, Emma, the quote driver, doing all this work behind the scenes, but not really bringing the other partner, Dave, along on the journey.

• 19:01Speaker 01

  Wait, can I just tell you what I did really quick? After reading your book?

• 19:05Ramit Sethi?

  Okay, you want to interrupt my analysis? Go ahead.

• 19:07Speaker 01

  Sorry. I read your book and I was on maternity leave and I took the big post-its that go on the wall and I was on the ground writing all the plan out for us. And then I put it up on the wall when the kid was napping and like we went through it.

• 19:21Ramit Sethi?

  So why did you bring that up? I'm curious.

• 19:23Speaker 01

  Well, because that was part of what prompted this conversation with Dave was I had this plan and part of that plan was that we needed to automate the savings account.

• 19:34Ramit Sethi?

  And when you were doing this massive plan on the floor, did you bring Dave into that planning session?

• 19:41Speaker 01

  I wrote it all down and then put it up on the wall and we looked at it together after.

• 19:49Ramit Sethi?

  And what was that like when you looked at it together?

• 19:52Speaker 02

  Thought I was back in math class and like just was being taught a lesson.

• 19:57Ramit Sethi?

  Do you like being taught about those money things you saw on the wall?

• 20:02Speaker 02

  It was off putting at first. I guess my hang up at the time was, why is Emma teaching me this? She's not some financial expert.

• 20:11Ramit Sethi?

  Oh, wow. But would you admit that you're not a financial expert yourself?

• 20:16Speaker 02

  Yeah, absolutely I'm not. Obviously, she's my wife. I know it's all within good intentions, but I know she's not great with money either. But my thought process when I first saw the whole thing laid out was, I think I want to hear this from someone else.

• 20:32Ramit Sethi?

  And did you find somebody else to teach you about money?

• 20:37Speaker 02

  No.

• 20:39Ramit Sethi?

  It's not really fair, right? She's like doing some work. Maybe she didn't even get everything right, but she put an effort into it during maternity leave. She put together this plan and your initial reaction was, why is she teaching me this? We need an expert who, by the way, I'm not going to go and find.

• 20:56Speaker 02

  Right. That's also not what I did. I sat there, I listened. We were conjuring up a plan.

• 21:04Ramit Sethi?

  I know she made a plan. Did you believe it like deep down?

• 21:09Speaker 02

  It had me worried. At the time, I'm still already kind of going paycheck to paycheck a little bit and it's, oh, man, now I gotta put more money here and she wants five different accounts and I have to separate everything and it just seems like a lot.

• 21:25Ramit Sethi?

  Did you tell her that?

• 21:28Speaker 02

  I don't remember.

• 21:29Speaker 01

  I don't know if he said the words, but I, I know Dave very well and I got the feeling. I knew coming away from that, that doing all of that was going to be a lot and he was uncomfortable with it.

• 21:43Ramit Sethi?

  So what do we do when we are presented with this massive plan that our partner put together without really talking to us about it? It's going to require a lot of work. I don't necessarily have the confidence in my partner. Realistically, do we think that plan is going to get executed or not?

• 21:57Speaker 01

  No.

• 21:59Ramit Sethi?

  Emma says no. Dave?

• 22:00Speaker 02

  No, because it didn't.

• 22:02Ramit Sethi?

  Exactly. What are you observing about this meeting with the big thing on the wall?

• 22:07Speaker 01

  I think it encapsulates a lot of the conversations, big or small, that we have. I'm talking. Dave is listening, going along, but not believing and being like, I don't trust that you know what you're talking about. So you can say whatever you want and I will say yes. But he doesn't really believe in what I'm saying.

• 22:27Ramit Sethi?

  Dave, what are you noticing about this example with the big thing on the wall?

• 22:31Speaker 02

  Obviously, I could see Emma's excited about it. You know, I was certainly more than willing to listen. But Emma's right about me. I do have internal feelings that probably don't agree with her at the time. Well, I don't remember exactly how the whole, the whole conversation and the presentation went, but.

• 22:52Ramit Sethi?

  Hold on, what's that? Why the laugh, Emma?

• 22:55Speaker 01

  I said it wasn't a presentation.

• 22:58Ramit Sethi?

  It sounds like to Dave it was. He sat down like a student and you stood up like a teacher.

• 23:05Ramit Sethi?

  I don't think this is funny, actually. You said it right. This is a great microcosm of your relationship with money. I don't think it's funny when one partner is skeptical of another. I actually think it's one of the most soul-crushing dynamics that exists in a relationship. I don't think it's funny to indulge your partner and let them talk, thinking in your head, "This plan isn't really gonna happen." I don't think it's funny to question your partner's credibility, which may or may not be good, but then to offer no solutions yourself. I think it's telling. I think there's a lot of things we can do with this. I think it's really candid and honest of you both to share it, and I appreciate it. But I don't think it's funny. What do you both think?

• 23:48Speaker 01

  I mean, I think what you just said is very insightful and a way that Dave and I probably have never looked at that situation.

• 23:59Ramit Sethi?

  What part of it was new to you?

• 24:01Speaker 01

  The skeptical part and how it just goes deeper than just talking about money. Right? It's how we relate to each other. It's how we respect each other.

• 24:09Ramit Sethi?

  The idea that one person needs convincing? Dave, why do you need to be convinced? Do you know about money?

• 24:19Speaker 02

  No.

• 24:20Ramit Sethi?

  So then technically, shouldn't you just go along with whatever Emma says?

• 24:24Speaker 02

  Not all the time, because I know Emma has not a good track record with money. Maybe scared me at the time. How do I know if this plan's gonna work? I've kind of seen how you've dealt with money in the past. I see how you spend it. I'm a little hesitant to believe this. And I think that's a fair, fair thing to say.

• 24:45Ramit Sethi?

  Okay. Another approach might be, hey, I don't really know if Emma knows what she's talking about. I better learn this stuff, because then I can understand what she's saying and maybe ask her some questions.

• 24:58Speaker 02

  That's true.

• 24:59Ramit Sethi?

  You didn't do that, right?

• 25:01Speaker 02

  No.

• 25:03Ramit Sethi?

  Passenger.

• 25:05Ramit Sethi?

  What do y'all think about this dynamic? Is it good or bad?

• 25:08Speaker 01

  Not great.

• 25:09Ramit Sethi?

  Okay. Is it gonna get you where you wanna go together?

• 25:13Speaker 02

  No.

• 25:14Ramit Sethi?

  Hell, no. It's like you two are in a boat. You don't even know where your destination is. One of you's not particularly good at boating. You capsized it a few times already, but you're the one who's like, "We're going east." And then the other one's like, "What the [bleep] east? How do you, I don't even know if you know what east is. I'm gonna stick my oar in the water, and I'm gonna wait until you show me true north." I'm really stretching my knowledge of nautical terms here, okay? Please, let's end this metaphor. But you're not getting anywhere with one person and their oar in the water, and the other's like talking furiously and rowing this and rowing that direction. Can't get anywhere. And the worst part is, you're not even having fun doing it. Y'all just feeling anxious and skeptical. The answer is not to just wait.

• 25:59Ramit Sethi?

  It's to change something big. Okay. You know what? I'm cutting in quickly because, looking back, I wish that I had approached this part of the conversation differently. Dave's skepticism about Emma's relationship with money is actually really hard to hear. And yes, she has struggled with credit card debt. But using that as an excuse to dismiss all of her efforts with the family finances does not seem fair. It also doesn't seem like a good strategy. Because if you are constantly second guessing someone else, that's not gonna get them to rise up and to become confident and competent. And this skepticism is something that a lot of people, particularly women, face.

• 26:44Ramit Sethi?

  You know, whether it be mothers under constant pressure to prove themselves, whether it's going to work and somebody questioning them, making them feel like they have to justify their mere existence, or "Why would you think that?", when the same questions are often not asked about other people. The feeling of being unfairly questioned, of someone being skeptical of you for merely existing, is one of the worst feelings on earth. And in a way, I think it's especially gendered. I don't think men experience this of being questioned for one thing or another all the time. If anything, if I had to really stretch it, maybe we take a man who's not assertive, and we call him weak. Can you imagine what it's like for the guys listening?

• 27:28Ramit Sethi?

  If I was like, why don't you just be more assertive? What's the problem? Why can't you do it? Just be more assertive, just speak up. And they're like, um, like, that's, I don't act like you. That's, I'm not you. Well, why don't you just do it? That feeling is horrible. Now imagine that happens to you in so many different parts of life. I wish that I had brought this topic up right here, because this skepticism is toxic. What I would have asked Dave would have been something like, what would it take for you to trust her? Because once you get caught in this, I don't trust my partner narrative, it's really hard to break free. I would like to lean in more to this idea of the house. When you met, and I believe you had your daughter before you were married, is that correct?

• 28:13Speaker 01

  Yes. So we were in California when she was born. Then we moved to Connecticut, and that is when we started saving for a house.

