248. "Her spending scares me. Should we get married?"

Ramit Sethi of I Will Teach You To Be Rich talks to Cre and April, a couple of five years, aged 46 and 48. Cre lives a debt-averse life and has been methodically building her wealth. April, on the other hand, earns more than twice Cre's income but struggles with significant debt and zero savings. They are at a crossroads, contemplating moving in together, but their conflicting approaches to money present a major hurdle. Cre fears that April’s spending habits will lead to constant arguments and financial strain, especially with the prospect of marriage and inheriting April's substantial debt. April, however, doesn't see her spending as a problem, insisting she lives a good life and can always work more to cover expenses. Ramit helps them uncover the generational patterns influencing their financial behaviors and challenges them to reconsider their current dynamic. In this episode we uncover: • How Cre and April act as "granny and child" during money conversations • Why April feels micromanaged and hides purchases • The emotional pressure April uses to get what she wants • The significant disparity in their net worth despite April's higher income • Why April initially doesn't see a problem with her spending habits • The uncomfortable truth about April treating money like she's still poor • How April's family history of money management influences her • The shocking revelation about generational money patterns • Why April's daughter is following a similar financial dynamic • Ramit's direct challenge to April's “innocent doe” persona • Cre's struggle to set clear financial boundaries • How April reacts to Cre's direct financial expectations • Ramit's step-by-step plan for April to tackle debt and build savings Chapters: (00:00:00) Introduction (00:04:14) April's persistent questions about Cree's spending (00:07:49) The "granny and child" roles in their money talks (00:12:47) Why April fears marrying into debt (00:13:46) The core of their financial disagreement (00:23:05) A stark comparison of their financial numbers (00:26:08) April's disconnect from her serious financial situation (00:36:00) Cree’s secret side income and resourcefulness (00:40:00) April’s luxury basement renovation with zero savings (00:44:40) Unpacking April's extensive debt and spending habits (00:48:28) Generational money patterns in April's family (01:05:32) Cree's struggle to set clear financial boundaries (01:10:09) The pitfalls of "walking on eggshells" in a relationship This episode is brought to you by: LMNT | Get a free 8-count Sample Pack with any LMNT order at https://drinklmnt.com/RAMIT Factor | Go to https://factormeals.com/ramit50OFF and use code RAMIT50OFF to get 50% off your first box, plus free breakfast for 1 year ZocDoc | Go to https://zocdoc.com/ramit to find and instantly book a top-rated doctor today #sponsored Leesa | Go to https://leesa.com for 30% off mattresses PLUS get an extra $50 off with promo code RAMIT, exclusive for my listeners DeleteMe | Get 20% off all consumer plans when you go to https://joindeleteme.com/ramit and use promo code RAMIT at checkout Connect with Ramit • Get my new book, Money For Couples • Get Money Coaching with Ramit • Download the Conscious Spending Plan • Listen to my book—now on Audible • Get my New York Times best-selling book • Get my no-numbers journal • Other episodes • Instagram • Twitter • YouTube Are you looking to retire in the next 5 years but wondering if you have enough saved? Apply to be coached for free on this podcast at iwt.com/apply

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

• 0:00Ramit Sethi?

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• 0:43Ramit Sethi?

  and you can join today at iwt.com/100k. When I was thinking about quitting my last job to do "I Will Teach You To Be Rich" full-time, I created a rule for myself. I couldn't go full-time with IWT until it earned at least as much as my monthly salary for three months in a row. And this really helped me take my business seriously. Now, for new business owners, I recommend something similar. And as you are getting set up, I also recommend keeping things simple by using Shopify. Shopify is the commerce platform behind millions of businesses around the world and 10% of all e-commerce in the US, including brands like Mattel and Jimm Shark.

• 1:28Ramit Sethi?

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• 2:02Ramit Sethi?

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• 2:10Ramit Sethi?

  You're gonna move in together? You're gonna get married? What are we doing here?

• 2:12Speaker 01

  I guess the problem is I don't agree with how she spends money.

• 2:15Speaker 02

  And I don't agree with how she wants to hoard money and not live life.

• 2:20Speaker 01

  That's extreme.

• 2:21Speaker 02

  I'm definitely on defense. It feels like micromanagement.

• 2:24Speaker 01

  Say we got married, then I owe $379,000 in debt. My salary's not gonna be able to take care of all that. We're gonna be in a world of hurt. It scares me.

• 2:35Ramit Sethi?

  You have zero in savings.

• 2:36Speaker 02

  True.

• 2:37Ramit Sethi?

  How much did the basement cost?

• 2:38Speaker 02

  Oh, it was a hundred grand.

• 2:39Ramit Sethi?

  What the...

• 2:40Speaker 01

  She doesn't see that there is a problem, so there's nothing to fix.

• 2:43Ramit Sethi?

  I need you to set the standard for yourself higher. I'm not here to fix you. Only you can fix your situation. Are the two of you financially compatible?

• 2:53Speaker 01

  Um...

• 2:56Ramit Sethi?

  Listen to this line from her application. "We haven't been able to take the next step in our relationship because we don't see eye to eye on money. It has been a roadblock that has almost led to a breakup." Today, I'm speaking with Cree and April. They're 46 and 48 years old. They've been together for five years, and they hope to move in together in the next few months. But just like Cree mentioned in her application, the difference in how they view money has led to hesitation on what they should do next. Cree is debt averse, and she's been quietly, methodically building her wealth. April is earning more than twice what Cree earns, but she's in debt. She's got zero savings, and she fights over how she manages her money.

• 3:40Ramit Sethi?

  They're talking to me in part today because they are facing a crossroads as they discuss moving in together and potentially combining their lives. Now, what would you do? Before we get to today's conversation, tell me in the comments below if you were in a relationship where your partner had a high income, but no savings and lots of debt. What would you do? Would you move in together? Would you walk away? What conversation would you have? And be honest. Tell me exactly what you would really do. Remember, they love each other, or else they wouldn't be here, sharing their personal details with millions of people. And I want to give a warm welcome to all of the new listeners of Money for Couples. Please know that I read every single comment that you... You post and I love to hear feedback from my community.

• 4:22Ramit Sethi?

  My team and I have built a special culture in this community that I want to share with you. We are respectful of my guests. They show a lot of courage to come on this show and share their numbers. We have high expectations for people because we've seen how fast people can change. But we also have compassion because we know that changing is hard. And we know that it's easy to judge people. But before we leave some comment that's really mean, we always ask ourselves, would I be willing to share the most intimate part of my relationship with millions of people on this show? So a big welcome to all of our new and returning listeners. I love having you as part of our community. Now I'm looking at their conscious spending plans. They keep their money separate and so they each filled out one individually.

• 5:07Ramit Sethi?

  If you want my help with your own CSP, you can join my money coaching program at IWT.com/moneycoaching. Assets $395,000 for Cree, $329,000 for April. Investments $62,000 for Cree, $20,000 for April. Savings $26,000 for Cree, zero for April, that's interesting. Debt $133,000 for Cree, $379,000 for April. Total net worth $350,000 for Cree, negative $30,000 for April. Now there's some pretty big clues in how each of them handle their money already, just from those numbers. The real question that I want to know is, are they financially compatible? And what should they do next?

• 5:53Ramit Sethi?

  Let's find out. Cree, in your application, you wrote something that caught my eye. You said, "She's a spender and I'm a saver. She makes more money than me, but I've saved more. We want to move in together, but I'm scared that our money differences will cause problems." What are you afraid will happen if you move in together without changing the way you both treat money?

• 6:18Speaker 01

  I'm afraid that our opposing views on it will create friction and more arguments.

• 6:25Ramit Sethi?

  Like what?

• 6:26Speaker 01

  Well, I mean, arguments around like, like money. I tend to probably ask a lot about it because she'll have something new and I'll be like, oh, where'd you get that? Oh, how much does that cost? And just the way she answers, I know she's like, oh, shut up, it's my money.

• 6:41Ramit Sethi?

  Give me an example from the last few months. What's something that you saw and what did you say?

• 6:46Speaker 01

  It was like this weekend and I was like, oh, where'd you get that? And you were like, Amazon? And I was like, oh, okay. How much was that?

• 6:53Ramit Sethi?

  What was it, April?

• 6:54Speaker 02

  I ordered another tripod.

• 6:58Speaker 01

  You already have a tripod? So I was like, why, why'd you need another tripod?

• 7:01Ramit Sethi?

  How often do these conversations happen?

• 7:04Speaker 01

  Probably every time she buys something.

• 7:06Ramit Sethi?

  Oh, now.

• 7:07Speaker 01

  No, no, not every time, but like if, if I see it like, like if I see something and I'm like, don't you already have one of those? And, you know, or she'll be like, oh, well, this one broke or this one's the new 2.5 version that works better like.

