Pod Insights Money For Couples with Ramit Sethi 203. “He makes 3x more, but wants to split everything 50/50” About this episode Katie (28) and Robin (35) live together in Tennessee and are planning a wedding. They earn a combined $386K, but don't split bills proportionally—even though he makes three times more. She feels judged, lies about spending, and recently racked up credit card debt after secretly booking a ski trip for his birthday. He’s investing $8K/month while she’s barely breaking even.
As they discuss a prenup and her plan to quit her job for grad school, deep questions arise: Can they truly combine finances? Can she stop people-pleasing? Can he be more generous? Ramit helps them untangle power dynamics, rebalance the split, and build a shared vision for money—before resentment derails their future.
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Transcript 14,891 words · 4 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
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2:38 Ramit Sethi? Start your free trial at Shopify.com/ramit. Start your free trial at Shopify.com/ramit. It sounds like we're at a funeral, like the Crypt Keeper is about to roll open. What the [bleep] going on here?
2:51 Speaker 01 I tend to be a little bit more selfish as it relates to money.
2:55 Speaker 02 I feel like I have to justify what I do with my money constantly.
2:59 Ramit Sethi? Have you ever lied to Robin about money or hidden anything from him, financially speaking?
3:05 Speaker 02 Yes.
3:06 Ramit Sethi? It doesn't seem like a healthy relationship dynamic or a healthy relationship with money.
3:11 Speaker 02 I don't know how to speak up for myself. I think I just kind of like shrink back and so I give the power to him.
3:20 Ramit Sethi? Has there been a discussion about a prenup?
3:22 Speaker 01 It's something that is certainly on my mind. I'd be devastated about it. A, that I'm getting divorced and B, that my money's going away.
3:29 Ramit Sethi? Okay, Katie and Robin. Katie wrote the application and she says, "We come from extremely different financial upbringings and backgrounds. He makes at least three times what I make. We're trying to figure out how to manage our finances together. We're also planning on getting married, moving, and possibly starting a family, all in the next 12 months. When I brought up my stress about my financial situation in comparison to his, he wants to keep things 50/50." She says, "Overall, we..." Really don't fight or argue. We discuss things in a healthy way. Well, that's not true because if it was discussed in a healthy way, then you would be splitting things 50 50. Healthy doesn't just mean you don't yell at each other.
4:11 Ramit Sethi? Healthy also means you get to outcomes that are equitable and feel good for everybody. She's 28, he's 35. Household income $325,000. And look at the split, $250,000 him, $75,000 her. Her fixed costs are 118%. So she's literally spending more than she makes every single month just on fixed costs. This right here explains so much of the stress that I see in the application. So we're going to need to work on how they are splitting expenses.
4:45 Ramit Sethi? Katie, where were you when you applied for the podcast?
4:48 Speaker 02 I remember I was in the public parking lot about to go get our groceries for the week. And we had just moved in together and we had been talking about finances. And I was just maybe a little bit frustrated about some of the financial dynamics at the time. And so I was like, can we apply to this? Can we try this out? And he was like, sure, why not?
5:14 Ramit Sethi? What exactly were you frustrated about?
5:17 Speaker 02 I think I was probably frustrated with how we were splitting finances. Before we moved in together, we split things almost 50 50. And then when we moved in together, I was like, hey, I really can't afford 50% of rent. So can we do this a different way? And so we had a very long conversation and we ended up splitting rent 60 40. But then everything else though was primarily 50 50 at the time. And I was spending a lot more of my income compared to how much he was. And it was just kind of frustrating in that way.
5:59 Ramit Sethi? Can we actually recreate that conversation? The one where you all talked about switching away from fifty fifty?
6:07 Speaker 02 I think we were sitting at our like kitchen bar and you had pulled out a spiral notebook and we're going over all the different options.
6:16 Ramit Sethi? Sorry, who started this conversation?
6:17 Speaker 01 Katie brought up the conversation and I provided a little bit of structure of hearing what you wanted to accomplish.
6:25 Ramit Sethi? Okay, let's do that.
6:26 Speaker 01 And trying my best to give that structure.
6:29 Ramit Sethi? All right, let's do it. Katie, you brought it up. Go ahead. What'd you say?
6:32 Speaker 02 Oh, our rent is twenty five hundred dollars a month. If we were to split that fifty fifty, that would be like one thousand two hundred dollars, which is about the same as my rent was before, but I was definitely struggling with that. So if we could try to figure this out in a way that I'm not struggling so much. And like, is there any way that we could do this in like a percentage way rather than like a fifty fifty?
7:03 Speaker 01 If we're paying twenty five hundred a month for rent, then what's a number that you're more comfortable with doing?
7:10 Speaker 02 Probably around a thousand.
7:13 Speaker 01 Okay, so if if we come to some sort of like compromise and say it's a thousand a month, right? And I'd say pay the other fifteen a month. Tell me how exactly that'll like alleviate finance for you. Like, where does that extra money go to then?
7:28 Speaker 02 That extra money would be able to go towards my savings. I would finally be able to put some money into savings and into my Roth IRA. So that would be only about two hundred dollars a month, but that would still help.
7:43 Speaker 01 I'm definitely open to the thousand dollars or somewhere around there. I just want to make sure it's going to be used in a productive way. Well, let's say hypothetically, going forward, it's a thousand and fifteen hundred, right? What is the other budgetary groceries or utilities or those things? Is it fifty fifty? Is it seventy five, twenty five? Like, how do you see that?
8:08 Speaker 02 I would like to split it similarly where I'm not paying fifty fifty towards the groceries, even then that I make a lot less. So fifty percent of my income going towards groceries is a lot more for me than it is for you.
8:25 Speaker 01 So I'm definitely open minded in that space, too. What would you propose or have an idea of how to split those up then?
8:34 Speaker 02 I guess we could start with sixty forty and see where we go from there.
8:38 Ramit Sethi? Okay, can I pause you?
8:41 Ramit Sethi? I'm just gonna come out and tell you right now. So what I saw were Katie raising a concern, which I appreciate, being proactive. That's pretty cool. I noticed Katie, you didn't have a clear grasp of your numbers. There was phrases you used where you gave away your power. I don't know if you caught that. You said things like, could we try, dot, dot, dot? Is there any way we could, dot, dot, dot? I also observed the dynamic where Robin basically took on the role of, okay, what would you like to do? Which can be good. I like getting the input from your partner. I didn't hear a lot of validation.
9:23 Ramit Sethi? I heard it once, and I also didn't hear Katie saying, well, what do you think is fair? And actually getting Robin to come out and be specific about what solution he might make. The final thing which surprised me was, well, if you spend less on rent, what are you going to do with that money because I want it to be productive? What do y'all think about those observations? I could be wrong. Tell me what you think.
9:49 Speaker 02 I feel like that's pretty accurate. I feel like that is how it typically goes. I feel like a lot of times I bring up financial concerns and I don't necessarily feel confident bringing up those concerns. And then that is so much of his world. That's what he's used to talking in those terms. And so he just kind of takes over the conversation. And then I kind of feel like, oh. I don't know how to speak up for myself and I I know he's not doing that on purpose. He's not trying to overpower me, but I think I just kind of like shrink back. And so I give the power to him.
10:33 Speaker 02 Um, and I want him to say it. I want him to be the one to suggest. I'll take this because I can afford it.
10:42 Ramit Sethi? Okay.
10:42 Speaker 02 Yeah.
10:43 Ramit Sethi? Robin?
10:44 Speaker 01 I I truly want it to be like a positive experience or or moving of the needle forward, right?
10:52 Ramit Sethi? Do you guys think that the recreation that you just did was productive?
10:57 Speaker 02 It was productive.
10:58 Ramit Sethi? Okay, Robin?
11:00 Speaker 01 Yeah, no, not so much.
11:02 Ramit Sethi? Okay, and um, was it, did it build connection?
11:06 Speaker 01 I don't think so.
11:07 Ramit Sethi? Yeah, I agree. It sounded like we're at a funeral, like the Crypt Keeper is about to roll open. Like, what the [__] going on here? No fun, no jokes. I love this roof. I'm so happy we're protected from the rain. Thank you. And then like, hey, let's figure out how we can still be protected from the rain. And I don't have to pay ninety eight percent proportionally of my income. You know, we can have some fun with it. That's just my style, but you can choose your own style. Right? We want to end, we want to start with love. We want to end with love. It didn't feel like that, right? It felt like logistics. Would everybody agree?
11:43 Speaker 02 Yeah.
11:44 Ramit Sethi? Okay, cool. So that was very helpful for me to understand where you're all coming from. Let's, let's keep working. I want to understand more about what's going on here. Can you think of a time in the last six months where you were not on the same page with each other financially speaking? How come both of you just started smiling?
12:04 Speaker 01 There's several.
12:05 Ramit Sethi? All right, each person give me one.