• 28:20Ramit Sethi?

  Let's talk about the numbers that you chose for the house. How did you decide how much you wanted to put aside each week or each month for this house?

• 28:29Speaker 01

  How much we could.

• 28:30Speaker 02

  That's the thing is that we're still so far beyond even being able to put a real down payment on a, on a house that works for our family. We're not talking luxury.

• 28:41Ramit Sethi?

  How long will it take you to have enough for a down payment?

• 28:44Speaker 02

  At this rate, like 10 more years?

• 28:46Ramit Sethi?

  Okay.

• 28:47Speaker 02

  We can put at least 5% down right now on, say, a $400,000 house.

• 28:52Ramit Sethi?

  So you have $20,000 you could put down right now?

• 28:54Speaker 02

  Yeah.

• 28:55Ramit Sethi?

  Okay, could you afford a $400,000 house?

• 28:58Speaker 02

  Technically, no.

• 28:59Speaker 01

  Why?

• 29:00Speaker 02

  We'd be paying probably somewhere around $4,000, maybe a little less, but it's still, it's still a lot of money per month compared to what we pay in rent, which is also a lot of money per month. But we're willing to stretch that $400,000 a lot more because the housing market is just terrible.

• 29:19Ramit Sethi?

  What do you mean you're willing to stretch to $400,000?

• 29:23Speaker 02

  To maybe $500,000, maybe $600,000.

• 29:26Ramit Sethi?

  How could you do that if you can't even afford a $400,000 house?

• 29:30Speaker 02

  We can make it work. Daycare is killing us. There's a lot of debt and it seems like all this is getting taken care of within a year.

• 29:38Ramit Sethi?

  Okay, we'll look at the numbers and we can certainly make some projections. I think that'll be really helpful. I understand that you were looking and you found a house that was above your budget. How much was the house that you found?

• 29:51Speaker 01

  I think it was around $700,000.

• 29:53Ramit Sethi?

  $700,000. Okay, so what happened?

• 29:57Speaker 01

  I was very uncomfortable with that number and it ended up going for about that before we had to talk about it more.

• 30:06Ramit Sethi?

  Dave, what was your approach when you heard the house was available? Did you want to get it or no?

• 30:12Speaker 02

  I did.

• 30:13Ramit Sethi?

  What did you say to Emma?

• 30:15Speaker 02

  I said, we can figure it out.

• 30:17Ramit Sethi?

  Okay.

• 30:17Speaker 02

  You know, our daughter's out of daycare next year. Your debt's paid off next year. That's a good chunk of money back in our accounts to help pay the mortgage.

• 30:26Ramit Sethi?

  Okay, awesome. Did you know the exact dollar amounts or was it more of a feeling? That these things are going to be gone from our spending, so that'll probably make up for this new mortgage.

• 30:38Speaker 02

  Maybe it was more the feeling. I didn't have the exact dollar amounts.

• 30:42Ramit Sethi?

  Gotcha. And Emma, when Dave said that to you, what was your reaction?

• 30:47Speaker 01

  I wanted to see it on paper.

• 30:50Ramit Sethi?

  Okay, did Dave put it on paper for you?

• 30:53Speaker 01

  No.

• 30:54Ramit Sethi?

  Dave, you don't put things on paper when it comes to money, right?

• 30:57Speaker 02

  No, not the best, Ada.

• 30:59Ramit Sethi?

  Okay, so Emma, what happened then?

• 31:02Speaker 01

  The house ended up selling for higher. And so we weren't kind of forced to make a decision together on that particular house. So if it were to come up again, we'd probably be in the same situation potentially.

• 31:17Ramit Sethi?

  What will you do next time?

• 31:19Speaker 01

  Hopefully not the same thing.

• 31:20Ramit Sethi?

  Dave will say like, I think we can make it work. Reassuring, even though you don't really know about the numbers. How can you reassure someone if you don't actually know what you're talking about?

• 31:31Speaker 02

  Yeah, it's a good point.

• 31:33Ramit Sethi?

  And then Emma's over here anxious, worried about the numbers, wants to see it on paper. But of course, you know, when you ask that question of Dave, he's not going to put it on paper. He even said he doesn't really do the paper stuff, the number stuff. So when you ask him that, it's not really a fair request, is it?

• 31:46Speaker 01

  No, and I guess my ask would be I would want him to participate and we could look at it together.

• 31:51Ramit Sethi?

  I want you all to do your money together as well. That's why I'm here. But let me also say this. I don't really think it's fair to ask your husband to work together on the most complex financial decision you will ever make. Y'all haven't even sat down and mapped out having two savings accounts. How, how can you expect to figure out amortization chart together? It's not fair, right? Dave, would you agree?

• 32:19Speaker 02

  Absolutely.

• 32:20Ramit Sethi?

  Okay, cool. I love when we all agree on a few key things. I do think that, Dave, you've taken a backseat. I think you are the passenger and what's worse, I actually think you are the backseat passenger. That's not healthy. I don't like that. Emma, I think that the way that you engage with money, it's not serving you because you're actually not feeling good, even though it seems like you've paid off a lot of debt. It's not serving your relationship because Dave's not engaged. And sadly, sometimes the person who's more apt towards money has to find a way to get the other partner engaged.

• 32:56Speaker 01

  Agree.

• 32:57Speaker 02

  Yes.

• 32:57Speaker 01

  I think that is what we've been feeling and not been able to really vocalize to each other.

• 33:05Ramit Sethi?

  Dave is what I call the ignorant reassure. And you see this dynamic in a lot of the heterosexual couples I've spoken to. In these couples, she will often manage the day-to-day finances. The way that she describes it is pay the bills, make sure we have enough in the checking account, etc. And oftentimes, she will start to get worried about the money. Are we gonna have enough? Maybe she has a history of scarcity with money. And she will bring these topics up. And he will do this. He'll cross his arms effectively and say, "We're gonna be fine, babe. Stop worrying." It's like, how the [bleep] do you know you're gonna be fine? You haven't looked at the numbers in 13 years. He is the ignorant reassure.

• 33:47Ramit Sethi?

  Ignorant because he, and it's almost always he, has no real relationship with the numbers. He doesn't look at them. He just earns a paycheck and that's it. Reassure because, deep down, he sees emotions as bad. And he wants them to stop. Now, as a guy, I totally get this. Emotions feel uncomfortable. I just want it to stop so I can look at my spreadsheet all day. Cell C32 never, never made me feel this way. So what does he do? He goes, "It's going to be fine." You don't know if it's gonna be fine. You don't even know what fine is. You have no relationship with the numbers. You're simply saying, "Stop worrying. Your worries are not real." You will see this dynamic of the ignorant reassure in many places.

• 34:32Ramit Sethi?

  If you see it, call it out and recalibrate your relationship. Why do you need a house?

• 34:39Speaker 01

  For me, just having a house feels like our family is settled. This is where our kids are gonna grow up. This is the school system they're gonna be in. We can paint the walls. It's ours.

• 34:50Ramit Sethi?

  And right now, you feel unsettled?

• 34:53Speaker 01

  Yes.

• 34:55Ramit Sethi?

  That doesn't feel good.

• 34:56Speaker 01

  No.

• 34:57Ramit Sethi?

  Emma, are you the one who wants a house? Or Dave, do you also want a house?

• 35:01Speaker 02

  I also want a house too. I want some stability. You know, be part of a community, part of a neighborhood.

• 35:06Ramit Sethi?

  What is the most important? Have you all discussed that?

• 35:09Speaker 02

  I think the most important thing for me is the kids having a yard, having a driveway to play in, us having space to be a family. We're really cramped right now.

• 35:18Ramit Sethi?

  It doesn't sound like you actually talked about this, like, with clarity. Would you both agree?

• 35:24Speaker 01

  Not with clarity.

• 35:26Ramit Sethi?

  Again, I'm not blaming you all. This is how most people talk about the biggest purchase of their lives. They actually start with the destination first, and then they reverse engineer it into coming up with several reasons why they need a house, but they are rarely crystal clear about exactly why they are getting a house. It sounds like you're saying you need more space. Is that right?

• 35:48Speaker 01

  Yeah.

• 35:49Ramit Sethi?

  Okay. What if I told you, yeah, you can have a bigger house, but you gotta move like 40 minutes away, or 80 minutes away, or whatever? How would you all feel about that?

• 35:59Speaker 01

  In answering your question, then, location would be number one. Dave, would you agree?

• 36:04Ramit Sethi?

  What the [bleep], that never came up once. You all see what I'm talking about!

• 36:08Speaker 01

  Well, I feel like it's just so ingrained in us that we know exactly where we want to be that we forget.

• 36:12Ramit Sethi?

  Is anyone seeing a pattern here? Oh, there's this thing in my head, but I never said it out loud, and so it's causing massive amounts of confusion.

• 36:19Speaker 01

  Yeah.

• 36:20Ramit Sethi?