• 7:21Ramit Sethi?

  When you bring up these questions and you say like, hey, why'd you get that? You already have one, et cetera. What are you getting at when you ask that question?

• 7:29Speaker 01

  I mean, I feel like there's better things she could have spent the money on, I guess.

• 7:33Ramit Sethi?

  You ever just tell her that?

• 7:34Speaker 01

  I feel like I have, yeah.

• 7:36Ramit Sethi?

  How do you decide when to ask a question versus just being like, I think that was a bad decision?

• 7:42Speaker 01

  Oh, I usually don't leave with, that was a bad decision because that usually doesn't go over very well.

• 7:48Ramit Sethi?

  Does it go over better when you ask her, why'd you get that?

• 7:51Speaker 01

  No, but it seems like it's a little more gentle. But no, neither one of them really go over that great. I mean, she'll answer the question, but I think she resents the question.

• 8:00Ramit Sethi?

  Why do you ask it?

• 8:01Speaker 01

  It's just in my nature. Because I would rather her spend that money or not maybe invest it or save it or do something different.

• 8:11Ramit Sethi?

  How many times have you asked a question like this in the last year?

• 8:14Speaker 01

  I'll go with 12 for one a month.

• 8:16Ramit Sethi?

  I don't believe that. You just asked it like, come on, April, how many times you think she's asked that question?

• 8:20Speaker 02

  I'd say 48 for more like four times a month.

• 8:23Ramit Sethi?

  It's either 48 or 480. There's no way it's 12 in a year. No way. All right, so you asked a question and Creed, does it work?

• 8:32Speaker 01

  No.

• 8:33Ramit Sethi?

  No. I love human nature. Something doesn't work for literally decades and people go, you know what I think I'll do? I'm gonna do it for another 20 years. I don't get them. It's really weird. All right. April, what's it like to get these questions from Creed?

• 8:51Speaker 02

  I don't love it. I, I, I tend to hide purchases and I don't like it. It feels like micromanagement, which I don't love.

• 9:02Ramit Sethi?

  And your, your response when she asks the question is?

• 9:06Speaker 02

  Um, I try to give it, you know, calmly, but I'm sure sometimes there's some passive aggressive and some sass, but.

• 9:12Ramit Sethi?

  You minimize it? Oh, I didn't buy that many things. Justify it. Well, I needed it because I need this new upgrade.

• 9:21Speaker 02

  Yeah.

• 9:21Ramit Sethi?

  Yeah. Rationalize it. All of those things. So if the two of you look at your conversations about these new things that April buys and you zoom up, what role is each of you playing in that conversation? Cree, what is your role?

• 9:34Speaker 01

  Like the authoritarian?

• 9:36Ramit Sethi?

  Well, authoritarians don't ask questions. They just.

• 9:38Speaker 01

  Oh, okay. I, I guess I'm like the, the granny pointing the finger.

• 9:42Ramit Sethi?

  The granny. I like that. What'd you do that for? You know, we, we have, we have flour in the pantry. Why'd you go buy that? Okay. I like that. And April, what's your role?

• 9:52Speaker 02

  I'm definitely on defense. I'm like the little kid.

• 9:55Ramit Sethi?

  Nice.

• 9:56Speaker 02

  You know, is sneaking around, trying to do stuff.

• 9:58Ramit Sethi?

  Yeah, I can see like arms crossed, like shoulders up, playing small or like playing peekaboo. Oh, I didn't really buy that thing. Wow. Very evocative roles that each of you are playing. You like those roles?

• 10:11Speaker 01

  Absolutely not.

• 10:13Ramit Sethi?

  It's not even parent child. It's granny child in this one. It's kind of weird. I never heard someone describe themselves as a granny. All right. Good to know. So April, what do you think about moving in together? Cause Cree said she's nervous about getting into fights and disagreements. If you move in together, what do you think?

• 10:32Speaker 02

  I'm simultaneously excited about moving in together and also nervous about the possibility that our relationship could suffer.

• 10:42Ramit Sethi?

  Why would it suffer?

• 10:43Speaker 02

  We don't argue much now, but we have distance. We have two separate households and I think sometimes absence makes the heart grow fonder.

• 10:50Ramit Sethi?

  Is there one person who wants to move in more than the other or both?

• 10:54Speaker 01

  No, I think we both want to be together. That, that for a long time, the decision has been where to be. She has her house. I have my house.

• 11:01Ramit Sethi?

  Can you think of a time in the last few months where you were not on the same page with money?

• 11:06Speaker 02

  It's pretty consistent. Um, we took a trip.

• 11:09Ramit Sethi?

  Oh, yeah.

• 11:10Speaker 02

  To France.

• 11:12Speaker 01

  I don't think she wanted to go as much as I did. Um, because she had a some other financial obligations. I do feel like a time like that is a priority, so I put pressure on her.

• 11:23Ramit Sethi?

  How did you do that?

• 11:24Speaker 01

  I think I maybe guilt, do I guilt you?

• 11:32Speaker 01

  Yeah, it was a little bit of guilt. Uh, and you were just, you're putting things in perspective, you know, like.

• 11:39Ramit Sethi?

  Okay, hold on, I want to hear from April.

• 11:41Speaker 01

  Okay, okay, and I definitely feel like I, um, I, I'm, I'm emotional. Uh, I'm usually really happy and then when I'm disappointed, I'm really disappointed and it's like you can see it and it, you know, you don't want to do that really, if you don't have to.

• 11:55Ramit Sethi?

  Have you found yourself, April, throughout life, using your emotions to get the results that you want?

• 12:00Speaker 01

  I could see that, yeah.

• 12:02Ramit Sethi?

  Creed, are you a people pleaser?

• 12:03Speaker 01

  Probably is.

• 12:04Ramit Sethi?

  Uh huh. Tell me if this rings true or not. April, if you're happy, you're really happy, you're visibly happy. If you're disappointed, you're visibly disappointed. Creed doesn't want to disappoint you, so she will agree to something that maybe she did not really want to do deep down or financially cannot afford to do it. How true does that ring?

• 12:24Speaker 01

  Yeah.

• 12:25Ramit Sethi?

  Both are nodding. All right, so, so you convinced her to go to France.

• 12:30Speaker 01

  We were driving back to my hometown and think for the last hour, we didn't talk to each other.

• 12:37Ramit Sethi?

  Why, why is that, Creed? What do you remember?

• 12:39Speaker 01

  I had already expressed that, you know, I, I had a lot of trips already that I had taken for the year. So I was like, mm, France really isn't in the budget for me. And then, so when she was like, well, when we go to France, I was like, well, I didn't even say I was going to France. And she was like, well, why wouldn't you be going to France? Like, uh, that's a trip that I want to take with you and, you know, why wouldn't you be going? And I was like, well, I, you know, again, I hadn't really planned and budgeted for that. I think I kind of went off and I was like, I don't really want to go, I don't even want to go. And she was like, well, then if you don't want to go, then you shouldn't go. And then, then, then, then we just kind of went in our separate corners.

• 13:17Ramit Sethi?

  How did you end up deciding to go?

• 13:19Speaker 01

  I don't like seeing her sad. I wanted to go, I just was like. There's better things I could be doing with that money, but.

• 13:26Ramit Sethi?

  Like, like what?

• 13:27Speaker 01

  Paying off my car.

• 13:28Ramit Sethi?

  All right. Now, how long have the two of you been together?

• 13:30Speaker 01

  Five years.

• 13:31Ramit Sethi?

  Five years, okay. And is potential marriage in your future?

• 13:35Speaker 01

  That's the goal.

• 13:36Ramit Sethi?

  Okay, what's stopping you from that?

• 13:38Speaker 01

  Uh, well, we decided that we would wait because, uh, Ashley will graduates in, um.

• 13:45Speaker 02

  May.

• 13:45Speaker 01

  May.

• 13:46Ramit Sethi?

  That's your daughter?

• 13:47Speaker 01

  Yes. And so we were like, okay, then, then, then she'll, then April will move in with me. While she's off, you know, living her life, finding her way in the world. And then, you know, that was the next progression.

• 13:58Ramit Sethi?

  So you, you feel like it's a pretty clear line from here to marriage?

• 14:02Speaker 01

  I, I do, yes.

• 14:03Ramit Sethi?

  Okay, April?

• 14:04Speaker 02

  I agree.

• 14:06Ramit Sethi?

  Okay, so what's the problem today? Sounds great. You're gonna move in together, you're gonna get married, what are we doing here?

• 14:12Speaker 02

  We're hopefully not fighting about money. Um, I don't want to be, um, judged for my guilt-free spending. I want to spend my money because I work hard for it.

• 14:23Ramit Sethi?

  Mm-hmm.

• 14:23Speaker 01

  I mean, I don't want to marry into a huge amount of debt. So if we had a plan, that would work.