12:07 Speaker 01 She wanted to do something sweet for my birthday, a ski trip to Colorado. Knowing that it costs X amount of dollars and the financial picture leading up to that and what it actually costs out of pocket stressed me out.
12:21 Ramit Sethi? What are we talking about here? How much did it cost?
12:23 Speaker 02 It probably costs about $3,000.
12:27 Ramit Sethi? $3,000, including airfare, Lyft ticket, taxi, drinks, tax, tips.
12:35 Speaker 02 Oh, no.
12:36 Ramit Sethi? Oh, no? Oh, wow.
12:37 Speaker 02 No.
12:38 Ramit Sethi? Give me the real number. Don't [bleep] me.
12:40 Speaker 02 Oh, God, I don't even know. Um, the airfare, the Airbnb, the Lyft ticket, all ran about $3,000.
12:50 Ramit Sethi? All right. So it was like 6,000. All right, fine. Katie, how come you look so uncomfortable right now? You don't agree? Tell me. If I'm wrong, I'm wrong. Tell me.
12:56 Speaker 02 I booked this trip and I spent $3,000 that I did not have immediately. And I had a plan. I knew exactly how many shifts I needed to work to pay it off. And I was planning on having it completely paid off before he ever knew about it. And then I got sick and I didn't get to work all those shifts. And I carried a balance on my credit card to the next month.
13:24 Speaker 01 The part where she mentioned, I paid for it when I didn't have the money, makes my head spin.
13:30 Ramit Sethi? You talked about this before, I imagine?
13:32 Speaker 02 Yeah.
13:33 Ramit Sethi? Okay, when did it come up that you had a conversation about the costs of this trip?
13:37 Speaker 02 Probably a couple of weeks before we left for the trip. We had both worked really hard to get me out of credit card debt. And he had kept saying how proud of me he was that I was out of that credit card debt. And I was talking about doing this ski trip. And he was like, well, hey, I don't want you to keep spending money on this. Let me know what I need to pay for so that you don't carry a balance. And then it got to the point where it's like, oh, I am still carrying a balance and I need to tell him. So then I ended up telling him, like, hey, I still have like about $1,000 that I have not been able to pay off with my credit card that I'm carrying over for to the next month. And I'm super stressed out.
14:20 Ramit Sethi? Katie, did you feel guilty?
14:23 Speaker 02 Yes.
14:24 Ramit Sethi? Okay. You, you mentioned you felt stressed. Was there a thrill around, I paid off my credit card debt, I'm going to plan this trip. I know I don't have the money, but I have this three-step plan to make sure that it's all paid off before he ever knows about it.
14:43 Speaker 02 Yeah, I mean, I was really proud of myself for getting out of the credit card debt. We were starting to talk about his birthday, so I was like, okay, I can, I can come up with a plan to do something for his birthday. But at that point, it was close enough to his birthday that I couldn't really save up and then purchase. I had to purchase and then pay off. And so it did make me very anxious to carry that balance and to get into credit card debt.
15:14 Ramit Sethi? Why don't you just take him to the zoo? It's a lot cheaper.
15:17 Speaker 02 Cause he had said multiple times that he wanted to go skiing.
15:21 Ramit Sethi? Ah, okay. All right, so he said it, so you were like, this is gonna be something nice. I'll pay it. I have a plan. And then life got in the way and you got into credit card debt. Again.
15:37 Ramit Sethi? Are you still in credit card debt?
15:39 Speaker 02 No, it's paid off now.
15:41 Ramit Sethi? Katie, do you see any problem with this or is this normal to you?
15:44 Speaker 02 Oh, no, I see a problem with it. I don't want to be in that cycle.
15:49 Ramit Sethi? Have you updated your Pinterest board for your wedding to, instead of reflecting roses, it now has carnations in it?
15:56 Speaker 02 No, absolutely not.
16:00 Ramit Sethi? Absolutely not.
16:03 Ramit Sethi? Okay.
16:03 Speaker 01 I love that question.
16:04 Ramit Sethi? So Katie, have you ever lied to Robin about money or hidden anything from him financially speaking?
16:13 Speaker 02 Yes.
16:15 Ramit Sethi? Okay.
16:15 Speaker 02 This was another thing that came up within like the last week.
16:21 Speaker 02 We had talked about my finances and everything like that. And I had mentioned that I had wanted to do a series of facials before the wedding. And he was like, I don't think that that's the best allocation of money right now. And I was kinda like, well, I really want to do this. And he's like, well, maybe in a couple of months. And I was just like, all right. And I went ahead and booked the appointment and I, when I got the facial and it was like $200 and he texted me while I was in the middle of the facial. And he was like, where are you at? Like, I thought you'd be home by now. And I saw it afterwards, I was like, just running errands. Hmm, that's all.
17:03 Speaker 02 And then I got home and he's like, so you, you mean you were at the med spa? And I was like.
17:10 Speaker 02 Yeah, I got the facial that I probably shouldn't have spent money on, but I did.
17:18 Ramit Sethi? How did he know?
17:19 Speaker 01 Location on her face.
17:21 Ramit Sethi? Man, I feel old right now. Is this what people do? Like, people are not only tracking, but you're like, looking at it? This is crazy. Alright, there are so many things about this story that surprised me. First of all, I didn't know, how much did you say it cost? Two hundred bucks?
17:37 Speaker 02 Yeah.
17:38 Ramit Sethi? Okay, and do you do that once or like ten times?
17:41 Speaker 02 I would ideally like to get it done once a month up until the wedding, but I only did it once.
17:47 Ramit Sethi? Okay, two hundred bucks. So that's number one. I didn't even know that. Second of all, this location sharing is blowing my mind. And then I guess we should probably come back to the real issue at hand, which is, oh, like, spending money and not telling your partner and then not being honest about it. How did you resolve this?
18:04 Speaker 02 He was kind of like, that's, I was like, yeah, that was really of me. And then we just talked about it. He's like, I don't even care that you went to go get the facial. At the end of the day, just don't lie to me about it.
18:19 Ramit Sethi? Robin, is that true? You didn't care that she got that facial?
18:23 Speaker 01 No, didn't bother me.
18:25 Ramit Sethi? What, did anything about this bother you?
18:29 Speaker 01 The secrecy, right? That tells me fundamentally that there's some sort of disconnect as it relates back to money. And whatever that core issue is, needs to be revealed and then addressed.
18:43 Ramit Sethi? Yeah, I agree. I have to say, I would be pretty upset. I don't mind that my wife spends money differently than I do. In fact, she loves self-care. So everything you're saying, Katie, she and you would have a awesome chat. But money is one of those things that is so intimate that inherently it is sensitive. Right? Most of us are highly emotional about money. Men, women, everybody. And in an intimate relationship, the stakes are kind of high.
19:13 Speaker 02 Yeah.
19:13 Ramit Sethi? Lying alone is like a just big no-no, but then when it comes to money, oh, it sets such a bad precedent. And even though it's two hundred dollars, it's not about the amount. In fact, if anything, in your lifetimes, you will be dealing with amounts that are a hundred times that size. So I find this to be pretty serious. I find it to be something that I'm really glad we get a chance to talk about today because obviously there's something deeper beneath it. It's not just about getting some self-care treatment. It's about something more. Katie, what do you think it's about?
19:49 Speaker 02 I feel like I have to justify where what I do with my money constantly. And so when he was kind of like, well, I don't think that's a good way to spend your money when we're trying to save and like spend money on a wedding. It's kind of like, dang, I don't get to spend much money. Like, I don't have all that much to be able to like spend on the things that I want to. I don't have that freedom. So I think that's kind of where it's done from. I felt like I had to justify it to him. So I'd rather just not say it.
20:24 Ramit Sethi? Have you ever said that to him?
20:26 Speaker 02 No.
20:28 Ramit Sethi? Why not?
20:29 Speaker 02 Because I get emotional and cry.
20:32 Ramit Sethi? I don't mind crying.
20:34 Speaker 02 Yeah.
20:35 Ramit Sethi? Why? Why haven't you said that to him?
20:38 Speaker 02 I feel like that would hurt his feelings. That's not what he wants to hear. I know he doesn't want to make me feel like that.
20:44 Ramit Sethi? So your response is to?
20:48 Speaker 02 I guess protect his feelings.
20:51 Ramit Sethi? Take on the burden yourself?
20:54 Speaker 02 Yeah.
20:54 Ramit Sethi? And then go and spend it on the thing you want and lie about it?
20:58 Speaker 02 Yeah.
21:00 Ramit Sethi? Doesn't seem like a healthy relationship dynamic or a healthy relationship with money. Katie's decision to book that facial even after Robin said to wait reminds me of the concept of revenge sleep. Have you heard of this? It's when someone stays up late at night, not just because they want to, but because it's that one time of the day that they have control of their time. Take the average person. By the time their spouse is asleep, by the time the kids are in bed, they're exhausted. But maybe they have that tiny sliver of time. So they stay up watching TV, scrolling on their phone, doing something else for themselves, even though they probably know it's not good for their health. It's
21:42 Ramit Sethi? not good for their day tomorrow. What Katie's doing is the financial version of that. And when she feels like she constantly has to justify where every dollar goes, it's a horrible feeling. That evokes something called reactance, where we rebel against these rules that are set upon us. It's not really about logic, it's about autonomy. And in this case, autonomy in part looked like swiping her card and not telling Robin about it. Now, I'm not justifying it. I'm simply looking at what's behind this action.