  Mm-hmm. Guys, if you don't effectively communicate, you can't make good decisions. You're going to slide into every financial decision of your life. Why am I creating this massive freaking calendar presentation? I don't know, I never told my partner. Why am I sitting back like this, skeptical of my partner? Oh, I don't know, I never really told her. Hey, I actually don't think you have a great track record, and it makes me nervous. Here's what I'm gonna do about it. Why are we buying a house? I don't know. Everybody needs a house, right? Guys, we gotta be more communicative about this. That's why we're here. All right, you want location? Amazing. I love it. That's actually my first priority as well with housing. Location first. I'd rather have a much smaller place and have an amazing location. Would you all be

• 37:03Ramit Sethi?

  willing to make that trade-off? Sounds like you have a pretty good location right now. What if all other options for bigger places were in worse locations? Would you stay in this place?

• 37:12Speaker 02

  Yeah, I would.

• 37:13Ramit Sethi?

  All right. It's helpful to know. When we look at the numbers, it's gonna tell us a lot more. I just want to point out that so many of our goals are based around this idea of what life should be. And it's usually a vision that we all have in our head. A suburban house, a yard, going apple picking in the fall, which can all be nice. But we should know what it takes to get that. For example, if you want to have that big suburban house, would you be willing to move an hour away? Meaning you or your spouse is gone for an extra two hours a day? Would you be willing to cut your vacations from twice a year to once every three years?

• 37:56Ramit Sethi?

  Would you be willing to go two months without eating out? These are the questions that I want you to be asking because most of us don't think about actual trade offs. We just go, "I want that." We don't think about what it takes to actually get that. So if you find yourself in a similar situation with you or with your partner, ask yourself, first of all, do we really want that? Let's get specific, let's get vivid. Second, what are the sacrifices we will have to make to get that? Now let's take a quick pause to support our sponsors. There are so many similarities between personal finance and fitness. They both involve following a plan.

• 38:38Ramit Sethi?

  They both involve being intentional and changing your internal psychology. And actually, I find that a lot of people, once they get good at money, they actually transfer that to their own personal fitness. Now, part of fitness is also what you eat. And to be able to have any tools that make this easier for you is a huge win in my book. So I'd like to introduce you to Factor, which lets you eat delicious, nutrient-dense meals without all the hassle. Factor is a meal service that delivers fully-prepared, ready-to-eat meals directly to your door. And they have a lot of variety. They have over 100 rotating weekly meals, including high-protein options, keto, GLP-1 friendly. They even have a Muscle Pro Collection for strength and workout recovery.

• 39:22Ramit Sethi?

  Factor meals include lean proteins, colorful veggies, and healthy fats. Plus, they are Ever frozen and they are ready to eat in under two minutes. This is an easy way to try introducing systems into your health, specifically the way you eat. And if I needed healthy, ready-made meals, this is what I would use. Head to factormeals.com/ramit50off and use code RAMIT50OFF to get 50% off and free daily greens per box with new subscription only, while supplies last until September 27, 2026. See website for more details.

• 39:59Ramit Sethi?

  One of my friends recently had to call her phone provider to ask a simple question about her account. It took her over 30 minutes to finally get connected to someone. Answering the question only took like 45 seconds. If you run a business, do not do this to your customers. Instead, I recommend you use 11 Agents by 11 Labs and make their experience great from the very beginning. 11 Agents is a platform for AI voice and chat agents that can actually listen, understand, and resolve customer issues. They handle the simple stuff like looking up customer accounts, processing requests, and they know when to hand off complex tasks to a person. Their agents use the same AI tech as 11 Labs, the company known for realistic voice and audio models in over 70 languages.

• 40:42Ramit Sethi?

  So if you've ever heard an AI voice that sounds real and natural, there's a good chance it's from 11 Labs. My team and I actually use 11 Labs. And if I needed AI voice and chat agents, I would use 11 Agents. If you're looking to improve your customer service experience, check out 11 Agents. If you run a business or handle customer operations across support, sales, or marketing, you can start with a demo at 11labs.io/ramit. See how 11 Agents can fit into your workflows and help build experiences that your customers will actually love. 11labs.io/ramit. That's E-L-E-V-E-N-L-A-B-S dot I-O slash ramit.

• 41:27Ramit Sethi?

  Welcome back. Let's keep going. What was it like doing the conscious spending plan together?

• 41:33Speaker 02

  We've done it together before, so we kind of knew our numbers.

• 41:38Ramit Sethi?

  Whoa, awesome. When did you do it for the first time?

• 41:41Speaker 01

  About like a year and a half ago.

• 41:43Ramit Sethi?

  Go ahead.

• 41:43Speaker 01

  It was around the same time as the chart and we weren't really happy with it, but we didn't know what to do about it. So we just kind of like did it and then we're like, okay.

• 41:51Ramit Sethi?

  All right, let's take a look at the CSP, huh? The one that you're unhappy about. Emma, can you read off the word in bold and then the number in full next to it for this entire box? Go ahead.

• 42:01Speaker 01

  Assets, 5,000. Investments, 158,000. Savings, 41,000. Debt, 53,000. Total net worth, 151,000.

• 42:13Ramit Sethi?

  All right, what do y'all think about those numbers?

• 42:15Speaker 01

  They're not horrible, but I wish they were different.

• 42:20Ramit Sethi?

  Okay. Dave?

• 42:22Speaker 02

  Actually, seeing it on there, it doesn't make me feel so bad.

• 42:26Ramit Sethi?

  Which part?

• 42:27Speaker 02

  The total net worth?

• 42:29Ramit Sethi?

  All right. I like when people see the CSP and it gives them a new perspective. Sometimes we forget how far we've come. We're over here like hoarding money or feeling worried about XYZ and we go, wait a second. I gotta actually zoom out, look at the big picture. That's what the CSP excels at doing. It allows you to see everything in a very simple format. So I'm really happy to hear that. Dave, can you tell us your gross monthly combined income?

• 42:59Speaker 02

  $21,554.

• 43:02Ramit Sethi?

  Did you all know that your household income is $258,000 a year?

• 43:08Speaker 01

  Mm-hmm.

• 43:08Ramit Sethi?

  Emma says yes. Dave?

• 43:10Speaker 02

  Yeah.

• 43:11Ramit Sethi?

  Do you guys think that's a lot of money or not?

• 43:13Speaker 02

  I think that's a lot of money.

• 43:15Ramit Sethi?

  Emma?

• 43:16Speaker 01

  It sounds like a lot, but then I feel like it only is as much as you have to fill the expenses. I feel like so much is being taken out that when it comes to saving and spending, we have nothing. So as much as I know that that's how much we make and that feels good, that only goes so far when we actually don't like see it in our everyday.

• 43:38Ramit Sethi?

  Okay, I want you to remember what you just said. $258,000, you go, "We don't have any money to save or spend." You said that, right?

• 43:46Speaker 01

  I did.

• 43:47Ramit Sethi?

  Okay. Hold that thought, because we're gonna look at the rest of your spending.

• 43:50Speaker 01

  Okay.

• 43:51Ramit Sethi?

  Let's take a look. All right, so you're netting 15K a month, which means you got a 401K, right?

• 43:58Speaker 01

  I'm the only one that has 401K.

• 44:00Ramit Sethi?

  You maxing it out?

• 44:02Speaker 01

  I'm contributing the most amount that like I get the full match for.

• 44:06Ramit Sethi?

  All right, fine. That's still thousands of dollars a year. That's meaningful. That matters. It's real. Okay, we gotta start rewriting our narrative that we make $258,000 and we don't have any money to save or spend. That's simply not true. We see it right there. Let's keep going. Fixed costs, 61%. What do you guys think about that?

• 44:25Speaker 02

  It's a high number.

• 44:26Ramit Sethi?

  What should it be?

• 44:26Speaker 01

  Wait, is that right? Mine is 82 and his is 67. How is it 61 combined?

• 44:32Ramit Sethi?

  That is weird. One of you's at 82% and one of you's at 67%. So...

• 44:39Speaker 01

  So I added in the line of childcare. I don't know if that messed things up.

• 44:43Ramit Sethi?

  Yeah.

• 44:44Speaker 01

  Sorry. I know. I'm sorry.

• 44:46Ramit Sethi?

  Why do you guys mess with my formulas? Why?

• 44:48Speaker 01

  I know I wasn't supposed to, but I didn't know where to put childcare and that's a fixed cost.

• 44:52Ramit Sethi?

  All right, fine. So now your fixed cost is 76%.

• 44:55Speaker 01

  Yeah.

• 44:56Ramit Sethi?

  Oh, that's pretty high. It should be 50 to 60%. And frankly, with your income, which is a very high income, typically it's the lower end of that. So at 76%, that number right there is why you feel stressed and anxious and why you're having these small arguments about how much money's going into a savings account. Y'all get that?

• 45:19Speaker 01

  Yeah.

• 45:20Ramit Sethi?