• 14:31Ramit Sethi?

  What if you don't have a plan?

• 14:32Speaker 01

  Then that's gonna suck.

• 14:34Ramit Sethi?

  April, when you look at your bank accounts, how do you feel?

• 14:36Speaker 02

  I feel okay.

• 14:38Ramit Sethi?

  How about your spending?

• 14:39Speaker 02

  I feel like it's out of control.

• 14:41Ramit Sethi?

  Why?

• 14:42Speaker 02

  I just willy-nilly spend on stuff.

• 14:44Ramit Sethi?

  Like what?

• 14:44Speaker 02

  Uh, buying stuff, my daughter.

• 14:46Ramit Sethi?

  How do you spend it? You spend it on credit cards, you spend it cash, how do you spend it?

• 14:52Speaker 02

  Debit, my checking account.

• 14:53Ramit Sethi?

  Debit and that means you have credit card debt, right?

• 14:56Speaker 02

  Oh, yes.

• 14:56Ramit Sethi?

  Yeah. People who have credit card debt always use debit cards. Have you tried to change your spending?

• 15:02Speaker 02

  Yes.

• 15:03Ramit Sethi?

  Did it work?

• 15:04Speaker 02

  No.

• 15:05Ramit Sethi?

  Okay, and Cree, is this some of the source of the conflict? Do you see her spending and you go, I don't like the way you spend money?

• 15:11Speaker 01

  Yes.

• 15:12Ramit Sethi?

  You don't say it like that, though, right? You say, why'd you buy that?

• 15:15Speaker 01

  That's, that's right.

• 15:16Ramit Sethi?

  Okay, and then April goes, me, little old me, I didn't, I didn't really buy that. And now you two are playing a game instead of actually talking about the real issue. What is the real issue here?

• 15:27Speaker 02

  Priorities, money priorities.

• 15:29Ramit Sethi?

  Be direct. That's just a word. What is the real issue with the two of you?

• 15:34Speaker 01

  I guess the problem is we don't agree. Oh, I don't agree with how she spends money, I guess I should say.

• 15:38Ramit Sethi?

  Thank you.

• 15:38Speaker 02

  Yeah, for sure. And I don't agree with how she like wants to hoard money and like not live life.

• 15:46Speaker 01

  Live life?

• 15:47Speaker 02

  Live life. Life is short. Tomorrow's not promised to either one of us.

• 15:51Speaker 01

  But I don't want us to be sixty-five and looking at each other like, well, we got thirty dollars between us.

• 15:57Speaker 02

  And I don't want to be sixty-five like, man, I wish I had gone on that trip or done that thing.

• 16:02Speaker 01

  And there we are.

• 16:04Ramit Sethi?

  Finally, we are getting some real honesty. Most couples never talk like that. Instead, they dance around money. This is what you might call level one honesty. I don't agree with how you spend your money. I don't agree with how you hoard money. At level one, couples argue about the transaction, the amount someone spent on avocados or their random Amazon purchase. But the real conversation is deeper than that. If you can make it to level ten honest, you might say something like, I feel unsafe when you spend like that. Or I don't feel like you actually see me or understand who I am, what I want, when you save every single dollar.

• 16:46Ramit Sethi?

  That level where you are talking about what you feel, you're able to masterfully talk about the numbers as well as your relationship with each other, that is where real connection actually happens. And it's rarely about the numbers alone, but this takes understanding yourself and being honest about what you actually want and need. This is extremely advanced because not only do you have to master your own inner psychology, including the idea that it's okay to want certain things, but you actually have to work on your technical communication skills to really reach your partner. This is what the podcast is about. It's not how much money you saved on rice cakes at the grocery store.

• 17:29Ramit Sethi?

  It's about systematically, progressively moving up your skill ladder so that you see money as a source of opportunity. And adventure and joy and not simply as a wedge that keeps you apart. Right now, they are stuck at level one. To make a change, they have to be willing to go to a higher level. And we're gonna see if they can get there, right after this. April, when you hear Cree say that she is scared to move in together because of money, how's that make you feel?

• 18:00Speaker 02

  Sad.

• 18:01Ramit Sethi?

  Why?

• 18:02Speaker 02

  Uh, who wants to be the problem? Who wants to feel like, um, something within them is holding back? Like making somebody else feel like, eh, I don't want that.

• 18:13Ramit Sethi?

  When you feel that way, you feel sad about it, what comes next for you?

• 18:18Speaker 02

  I need to figure it out. What can I do? How can I be better? I know, I know what I should be doing. How can I do more of that?

• 18:23Ramit Sethi?

  What should you be doing?

• 18:25Speaker 02

  I should be saving more money. I should be paying myself first. I should be paying down my credit cards.

• 18:30Ramit Sethi?

  It's interesting you say that, cause just a second ago, you were saying to Cree, I don't want to be 65 and wondering if I should have taken that trip, etc. So how do you reconcile those two? I should be saving more, but I don't want to get older and not have lived the life the way I want to.

• 18:43Speaker 02

  I think, I think it's possible to do both.

• 18:45Ramit Sethi?

  Oh, do you do that?

• 18:47Speaker 02

  I'm not actively doing it, but I think it can be done.

• 18:50Ramit Sethi?

  Okay. How often do you talk about money in your relationship?

• 18:53Speaker 02

  Not often.

• 18:54Ramit Sethi?

  And if it were up to you, would you talk about money more or less?

• 18:58Speaker 02

  Less.

• 18:58Ramit Sethi?

  That's what I thought. He goes, I don't want to talk about it. Leave me alone. Let me buy what I want to buy and we're good. And then Cree's like, yeah, but why did you buy that? One thing from the store, bringing it up. Okay, so besides that dynamic where Cree chases and April avoids, do, are there any other types of money conversations that you have?

• 19:23Speaker 02

  Uh, we talk about, you know, like when we go out to eat, you know, whose turn is it? We always alternate.

• 19:28Ramit Sethi?

  Okay.

• 19:29Speaker 02

  Um, you know, is it your turn? Is it my turn? I don't know. And I'll, I'll go, I'll get it this time.

• 19:33Ramit Sethi?

  Cool. What else?

• 19:35Speaker 01

  Uh, I think when we go on trips, we kind of, we, we like, we have our own separate, like, I don't know if you call it budgets, we, we have the money that we are going to spend and we play well off each other with that. Like we'll go get a massage, like, all right, I got that. And then we're like, oh, we're gonna do this bus tour and, oh, okay, I got that, you know?

• 19:54Ramit Sethi?

  Okay.

• 19:54Speaker 01

  Things like that.

• 19:55Ramit Sethi?

  Do you have different tastes in, like, travel or food? Does one of you prefer more expensive things than the other?

• 20:04Speaker 01

  Yes.

• 20:05Ramit Sethi?

  Who's the one?

• 20:05Speaker 02

  April prefers to fly with an airline that she prefers.

• 20:09Ramit Sethi?

  OK, got it.

• 20:10Speaker 02

  And Cree likes nice restaurants with reservations.

• 20:14Ramit Sethi?

  Is that right?

• 20:15Speaker 01

  Yeah, I'm not a total like complete cheapskate. I like to enjoy things.

• 20:23Ramit Sethi?

  You did put somewhere in one of your notes to me that you grew up sometimes being called cheap. Is that right, Cree?

• 20:33Speaker 01

  Yes, I, I, I still get called that to this day.

• 20:35Ramit Sethi?

  Are you cheap?

• 20:36Speaker 01

  I, I want to get a good thing for my butt.

• 20:40Ramit Sethi?

  That's what cheap people say.

• 20:42Speaker 01

  OK, well, then I'm cheap then.

• 20:43Ramit Sethi?

  OK, cheap people go, well, I'm actually, I don't know if I would call myself cheap. I'm selective. They use these words that are always quite charitable. You know, I just don't need the really fancy wine. For me, I'm perfectly happy and it just cuts across everything they do. That's why I'm very surprised that you like nice restaurants. I rarely hear a cheap person saying, I like nice restaurants. What's behind that?

• 21:10Speaker 01

  I like nice everything, but I could go buy, you know, a Jaguar, but I'm gonna buy a Honda because I'm practical.

• 21:17Ramit Sethi?

  I don't mind that. I don't think that makes you cheap. All right, well, we'll, we'll talk more about whether you're cheap or not. And it's not just because you like a Honda and I like Hondas too, OK? It's not.

• 21:26Speaker 01

  OK.

• 21:28Ramit Sethi?

  OK, so do you have any shared bills between the two of you?

• 21:32Speaker 02

  No, no.

• 21:34Ramit Sethi?

  It's all separate?

• 21:35Speaker 01

  Correct.

• 21:37Ramit Sethi?