22:19 Ramit Sethi? Now, the problem is even if you understand what's behind it, lying is a real problem, especially with money, because money is incredibly intimate and it is so shrouded in mystery. When you lie about money in a relationship, it destroys trust. So when I find out one partner lied to the other about spending, I want to know where the disconnect came from. I'm going to ask that exact question when we get back from the break. 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,
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25:37 Ramit Sethi? Where do you think your disconnect around money comes from?
25:40 Speaker 01 I think a little bit with respects to upbringing and just my background of what I do for a living, being in the financial field.
25:47 Ramit Sethi? Katie, same question to you.
25:49 Speaker 02 I make a lot less than he does, and so I have to be a lot more careful with where I spend my money on. I don't have that same freedom.
26:00 Ramit Sethi? How long have you been living together?
26:03 Speaker 01 10 months.
26:03 Ramit Sethi? All right. And then, how long until the wedding?
26:07 Speaker 02 Six months.
26:08 Ramit Sethi? All right. So you combined some income when? When you moved in together?
26:13 Speaker 01 Shortly afterward.
26:15 Ramit Sethi? Okay. All right. Robin, what's that transition been going from single guy, high earner, to now combining income?
26:23 Speaker 01 It's been an adjustment, thinking about we versus I. You know, I'm 36 years old now, and every day of my life, financially, it's been me, me, me. How can I make sure that my financial future is okay today? And how make sure my financial future is taken care of tomorrow and down the road? And bringing her into we is a major adjustment.
26:48 Ramit Sethi? What does it feel like when you think about it?
26:50 Speaker 01 Stressful. I won't say tedious is the right word because it's not something that I dread per se doing. It's almost as if this is such a foreign concept that I need an outside force to kind of knock me on the head a little bit.
27:06 Ramit Sethi? Stressful, why?
27:08 Speaker 01 Well, I do notice that my individual monthly expenses go up because I do pick up the tab like if we go out to dinner, things like that. So you know, the credit card bill is usually a little bit higher than than it had been historically. It's not the end of the world because I enjoy my time and spending money on us. And I have a little more financial freedom to do that and do those things with her.
27:31 Ramit Sethi? Is it hard combining income?
27:33 Speaker 01 I would say it's hard because I'm about eight years older than her. So I did have a head start, right? That's nobody's fault. When I look back and heart back to when I was, you know, in my early twenties, my priorities with money. I'm maxing out my 401k or trying to, I'm maxing out my Roth IRA because I was under the income limit. I'm maxing out my HSA, right? That was my priority. We had met going back those three years ago and she's come a very long way, didn't have her 403B set up. Didn't really have a savings account of much to speak of and did have the credit card debt. When she had initially said those things to me, I'm like, oh my gosh.
28:17 Speaker 01 How do you not have these things already? Like at least in in motion already? It was shocking.
28:25 Ramit Sethi? Okay, that's really helpful to hear. I have to tell you, I have a lot in common with some of your views. When I met my now wife, I had been earning money, a lot of money for a long time. And I was single and like I had my own way of doing it. Saving, spending, like it was dialed in. And then when we got married and moved in and we had to start talking about money. That was challenging because for the first time I had to kind of like talk about my decisions out loud and then we saw money differently and then we had differences in incomes and in
29:07 Ramit Sethi? experience with money, in jobs, and it was all hard. It was really hard. So I can hear a lot of my early self in the way that you're describing this situation. Let me hear from you, Katie. What does it feel like to bring your incomes and expenses together?
29:25 Speaker 02 I'm still living paycheck to paycheck and I'm still struggling where I had hoped it would be, we can share the burden of the finances instead of it being like feeling like I'm still living paycheck to paycheck and struggling to pay off my credit card every month.
29:48 Ramit Sethi? Robin, are you nervous about Katie's relationship with money and how that might affect both of you financially speaking?
29:56 Speaker 01 I am, yes.
29:57 Ramit Sethi? Why?
29:59 Speaker 01 I don't want maybe some of the repeats that she's explained so far to keep cycling back over and over. And I also want financial security. That's why I got into the industry that I'm in, in the first place. I have a vision of what that looks like, but it's only ever been as an individual instead of a partnership. So that really throws a huge dynamic that I welcome. It's one that I also don't know how to wade through the minutia per se. We eventually do want three kids and I want them to be able to pursue whatever their interests might be and give them the financial means to do so. As it relates to
30:42 Speaker 01 Katie and I, I want us to be able to look back on our life together and realize that we accomplished the things that we wanted to do that require any type of capital to do it. And I think any type of misallocation of money might impact that type of thing right there.
30:59 Ramit Sethi? Okay. Katie, how does that strike you, hearing that?
31:02 Speaker 02 I want the same thing. I think we have a pretty shared vision in that regard. I would like to have financial freedom and not feel like I'm living paycheck to paycheck or that I'm having to constantly count my pennies. I don't want to have to constantly be stressed about where money is coming from.
31:21 Ramit Sethi? With that ski gift example that we talked about, didn't you bring the stress on yourself?
31:27 Speaker 02 Yeah.
31:28 Ramit Sethi? Okay, so talk to me about that, because you said you don't want to be stressed, but then your very behaviors brought that stress upon you.
31:34 Speaker 02 I knew that was what he wanted to do for his birthday, and so the only way I knew how to make it happen was to take on that stress. I'm not at the place to be able to do that, so I shouldn't have done that.
31:50 Ramit Sethi? All right, that's a pretty mature approach. I appreciate that. Katie, are you a people pleaser?
31:56 Speaker 02 Yeah.
31:57 Ramit Sethi? In your relationship dynamics, in your financial dynamics, as you turn 35, 40, 56, how do you think that people pleasing might show up?
32:09 Speaker 02 Well, I know for now, I don't like to ask for help for things. I don't want to have to put the burden on anyone else. So, looking forward, if that's something that I don't fix, then it will be me struggling and stressing about money and him not knowing anything about it. Or I'll wait until the last minute to tell him about it instead of having that uncomfortable conversation early on.
32:39 Ramit Sethi? I agree. You'll do all those things and more. I think you will develop into the dynamic where he's frustrated and eventually disappointed in you, which is crushing from a relationship perspective. And you will constantly feel like you are trying to prove to him that you can be good. Another relationship dynamic I hate. And then as you bring kids in, if you can't say no to your partner, to yourself, then it's multiplied by 100 when it comes to kids. It's a really hard problem. So to me, this is like amazing opportunity. People pleasing is a challenge, something that can be worked through in therapy, but I think we can all recognize it here. I understand that you want to go back to school to increase your income, Katie, is that right?
33:25 Speaker 02 Yes, I'm actively applying to CRNA programs. They're very, very competitive, so the plan is essentially for me to get in as soon as possible because it's a three-year program and I cannot work while I'm in that three-year program.
33:43 Ramit Sethi? Wow.
33:44 Speaker 02 So.
33:44 Ramit Sethi? How are you going to handle the finances?
33:47 Speaker 02 So we've talked about it and he said that he's willing to cover the finances while I'm in school with the expectation that when I get out, I'll make a lot more than I make right now.
34:00 Ramit Sethi? Got it. Have you calculated how much more you'll make?
34:04 Speaker 02 Starting out, I'd make about $200,000 a year and right now I make like 75K a year.
34:12 Ramit Sethi? That's a big jump. Robin, you've been in the financial industry for a long time. Sounds like you have a high income, probably several assets bringing to the marriage. Has there been a discussion about a prenup?
34:23 Speaker 01 We've dipped our toe into the pool of that and it's something that is certainly on my mind. With my assets being much, much greater than hers, if things for some reason grew sour, that's a biggie for me. I've worked really long time to accumulate and been, been very prudent with my approach to saving and I divorcing is a nerve-wracking feeling. Yeah.
34:49 Ramit Sethi? Are you all gonna do it or what's the current state of affairs?
34:53 Speaker 01 We don't know.
34:54 Ramit Sethi? Katie, where are you on this?
34:56 Speaker 02 I completely understand his perspective and his background that he sees these things happening.
35:03 Ramit Sethi? Yeah.
35:03 Speaker 02 All the time and if it makes him feel more comfortable and like will relieve that stress off of him going into the marriage, I don't mind doing that. It's just weighing the like the expense of and the hassle of doing it.
35:20 Ramit Sethi? Like both of you say you want it, but you're not being. decisive about saying, yeah, we're gonna do it. What's going on here?