  Right there. We'll dig into those numbers in a minute, but let's keep going down the list. Investments, 3%. Savings at 1% and that is $200 a month for a house down payment. And then finally, we have guilt-free spending, which claims to be 19%. I actually don't think you all know how much you're spending on guilt-free spending per month. Do you? Emma's shaking her head, "No." Dave is standing like a statue. Approximations are okay the first time you do the CSP. You know, you kind of jot down what you think. But then the instructions in the CSP are you actually got to pull your numbers and you got to look at the rest of the year. What do we spend in? You got to spread that out to get a much more accurate number. You don't know how much you're spending.

• 46:05Ramit Sethi?

  And also, you have a narrative. "We don't have any money. We're not spending anything." Our stories are more powerful than reality. And that's what the CSP helps you cut through. Dave, what are you noticing from this?

• 46:17Speaker 02

  An eye opener.

• 46:20Speaker 02

  It's interesting to see how much we're actually spending on certain luxuries, I guess.

• 46:27Ramit Sethi?

  Yeah. You know, the irony is because you all don't really talk about money, you're not actually both engaged with money, not at all. You actually don't have any guilt-free spending because all your money is guilt-ridden. That's a terrible way to live, especially making $260,000 a year. But if you actually were a team and you came together, you said like, "Let's create a shared vision. Let's actually decide what's important to us. Let's be honest and we both need to be at a certain level. We need to understand money." Suddenly, you would actually have more money to spend guilt-free than you do right now.

• 47:02Speaker 01

  That'd be great.

• 47:02Ramit Sethi?

  I got some questions for you now on the numbers. We have $53,000 of debt. What type of debt is that, Emma?

• 47:09Speaker 01

  Student loan and credit cards.

• 47:11Ramit Sethi?

  How much is the student loans?

• 47:13Speaker 01

  Student loans, like 5,000.

• 47:16Ramit Sethi?

  What's the interest rate?

• 47:17Speaker 01

  7%.

• 47:19Ramit Sethi?

  And the rest of it? 48K credit card debt?

• 47:22Speaker 01

  I have one personal loan that was a consolidation. That's 15K at 6%. And the rest is credit card.

• 47:33Ramit Sethi?

  What's all that debt?

• 47:34Speaker 01

  I wish I could tell you. I opened my first credit card in college and I had a lot of student loans. And I feel like it's just snowballed since then. And I feel like I was just never really had the tools to manage money or like knew what I was doing.

• 47:49Ramit Sethi?

  They're like, what do you spend it on?

• 47:50Speaker 01

  Just everyday stuff. I was just trying to live and get by and I feel like I didn't have enough money for a while. So I was using the credit card to do that.

• 47:57Ramit Sethi?

  Who's the one who makes more out of the two of you?

• 48:00Speaker 01

  I do.

• 48:00Ramit Sethi?

  Okay. Emma, you make thirteen thousand dollars a month gross. It's a lot of money. Both of you make a lot of money. Dave, you make eight K a month gross. It's very good. When you look at me and you think about how I relate to my money, do you think I'm constantly in motion?

• 48:15Speaker 01

  No, I know you're not.

• 48:16Ramit Sethi?

  So what am I?

• 48:17Speaker 01

  It's supposed to automate and you're not supposed to have to think about it.

• 48:20Ramit Sethi?

  Describe my behavior with money.

• 48:22Speaker 01

  Thoughtful, planned. Purposeful.

• 48:26Ramit Sethi?

  Calm. Describe your behavior with money.

• 48:28Speaker 01

  Brantick, impulsive.

• 48:31Ramit Sethi?

  You like it?

• 48:32Speaker 01

  No, I don't. I struggle because it's part of just like how I work. Like I need to like check things off. I need to feel like I'm doing something and because I feel like money is something that we need to work on, I always feel like I need to be doing something to make it better.

• 48:48Ramit Sethi?

  Maybe. What I don't hear you saying is I really need to find a way to calm myself. I don't hear you saying I need a way to find a way to connect with my husband about money. I don't hear you saying I need to find a way to work together with him to create a vision of money for our family. I don't hear any of that. What I hear is we need a house, net, oh, we need a house, house, house, house, house. I hear we need to transfer money, this money, that money, this money, that consolidate, do it all. It's very erratic.

• 49:20Speaker 01

  Yeah, it is.

• 49:22Ramit Sethi?

  How long have you been in that behavior pattern?

• 49:25Speaker 01

  Forever.

• 49:27Ramit Sethi?

  And you said, that's just the way I operate. What if I told my wife, listen lady, I don't talk about feelings. Okay? That's, that's just the way I am. What do you think my wife's response would have been to that?

• 49:39Speaker 01

  Like, "See you later"? I don't know.

• 49:41Ramit Sethi?

  Yeah, I don't think she would have been too happy with that. She would have really laid me out. But yet, you say that about yourself. "That's just the way I am." I don't believe that. I believe you can be calm, cool, connected with Dave when it comes to money. I don't think you're getting that right now. I think you're getting a lot of drama. I think it feels, in a misguided way, productive, although it's not. You have $53,000 of debt. It's not working, obviously.

• 50:08Speaker 01

  I know. And I feel like that's where I am. I'm at a loss.

• 50:11Ramit Sethi?

  Okay. Dave, I want to check in with you. Does any of this surprise you?

• 50:16Speaker 02

  No. I'm hearing a lot of truths from Emma, which she's very good at. She's very good at talking about her emotions, even while we're talking about her finances.

• 50:26Ramit Sethi?

  I agree. You're more emotionally attuned, Emma. But I also think you have some stories about yourself that are obviously not true. You could change the way that you think about money, behave with money, and even feel with money. Do you believe that?

• 50:39Speaker 01

  I do.

• 50:39Speaker 02

  Absolutely. Yeah.

• 50:40Ramit Sethi?

  Okay. Good. Good. That's a huge step. That's great. Why do you all have separate accounts?

• 50:46Speaker 02

  I guess it goes back to hesitancy. I'm worried she's gonna spend a lot. And then that leaves me with whatever bare minimum I would need to get gas and whatever keeps me going to work. So it's like, I'm worried she still continues her spending habits, and I'm stuck with the bare minimum.

• 51:05Ramit Sethi?

  Okay. What, Dave, would you say are Emma's spending patterns that you referred to? What are you talking about?

• 51:12Speaker 02

  A lot of Amazon packages. And I see her rolling her eyes, but there's packages every day. And there's no real accountability for it.

• 51:19Ramit Sethi?

  What else besides Amazon? What's going on the credit cards? What's the rest of it?

• 51:24Speaker 02

  I don't know.

• 51:25Ramit Sethi?

  You ever ask her?

• 51:27Speaker 02

  Well, she's showed me all her statements. I'm not very financially literate. I couldn't tell you exactly what's being spent, but I do see money being spent. And I do know that she's doing a lot of work paying off her debt.

• 51:41Ramit Sethi?

  Can I just kind of call out the elephant in the room right now? What I don't sense is a lot of curiosity from both of you and what's going on here. And even in that last few sentences, Dave, where you said like, "I don't know. I'm not financially oriented. I just need a number."

• 51:59Ramit Sethi?

  I'm not into that, Dave. You're telling me that you feel anxious about money all the time. You don't trust your wife, who has two kids with you, to combine money, but you can't figure out how to read where she's spending her money, or have her create a chart for you? I just don't buy it. I actually just don't think this is important for both of you. I think you've gotten used to feeling bad about money. I think you have these dreams of buying a house, and you both have found a way to thrive on this anxiety about money without actually changing anything.

• 52:30Speaker 01

  I think we're struggling because we don't know how to change it. I think we both want to change it. We both recognize the cycles that we're in, and we just keep on going in them because we don't have the tools or the communication skills to change it.

• 52:43Ramit Sethi?

  Okay, I agree with that. But if you really want to change it, what I want to see, or what I would expect to see from both of you, is physically and figuratively leaning forward. I feel like I'm pulling teeth to get answers. Honestly, I'm starting to get a little frustrated. It feels like they are leaning back and expecting me to fix everything for them. And it's a funny dynamic I see a lot on this podcast. People go through a lot to come and speak to me. They fill out an application. They talk to multiple people on my team. They have to do all kinds of checks and complete their CSP. It's very time-consuming. And then when they finally sit down with me, some couples basically lean back, put their hands in the air and go, "You fix it."

• 53:28Ramit Sethi?

  Their entire mental model is that they have done the work to get here, and now I'm a magician who's going to wave this magic wand and fix it for them. Not going to happen. That's not how this works. In fact, I'm not going to fix your situation. You are. What they don't realize is that their delegation of this problem to me is just yet another symptom of the passive relationship with money that has led them here. So I'm going to try to shift that right now. Listen as I toss the ball right back in their court. There are so many similarities between personal finance and fitness. They both involve following a plan.

• 54:13Ramit Sethi?