  I just want to jump in quickly because I don't mind that Cree and April keep their finances separate. They're not married, they don't live together. It's actually quite normal for couples to keep their finances separate at this stage in a relationship. But it's important to note because just like every other couple on this podcast, they had to fill out a conscious spending plan and they filled out a separate one for themselves as opposed to a joint CSP like we normally see. So let's take a look at the numbers. So since you keep everything separate, we're gonna look at your conscious spending plans, plural. All right, let's start with Cree. So Cree, I'm gonna go through these numbers. If you don't mind, I'll just walk us through them and April's, and then we can talk about what it all means.

• 22:20Ramit Sethi?

  Cree, your assets are 395,000, investments 62,000, savings 26,000, and debt 133,000 for a total net worth of $350,000. What do you think about those numbers, Cree? I wish I didn't have as much debt. All right, let's go on to April's numbers. April, you have $329,000 of assets. Investments are $20,000, savings zero, debt $379,000 for a total net worth of negative $30,000. What do you think about those numbers, April?

• 22:58Speaker 02

  It's terrible.

• 22:59Ramit Sethi?

  Terrible. Why do you say that?

• 23:01Speaker 02

  Because I owe more than I have. My debt exceeds my value.

• 23:07Ramit Sethi?

  Okay. Cree, what do you think about April's numbers? Yeah, they need some work. That's a very nice way of responding.

• 23:13Speaker 02

  That was very gentle.

• 23:15Ramit Sethi?

  Okay, first of all, I don't mind if somebody has a negative net worth. That's fine. A lot of people have a negative net worth. It's okay. There's usually, almost always, a way to work out of it. What really caught my eye was the income. Cree, what do you do for a living? I work for a nonprofit. And April, what do you do for a living?

• 23:34Speaker 02

  I'm a nurse.

• 23:35Ramit Sethi?

  You're a nurse. Okay, great. Cree, your income is $56,000 per year. And with that income, you have $26,000 savings and $62,000 in investments. In fact, your net worth is $350,000. April, your income is $192,000. That's a lot of money. And you have $0 in savings and in fact, a negative $30,000 net worth. What do you both think about that?

• 24:06Speaker 02

  That's the root of the problem.

• 24:09Ramit Sethi?

  Can we, can we do it another way? What if you saw another couple with this characteristic? One person who earns a lot of money and actually has a negative net worth, and another person who earns a fraction of the first person and has a net worth of $350,000? What would you say about their situation if you were very direct?

• 24:29Speaker 02

  The person who makes very little and has done so much more really needs to help the other person to like, try to do more with, with they have.

• 24:39Ramit Sethi?

  Okay, Creep?

• 24:41Speaker 01

  I would say that the person that's making a lot of money is making a lot of mistakes with the money.

• 24:50Ramit Sethi?

  Finish the sentence, and so?

• 24:52Speaker 01

  And so they need to do better.

• 24:56Ramit Sethi?

  Interesting, April, your response. The person who makes less and has saved more needs to help the other person.

• 25:03Speaker 02

  Yeah, cuz I feel like the knowledge of how to amass of more savings and investments is there within that couple.

• 25:13Ramit Sethi?

  Hasn't Creep been trying to tell you that?

• 25:15Speaker 02

  I don't feel like, why'd you spend that? Why'd you do that? I don't think that's, that helps, that's not helpful.

• 25:21Ramit Sethi?

  First of all, I agree with your assessment. When you said, hey, if I saw a couple with these numbers, there's obviously some things that stand out to me. But your response was so interesting to me. Your response being, the person who makes less but has more should help the other. My response would be, the person who makes a ton of money should change the way that they relate to money and dramatically pay off debt and increase their savings and investments. Like, it actually has nothing to do with the other person at all. You're not married, you're not even living together. So what does it have to do with them? It's about the person who earns the money. They're obviously capable to make almost $200,000 a year. They should take on the reins themselves and be responsible for their own financial security. How does that strike you?

• 26:05Speaker 02

  It's accurate. I think it's, it sounds, it's easy to say, but I have found that it's hard to do. Changing your approach, relationship, and the way you deal with money.

• 26:18Ramit Sethi?

  What if you just don't, like you still get to go on these nice trips? Still get to buy stuff. What if you just don't?

• 26:23Speaker 02

  I think the big root of my issue is I don't really have an issue with my money and how I manage it. Like, I still have a roof. I still have utilities. I still live an okay life. How do you get people to change who don't see a problem? So that's what we're trying to do. We're trying to get April to change when she doesn't really see a problem.

• 26:45Ramit Sethi?

  Extremely honest. I really appreciate that. Cree, what do you feel when you hear that?

• 26:51Speaker 01

  Yeah, you're right. Everything's separate right now, but say we got married and then I owe, what? I have a, I have $379,000 in debt on top of my 133. So then say something happens to her. She's the big earner. We're gonna be in a world of hurt, you know? Like, like my, my salary's not gonna be able to take care of all that.

• 27:15Ramit Sethi?

  What's the punchline of this sentence? So therefore what?

• 27:19Speaker 01

  So therefore it scares me to think about that situation.

• 27:24Ramit Sethi?

  That's it? It scares you? That's the end of the sentence?

• 27:27Speaker 01

  Yeah, it scares me and it makes me not wanna be in that situation.

• 27:30Ramit Sethi?

  But it doesn't sound like that, cuz you, you all are planning to move in together in May.

• 27:34Speaker 02

  Well, the hope is that we can get some sort of plan. The hope is that I can get a plan to get this ball rolling in the other direction.

• 27:44Ramit Sethi?

  Hold on. I, I just wanna reflect on the way your language just changed. The hope, somewhere in the distance, somebody from the heavens is gonna come down and deliver the plan for me.

• 27:56Speaker 02

  It's you. You're, you're the, you're the person, though.

• 27:58Ramit Sethi?

  Nah, I'm not, I'm not coming, first of all, I'm not coming from the heavens. If anything, I'm, I'm in hell a lot of the times when I'm reading my own comments on social media, what people say to me. Second, I can't make you do anything. Only you can. We need to really fix that misconception right now. I'm not here to fix you. Only you can fix your situation.

• 28:19Ramit Sethi?

  I am struck by the dynamic between April and Cree. It's almost like they are both playing characters. Do you notice? April falls into the character of what I call the innocent doe. "Oh, me? Little old me? I'm just not good with numbers." And that identity is quite adaptive. What I mean by that is that identity allows her to avoid making financial decisions. It is actually something that feels almost like a warm coat. It feels comfortable. April said just a minute ago, she doesn't see a problem because she still has a roof over her head. She still gets to go on vacation. Sounds pretty nice. Now, I could sit here and make a concrete plan for April,

• 29:01Ramit Sethi?

  but unless she's willing to take responsibility and ownership of her money, nothing will change. This is important for you to recognize. When you are talking to somebody, maybe your spouse, maybe a friend, a family member, and they simply will ask you the same question over and over and over, but they never do anything about it, you should probably stop and say, "What's really going on here? Are they really looking for information? Or is there something deeper happening in this dynamic?" Notice, by the way, that Cree perpetuates this dynamic because she's a people pleaser. And when you pair an innocent doe with a people pleaser, it can often create this cycle where neither partner is actually addressing the true underlying financial issues.

• 29:44Ramit Sethi?

  The innocent doe just continues avoiding responsibility because why would they not? While the people pleaser avoids confrontation to keep the peace. Now, we gotta do something about this. We gotta break this cycle, but to do that, both partners need to actually acknowledge this dynamic is not working. That step is actually incredibly powerful, just to say, "Hey, I'm not sure what's going on here, but this is not working." Then they need to believe that there is a way to change the dynamic, even if they don't yet know what it is. And then finally, they need to develop the skills to change the dynamic. Are you starting to get it yet? This is not just about money. This is about changing your relationship with food,

• 30:26Ramit Sethi?

  or fitness, or your loved one, or your kids, or anything where you are improving and changing your life. First, you need to acknowledge this is not working. Then you need to believe that there's a way to make it better, even if you don't yet know it. And finally, finally, you need to develop the skills to change the dynamic. If you jump into freaking tactics immediately, you will get stuck, you will get lost, and you will stop. This is why we take it slow in order to go fast. Now, if you are in a similar situation, and if what I just said really resonated with you, then I want you to consider joining my money coaching program. It's designed to help you and couples align your financial goals

• 31:10Ramit Sethi?

  and to get unstuck by building the right skills in the right order. You can join now at IWT.com/moneycoaching. Now, we'll get back to the numbers right after this. Creo your income $56,000. And your fixed cost, what's that number there?

• 31:27Speaker 01

  Seventy-five percent?

• 31:29Ramit Sethi?

  Yeah, seventy-five percent. All right, so that's a bit high. So you feel a little stressed out about money?

• 31:34Speaker 01

  I don't.

• 31:34Ramit Sethi?