35:26 Speaker 01 I think there's two overarching things for me. One, I feel selfish. And B, the stigma of doing a prenup. It comes from me seeing real life examples in my, in my work multiple times a year with the clients that I interact with and seeing domino effect. And if I forecast my life and that happens to me, I'd be devastated about it. A, that I'm getting divorced and B, that my money's going away.
35:58 Ramit Sethi? I need to jump in here for a second because Robin mentioned the stigma around prenups. I suspect what's really happening is that if word got around to his friends and family, he thinks the optics of asking for a prenup would be bad. Basically, they would be, rich guy demands a prenup. That's because in America, the majority of people do not know how a prenup works. And they just think it's some wealthy [BLEEP] demanding that somebody else sign it, usually through the window of a freaking limo. But a prenup actually makes a ton of sense for him. He just doesn't want to be that guy. And I have to say, Robin's not the only one caught up in appearances. Katie shared with me that she grew up in a frugal household where the only message she heard was,
36:43 Ramit Sethi? save. So now she's got this script running in the background, save, save, save. You shouldn't spend. It's that classic Midwestern money culture where people almost compete to see who can spend the least. And the fact is that mindset is completely incompatible with who Robin and Katie are today and definitely who they want to be in the future. And if they don't work this out now, just fast forward a few years, three kids, busy lives. Suddenly she's feeling guilty for spending even a dollar on something for herself, like so many moms do. Meanwhile, he's looking at the target bill saying, wait, why are we spending this much? No, I don't want that future and I know they don't either.
37:24 Ramit Sethi? So my job is to push them to have these uncomfortable conversations like the one about a prenup and to be decisive. Watch how I push them to do this right after the break.
37:37 Ramit 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. They have over 100 rotating weekly meals,
38:22 Ramit Sethi? 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.
39:05 Ramit Sethi? One of my rich life rules is that I am happy to pay to learn from the best. That's why I have personally paid for MasterClass, this episode's sponsor. One class I really enjoyed taking was Prepare to be Unprepared with Amy Poehler. I'm always interested in trying to improve my speaking skills. This was a great class where I learned a ton about the rules of improv and how to apply that to my life, so I can be more adaptable on the fly. I use a lot of these principles, actually, when I'm talking on my podcast. Unlike other platforms, MasterClass puts you in the room with the people who defined their fields. They're not just experts, they are the best in the world. MasterClass has plans starting at $10 a month, giving you
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40:27 Ramit Sethi? First of all, prenups are meant to protect both people. Prenups focus on premarital assets, things that happened before you all ever met. They also allow you to make a decision on something that hopefully never happens, but allows you to make it at your best now, rather than what might happen 20 years down the line in some unforeseen circumstance. I think is probably a little bit more telling is that you're both kind of circling and not being decisive about it. And in fact, if you're like thinking about it, then you shouldn't bring it up. This isn't one of those things that you kind of, "Hey, I don't know. I'm thinking about this." What do you think? No, it's not that. It's like, the person who wants a prenup thinks about it, talks to their friends, does their diligence, and then comes and says, "Hey, this is really
41:12 Ramit Sethi? important to me." Right? I actually have a script in my book of exactly what to say in Money for Couples. It isn't something you like, "Oh, hey, I don't know. What do you think?" Like, no. It's either critically important to you, or it's not.
41:26 Speaker 02 I've heard that is very hard and very stressful to go through.
41:30 Ramit Sethi? Yeah.
41:30 Speaker 02 And I don't necessarily want to start our marriage with a super hard and stressful thing, when we're already super stressed out with a thousand other things going on.
41:39 Ramit Sethi? Are you gonna get a dog one day?
41:42 Speaker 02 Yeah.
41:43 Ramit Sethi? Why?
41:43 Speaker 02 We love dogs.
41:46 Ramit Sethi? Sounds stressful. Dog [BLEEP] all over your house, leaving dog hair all over your beautiful sweater. Ugh, why you want to get a stressful animal?
41:58 Speaker 01 Touche.
42:01 Ramit Sethi? Sometimes the things that are important to us are stressful.
42:04 Speaker 01 They're stressful.
42:05 Ramit Sethi? But we don't turn away from them. We actually turn directly to them.
42:10 Speaker 02 I don't necessarily have the asset. So if it's something that he wants, then I feel like that's up to him to say, I want.
42:18 Ramit Sethi? Agreed.
42:19 Speaker 02 And to bring up. So I don't feel like I really have an opinion on it.
42:23 Ramit Sethi? Robin, it is up to you. The person with more assets is the one who brings up a prenup. Do you see that sometimes being indecisive can have invisible costs on your partner?
42:36 Speaker 01 Yeah, yeah.
42:36 Ramit Sethi? Like, I didn't bring up a prenup until I [BLEEP] you. It was important to me. So that's my suggestion to you. And actually, just in general, the two of you, if you want to live this beautiful vision of a rich life that you talked about, traveling, kids, moving to a higher cost of living city, like, that all sounds amazing. I love it all. It takes being decisive about certain things. You don't trip and fall your way into that vision of a rich life, right?
43:02 Speaker 01 Yeah.
43:03 Ramit Sethi? All right. Now, Robin, you earlier mentioned that you struggle taking on more of the financial burden regarding your joint expenses. Are you comfortable taking on all the expenses for three years while Katie's in school?
43:17 Speaker 01 I think it'll be an adjustment. I think it's something that I can absolutely do, dollars and cents wise. I think it's going to be unpleasant at first just because it is a huge, huge effect in my mental makeup. It's just that I versus we thing. I've made a profound effort in the last however many months to shift that mental makeup because I want us to flourish in a financial way.
43:41 Ramit Sethi? Okay. What's the struggle, though?
43:43 Speaker 01 I think it's the psychology of it. Humans are innately resistant to change. When you are comfortable in one arena, one dynamic, one philosophy, that when something comes in and you have to alter your course.
43:56 Ramit Sethi? Are you turning into Plato? I'm not asking for philosophy. Tell me about your numbers. If she goes back to school and she stops earning money, that means you're going to have to spend thousands of dollars more per month, correct?
44:09 Speaker 01 Yeah.
44:10 Ramit Sethi? All right. Where's it gonna hurt the most?
44:12 Speaker 01 The shock and awe of seeing those larger numbers is not something that I'm accustomed to. I think some, some of the things that money will be spent on will be hard for me to spend money on because I don't necessarily agree with the items that are being purchased, I suppose.
44:29 Ramit Sethi? All right. This is a good uncomfortable conversation. Let's turn right into it. Let's fast forward. Let's say six months from now, you're married and you started your graduate school, right? And you are earning zero dollars, Katie. All right. So here you are. It's December, January, whatever. And you're in school. It's gonna be for three years. And you decide you want, what is something that you would want to spend your money on discretionary?
45:00 Speaker 02 Being able to go get lunch with my friends.
45:03 Ramit Sethi? Fantastic. How's it gonna happen? Have the conversation.
45:06 Speaker 02 I know I'm not making any money right now, but I feel like I still need to be able to have fun and keep in contact with my friends. I want to stay in contact and I want to go get lunch or I want to go get dinner and drinks with my friends. That's probably gonna be a $50 tab. Just me can like, can I go?
45:30 Ramit Sethi? Okay.
45:30 Speaker 02 I don't want to have to ask for it though.
45:33 Speaker 01 I mean, to me, that's fine. That's fine.
45:35 Ramit Sethi? Stop the lies. This is, this conversation will never go like that. Yeah. Okay, listen, we're gonna do that again because actually this is great practice. But what you started off, putting yourself in a subordinate position in the first sentence. "I know that I'm not earning any money." Look at my, I'm shrinking. Ah, I'm like a reverse flower.
46:01 Ramit Sethi? "I know, but once in a while I need to have lunch." Any partner, when they hear that approach, what do you think their response is gonna be?
46:14 Speaker 02 Like, no, like, I don't know, just kind of like, why then?
46:18 Ramit Sethi? Exactly, because you are, you are almost asking like a kid asks for a cookie at a grocery store. "Oh mommy, do you think that I can have this cookie?" And they already had like 10 cookies. And mom naturally is like, "No, you're not having that cookie." When you present yourself like that, you are co-creating a dynamic where your partner judges you. Where your partner now has power over evaluating whether that one decision is right or not. So can we do it again and this time, don't give away your power?
46:52 Speaker 02 Hey, Robin, I'm gonna go grab lunch with Joe.
46:56 Speaker 01 Great, have fun. Tell Joe I said hi.
46:59 Ramit Sethi? Okay.
46:59 Speaker 02 Alright, I'll take the car.
47:02 Ramit Sethi? Ah, what was that last comment? Say that again?
47:05 Speaker 02 I'll take the car.
47:06 Ramit Sethi? Okay, so I like that. First of all, it felt a lot more fun, right? What'd you notice about the duration of the first question versus the second?
47:15 Speaker 02 Super short and sweet.