  They both involve being intentional and changing your internal psychology. And actually, I find that a lot of people, once they get good at money, they actually transfer that to their own personal fitness. Now, part of fitness is also what you eat. And to be able to have any tools that make this easier for you is a huge win in my book. So I'd like to introduce you to Factor, which lets you eat delicious nutrient-dense meals without all the hassle. Factor is a meal service that delivers fully-prepared, ready-to-eat meals directly to your door. And they have a lot of variety. They have over 100 rotating weekly meals, including high-protein options, keto, GLP-1-friendly. They even have a Muscle Pro Collection for strength and workout recovery.

• 54:57Ramit Sethi?

  Factor meals include lean proteins, colorful veggies, and healthy fats. Plus, they are never frozen and they are ready to eat in under two minutes. This is an easy way to try introducing systems into your health, specifically the way you eat. And if I needed healthy, ready-made meals, this is what I would use. Head to factormeals.com/ramit50off and use code RAMIT50OFF to get 50% off and free daily greens per box with new subscription only, while supplies last until September 27, 2026. See website for more details.

• 55:35Ramit Sethi?

  So here's what we're going to do to change the dynamic. Right now, we're going to switch things up. I am not telling you anything. From now on, I'm simply executing what you tell me what to do. We have the Conscious Spending Plan in front of us. So you ask me questions, I will answer them for you. You tell me, let's cut this spending or that spending, and we can do it. But I can't be the one driving this because, Dave, you're playing passenger again. I'm just not into it. And Emma, you're justifying your behavior by saying it's just me. I can't change, not into it. I'm trying to change our dynamic and we're going to change it with a big bang. So you tell me what you want to do.

• 56:10Speaker 02

  So I think we want to continue with the conversation on how couples like us can do better in our current situation.

• 56:16Ramit Sethi?

  Okay, great. What specific questions can I answer for you?

• 56:20Speaker 02

  How can we save more money throughout the year? How can we allocate our monthly finances? And best way to combine our accounts together where we both feel comfortable.

• 56:32Ramit Sethi?

  Okay, let's start with talking about the accounts. Because I think that's the foundation of your finances. There's good research showing that combining accounts is very helpful when it comes to money in a relationship. Not only is it good for trust, it's good to make things smooth. Right now, it's very confusing. It's also complicated. You've got money being transferred around, different accounts. Somebody has to reconcile all this stuff. At the same time, I hear what you said, Dave, about, one, worrying about, "Am I spending too much?" Which is a real concern, and we should talk about that. Two, wanting to make sure you have money for yourself, which I totally respect.

• 57:15Ramit Sethi?

  Each partner should have money for themselves for guilt-free spending. It doesn't even matter if one partner's a lower earner. It doesn't even matter if this partner earns $0. They should still have money for themselves for guilt-free spending. So, one way to solve that is to combine your incomes into one joint checking account. All your joint expenses are paid from that. And because you're married with kids, most of your expenses are joint. Under your fixed costs, pretty much everything is joint. So you could pay all that from your joint. Your savings is going to be joint. Your investments are, to some extent, going to be joint. They'll affect both of you. And then your guilt-free spending, most of it will be joint because you're a family. But each of you should have some amount of money that goes to each of you.

• 58:00Ramit Sethi?

  If one person wants to go out for beers, the other wants to get a massage, that's fine. As long as it fits within your number, boom, you're even using a separate card for that. An individual card, not your joint card where you then have to transfer it back and forth. You see how that works?

• 58:16Speaker 02

  Yeah.

• 58:16Ramit Sethi?

  How does that sound?

• 58:17Speaker 02

  That makes sense to me.

• 58:18Ramit Sethi?

  What would it look like and feel like if the two of you had joint finances like I just described?

• 58:24Speaker 01

  I would love it.

• 58:25Speaker 02

  I think it's a good first step.

• 58:27Speaker 01

  I think we could also just have more healthy conversations and we could look at it together and separately. I think that's where we struggle a lot right now, that we can't take our time to look at it separately because we have different accounts. So I can't see everything, he can't see everything. So it's very hard for us to then come together and have a conversation because neither of us has the full picture.

• 58:50Speaker 02

  For me, you know, it creates trust. We're both working at it together. Someone messes up, we can call them out right away for it, vice versa, but it's, it builds partnership.

• 59:03Ramit Sethi?

  Yeah, I agree with that. I might even look at it in a slightly different way. I would say something like, look, I'm really excited to combine our accounts. First of all, it's going to be easier for us to see what's going on, get the big picture. It means that we're going to be more aligned and I, I want to build trust. Part two, I have to tell you, I'm a little worried. It worries me because in the past, I know you've gotten into credit card debt. And I want to be really open, letting you know that I'm worried, but I also know that I have to trust you. And this is a way that we can come together. The way I feel is I really don't want to get into any more debt.

• 59:44Ramit Sethi?

  That would be really hurtful to me, but I know that mistakes might happen. And my expectation is that we both talk about money every month. We both have total transparency on our spending. We're both involved with managing at least one number, groceries, eating out, whatever. And in that way, I want us to get really good as a team at paying off debt, at investing more, even on spending on the things we love. That's part two. Dave, what'd you notice about that part two? Accountability, a little bit of grades.

• 1:00:15Speaker 02

  I'm not great either by any means, you know, I'm not gonna let Emma take the whole brunt of

• 1:00:21Ramit Sethi?

  Mm-hmm.

• 1:00:21Speaker 02

  that conversation. It does fall on both of us.

• 1:00:25Ramit Sethi?

  Agreed. I mean, I don't think you've ever said anything like that in your relationship, have you?

• 1:00:29Speaker 02

  I don't think so.

• 1:00:30Ramit Sethi?

  No, you've been the passenger and Emma's been chasing you, even though she's not even particularly great at spending or managing money. She admitted it. You all, everybody admits it on this call. But yet she's chasing you and you're sitting back, avoiding, the more you avoid, the more she chases, you're in the chaser avoider dynamic. And in fact, you're even going like this, convince me, but there's no trust. So it's a very odd dynamic that the two of you have. You're just stuck. And the only way to get out of it is to decide to get out of it and to radically change. Setting up accounts is the first step. What's next?

• 1:01:03Speaker 01

  How we can move our investment percentage higher?

• 1:01:09Ramit Sethi?

  You currently have 3%, it's maybe like more like 6% if we include your pre-tax. So let's just make it easy, like 12,000 bucks a year. So Emma, your question is, how do we get that number higher? You tell me. Tell me what to do and I will change numbers as you tell me.

• 1:01:27Speaker 01

  And as I look at the top, right, rent, like, none of that really can really change. So groceries would be the first one that I think we could cut from.

• 1:01:36Ramit Sethi?

  How much?

• 1:01:38Speaker 01

  $200.

• 1:01:40Ramit Sethi?

  Okay, you're the shopper. Do you actually have a number that you use when you shop?

• 1:01:44Speaker 01

  I try and keep it to 800 a month, which is like 200 a week. But then there's like extra stops, so then it's about a thousand.

• 1:01:52Ramit Sethi?

  All right. So you could eliminate $200 a month off of that. Is that what you're telling me?

• 1:01:56Speaker 01

  Yeah.

• 1:01:57Ramit Sethi?

  You feel confident about that?

• 1:01:58Speaker 01

  Yes, I definitely can do it.

• 1:02:00Ramit Sethi?

  Love it. Love that answer. Okay, let's take it down to 800. Good job. Watch this number up here. It goes from 76%.

• 1:02:07Ramit Sethi?

  What happened?

• 1:02:08Speaker 01

  It went down.

• 1:02:09Speaker 02

  Down a percent.

• 1:02:10Ramit Sethi?

  It went to 75%. Okay, cool. It's a small move, but it's a move in the right direction. That shows us that we can affect these things. I agree. Should we just redirect that money into investments?

• 1:02:21Speaker 01

  Yeah.

• 1:02:22Ramit Sethi?

  Let's just do it right now. Yeah, okay, I'm just gonna put it for stocks. You can obviously do it for whatever you want. Keep going.

• 1:02:27Speaker 01

  Dave, your phone bill is at 140. Maybe we could get that down a little bit?

• 1:02:32Speaker 02

  That's what my phone bill is. Do you get yours paid through work? So it doesn't make sense for us to do a family plan and then you're end up paying a phone bill.

• 1:02:42Ramit Sethi?

  What's happening right now?

• 1:02:43Speaker 02

  We're separating our finances.

• 1:02:46Ramit Sethi?

  Yes, and Emma's really what Emma just did is she's asking for help. And what you're doing, Dave, is leaning back and you're explaining why it is the way it is. She's not asking for you to explain why it is the way it is. She's saying, "Help me." So what you should do as a passenger is get your ass out of the passenger seat and say, "Babe, you've been driving for long enough. In fact, you just saved us $200 a month. Let me take the wheel for a second and let me make some suggestions on how we can increase the investment number. Get out of the passenger role. Go ahead, Dave.