  No?

• 31:35Speaker 01

  Oh, it's because she's got a secret.

• 31:37Ramit Sethi?

  What the?

• 31:37Speaker 01

  I don't have a secret. What secret do I have?

• 31:40Ramit Sethi?

  This was not in my notes. What secret?

• 31:42Speaker 01

  Tell them about your little weekend job and all your little cash that you've been getting. Even before I had that, I don't feel stressed about money. I do, I did pick up a part-time job, and I work it on the weekends. And it's a pretty decent amount of money that I make.

• 31:57Ramit Sethi?

  How much?

• 31:58Speaker 01

  It's about $1,200 extra dollars a month.

• 32:01Ramit Sethi?

  Gross or net?

• 32:02Speaker 01

  Net.

• 32:03Ramit Sethi?

  Yeah, okay. Why is this a secret? This is cool. What's the secret?

• 32:06Speaker 01

  I didn't. It's not a secret. I mean, I didn't put it in the CSP because like it's not forever. I decided I wanted to do this and so I did it.

• 32:13Ramit Sethi?

  Why'd you do it?

• 32:13Speaker 01

  Uh, well, mainly because I um, I had a car accident and I totaled my paid off Honda and I bought a new Honda.

• 32:20Ramit Sethi?

  Gotcha.

• 32:20Speaker 01

  And I'm like, I hate having a car payment, so.

• 32:23Ramit Sethi?

  All right. All right, cool. So I like that resourcefulness. So can I add 1,200 bucks?

• 32:28Speaker 01

  Yeah, and currently, right now, I have a renter and so I have a little extra income from that too. But it's not forever either. Obviously, when she moves in, I'm not gonna have that renter.

• 32:39Ramit Sethi?

  All right, well, let's put the 1,200. So that, wow, that brings your fixed cost down to 56%. And the renter, how much does a renter pay?

• 32:47Speaker 01

  Eight fifty a month.

• 32:48Ramit Sethi?

  Damn, that's nice. Holy ****. So I just took that number down and it drops your number down to 40%. Yeah, you're, you're doing great. Financially speaking, especially on a $56,000 gross salary with the increase of the side income and the renter. Fantastic work. Let's look at the rest of it here. Your car payment is 484. Debt payments are zero. What the ****? You have $132,000 of debt. How are you paying zero?

• 33:16Speaker 01

  Well, that's my house. The 1210, that's my mortgage. And my house.

• 33:20Ramit Sethi?

  No other debt?

• 33:21Speaker 01

  Correct.

• 33:22Ramit Sethi?

  Wow, all right. Investments are $708 a month for your 401K. Very impressive. And an extra $100 a month for some post-tax stuff. Savings are at 6%. You have $100 a month going towards an emergency fund and you have $26,000 in an emergency fund. That's 10 months of expenses. Wow. Vacations at 125. Gifts at 50. And then guilt-free spending is at 36% or $1,694, which I know you don't spend that much every single month. What do you do with the extra money?

• 33:58Speaker 01

  I pay to the principal of my car loan.

• 34:01Ramit Sethi?

  Okay.

• 34:01Speaker 01

  I save some too. Like, uh, the automated number is what is going into my savings, but I add a little bit more.

• 34:09Ramit Sethi?

  Out of curiosity, just one question for you. Why don't you invest more aggressively?

• 34:13Speaker 01

  Probably because I'm scared.

• 34:16Ramit Sethi?

  Yeah. I think that's exactly the right answer. Honestly, this is a quite amazing conscious spending plan. It's extremely impressive on a $56,000 salary, or even if we add in all this extra stuff, it's still very impressive. But the striking thing is not the 10 months of savings, which is great. It's that you only have $62,000 of investments when you actually have a ton of extra money every single month that could be going.

• 34:44Speaker 02

  Right.

• 34:44Ramit Sethi?

  And that, that to me suggests probably like, don't understand investments, maybe scared, et cetera, which is, you just corroborated that.

• 34:50Speaker 02

  I mean, well, the main thing now is I really just want to pay this car off.

• 34:54Ramit Sethi?

  I can tell. You hate debt, right?

• 34:56Speaker 02

  I do.

• 34:56Ramit Sethi?

  But you know what I hate? Getting older and not having enough in investments.

• 35:01Speaker 02

  Right. So should I be doing half of that into investments, you think?

• 35:05Ramit Sethi?

  Well, we could talk about that, but you don't have enough invested, especially for someone who's like very diligent. You're just saving, which is fine, but it's not enough.

• 35:16Ramit Sethi?

  You need to be doing more. And based on your ability to use your money effectively, you just, you need to be investing more.

• 35:23Speaker 02

  Okay.

• 35:24Ramit Sethi?

  All right. Let's take a look at April's 192,000. You're contributing 401k, 800 bucks a month. That's good. Your fixed costs are 48%. It's pretty low. That's nice. So you have a very low mortgage.

• 35:38Speaker 02

  It was a HELOC that I recently converted to a mortgage. I took a loan on my house to renovate the basement.

• 35:45Ramit Sethi?

  But the, why'd you do that?

• 35:47Speaker 02

  This house actually is the house I was born in. My grandparents left it to me and my daughter.

• 35:51Ramit Sethi?

  Okay.

• 35:52Speaker 02

  With no, no payment. Um, and it was built in 1970 and it looked like it was built in 1970. And I was just miserable there. I was traveling a lot more because I hated my house.

• 36:03Ramit Sethi?

  Oh.

• 36:03Speaker 02

  So I upgraded my house and I'm a lot happier there now.

• 36:06Ramit Sethi?

  Wait, you have zero in savings?

• 36:08Speaker 02

  True.

• 36:09Ramit Sethi?

  How much did the basement cost?

• 36:10Speaker 02

  Oh, it was a hundred grand.

• 36:11Ramit Sethi?

  Alright.

• 36:12Speaker 02

  Like, I live in the basement.

• 36:13Ramit Sethi?

  You live in the basement? Who lives upstairs?

• 36:15Speaker 02

  My daughter lives upstairs. We have separate halves of the house and we're so much happier now.

• 36:21Ramit Sethi?

  Ah, does she pay?

• 36:23Speaker 02

  Oh.

• 36:24Ramit Sethi?

  No. Why doesn't she live in the basement?

• 36:26Speaker 02

  Because the basement's nice. I had the basement renovated.

• 36:28Ramit Sethi?

  Yeah, but before?

• 36:30Speaker 02

  Uh, before we were sharing, uh, the upstairs. There's three bedrooms upstairs.

• 36:33Ramit Sethi?

  I'm confused. You had three bedrooms? That's not enough space for two people?

• 36:37Speaker 02

  She's not a clean person and we argued every day about how not clean she is. We argue so much less now.

• 36:45Ramit Sethi?

  What the [bleep]?

• 36:47Ramit Sethi?

  How old is your daughter?

• 36:48Speaker 02

  She's seventeen.

• 36:49Ramit Sethi?

  I'm not a parent. I'm certainly not a parent of a teenage girl, but I don't know, spending a hundred gates so that I have more space at, from a three-bedroom house? Okay, this is a good clue. Let's continue on. Your housing is, like I said, very low, but it's, it's actually, it's not the primary mortgage. It's that you took a HELOC and so you're paying that. Even still, that's pretty low. Insurance is one thousand one hundred per month. That's a bit high, but what do I care? If it's forty-eight percent, you could spend whatever you want. Phone is four fifty. You're paying for your daughter, right?

• 37:21Speaker 02

  We have five lines.

• 37:22Ramit Sethi?

  Who's five people?

• 37:25Speaker 02

  I have a business phone. I have my phone. She has a phone and we have two Apple Watches.

• 37:30Ramit Sethi?

  Any iPads?

• 37:31Speaker 02

  She has an iPad, but I don't pay for a line for it. It doesn't have data.

• 37:34Ramit Sethi?

  Got it. But you pay for the watches?

• 37:35Speaker 02

  The watches have lines, yeah.

• 37:37Ramit Sethi?

  You're three hundred seventy-nine thousand dollars of debt. Does that include any credit card debt?

• 37:40Speaker 02

  Yes.

• 37:40Ramit Sethi?

  Thank you, Lord. Keeping my statistic consistent. People in credit card debt almost always have an Apple Watch or an iPad where they pay for additional connectivity. Why is that?

• 37:54Speaker 02

  I don't know.

• 37:55Ramit Sethi?

  Can you say no to your daughter?

• 37:57Speaker 02

  Yeah.

• 37:58Ramit Sethi?

  Yeah? Really?

• 37:59Speaker 02

  Yeah, yeah.

• 38:00Ramit Sethi?

  Whoa, look at Cree's face.

• 38:01Speaker 02

  She can. She can. She just doesn't.

• 38:07Ramit Sethi?