47:16 Ramit Sethi? Yeah, too much talking means giving away your power. Like when I'm coaching people one-on-one, sometimes I'm like, "Hey, politely, stop talking." Because the longer you talk, you give away your power. If you look at powerful people, they don't talk a lot and explain themselves. But also I noticed a couple of other minor things then. Now we're in the last 5%, we're really tweaking here. First of all, asking for a credit card, shouldn't you have your own?
47:43 Speaker 02 Yeah.
47:43 Ramit Sethi? Like a joint card or even an individual card?
47:47 Speaker 02 Mm-hmm.
47:48 Ramit Sethi? Right? We don't want to set up the dynamic of having to ask your husband for money, even if you're earning zero dollars. Which brings me to my second point, should you even be asking? Because if you're asking about lunch, then you're asking about nails. And if you're asking about nails, then you're asking about buying an extra hot dog at the grocery store. And if you're asking about that, then you're asking about a facial. And it's 1 million requests over the next three years.
48:11 Speaker 02 Yeah.
48:12 Ramit Sethi? Y'all want to do that? You want to have those conversations a million times? Both of them are shaking their head no.
48:16 Speaker 01 No.
48:17 Ramit Sethi? Thank the Lord! Okay, if we all agree we don't want to have these painful conversations, then we can talk about how to change it earlier on in the process, like at the root cause.
48:29 Speaker 01 Yeah, yep, yep.
48:32 Ramit Sethi? Beautiful. All right. Shall we get into the numbers?
48:34 Speaker 02 Yeah, sure.
48:35 Ramit Sethi? Let's take a look. Robin, will you read the word in bold and then the full number next to it?
48:40 Speaker 01 Assets 26,000, investments 674,903, savings 105,028, debt 17,022, total net worth 788,909.
48:57 Ramit Sethi? What do y'all think about those numbers?
49:00 Speaker 02 I think that that's very impressive. I also know that that is 90% him.
49:06 Ramit Sethi? Okay, fair enough. Robin, what about you?
49:09 Speaker 01 Yeah, I'm very pleased with what I have accumulated and now what we have combined. I'm in my mid 30s, she's in her late 20s, and I think that we have a very good start on things and need to keep that momentum going.
49:26 Ramit Sethi? Shall we look at the income? All right. Katie, can you read off your gross combined monthly income?
49:33 Speaker 02 32,208.
49:35 Ramit Sethi? All right. What do y'all think about that number?
49:38 Speaker 02 A lot.
49:39 Ramit Sethi? That's a lot of money.
49:40 Speaker 01 Yeah.
49:40 Ramit Sethi? Yo!
49:41 Speaker 01 Yeah.
49:42 Ramit Sethi? You're in your 20s and 30s and you're making $386,000 a year combined?
49:48 Speaker 02 That's impressive.
49:50 Ramit Sethi? Whoa. What does that mean to you? To be able to be making that much as a household?
49:56 Speaker 02 Shouldn't have stress and we shouldn't be worried about like small expenses and like little things.
50:03 Ramit Sethi? Didn't we spend like an hour talking about that?
50:05 Speaker 02 Yeah.
50:06 Ramit Sethi? Okay. Robin, what does that number mean to you?
50:09 Speaker 01 It means a future. It means the drivers that I shared with you earlier are attainable.
50:16 Ramit Sethi? Yeah. Wow. That's pretty cool. Do y'all feel like you make a lot of money together?
50:22 Speaker 02 Yeah.
50:23 Speaker 01 Yeah, I think so.
50:24 Ramit Sethi? Okay, cool. That's refreshing to hear. To me, the answer is obvious. Yes, you both make a lot of money combined. It's also clear that there's a major disparity in income. Major. Let's talk about it on a monthly basis. Robin, you make $25,000 a month. Katie, you make about 7,500 a month. That's a major, major difference. What do y'all think about that differential?
50:51 Speaker 02 It's probably where a lot of the stress and a lot of our not seeing eye to eye comes in. Because if I'm splitting 50% of our, like, expenses, that's almost my whole paycheck. I have nothing I can save at the end of the month.
51:09 Ramit Sethi? You're right. We'll take a look at the breakdown in just a second. What about for you, Robin?
51:13 Speaker 01 I see more of what she is saying and how she feels about it. I'm seeing her want to increase that number and kind of week by week, month by month, wearing the stress kind of on her chest, so to speak.
51:28 Ramit Sethi? What if she never increased her income?
51:30 Speaker 01 Then we'll figure it out. We already established in the last five minutes that we have a good combined income that we can figure things out. It's just a matter of, hey, this is where we are. This is where we're trying to get to. Where's, how are we going to build this bridge together?
51:45 Ramit Sethi? Okay, let's keep going down the expenses. Fixed costs at 59%. That's interesting. I say interesting because typically at numbers 50 to 60%, with a monstrous income like the two of you have, there's got to be a major expense in here. I know it's not debt because you have a very small amount of debt. Oh, there it is. Wedding. We're going to talk about that. You're putting 3,300 bucks a month aside for the wedding. We'll come back to that. Investments, is this right? 40%? You're all investing $8,000 a month? Is that right?
52:17 Speaker 01 On my non-retirement account, I'm putting money at a pretty high clip.
52:22 Ramit Sethi? Okay, this is all starting to become very clear to me. Savings are at 5%. So basically, you have 350 bucks a month for an emergency fund, but you already have $100,000 in your emergency fund. So whatever. And then guilt-free spending is at negative 4%. That can't be right.
52:41 Speaker 01 No.
52:42 Ramit Sethi? You eat out and stuff like that?
52:44 Speaker 02 Mm hmm.
52:45 Ramit Sethi? All right, so something's wrong here. Anybody know what it is?
52:49 Speaker 02 When we were going through it, I think we got confused. That's how much we have spent in this last month. We already have a combined wedding savings account.
52:57 Ramit Sethi? Ah, let's make a change. So you already have your money for your wedding set aside, correct?
53:02 Speaker 02 Mm hmm.
53:03 Ramit Sethi? All right, I'm gonna delete this then. This changes everything. Watch. Watch this number up here. Right now, your fixed costs are 59%. I'm taking this as zero. See that number? What did it just drop to in fixed costs?
53:13 Speaker 02 Forty three.
53:14 Speaker 01 Forty three.
53:15 Ramit Sethi? Forty three percent. Much more appropriate for a very high earning couple. That's young, no children. That makes a lot more sense. Your number probably should be in the 30s or 40s when you have a huge income like that. Okay, great. So we don't need to count what you've already put aside in savings. That's basically reflected in your $105,000 of savings. How much is your wedding gonna cost, by the way?
53:40 Speaker 02 The wedding itself is $30,000 and then honeymoon is $10,000, so $40,000 in total.
53:47 Ramit Sethi? Okay, that's good. And by the way, 30K, what was the initial budget? 25K?
53:52 Speaker 02 Twenty?
53:53 Ramit Sethi? Twenty.
53:54 Speaker 01 It's 20. I knew that it was going to balloon.
53:57 Ramit Sethi? Yeah.
53:58 Speaker 01 From 20 to the 30 rate. I just knew it.
54:01 Ramit Sethi? How do you feel about it?
54:02 Speaker 01 I joked around with Lauren the other day. I'd go marry her in front of the front door at McDonald's. I'd go do it wherever and then let's save that money and put it towards our future.
54:15 Ramit Sethi? What the [bleep]? Oh, that's not the direction I thought it was gonna go. That was like kinda sweet. Wait.
54:20 Speaker 02 No.
54:22 Ramit Sethi? I'm trying to figure this story out. I would marry her in front of a McDonald's because I love her. So let's not do this wedding, but I love her, so I'm gonna go along with what she wants. Is that what you're saying?
54:34 Speaker 01 Most little girls want a big day and so I'm giving in to that. Good deal.
54:39 Ramit Sethi? There's too many people in America who do this gendered thing, which is going on right now. Like, oh, my wife, I make the money, she spends it. Ha, ha, ha, ha. I don't think you are the guy. Who deep down believes all of that, but I see clues of it. And it also comes up around weddings. Every little girl, blah, blah, blah. Let me tell you something. If we had a bridezilla or a groomzilla in our wedding, it was me. I had the vision. I've been saving since I was in my mid twenties. I was like, let's party, let's have a huge wedding. And I knew the budget would go over. I knew it. It went way over. How do you think I felt about that?
55:17 Speaker 01 Imagine if you were to be setting aside since you were younger that you expected it and it was a pill you were able to swallow.