• 1:03:18Speaker 02

  Auto insurance. We are gonna combine ours and that's gonna save us an extra 100 a month.

• 1:03:25Ramit Sethi?

  Really?

• 1:03:25Speaker 02

  After we combine it. Yeah.

• 1:03:27Ramit Sethi?

  You already checked that?

• 1:03:28Speaker 01

  Mm-hmm.

• 1:03:28Speaker 02

  Yeah.

• 1:03:29Ramit Sethi?

  All right, so tell me what to do.

• 1:03:30Speaker 02

  Instead of the $180, combined, it would be 280. We're saving like an extra $100 by combining that so we can put an extra $100 into investments.

• 1:03:43Ramit Sethi?

  Watch. Look at the fixed cost number. It's at 75%. Went down to 74%.

• 1:03:48Speaker 02

  Yeah.

• 1:03:49Ramit Sethi?

  All right, what do you want to do with the 100 bucks? You want to put it in investments?

• 1:03:52Speaker 02

  Yeah, I like stocks.

• 1:03:53Ramit Sethi?

  All right, let's put it there. We're still at 5%.

• 1:03:56Speaker 02

  All right, well, let's find somewhere else where we can move it up.

• 1:03:59Ramit Sethi?

  Nice. What else you got? Where's the Amazon stuff? I don't see that on here. The boxes every day?

• 1:04:05Speaker 01

  I have a subscription that, I mean, I count that as guilt free.

• 1:04:08Ramit Sethi?

  Open up Amazon real quick. Go to your orders if you don't mind.

• 1:04:12Speaker 01

  All right. So there are sprinkles for Valentine's Day.

• 1:04:21Speaker 01

  Decorations for my parents 50th anniversary. That's on Sunday and nail polish.

• 1:04:27Ramit Sethi?

  Okay, keep going. Just read them off.

• 1:04:30Speaker 01

  A under the desk cable holder for my desk. Kitchen scissors, because we lost them. Diaper cream for our son. Dryer sheets, diaper, pale, garbage bags. Our kids' soap, my protein powder, dish soap, a water filter for our fridge, hand soap and a brush.

• 1:04:57Ramit Sethi?

  Okay, let's pause. What do you think about those purchases?

• 1:05:00Speaker 01

  Some of them are necessary, some of them probably are not.

• 1:05:04Ramit Sethi?

  How do you decide what's necessary and what's not?

• 1:05:07Speaker 01

  I don't have a good criteria.

• 1:05:09Ramit Sethi?

  Sounds like you see what you want and it arrives the next day.

• 1:05:13Speaker 01

  If it's not for myself, I feel like it's okay.

• 1:05:16Ramit Sethi?

  This is a common deception that a lot of moms use, usually with their kids. And I see almost, almost always the story that people in this situation often tell themselves, it's not for me. I don't need all this stuff, but it's for my kids. And I can see as I say it, you becoming a little bit emotional. But we have to ask ourselves, what lessons are we teaching kids? By buying thing after thing with no framework on what is necessary, what's important? We have to ask ourselves, what is it costing our relationship? And what's it costing you individually? From a mental health perspective, I'm not here to tell you not to buy soap or anything. But I do think that there's probably no vision of what you spend as a family. Can I ask you a question about food? Dave, finish this sentence for me.

• 1:06:02Ramit Sethi?

  In our family, Dave, when it comes to our kids, we... Dot, dot, dot.

• 1:06:07Speaker 02

  When it comes to our kids, we definitely spoil them.

• 1:06:11Ramit Sethi?

  Oh, y'all make $260,000. I don't think any of your parents made 260K. It's not surprising that your kids get more, plus they have Amazon Prime. I actually don't think it's a problem that your kids get more than you. Things have changed since back then. Y'all remember how many toys we had as kids? Not a lot. However, the question is not simply about quantity, it's about meaning. Do they understand the value? Do we even understand the value as their parents? How are we deciding what they get? Emma, let me ask you the same question. In our family, when it comes to our kids, we... Dot, dot, dot.

• 1:06:45Speaker 01

  Give them what we think they need.

• 1:06:48Ramit Sethi?

  You know what occurs to me? I don't think you two have really developed a family culture. Like, I'll give you an example. Some families might say, in our family, we eat dinner together every weeknight. Or in our family, we have dinner out every Saturday night. Cool, that's a culture thing? That's awesome. In our family, we take off our shoes before we come in the house. Okay, cool. In our family, we are very relaxed about rules for our kids, except when it comes to safety. You all have any rules like that?

• 1:07:21Speaker 02

  Every Friday, we get takeout pizza. Come home, let the kids watch a kids movie.

• 1:07:26Ramit Sethi?

  Yeah.

• 1:07:27Speaker 02

  They love it.

• 1:07:27Ramit Sethi?

  Hell yeah!

• 1:07:29Speaker 02

  Every night, we try to sit at the table all together. Emma, you know, she's great at preparing meals, getting dinners ready, making sure that we can do that type of thing.

• 1:07:42Ramit Sethi?

  Amazing. Okay, I'm glad that I gave the example. I love hearing these. Emma, you got any ones you want to share too?

• 1:07:47Speaker 01

  While we're eating, even if Dave and I are not eating, we sit with the kids and we talk to them or we read them a book. Cause I just want to make sure that eating is like a happy celebratory time.

• 1:07:58Ramit Sethi?

  Yeah.

• 1:07:58Speaker 02

  Yeah.

• 1:07:59Speaker 01

  Also, our family, we really value time outside and play. We are always on the floor, playing with them, getting outside every day, going to walks, going to the skate park.

• 1:08:09Ramit Sethi?

  You know what? I gotta tell you, I love hearing different people's philosophies, their points of view on eating, on parenting, on cleanliness, whatever. I love it. I don't even have to agree with it, but I'm just like, damn, for you to have come up with that rule. Every night, we try to eat with the kids and we sit there and talk to them or we read them a book. Like, you had to go through a lot of really hard dinners to come up with that. And I love it. It shows me that you two have a vision. That is so cool. In my opinion, having that strong point of view, one of the rarest things in the world. Now, can you do me a favor and apply that to money?

• 1:08:51Ramit Sethi?

  In our family, when it comes to money, we...

• 1:08:57Speaker 02

  When it comes to money in our family, we value travel, memories during that travel. We value going out with each other.

• 1:09:06Ramit Sethi?

  Okay, I like it. You're telling me in your family, you value travel and experiences, is that right?

• 1:09:14Speaker 02

  Yeah.

• 1:09:15Ramit Sethi?

  Okay. Where's that on the conscious spending plan?

• 1:09:18Speaker 02

  Not.

• 1:09:19Ramit Sethi?

  Yeah, that's the point. So while you may value travel, if you really value whatever it is that's important to you as a family, it should show up on your calendar and it should show up on your CSP. That's how you know you're actually being honest. What's happening right now is your money is just going random places. Let's create a rule. Let's create one that helps you create trust with each other and money. Emma, why don't you go first?

• 1:09:47Speaker 01

  We talk to each other about anything before we buy anything.

• 1:09:50Ramit Sethi?

  All right, you're gonna text them for everything you buy?

• 1:09:53Speaker 01

  No, no, no, no.

• 1:09:54Ramit Sethi?

  Can I give you a simpler example?

• 1:09:56Speaker 01

  Yes, please.

• 1:09:57Ramit Sethi?

  In our family, we talk about money once a month, and both of us come prepared and ready to share our numbers. Doesn't that accomplish the same thing without putting a spotlight on me and making me the victim or the criminal? I know it's hard because you don't have a healthy model. Your parents didn't really talk about money. I get that it's hard, but imagine.

• 1:10:18Speaker 01

  Talk about it openly and honestly.

• 1:10:22Ramit Sethi?

  If I had debt, what would I do with my wife to build trust?

• 1:10:26Speaker 01

  Show it to her, allow her to see it, like what it is, and let them see it every month.

• 1:10:34Ramit Sethi?

  I would make a plan for my debt payoff. I would show them the exact month and year that the debt's gonna be paid off. And every month, like a video game, oh, I'm 6% closer. Still on track. In fact, got a bonus at work, put an extra $5,000 towards it. It's going great. High five! Building trust by loving you, not just transparency, which is great, but also getting excited. What do you think about that?

• 1:11:01Speaker 01

  That sounds really nice.

• 1:11:03Ramit Sethi?

  You build trust with your kids every day, don't you?

• 1:11:05Speaker 01

  I hope so.

• 1:11:06Ramit Sethi?

  Yes, I'm sure they love you and I'm sure they trust you. How do you build trust with your kids?

• 1:11:11Speaker 01

  Spending quality time with them, listening, not just to respond, but to hear them.

• 1:11:17Ramit Sethi?

  Any possibility of doing that here?

• 1:11:18Speaker 01

  We do struggle with that with each other.

• 1:11:21Speaker 02

  Yeah, I totally agree.