  Cree was like this, she was just shaking her head slowly. And she was like, just wait until this guy stops talking, cuz I'm gonna tell the truth right now. Let me ask it another way. Thank you for the clue, Cree. Do you ever say no to your daughter, April?

• 38:21Speaker 02

  Yes, for sure. She's asked to do a ton of things that I've said no to. And sometimes I'm real with her about why, no. Does, I mean, look, you wanna do this, we can't do this. We've gotta do one or the other.

• 38:35Ramit Sethi?

  Okay, how's she with money?

• 38:36Speaker 02

  She's actually got more in savings than me.

• 38:40Ramit Sethi?

  Wow, alright, that's interesting. Let's continue down. Investments are at zero. Savings are at 7%, but the savings are for vacations. Eight hundred dollars a month for vacation, nothing towards an emergency fund, okay. And then 45% on guilt-free spending. I don't really believe this number. Five thousand four hundred dollars, that's basically what's left over. April, is that number correct?

• 39:03Speaker 02

  Uh, I think that's probably close.

• 39:06Ramit Sethi?

  Like, what do you spend it on?

• 39:07Speaker 02

  I spend a lot of money eating out. Um, I do a lot of the pay-in-for stuff. I do a lot of pay-in-for things.

• 39:17Ramit Sethi?

  Buy now, pay later?

• 39:19Speaker 02

  Klarna.

• 39:20Ramit Sethi?

  Oh, god.

• 39:20Speaker 02

  A firm, I do a ton of that.

• 39:23Ramit Sethi?

  Why?

• 39:24Speaker 02

  Because I like the idea of having things now, but not having to pay so much for it right away.

• 39:31Ramit Sethi?

  Okay.

• 39:31Speaker 02

  I like to spend money, but I do want to save.

• 39:35Ramit Sethi?

  Don't tell me what you think I wanna hear, tell me what you feel.

• 39:38Speaker 02

  No, I feel like I wanna save. I'd love to have some savings. I'd love to have an emergency fund.

• 39:42Ramit Sethi?

  If you wanted to save, you would've saved.

• 39:45Speaker 02

  Right.

• 39:46Ramit Sethi?

  Maybe you just don't want to.

• 39:47Speaker 02

  I feel like I do want to, though.

• 39:49Ramit Sethi?

  If I were in your house right now with a clipboard, and I were observing you for five days, tell me what I would write down. That I would see with my own two eyes that would tell me you want to save money.

• 40:03Speaker 02

  Yesterday, I ate some food that I'd already purchased instead of eating out. That was me wanting to save money.

• 40:09Ramit Sethi?

  Okay, and and then so I'm writing that down. She's eating food that is already in her fridge. Where's the savings?

• 40:16Speaker 02

  Because then I'm not eating out.

• 40:18Ramit Sethi?

  Where's the savings? You still have $0 in your savings account. Where's the savings?

• 40:22Speaker 02

  Right, it's in my checking account.

• 40:24Ramit Sethi?

  And it's just gonna get spent tomorrow. That's not savings. That's you just eating food in your fridge. April, on your CSP, you list $379,000 in debt. What is that debt for?

• 40:37Speaker 02

  Half of it is my, um, the loan, the mortgage, and half of it is my student loans. Subsidized and unsubsidized loans.

• 40:46Ramit Sethi?

  Okay, what about the credit card debt?

• 40:48Speaker 02

  Oh, that's in there too.

• 40:49Ramit Sethi?

  How much?

• 40:50Speaker 02

  10, 10,000. I have three credit cards.

• 40:52Ramit Sethi?

  How much do you owe in student loans?

• 40:54Speaker 02

  Like $180,000.

• 40:57Ramit Sethi?

  You have a car loan?

• 40:58Speaker 02

  Yes.

• 40:59Ramit Sethi?

  How much?

• 40:59Speaker 02

  34,000.

• 41:01Ramit Sethi?

  And then what about this buy now, pay later stuff that you use?

• 41:04Speaker 02

  Oh, yeah, that's not in there.

• 41:05Ramit Sethi?

  How much?

• 41:06Speaker 02

  How much of that do I have? Woo, probably about $2,000.

• 41:11Ramit Sethi?

  I'm curious why your reaction was like, woo, like 2K is is like astronomical for you, but $10,000 of credit card debt was just a casual mention.

• 41:22Speaker 02

  Well, I feel like I feel like $2,000 because it just got back up to $2,000. I actually paid off that, um, paying for, um, stuff. I'd paid it down to nothing. So I feel like I'm capable of paying off 2,000. I think I'm capable of paying off 10,000.

• 41:36Ramit Sethi?

  Why haven't you?

• 41:37Speaker 02

  I just haven't been, I haven't wanted to. I haven't been, I haven't just done it.

• 41:43Ramit Sethi?

  Cree, what are you hearing as you hear April describe her relationship with money?

• 41:47Speaker 01

  Well, I think it goes back to what she said. She doesn't see that there is a problem, so there's nothing to fix.

• 41:52Ramit Sethi?

  Correct. And?

• 41:54Speaker 02

  And there is a problem. I want to be different. I want to start saving. Since we decided to come on the podcast in the last month, I've reduced my spending because my big problem is I live outside my means. I spend too much money. Um, so in the last month, I've spent less. I was in this terrible thing called daily pay, where I was borrowing from my next paycheck in order to have enough money to do all the extra things that I want to do. So I was owing myself $2,000 per pay period. Why? That's how much I was, that's how much I was overspending. I am not conscious with my spending at all. I have, I, before we decided to come on this show, I didn't know how much I made per month.

• 42:37Speaker 02

  Um, and I certainly didn't know how much I spent on anything.

• 42:40Ramit Sethi?

  How did you grow up with money? What do you remember your family saying about money? When you were young?

• 42:44Speaker 02

  It was never really an issue. I, I, anything I asked for, pretty much got it. I didn't ask for anything extravagant, but I think the things I wanted, I got.

• 42:55Ramit Sethi?

  How many siblings?

• 42:56Speaker 02

  I have a brother, but uh, my mom died when I was 13. My brother went to live with his father and my grand, my mom's parents took me in. And it was just me.

• 43:07Ramit Sethi?

  Oh my gosh. I'm sorry. That's a really tough age to lose a parent.

• 43:13Ramit Sethi?

  Did that change your relationship with money at all?

• 43:16Speaker 02

  Uh, I remember my mom really struggling. She worked two jobs. My stepdad was a drug addict and didn't uh, help at all. Um, I have very few memories of my mom, but she worked a lot. And uh, my grandparents, um, we spent a lot of time together. We really enjoyed each other.

• 43:37Ramit Sethi?

  What, what was your grandparents' relationship with money?

• 43:39Speaker 02

  Uh, my grandmother made like seven, like eight dollars an hour at top out, but she managed to take care. I mean, like I never knew us to struggle financially. And when she died, like everything was paid for and she left me like 20 grand.

• 43:57Ramit Sethi?

  And your grandfather?

• 43:58Speaker 02

  He was an alcoholic and he spent all of his money on things of that related to alcohol. So he, my, yeah, so my grandmother paid all the, like she said, she would describe her, she paid the essential bills, like the mortgage and he paid the things that we could do without, like the water and utilities.

• 44:17Ramit Sethi?

  You could do without water and utilities?

• 44:20Speaker 02

  If he messed up or didn't do his part on time.

• 44:25Ramit Sethi?

  The water would be turned off?

• 44:26Speaker 02

  I don't remember it ever being turned off. I feel like he, they must have argued enough to where he stayed on top of that. But I knew those were his responsibilities.

• 44:34Ramit Sethi?

  Is anyone struck by the connection between the word grandmother and Cree?

• 44:40Speaker 02

  Yes.

• 44:42Ramit Sethi?

  Cree, as I mentioned, you're the first person who's described yourself as a grandmother. Then I find out April had a grandmother who made a modest income, same as Cree. Look at April's face. She's covering her mouth and yet was dialed in on her spending, accumulated a sizable savings account, and not only that, she had a side income that she did same as Cree.

• 45:07Speaker 02

  Dang, I'm dating my grandma. Oh, that's awful.

• 45:11Ramit Sethi?

  April, did you ever see that connection before now?

• 45:13Speaker 02

  No, I didn't.

• 45:15Ramit Sethi?

  And what did the stability of your grandmother allow your grandfather to do?

• 45:23Speaker 02

  To mess off the majority of his income.

• 45:26Ramit Sethi?

  What do you all see here in this dynamic similar to how you grew up with your grandparents?

• 45:32Speaker 02

  It looks kind of the same, right? I mean, one person's holding it down, making sure the bills and the mortgage is paid. And the other person's like, all right, Amazon, here's my credit card.

• 45:43Ramit Sethi?