55:25 Ramit Sethi? Very interesting choice of words. Notice again that deep down, you believe that a wedding is a pill to be swallowed. Or something like, I gotta let her have this thing. Cause it's, you know, this little girl's. No, I was like, all right. It went over and it was great. And I never said to my wife ever. Oh God, every little girl dreams about this, nor would I ever. Because if we have chosen to do this together, then I would never clip her wings by saying like, I know this is so that we could marry in front of McDonald's. No, it's like, babe, this is going to be so great. Now, if you need to set a specific amount, set the amount. But
56:07 Ramit Sethi? these micro jabs, the McDonald's thing, the little girl thing, it actually wears on people a lot. And that's part of what's happening here when Katie is saying, I feel judged, I feel that I have to prove myself. These phrases are contributing to that. I just want to stress how destructive these seemingly casual comments can be. They're actually micro jabs that are devastating to a relationship. Honestly, my job is almost easier when one partner is outright aggressive about money. I can spot it. I can shut that down easily. But what's happening here, this passive aggressive type of comment,
56:48 Ramit Sethi? this aggression that's veiled in an innocent playful delivery? No, that is incredibly destructive to a relationship. What he's actually doing without even realizing it is affirming these age old gender stereotypes. You know, you've heard so many guys say, "I make the money, she spends it." I hate that phrase. It's so deeply ingrained that the people who say that don't even realize they're doing it. But on the receiving end of being judged, of getting these subtle jabs, it's devastating. Especially when you take into account that he earns nearly four times what she does.
57:27 Ramit Sethi? What he's doing by communicating these jabs is signaling that the things she values are not that important. In fact, they're worthy of being mocked. I don't want my dreams to be mocked. I bet you don't either, especially not by our life partners.
57:46 Ramit 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.
58:28 Ramit Sethi? They have over 100 rotating weekly meals, including high protein options, keto, GLP one 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 27th, 2026. See website for more details.
59:14 Ramit Sethi? All right, let's keep going. Robin, who makes about $25,000 a month, his fixed costs are 24% of his take-home pay. That's one of the lowest numbers I've ever seen on the conscious spending plan. Katie makes about $7,500 a month gross, and fixed costs are 95% of her take-home pay. So Katie, what does that tell you?
59:40 Speaker 02 I'm spending too much money.
59:42 Ramit Sethi? Yes.
59:43 Speaker 02 Like, I can't afford to spend that much money.
59:45 Ramit Sethi? I agree. What does it feel like when you see those numbers?
59:51 Speaker 02 It just stresses me out.
59:53 Ramit Sethi? Yeah.
59:54 Speaker 02 And I feel like I can't do the things I want to do. And if I go do it, I do feel judged about. Like, that's where it's like, okay, you went and got a $200 facial. Well, can you really afford it? Not when I'm paying 95% of like all my money. And then it's like, well, now I'm overthinking it all. Every single dollar I ever spend, I'm overthinking and stressed out.
1:00:17 Ramit Sethi? I hear everything you just said. I totally am with you. It doesn't feel good. When you're paying 95%, you're underwater. Like, it can feel like you cannot breathe. Okay, I get that. I noticed there was a certain word you didn't use. It was very focused on you. I feel this, I can't do that. What about the two of you? Do you have any feelings about the relationship dynamic that is contributing to this?
1:00:46 Speaker 02 It feels unfair.
1:00:47 Ramit Sethi? I agree. That's the first word that came to mind for me. Unfair. Robin, do you think that the financial setup as it currently stands is generous?
1:00:57 Speaker 01 Not the word that I would use.
1:00:59 Ramit Sethi? Okay. What word would you use?
1:01:00 Speaker 01 Imbalanced.
1:01:02 Ramit Sethi? Oh, I agree. Favouring whom?
1:01:05 Speaker 01 It definitely favoured my side of the equation there. It makes me feel guilty because I love her to death. I don't want her to feel bad about money or anything else.
1:01:15 Ramit Sethi? If I look down, the numbers become even more stark. On a monthly basis, Robin, you invest post-tax $8,044, and I'm certain you're maxing out your pre-tax, whereas she invests $200. That's $8,044 versus $200 for a total combined contribution post-tax of $8,244. It's not fair.
1:01:40 Speaker 01 No, it's not.
1:01:41 Ramit Sethi? So how did we get here? Because we can fix this. There's no doubt about that. But what's important is that we understand how you got here.
1:01:50 Speaker 01 I'm taking care of myself, making sure that I'm okay today and I'm okay tomorrow. Having these items brought to the surface makes me realize it needs to be a little bit more fair and leaning more into the word of generosity from my side of things.
1:02:06 Ramit Sethi? Okay. Thank you for that. Katie, how did we get here?
1:02:10 Speaker 02 Starting out with just like being 50/50 on everything. And then as we have grown together, we haven't really changed our financial dynamic all that much. And I have had a hard time speaking up and like asking for it to be changed.
1:02:28 Ramit Sethi? And when you did, which you did, to your credit, you raised a question, but in that recreation, as you shared with me, you kind of settled for it to be like 60/40. Your split is not 60/40, right? Are you aware of that?
1:02:42 Speaker 02 Yeah, I haven't looked at.
1:02:44 Ramit Sethi? So Katie, if you want to feel good about money in your relationship, you have individual work to do, as Robin does too. And your individual work has to do with becoming much more comfortable, fluent, and confident with money. So for example, when I ask, hey, do you know the split of how much income you all make? The split is way, way, way different than 60/40. He makes almost four times what you make on a gross basis and three times on a net basis. Like, it's a huge difference. So when you went into that conversation, I'm just going to share
1:03:28 Ramit Sethi? a different approach. You might have gone into that conversation and said, you know what, babe? I really want to talk to you about our financial split. I've been feeling a little stressed, but I think I have at least one suggestion. I'd love to talk to you next week. How's Wednesday or Thursday? You come to the next meeting, you go, listen, I ran the numbers. From my perspective, I've realized that you make roughly 80% and I make 20% of our income. Right now, we're actually splitting it 50/50. And what that means for me is that by the time we cover our fixed costs, I literally have no money left over, none. And that's causing me to make some poor decisions. I need to have money for savings and I need to have money for investments. It's important to me as we go into this marriage.
1:04:13 Ramit Sethi? I'd like to talk about adjusting it. Here's my proposal, 80/20 split. I'm certainly willing to hear what you think, but we need to make a change.
1:04:22 Speaker 02 I feel like every time I have brought it up and tried to talk about finances and how I'm stressed out and how I would like for this split to be changed. It's always, how can you spend your money different?
1:04:35 Ramit Sethi? Yeah.
1:04:35 Speaker 02 Or what can you cut back on? Instead of what can we do together? It's always been like, well, then what do you need to do to modify your spending? The solution when we've talked has always been like, well, what do you need to do to change your spending habits?
1:04:50 Ramit Sethi? Let me pause you there for once. I hear you loud and clear. I'm going to address that. Okay, I'm going to. But before I move on, did you hear my sample conversation?
1:05:02 Speaker 02 Yeah.
1:05:03 Ramit Sethi? What did you notice about it?
1:05:05 Speaker 02 I have a plan and I came to him with a plan.
1:05:10 Ramit Sethi? Yeah. We're talking about where we are today and where we're going forward, right? Partners. Do you acknowledge that you can be a financial partner even though you make a lot less money?
1:05:22 Speaker 02 I would be.
1:05:24 Ramit Sethi? Yeah. Do you feel guilty about not making as much as he does?
1:05:28 Speaker 02 Yeah.
1:05:29 Ramit Sethi? Okay. Do you realize you're about to make a lot less for several years?
1:05:34 Speaker 02 Yeah.
1:05:35 Ramit Sethi? Truthfully, there are so many ways for you to contribute beyond money. It's really important as a couple to talk about all the different ways that contributions matter. Because maybe at some point, one of you will stay home with one kid, two kids, three kids. Maybe some of you will go part-time. Maybe some of you will manage the household. That's value. And I think, Katie, especially for you, it's important to internalize that. You're probably not going to make as much as he does. That's okay. Now, Rob, what the [bleep], man? This is untenable. You want to win. For you, winning is, is winning at the game of finances. Optimizers can do a lot of good.
1:06:15 Ramit Sethi? Problem is, you take it to its logical extreme and they become unbearably cheap and selfish. And if you've listened to this podcast, you know I've talked to a bunch of rich people. They have like millions of dollars and their lives are [bleep] horrible. Do you see how you're on the path to be that guy?
1:06:32 Speaker 01 I do. Yeah. And I talk about with her, that $200 for the payroll could have been $1,000 if invested. So yeah, I'm tracking with you.
1:06:40 Ramit Sethi? Yeah, that's a micro jab. First of all, making $386,500 a year, you all should not be talking about a random $200 expense. Okay, that actually to me reveals that your financial infrastructure is set up wrong. You should have money set aside for each individual, whether they earn money or not, so that they each have money every month to do whatever they want with, no questions asked. Problem is, optimizers don't have any hobbies, so they just reinvest it. And they go, "Look, I [bleep] invested it. I'm winning." I go, "You're not winning. You're actually losing at the game of life. You might as well take that money and go treat a couple of friends for lunch, or give it to somebody who needs it, whatever."
1:07:22 Ramit Sethi? Investing over $100,000 a year, which is great. I love it. But I'm like, what if you took literally like $500 a month of that and like, did something else? Wouldn't that like dramatically improve your quality of life?