• 1:11:22Ramit Sethi?

  That would be such an amazing thing to do, say, you know what? I want to build more trust with you, Dave. I want us to both build trust. I want to take a couple of steps forward. One thing I'm gonna do, I'm gonna create a debt payoff plan and I want to show you. So every month, you're gonna see where I am. But also, next time we go into therapy, I want to talk to our therapist about what are some other tools we can use to build trust? It's so important to me, this isn't just about numbers. It's actually about something so much more important than numbers. It's about us and the connection we are building together. What do you think about that?

• 1:11:54Speaker 01

  Something that I don't know that I realized was kind of at the core of a lot of what's going on.

• 1:12:00Ramit Sethi?

  Dave, I want to hear from you because you correctly raised that, hey, part of the reason we haven't combined money is I don't really trust her handling of money. What do you think about her responses here?

• 1:12:12Speaker 02

  I'm proud of her. It takes a lot of courage to admit your debt in general. You know, it's not easy.

• 1:12:19Ramit Sethi?

  When you say, I'm proud of you to your partner, what a beautiful thing. When we're kids, we want our parents to be proud of us. When we're older, we want our spouse to be proud of us. And instead, actually, Dave, you, when we started this call, you're at the opposite. The opposite of proud is often skeptical. That's why I said it's death to a relationship. Skeptical means I don't even believe what you're telling me. But being proud is the opposite of that. So I think it's really cool that you completely swung to a much more loving side of that spectrum. Now, Dave, Emma took two steps forward. She said like, hey, this is how I want to build trust. How about you? I don't think Emma really trusts you about money either. She hasn't said it, but I suspect it. Emma?

• 1:13:02Speaker 01

  I think in a different, in a different way. Yes.

• 1:13:05Ramit Sethi?

  I think you're afraid of money. I think you're afraid of her behavior with money. I think you don't understand money. But most of all, if I were your partner, I would find it difficult to connect with you because you're so passive with money.

• 1:13:18Speaker 02

  Yeah, that is true.

• 1:13:20Ramit Sethi?

  I can suggest this, I can pay off $50,000 of debt. He's just gonna sit there glumly. It's really hard to be in a constructive relationship with a partner who's just opaque. You want your partner's love, you want their connection, at least you want some kind of response. And the partner goes.

• 1:13:40Speaker 02

  Yeah.

• 1:13:41Ramit Sethi?

  It's actually one of the most devastating things that can happen. So finish the sentence for me because you need to build some trust as well. In our relationship, when it comes to money, we.

• 1:13:51Speaker 02

  In our relationship, in our family, we will be more transparent sharing our finances.

• 1:13:59Ramit Sethi?

  Oh, we'll, we'll combine our finances. Is that what you're saying?

• 1:14:02Speaker 02

  Yeah.

• 1:14:03Ramit Sethi?

  I think sometimes when it comes to making changes with money, we start using like real technical language. People start speaking like Shakespeare. I doth not know what to do with my [BLEEP] CSP. Just speak English, okay? Hey, in our relationship, I didn't combine our finances because I didn't trust you, but I realized you are trustworthy and I need to take a step forward as well. So I'd like to combine finances and work with you. How's that sound?

• 1:14:28Speaker 02

  Helpful. I'm feeling more optimistic, more excited. I think it's something we can pull off.

• 1:14:33Ramit Sethi?

  I agree. I have total confidence so far. So we've talked about combining incomes. That's great. I have total confidence in that. We talked about creating some rules. Rules are not meant to necessarily be restrictive. You create these rules because they start to really share the type of culture you're creating in your family. Now let's look at the CSP for a second because I got a question about combining your income.

• 1:14:56Ramit Sethi?

  Now, have you all noticed the disparity in fixed costs? Emma, your number is 80% for your fixed costs and it's 65 for you, Dave. I guess part of that is, Emma, you have a lot of debt, right?

• 1:15:11Speaker 01

  Yep.

• 1:15:11Ramit Sethi?

  But you're also paying all the childcare while Dave is paying all the rent and utilities. Can you kind of see how you've both set yourselves up to be stressed?

• 1:15:21Speaker 02

  Yeah.

• 1:15:22Ramit Sethi?

  If you're spending 80% on fixed costs, you're broke. So the question might be, is there any opportunity for you, Dave, to help Emma with her debt?

• 1:15:32Speaker 02

  I guess she's never asked.

• 1:15:34Ramit Sethi?

  Emma, what do you think?

• 1:15:36Speaker 01

  I think for myself, I would rather pay it, but part of it was our wedding that I took out a loan for, to pay for. So part of it was combined.

• 1:15:44Ramit Sethi?

  What the [BLEEP]? You took out a loan to pay for your wedding? How much?

• 1:15:49Speaker 01

  I don't want to tell you what I did.

• 1:15:50Ramit Sethi?

  Tell me, I love it.

• 1:15:51Speaker 01

  No.

• 1:15:52Ramit Sethi?

  Tell me, come on. I've heard everything on the planet. Nothing phases me anymore.

• 1:15:56Speaker 01

  I took a loan for my 401k just to make sure we had money. And then we had to put stuff on the credit cards. So then I had taken out a personal loan to consolidate those credit cards from the wedding.

• 1:16:08Ramit Sethi?

  Uh, what the [bleep]. Do not do this. There are very few reasons I would ever support borrowing from a 401k, and a wedding is definitely not one of them. But I am glad that Emma shared it because it's so revealing. This conversation isn't just about today's money struggles. It's a symptom of decisions made years ago. It's just like in math. If a proof doesn't add up, the mistake usually happened way back in the process. So similarly, when Emma and Dave borrowed from her 401k, they set off a chain reaction that led to mounting credit card debt. And this is a powerful reminder of how one wrong turn can snowball over time.

• 1:16:52Ramit Sethi?

  You ever pay the 401k loan back?

• 1:16:54Speaker 01

  Yes.

• 1:16:54Ramit Sethi?

  All right. How much did the wedding cost?

• 1:16:56Speaker 01

  Forty thousand.

• 1:16:58Ramit Sethi?

  And you're still paying that off yourself?

• 1:17:00Speaker 01

  I don't even know what portion of that is in mine. I just, I feel responsible for doing it.

• 1:17:07Speaker 02

  And you did ask for me to help, and I do remember helping on that. And then you said it was paid off.

• 1:17:14Speaker 01

  My 401k loan.

• 1:17:16Speaker 02

  Well, I'm just talking about the wedding in general. I don't know about the 401k loan or any of that.

• 1:17:21Ramit Sethi?

  You guys see that having all these different accounts and all this complexity.

• 1:17:26Speaker 02

  Yeah.

• 1:17:26Ramit Sethi?

  It costs you a ton. You don't even understand what's going on. This is like, how many years ago? Four, five years ago? And it's just totally in the dark. One way that will help with this is simplifying your accounts and starting to actually talk about money regularly.

• 1:17:44Speaker 02

  Yeah.

• 1:17:45Ramit Sethi?

  I think that you should probably shift the wedding debt. That should be paid off jointly. That's my opinion. I think the other debt, the personal debt that you incurred, Emma, that should be yours. I think you should pay it off aggressively. Do you know your debt payoff date?

• 1:18:00Speaker 01

  It was November of this year. But that included putting my bonus, which I don't know exactly what it was towards that.

• 1:18:08Ramit Sethi?

  So it's going to be paid off within a year?

• 1:18:10Speaker 01

  Yes.

• 1:18:11Ramit Sethi?

  All right. That's pretty good. How come you seem so depressed about it? I'm really impressed. That's cool.

• 1:18:16Speaker 01

  Because it seems like a far away way.

• 1:18:19Ramit Sethi?

  A year?

• 1:18:20Speaker 02

  It's not though, all things considered.

• 1:18:24Ramit Sethi?

  I spent one year trying to increase my Olympic lift by like five pounds. A year is a very short amount of time. That's so impressive.

• 1:18:31Speaker 01

  I feel like that's work that I need to do on just how I think about myself and not beating myself up for it.

• 1:18:37Ramit Sethi?

  Yeah. Yeah. To me, I see a blank page ahead of you. You can write your story. The story right now is, we've always been bad at money. We slipped into getting married and we had kids and we got this house and we work really hard, but it feels like there's no money left over at the end. That's a story.

• 1:18:56Ramit Sethi?

  What story would you like to tell yourself five years from now? Your kid will be 10 years old. Tell her the story. Go ahead, Emma.

• 1:19:03Speaker 01

  We didn't talk about money a lot and we made a change. We made family values around money. We talked about it. And we created a partnership.

• 1:19:15Ramit Sethi?

  Love that.

• 1:19:16Speaker 01

  About managing our money.

• 1:19:18Ramit Sethi?

  Beautiful. Dave, give me the same story. What would you tell your 10 year old?