  Totally. And can we just fast forward to the next generation? Let's take your daughter. She's 17 years old. Let's say I spoke to her. What would she say about money?

• 45:55Speaker 02

  Interestingly enough, she has a little relationship and she is Cree and she's dating me.

• 46:03Ramit Sethi?

  Tell me about that.

• 46:04Speaker 02

  She has a boyfriend that she is always talking to me about how he's so reckless with his spending and he doesn't save anything. They had a little anniversary last month and she was in her feelings about how he wasn't going to have enough money to do something.

• 46:23Ramit Sethi?

  What'd you say to that?

• 46:24Speaker 02

  I was just like,

• 46:26Speaker 01

  Wow, listen to you.

• 46:29Ramit Sethi?

  Uh huh. Listen to you. Keep going. What's the, what's the punchline?

• 46:33Speaker 01

  I think she's not like me in her spending, but like me, she likes to spend money, though. She likes to spend your money. Cause like, you know, like, like we'll be on the weekends. She'll be like, hey, you guys wanna get, you know, order takeout? And we'll be like, no, we're good. You go ahead and order. She was like, no, nevermind. Cause when it has to be her money, she's like, no, okay. And then like her and the boyfriend were going out somewhere and they were like, you guys are coming, right? And we were like, oh, okay, I guess. So they went upstairs and April was like, oh, they want us to come. I was like, they want our credit card.

• 47:07Ramit Sethi?

  Wow.

• 47:09Speaker 01

  And of course we ended up paying, which I don't mind, but I'm just saying.

• 47:11Ramit Sethi?

  Mm hmm.

• 47:13Speaker 01

  It's easier to spend someone else's money.

• 47:14Ramit Sethi?

  Yeah. The parallel between how someone grew up with money and how they treat money today is always fascinating to me. In April's case, we see that this has been going on for generations. It's actually deeply ingrained in the fabric of who she is. It's interesting to me that April's daughter is following the exact same cycle. She may be playing a different role than April, but it's a similar cycle nonetheless. I'm not sure April is actually connecting those dots. I'm gonna use a strategy that we call twisting the knife. And I know it sounds a bit aggressive, but it's a tool to help people really see what happens if they take their behavior or their beliefs to the logical extreme.

• 47:55Ramit Sethi?

  What I'm gonna try to do is connect her financial behavior to something that is deeply meaningful to her, which is her role as a parent. The goal is to get her to see herself in a new life. If she sees the potential impact on her daughter, it might be the catalyst that she needs to finally take action. So I'm gonna try twisting the knife right after this. April, you ever think about your daughter's relationship with money as she gets older?

• 48:20Speaker 01

  Yeah, for sure. I don't want her to be like me.

• 48:22Ramit Sethi?

  Oh, why not? As you described it, you got a pretty good life. Go on vacation, eat out. Why not?

• 48:29Speaker 01

  I mean, because I don't have a plan to not work. My plan is to work. I don't plan to not work. And I feel like.

• 48:39Speaker 02

  It would be nice to not have to work.

• 48:43Ramit Sethi?

  Well, maybe your daughter will just have to work till she dies.

• 48:46Speaker 02

  I don't want that for her.

• 48:47Ramit Sethi?

  No?

• 48:48Speaker 02

  No.

• 48:49Ramit Sethi?

  What do you want for her?

• 48:50Speaker 02

  I want her to start investing now. I try to share with her the little bit of knowledge I have in terms of like how you can start early and have more.

• 48:59Ramit Sethi?

  You tell her that?

• 49:00Speaker 02

  I do.

• 49:01Ramit Sethi?

  Does she listen?

• 49:02Speaker 02

  She does.

• 49:03Ramit Sethi?

  Hmm. So you're like, do what I say, not what I do.

• 49:08Speaker 02

  And I think I, I think I do that a lot with her. In, in a lot of my experiences, I've shared a lot of my mistakes with her, like, hey, this is what I did and I don't recommend it. And I think she takes some of that.

• 49:21Ramit Sethi?

  I think that's pretty powerful. There's a lot of cultures that don't share their mistakes. Like in Indian culture, parents don't really share their mistakes. They don't even really talk like that, you know? But I think being able to share that is pretty awesome. And also, mistakes is one thing. One of the things that I've said before is people who have problems with money love to talk about their problems. So it's one thing to talk about problems or mistakes. It's a whole nother thing to actually change them. And a lot of times, what I've observed is people who talk about their problems or their mistakes, treat it like they're absolving them. Well, I talked about them. I shared my mistakes with you. I'm cleansed.

• 50:05Ramit Sethi?

  Not how it works. In fact, I would much rather you just teach your daughter how to set up an index fund investment. You could leave the mistakes behind. Take them or leave them. It's up to you. But that's not, alone is not enough. Showing them how you invest, how you save, how you've created a future, even though you didn't do it for 40 years, that is more powerful than any amount of sharing mistakes. What do you think?

• 50:26Speaker 02

  Yeah, I agree.

• 50:27Ramit Sethi?

  Okay. Cree, how did you grow up with money? Can you remind me?

• 50:31Speaker 01

  Oh, well, I was one of five. I don't feel like I grew up poor, but we definitely grew up conscious of what we spent, you know, because there were five mouths to feed plus two parents. So, um, but my dad was very, very frugal. Like, so people, people often say, oh, yeah, you're just like your dad. Because he was definitely a frugal guy. I feel like way more than I was, but it definitely rubbed off on me. They weren't doing any investing, so. That's not, that's something I've been trying to learn on my own, but like, the value of a dollar and saving for a rainy day, I definitely got that.

• 51:07Ramit Sethi?

  What phrases did they use when you were young about money?

• 51:11Speaker 01

  Money doesn't grow on trees.

• 51:12Ramit Sethi?

  Mm hmm. What else?

• 51:14Speaker 01

  Uh, you need that, like you need a hole in your head. Got that one a lot.

• 51:19Ramit Sethi?

  Kind of the same type of thing that you say to April, although not as direct. Why do you need that? It's the same general type of message, right? Are your parents still alive?

• 51:30Speaker 01

  No.

• 51:30Ramit Sethi?

  No, okay. How were they with money as they got older?

• 51:34Speaker 01

  Pretty good. I mean, my, my dad passed away first and he, um, he left some money. We didn't have to like, uh, you know, start a GoFundMe or nothing to get him in the ground. And he actually left my mom some, a decent amount of money. And then, you know, when my, when my mom passed away, um, she left the, the, the house to me and my siblings. And, you know, a little money as well.

• 51:59Ramit Sethi?

  What'd you do with the house with that many siblings?

• 52:01Speaker 01

  We have it. It's, uh, we, we use it for holidays and birthdays. We meet up there. And actually, one of my sisters actually just recently moved back in there.

• 52:10Ramit Sethi?

  Ah, wait.

• 52:11Speaker 01

  Someone's living there now.

• 52:12Ramit Sethi?

  And like, from a financial perspective?

• 52:15Speaker 01

  Uh, we, we just, we have what we call a kitty fund and we all put money in it every month.

• 52:21Ramit Sethi?

  Really?

• 52:22Speaker 01

  Yeah, to pay bills and maintenance and insurance and taxes and stuff.

• 52:26Ramit Sethi?

  No conflicts with that many siblings?

• 52:28Speaker 01

  No, we, we get along pretty well. We're pretty low key. So we just, we do what needs to be done.

• 52:33Ramit Sethi?

  That's amazing and actually quite rare. You know, the old style was like, we need to buy a house for generational wealth. And then they pass it down, but you know, if you have two kids, three kids, four kids, and there's a lot of conflict that often happens. And parents don't think about this. In fact, I had one person in one of my comments, I was like, hey, you have like, multiple kids, why are you only thinking about your house as generational wealth? And the person literally said, They can figure it out. When I'm long gone, I'll be out of here. And I was like, that just sounds kind of selfish. Uh, but in your case, amazing because your siblings all agree. Sounds like you're pretty unified on the vision of how to treat the house.

• 53:14Ramit Sethi?

  So Cree, what, what did you take away from your upbringing with money? That you are bringing to this relationship as it relates to your finances?

• 53:24Speaker 01

  I'm the, you know, person that's like, hey, you gotta save for a rainy day.

• 53:28Ramit Sethi?

  Mm hmm.

• 53:29Speaker 01

  A rainy day is definitely coming.

• 53:30Ramit Sethi?

  You wag the finger, you ask the question. It doesn't really work, but you just double down and keep doing it.

• 53:37Speaker 01

  Pretty much.

• 53:38Ramit Sethi?

  Okay. Looking at your CSPs side by side. We have Cree who makes $56,000 plus some side income. Has a total net worth of $350,000. April making $192,000 has a net worth of negative $30,000. And spends almost the same amount each month on discretionary stuff, eating out, et cetera, as her fixed costs. Here's my question. Are the two of you financially compatible?