1:07:35 Speaker 01 Never really thought about it like that. My brain operates within these two guardrails, like a bowling ball down the lane, right? And doesn't go outside of that. And I fully know that. And it's a, it's a major character flaw of mine. And she has done a very good job of bringing that to my attention and helping me open my eyes to that sort of thing. It's just from 16 to 36, doing things one way is so hard to unravel that.
1:08:03 Ramit Sethi? Thirty-six is not that old, my friend. You could change a lot.
1:08:06 Speaker 01 Yeah.
1:08:06 Ramit Sethi? Let me tell you something. I told Katie she needs to do some work, right? She needs to learn how money works. She needs to build her confidence. That is serious work, but you have work to do as well, Robin. And that work is when we say the word generous. Generosity is saying, I'm about to get married to this beautiful woman. I love her. I want to create this life together with her. I happen to have made some decisions 20 years ago, and I'm proud. I made those decisions. I stuck with it. I invested when I was in my early twenties. I maxed out my accounts, and now I get the best gift of all, which is to be able to spend part of that on my family, make her life a little easier.
1:08:47 Ramit Sethi? Let her know that when times get tough, she doesn't have to worry about it. To encourage her to dream bigger. Maybe that means going back to school. And also to take away some of the minor annoyances of life. How does that strike you?
1:09:03 Speaker 01 A lot to work on in that arena, and I'm more than willing to do that for her, for us.
1:09:09 Ramit Sethi? Katie, can I check in with you here? What are you feeling here?
1:09:12 Speaker 02 I feel like he's finally hearing me, like hearing what my concern is. I feel hopeful. I know he is definitely the type of person that when he is aware of something, he goes into it wholeheartedly. And I know that he doesn't mean to be the way he is in finances. I think he's just so used to doing things that way that he doesn't notice that it is putting me in that situation. And so I am very hopeful and like, I believe in him 100%.
1:09:47 Ramit Sethi? What are you all noticing about the dynamic here?
1:09:50 Speaker 01 I think that we're each other's biggest fan. There's not anything that we wouldn't do for one another. Now the puzzle pieces are out. We can bring the puzzle pieces back together to the picture that we want because we are aligned at 30,000 feet in the air.
1:10:05 Speaker 02 That makes me really happy. I know that we can figure anything out together. I have absolutely no doubt about that, and that's exactly why I wanted to do this.
1:10:15 Ramit Sethi? There's a lot of obvious love that I can see here. Like, both of you obviously have a lot of respect for each other, which is lovely to see. And that feels really good for me to see. Because sometimes I peer under this, I'm like, what am I about to find out under here? Uh-oh. But I can tell. Yeah. And it also reveals to me that there are some layers that you've probably had since you were kids, that probably it's time to discard those. Right? As we get to our new selves, our new chapter. Can anybody think of a layer that they have from when they were young? That maybe it's time to discard that layer?
1:10:53 Speaker 02 I put myself in like a subservient position, like where I have to ask for everything, like I'm a child.
1:10:59 Ramit Sethi? Yep. So I'm a child, I need to ask for permission, I need to ask for approval. I agree. Time to put that aside. That's going to take a lot of work, Katie. Are you prepared to do some work on that?
1:11:10 Speaker 02 Oh, absolutely, please.
1:11:12 Ramit Sethi? Great. Love that. What's another layer that you might decide, hey, this isn't serving me anymore?
1:11:18 Speaker 01 For me, it's my narrow-mindedness and my lack of generosity.
1:11:23 Ramit Sethi? Love that. Robin, I want to give you some tools right now. What would it look like, just as a thought experiment, if you were radically generous for one year?
1:11:33 Speaker 01 I think it would be that 94% number that we pulled up on the worksheet. That's the part where maybe she feels like she's in the deep end of the pool and needs metaphorically help getting her pool weenies on, so to speak.
1:11:48 Ramit Sethi? So you would bring that number down?
1:11:49 Speaker 01 Yes, and being okay with that. I think that's the other part of it.
1:11:53 Ramit Sethi? Okay, agreed. So I love that you just described two things. You described helping reduce her fixed costs, because right now they're untenable at 95%. And then you also identified the fact that you need to be okay with it. But I want to point out, we can make this change in like 10 seconds. Okay? I gave you a whole year to describe. You notice how you went right in the weeds? Zoom out. Think about a whole year of radical generosity. You make $25,000 a month.
1:12:20 Speaker 01 It may be having the silo account where we each have X per month that we can do this, do that, or the other, and not feel bad, guilty, resentful, any of those other words.
1:12:33 Ramit Sethi? Yep.
1:12:33 Speaker 01 That's the other thing that sticks up.
1:12:35 Ramit Sethi? It's good you're starting to realize that you're operating in a A to B way when we live in a... Yeah, like alphanumeric world, right? You're only going one dimensionally. So like, I love that you identified the CSP, which needs to be fixed. I love that you further identified feeling good about it. And you even furthermore identified that each partner needs to have a little bit of guilt for you spending money for themselves. Yes to all of that. I'll just make some suggestions. I might sit down with Katie and I might say, hey, let's have a conversation about the wedding. I want you to know that I'm so excited about this wedding. I'm so excited about marrying you. I'm so excited about our families coming together and us having a beautiful day.
1:13:18 Ramit Sethi? I realized that in the past, I've been a little worried about money. And I want to sit down and ask you, where are we today? What would make this wedding magical? And let's talk about it. So she comes to you, she goes, da, da, da, da, da. And you go, you know what? I realized something. We can do this. I want to put some extra money for our wedding. And I want you to know that I got this. Okay, that's radical generosity. The money part is disconnected from simply listening. Katie, tell me where we are. How do you feel? What could we do to make this magical? I can't promise everything, but at least tell me where, what you're feeling and where are we today? Oh, the connection, no jabs, just I'm here for you, babe. And sometimes you're here is just listening. And sometimes you're here is you writing a check. Amazing. What else?
1:14:03 Ramit Sethi? The birthday thing, which causes Katie to overspend. We can put aside a little bit of money every single month for a birthday fund. What's everybody thinking as I say this stuff?
1:14:12 Speaker 02 I really want to be generous. And that, that is something that I, that was a core value growing up. Family was very frugal, but even when it hurt, they were generous. That is very important to me, especially towards my family when they cannot afford things.
1:14:29 Ramit Sethi? Well, hold on, let me ask you a question. How can you be generous when you're spending 95% on fixed costs?
1:14:34 Speaker 02 Yeah.
1:14:35 Ramit Sethi? Katie, you've been a little too generous.
1:14:37 Speaker 02 Yeah.
1:14:38 Ramit Sethi? Come on, I'm talking to Robin about all this stuff and he's got a lot of work to do, but Katie, part of the two people doing this dance is he can't be radically generous if he's worried about his partner not being financially savvy.
1:14:56 Speaker 02 Mm-hmm.
1:14:57 Ramit Sethi? Right? I think that if the two of you want to be this power couple, which damn, highly paid guy working in finance, nurse, bringing all this money, it's like a very impressive couple. But in these couples, you've got to both be operating at a certain level. You've both got to be conversant with money and you have to have the discipline and control to say, "Look, these are the numbers that we agreed on and I'm not going to overspend."
1:15:22 Speaker 02 Yeah.
1:15:23 Ramit Sethi? So, the way to get there is number one, you've got to go all the way back to root causes. Your finances are way unbalanced. We're going to fix that right now. Neither of you have individual money set aside explicitly for guilt-free spending. We're going to fix that. And then, Katie, as somebody who's about to get married and be an active partner in a household that earns almost $400,000 a year at a very young age, it's time to build those skills of spending, of managing money. All right, we're going to make some changes to the CSP now. Y'all tell me what you want to do and I will simply be the computer operator.
1:16:03 Speaker 02 This is where I get uncomfortable.
1:16:05 Ramit Sethi? Katie, this is your chance to actually say what is fair, because nobody trips and falls and makes the world fair for you. You have to demand that it become fair.
1:16:17 Speaker 02 Yeah.
1:16:17 Ramit Sethi? If you can't do it in a safe, loving relationship, it's never going to happen. So, I think you can. I think you're ready. Go ahead and tell me what needs to happen here.
1:16:24 Speaker 02 I think we need to change the rent split up. If we could change it to where like maybe at $2,500.
1:16:33 Ramit Sethi? Okay.
1:16:34 Speaker 02 I don't know if that's fair, Robin. Do you think that that's fair?
1:16:38 Ramit Sethi? Why don't we try it and see? We can always take it back. His total fixed costs are 27% and hers are 85.
1:16:43 Speaker 01 We do spend a lot on groceries. Put it all over on me. What is that 13 something?
1:16:48 Ramit Sethi? Yeah, 1304. All right. And Robin, you're now at 31%. She's at 73%. Directionally, we're going the right way.
1:16:56 Speaker 01 The biggie, the other biggie down there is that education number.
1:16:59 Speaker 02 I would say also that skewed in an incorrect direction. I just went ahead and paid my whole semester. That's not a monthly.