• 1:19:22Speaker 02

  Honey, when we first got married, we didn't really know what to do about money. We spent a lot of it. We didn't realize what we were doing at the time. But we met this great guy on the computer. And we, we learned how to value our money and we learned how to put it in the right places so that we can have the things we have now.

• 1:19:42Ramit Sethi?

  First of all, give each other a round of applause. That was really cool. To me, that shows me that you have the opportunity to rewrite your story. Okay, great. Let's take a look at a couple of other things. Your debt is going to be paid off this year, which is amazing. That's 2,900 a month going away. All right, let's take this down to zero. Watch this number. From 74% fixed costs to 56%? Whoa. Okay, that's amazing. All right. And then childcare?

• 1:20:12Speaker 01

  Childcare will go down to 900 in

• 1:20:16Ramit Sethi?

  Next year.

• 1:20:16Speaker 01

  September. This, this September.

• 1:20:18Ramit Sethi?

  All right, watch this. 900. Oh my God, this is crazy. Things just changed to 47% fixed costs. That's amazing. Now, when that happens, what are you gonna do with the thousands of extra dollars you have per month?

• 1:20:34Speaker 01

  I would probably allocate like a thousand more to housing if we were to buy a house.

• 1:20:41Speaker 02

  Yeah, that's what I was gonna say. Definitely help out with any kind of mortgage payment.

• 1:20:45Ramit Sethi?

  You gotta stop talking in terms of absolute numbers and start talking in percentages.

• 1:20:50Speaker 02

  So maybe fifty percent towards the house payment, twenty-five percent in the kid's college fund, twenty-five percent investment.

• 1:21:00Ramit Sethi?

  What do you think, Emma?

• 1:21:01Speaker 01

  I like that. Definitely fifty percent into the mortgage payment. I would like to add ten, fifteen percent to guilt-free spending and like twenty percent in saving their investments.

• 1:21:12Ramit Sethi?

  First of all, I like the percentage talk. I like that you two are like, this actually feels like pretty good energy. I wanna be a little bit more directive because you're all thirty-nine years old and you told me that you're talking about retirement. Both of you have got to get educated. You read both my books together. And both of you have got to start writing down certain things that you wanna achieve because it's very easy to slip back into whatever's in front of you. I noticed you both do that. Ah, we gotta like put a thousand dollars a month towards a house. That's not how you do housing. You would think about it by saying, here's how much it's gonna cost us for a down payment. Plus, if we factor in total cost of ownership, it's instead of us paying, what are you guys paying for rent right now? Twenty-six hundred, it's gonna be like sixty-eight hundred. I'm making up a number.

• 1:21:57Ramit Sethi?

  Therefore, we gotta have that much money every single month for housing after we fill up our down payment account. That's how you think about it. You all know how much you're gonna have at retirement?

• 1:22:09Speaker 01

  Oh, not enough.

• 1:22:11Ramit Sethi?

  You want me to just run the math for you guys?

• 1:22:13Speaker 01

  Yes.

• 1:22:14Ramit Sethi?

  All right, watch this. What's your current principal?

• 1:22:16Speaker 01

  One fifty-eight.

• 1:22:18Ramit Sethi?

  Okay, and how much are you adding? Per year.

• 1:22:21Speaker 01

  Like eight thousand.

• 1:22:23Ramit Sethi?

  Years to grow, twenty six years until you're sixty five.

• 1:22:26Speaker 01

  Yeah.

• 1:22:27Ramit Sethi?

  And what interest rate should we put here? Oh, I just put it anyway. Seven percent. All right. How much you think it's gonna be?

• 1:22:33Speaker 01

  Under a million.

• 1:22:34Speaker 02

  Maybe six hundred thousand?

• 1:22:37Ramit Sethi?

  One point five million.

• 1:22:39Speaker 02

  Oh, wow. That's a much bigger number than I thought.

• 1:22:42Speaker 01

  If I'm being honest, I don't know how much we need to retire, and that in and of itself is an issue. So I see that number and I feel like I need to become more educated on knowing exactly how much we need.

• 1:22:53Speaker 02

  I mean, one point five million, I'd say that's a pretty good number. Right? Maybe you can't retire and just do whatever you want, but there's some wiggle room there.

• 1:23:04Ramit Sethi?

  Dave, can I just be really straight with you?

• 1:23:07Speaker 02

  Yeah.

• 1:23:08Ramit Sethi?

  You need to learn about money. Dave, this is a really important moment. This is an opportunity for you to be like, oh, I have no idea what one point five million dollars means. I better learn. Okay, one point five million dollars means roughly you can take out about sixty thousand dollars a year in income. You guys couldn't live on sixty K a year.

• 1:23:29Speaker 02

  No.

• 1:23:31Ramit Sethi?

  Remember, this assumes you do not own a house, so you'd be renting. There's no way. You couldn't even do it today. You make like multiples of that. So what that tells me is one point five million is not nearly enough. So shall we do another calculation?

• 1:23:46Speaker 01

  Yeah.

• 1:23:46Ramit Sethi?

  Let's say that you take the amount, Emma, that you were putting towards debt. Let's just round up for easy math, three thousand. That's three thousand a month. That's thirty six thousand dollars a year. Fair?

• 1:23:58Speaker 01

  Yeah.

• 1:23:59Ramit Sethi?

  And what if we just put that all in here as well?

• 1:24:02Speaker 01

  Mm hmm.

• 1:24:02Ramit Sethi?

  Okay, so let's take a look here. You all would be investing forty four thousand dollars a year. Look at this number down here, four point one million dollars. That's a hundred and sixty thousand dollars in safe withdrawal income per year. What do you guys think about that?

• 1:24:21Speaker 01

  Feels good.

• 1:24:24Ramit Sethi?

  That's pretty cool. Four million bucks, that's pretty cool. If you were to put fifty thousand dollars a year here, you're now at four point six million dollars. It really adds up. What do you think the main takeaway of this is?

• 1:24:39Speaker 01

  Gotta get really clear and crisp on the numbers and see what we need and how we're gonna get there.

• 1:24:47Ramit Sethi?

  Agreed. Okay, cool. And then finally, can we talk about the house?

• 1:24:53Ramit Sethi?

  So, your house that you're looking at would be like eight hundred thousand dollars a year, is that true?

• 1:24:58Speaker 01

  Six hundred with a max.

• 1:25:00Ramit Sethi?

  I always assume a twenty percent down payment. It's a good guideline, in my opinion, because if you can't save like ten percent, fifteen percent for a down payment, how are you gonna ever handle things breaking around the house? So, to me, it's almost demonstrating to myself, I have saved enough, I have the discipline, to be able to put twenty percent down, that means I have the ability to handle whatever might come my way. Okay? So, let's just go ahead and take a look at this math real quick. I'm gonna say twenty percent down, you can always change it or whatever, thirty year loan, six percent, fine. So, it says from this very simple calculator that you would be paying three thousand six hundred eleven dollars. But let me tell you this.

• 1:25:46Ramit Sethi?

  When I make my own calculations, I add way more than this. But that's because I legitimately do not know how to fix anything. If it were me, just for safety, I would add another at least extra one thousand to fifteen hundred a month. So now we're talking like forty-five hundred, five thousand a month. That's double what you're paying today, right?

• 1:26:11Ramit Sethi?

  Now, you can do it, but the question is, would we rather put our money in the market, grow it for retirement, or would we rather get a house and not put that money in the market?

• 1:26:22Speaker 01

  I haven't thought about it in that way to say, what else could we use that money for?

• 1:26:28Ramit Sethi?

  I think the first conversation you ever had about money just presupposed you need to buy a house. It was just like, of course we do, like frantic, we gotta put money aside. And what I'm really encouraging you to do after all this work that we've done is to slow down and say, wait a second, maybe we want to buy a house that's important in our family. Okay, we can find a way to do it. But first, let's zoom out and realize that a house is just one tiny piece of a rich life. Just one. And maybe we want to buy a house. Maybe we want to rent for the next 10 years. Maybe we want this or that. But we gotta be thoughtful about these big decisions. A big thank you to Dave and Emma for joining me today. They came into this conversation

• 1:27:10Ramit Sethi?

  hoping to find a clear path to home ownership. That's something that so many people in the United States want. But this discussion is a perfect example of letting the tail wag the dog. And I see this a lot, especially with major life purchases where one financial decision ends up driving an entire money philosophy. Just like Dave, who justified this enormous purchase by saying, we'll make it work, rather than truly running the numbers to ask, how will this affect our finances and our retirement? Now they've started developing the tools to step back, see the full picture, and make

• 1:27:48Ramit Sethi?

  an informed decision together. So they can stop being passengers and start driving as teammates. I'd love to know what they ultimately decided. Unfortunately, my team reached out several times to ask for follow-ups, but they never responded. That's disappointing. I spend a lot of time with I become invested, of course, and I want to know what they did with the tools, with the realizations that they had from our conversation. So Dave and Emma, I'd love to hear back from you and wherever they are in their journey, I wish them the best.