1:17:06 Ramit Sethi? How much do you pay per year?
1:17:09 Speaker 02 Classes are about that much per semester. So I usually double that.
1:17:13 Ramit Sethi? Okay, so it's like 4,400 per year?
1:17:17 Speaker 02 Yeah, yeah.
1:17:18 Ramit Sethi? All right, so 366. Okay, oh, this is good. 366. Okay, now we're making changes. Oh, look at these numbers. 31% for him, 39% for her.
1:17:31 Speaker 02 That's a lot better, yeah, for sure.
1:17:33 Ramit Sethi? Hold on, I need to tell everyone this because I'm about to get yelled at by 5 million people on the internet. Listen up, you freaks who are about to write me. Oh, they just had their math wrong, so all of a sudden, everything's magically working for them. That's not true. That's not the point of this entire conversation. Although, yes, your numbers were wildly off. Katie, which is sort of like, kind of the problem. This looks a little bit more realistic now that we've adjusted some numbers down here. You've told me before, it feels like I'm living paycheck to paycheck. Meanwhile, your soon to be husband is like chilling, investing over $100,000 a year. So there's this massive mismatch. He knows more about money and on and on.
1:18:10 Ramit Sethi? My wish for you, Katie, is that you embrace being confident with money by becoming competent. And what I want for the two of you is that you can support each other to get there, both of you. That Katie can become more comfortable with money, more skilled with money, which I know you can 100%. I have all the confidence. And that, Robin, you can embrace a sense of ease with money. A pride that you did this. You did a lot of hard work in your 20s and 30s, and you have helped.
1:18:50 Ramit Sethi? Secure a really, really bright financial future. And you've actually connected so deeply with Katie that she actually feels confident with money. Yeah, she's actually spending more than she used to. Fine, your family can afford it. She doesn't apologize for every purchase. She doesn't feel guilty. She's a partner. So when y'all talk about money on your monthly money meeting, she comes prepared. She knows her numbers. She's done her ratios. She drives a couple decisions. What a better way. The two of you might be spending an extra 500 bucks, 3,000 bucks a month, whatever. It's sort of irrelevant, but the two of you are partners.
1:19:34 Ramit Sethi? What would that feel like?
1:19:36 Speaker 02 So good.
1:19:37 Speaker 01 Just bliss.
1:19:39 Ramit Sethi? Yeah.
1:19:39 Speaker 02 Yeah.
1:19:40 Ramit Sethi? Yeah. Let's keep going on this money thing. We've got a couple more changes to make, okay? Now I want to zoom out and kind of tell you a couple of things that are a little bit more advanced. Okay, first of all, if you make these changes now, one way to do it is just to simply do it proportionally. As a simple example, let's say that Robin makes 75% of the household income and Katie makes 25%. Then proportionally, Robin should pay for 75% of all joint expenses, all groceries, house, insurance, whatever, individual stuff. Y'all can handle that on your own. And that's better for setting up proper incentives. Now, as you all get married, my suggestion is combine everything.
1:20:23 Ramit Sethi? Put it all together and from there you have your joint account. Everything goes in there. All your joint expenses are paid for. You all have your individual money where it's sent to each account every month, regardless of how much anybody's earning. So you might choose to split that. Most couples do. Let's just pretend for easy math. You have $100 a month for guilt free spending. A lot of couples will do something like $50 for joint guilt free spending. $25 to her, $25 to him. That's one way to go. In this case, we have a massive disparity in income. So Robin might say, hey, look, I would feel a little bit better if I had a little bit more. I work really hard. You all decide on what feels good to you.
1:21:06 Ramit Sethi? But can you imagine how it would feel to each have your own money every single month? Nobody looking over your shoulder. Pretty good. Okay. Finally, investments. It doesn't make any sense to have Robin, you maxing out all your investments and Katie having none. Very important because you want Katie to also feel secure, safe, good.
1:21:29 Speaker 01 Absolutely.
1:21:29 Ramit Sethi? Oh, one, one other thing. Have you all calculated how much you're going to have in the future?
1:21:34 Speaker 01 We haven't done that jointly.
1:21:35 Ramit Sethi? Let's do it. I think you guys are going to be pleasantly surprised. You're starting with $674,000, correct?
1:21:43 Speaker 01 Yeah.
1:21:43 Ramit Sethi? How many years you plan to invest for? Let's say until you're 65. How many years is that, Robin?
1:21:49 Speaker 01 31 more years.
1:21:51 Ramit Sethi? Okay. Interest rate, we're going to assume 7%. And how much are you adding to your investments every year?
1:21:57 Speaker 01 Gosh.
1:21:58 Ramit Sethi? I think it's about 120K.
1:22:00 Speaker 01 Yeah, I was going to say 112.
1:22:02 Ramit Sethi? Okay, let's do that. What's that number you see on the left?
1:22:06 Speaker 01 Almost 17 million.
1:22:08 Ramit Sethi? $17 million and your wife is painting her own nails.
1:22:12 Speaker 01 Yeah, I kind of feel like an ass right now. It's, it's, it's revealing and eye opening that,
1:22:20 Speaker 01 you know, and, and almost silly that I've had the lens that I've been looking through for so long. And then an uneasiness on my part to let go and be more generous. It's astounding to, to see that and be like, dude, what's your deal?
1:22:37 Ramit Sethi? I want to show you something. Take a look at this. Let's say that you took $12,000 a year and you just spent it instead of investing it. Maybe part of that went to Katie feeling more free. Maybe part of it went to you all traveling a little bit more, et cetera. It's like very little. 15.7 versus 16.9. What is the functional difference of 15.7 versus 16.9 to you? It's meaningless. How are you gonna even spend 16 million dollars? Your rent is like 2,300 bucks or something right now. I know you're young. My point is, spending money is gonna become an increasingly important skill for the two of you. And to do it together is actually the most important thing of all.
1:23:21 Ramit Sethi? What is our philosophy on money? In our family, we... Dot, dot, dot. That's important when you have that kind of money. And also, if you cut back on contributions by 5, 10, even 25,000 dollars a year, guys, at your scale, it makes no difference. Yeah. You won the money game on paper. But the real game is the one with the two of you. It's the one where you smile. It's the one where you feel safe, where you support your partner. And it's the way where you create such a healthy dynamic that if and when you have a family with kids or elderly parents, you know you have each other's back because you already did all this stuff. Now it's about the connection. I feel very confident in the two of you.
1:24:06 Ramit Sethi? You have this liminal stage between now and when you get married, where I do think you should make some immediate changes to your finances, provide some ease for you, Katie. And I think that by doing that and by going through the Money for Couples book, and by talking about money, and also potentially doing a prenup, I think that you're gonna be set up so well that when you get married, honestly, you will look back nine months from now. You will not recognize who you have become. It will be truly amazing how far you've gone. Wow, what a transformation. I want to say huge thanks to Robin and Katie for tackling some really tough subjects with me today.
1:24:49 Ramit Sethi? We covered some big lessons, some of which were not easy to hear. First, your partner shouldn't have to tell you that they're drowning before you recognize it and step in to help. Great partnership is proactive. They don't wait until the waves are over your mouth. They notice when the tide is changing and whatever other maritime metaphors that I don't know about. Second, these dynamics are co-created. Often, you will find that two people played a role in creating and cementing... A dynamic around money. And that's why it's so important to be confident and competent about your money.
1:25:31 Ramit Sethi? You build confidence by being competent, by knowing your numbers and being able to communicate about it. That hard work is worth it. You've got deeply ingrained money scripts to rewrite? Okay, it's not easy to change them, but you can. And as they prepare for marriage, I know they can do it too. Now, let's check in and hear their follow ups. First, Katie.
1:25:57 Speaker 03 It was a huge eye opener for me that I give away so much of my power with my language. And due to my lack of confidence regarding finance, I'm also in counseling just to kind of work on my confidence issues in that area. We have also restructured our dynamic regarding finances. We now both contribute an equal percentage rather than a 50 50 split. And that has really helped so that I don't feel like I am spending my whole paycheck towards household items. And I have a little bit more wiggle room at the end of the month.
1:26:41 Ramit Sethi? And now, Robyn's follow up.
1:26:43 Speaker 01 Couple of biggies that still stick out and things that I'm still working on is trying to we versus I rather. And I think I'll always be, well, maybe not always, but here in the near term, a work in progress there. Just trying to reshape kind of my mental makeup with that. And one of the things that we have recently done is we've redirected our paychecks to a comparable percentage of paycheck. And making a joint account to make expenses, make sure that we all, we each have kind of our own bucket of money, if you will. And I can tell it's really alleviated some of the concerns that Katie has had that we spoke to about.
1:27:23 Speaker 01 And it also is allowing me to lean in more to being extra gracious with funds as a unit for the two of us here. So those are a couple of biggies right there. One of the other ones is. Is that we are doing recurring money meetings, if you will, just to make sure that we still are progressing and always moving that needle. So, thank you very much. Hope all is well.
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