• 54:11Speaker 01

  Looking at those numbers, no.

• 54:13Ramit Sethi?

  April?

• 54:14Speaker 02

  No.

• 54:15Ramit Sethi?

  April says no. So does Cree. So what does that mean for you?

• 54:19Speaker 02

  I need to be different. Cree is better. Cree is right. Her stuff is, her stuff is better. I need to be different. I'm the problem.

• 54:26Ramit Sethi?

  You believe that?

• 54:27Speaker 02

  Yeah, yeah, I do.

• 54:29Ramit Sethi?

  Okay. I'll take you at your face value. So what are you gonna do?

• 54:32Speaker 02

  I gotta figure out how to be different. I gotta figure out how to have more control. Like, I just, I gotta, I gotta figure this out.

• 54:42Ramit Sethi?

  Didn't sound very convincing. It actually sounded like painful. Let me replay what you just did. I said, what's your plan? What are you gonna do?

• 54:54Ramit Sethi?

  Already, it's over. It's over. If that's the way you look at the journey that you claim you want to go on. Ah. It's gonna [bleep] suck. You're never gonna do it. Why would you? You want to try again? Why would you change?

• 55:12Speaker 02

  Because what I've been doing isn't good. It's not taking me in the direction that I want to go in.

• 55:18Ramit Sethi?

  Why not? You told me it is. You're traveling, you're wearing nice clothes.

• 55:22Speaker 02

  But when the rainy days come, I have to scramble and do something strange to get through it.

• 55:29Ramit Sethi?

  That's true, but if you've been doing it this way for 40-plus years, and you got a nice, the nice house that's renovated and you go on the trips,

• 55:40Ramit Sethi?

  it actually feels like it could be painful if you change that. The question was, are the two of you financially compatible? Both of you said no. Cree, what do you make of that?

• 55:51Speaker 01

  Uh, well, that, that, that money's probably gonna be an issue for us.

• 55:55Ramit Sethi?

  Not probably, it already is.

• 55:56Speaker 01

  No, it is an issue for us and will continue to be.

• 55:59Ramit Sethi?

  Okay.

• 56:00Speaker 01

  An issue for us.

• 56:01Ramit Sethi?

  Is it gonna be a bigger issue or a smaller issue if the two of you move in together?

• 56:05Speaker 01

  Bigger, that's bigger, for sure.

• 56:07Ramit Sethi?

  And then what's gonna happen?

• 56:08Speaker 01

  We're gonna argue.

• 56:09Ramit Sethi?

  You're gonna argue, I agree. And then what?

• 56:11Speaker 01

  Uh.

• 56:12Speaker 02

  That's not gonna last.

• 56:16Ramit Sethi?

  Now, we are finally getting to a higher level of honesty. What are we at? Level six, level eight, level 10? That this relationship will not last if big changes are not made. April has made some big strides in finally understanding the severity of the situation. So now I want to turn to Cree, because her role here is also very important. The work for Cree is to set a boundary, something that she has never done in her relationship with April when it comes to money. Instead, she's danced around it. She's made little jabs about things like Amazon purchases. But setting real boundaries is crucial if they want to bridge these opposing views about money.

• 56:57Ramit Sethi?

  And it's important that it happens now, before they move in together. Do you know why? Because right now Cree has leverage. April has never actually faced real consequences, so leverage is important to hold her accountable. Now, I know what you're thinking. Does this seem harsh? Ramit Sethi's so business-like when it comes to romantic relationships. Why are you so mean, Ramit? Your relationship is a business. Let me explain. In America, too many of us approach relationships with a Disney mentality. Oh, I love him, I love her. Let's kiss and live happily ever after. Now, you all want to give each other a big fat French kiss in public? Be my guest. But being in a serious relationship is a business too.

• 57:39Ramit Sethi?

  It's the business of running a household, of combining income, of designing a rich life and implementing the systems to make it happen. We gotta stop with this Disney-ification of relationships. My wish is for all of us to take our relationships seriously. That might mean using an agenda for your monthly money meeting. You can actually get the direct agenda that my wife and I use directly from my new book, Money for Couples. It might mean using a shared calendar or developing some SOPs in your relationship. My dream here would be for Cree to say to April, this is important to me and I expect my partner to do X, Y, Z. I love you and I want to be together.

• 58:22Ramit Sethi?

  But if you can't meet those expectations, I can't move in together. This is the level of seriousness that I want you to approach your relationship with. And I think here, for a people pleaser like Cree, this is going to be very challenging. Listen now as I push her to look at this as an opportunity. Cree, if I were you and I had grown up from a place of, oh my gosh, my dad is frugal and I'm a little bit anxious about money and I'm going to meticulously put money aside and always track all this stuff. And on the $56,000 income I had accumulated, what I'd accumulated, I would look at this opportunity as a gift. Because most people, when they get,

• 59:06Ramit Sethi?

  they consider moving in together or getting married, they're not talking about this kind of stuff that the two of you are talking about. They haven't laid out their CSPs next to each other and seen the core numbers. They haven't done that. You two have. And you have seen each other's habits and finances. Now, I'm not saying, don't move in. That's not my position. You are adults. But I am saying, Cree, if you want to set a...

• 59:33Ramit Sethi?

  Boundary on what you will accept, then this is probably the time to do it.

• 59:39Speaker 01

  On what I will accept as far as our relationship goes?

• 59:43Ramit Sethi?

  If you're financially incompatible with both of you have acknowledged you are, then what would it take for you to advance this relationship?

• 59:52Speaker 01

  I would love to see her make, you know, an effort towards, because I feel like it wouldn't really hurt that much. $5,400 of guilt-free spending is a lot of money. I feel like if you had half of that, you'd still be happy. So, you know, maybe take half of that and invest it or pay off debt.

• 1:00:13Ramit Sethi?

  Hold on, I'm not looking for you to give April advice.

• 1:00:17Speaker 01

  Yes.

• 1:00:17Ramit Sethi?

  April is an adult. She could do what she wants. I'm looking for you, Kri, to tell me what you will accept. Let me give you another example. If I was dating somebody and I have saved and invested in all this stuff, and then I find out they are, they have no savings, they have credit card debt, they're essentially spending what they make, you know, eating out, and they make a good income. My standard or my boundary might be, hey, if we're going to be in a relationship together, then it's important for me that you have a debt payoff plan. It's important for me that you are saving. The number itself is not that important, but it's important that we have a similar vision on money

• 1:01:02Ramit Sethi?

  because we're going to go through life together. And I need to know that I have a teammate in this, a partner, not someone I'm fighting against. That's setting a standard. A boundary is saying, look, if you can't do that, I'm not going to come down on you. It's not my position, but I can't be in a relationship with somebody who doesn't do these things. That's just not the right partner for me. How does that strike you?

• 1:01:24Speaker 01

  That's extreme. I mean, I don't feel like we can't be together because of it, but I do, I do feel like it would be a strain. And we have talked about her, you know, having a plan because, you know, like I said, I don't want to inherit all of that debt. Us moving in together doesn't make me inherit all that debt, but us getting married does.

• 1:01:47Ramit Sethi?

  So what would change between moving in and getting married?

• 1:01:50Speaker 01

  I mean, I guess we would just be moving in. Marriage is, is a thing that... We've kind of talked about, I don't know if it's like the end all be all for us, but I would not like to inherit $300,000 of debt.

• 1:02:07Ramit Sethi?

  Again, you can't control what April does. April does what she's gonna do. And April, I'm gonna come back to you in just a second. All you can do, Cree, is decide what you will accept.

• 1:02:16Speaker 01

  Right. So I'm saying, I'm here saying that we need a plan for this before we take that next step.

• 1:02:24Ramit Sethi?

  We're talking about the plan right now. The plan starts with you deciding what you will accept, and then April decides what she's gonna do. The way that the two of you have been dancing around it for years, hey, why'd you buy that? I don't know. That's not helping to build a plan. That's just the two of you dancing. The way that you build a plan with the dynamic that the two of you have is that one person says, this is what I will accept. And then the other person decides if they're gonna do something about it or not.

• 1:02:52Speaker 01

  Okay, yeah.

• 1:02:52Ramit Sethi?

  Now, you don't have to do it, Cree. You might say, I'm not gonna even bring up the topic of, these are my standards, this is what, because as you put it, you find that to be extreme. You could perfectly say, hey, I'm not gonna do that. We'll move in and we'll figure it out. My response to that would be, history suggests you will not figure it out.

• 1:03:11Speaker 01

  Yeah, and I kind of feel the same way. So it's an issue that I don't have the answer for.

• 1:03:17Ramit Sethi?

  Okay, let's pause and turn to April. April, you've been very patient listening to that. What are you thinking, hearing my conversation with Cree?

• 1:03:27Speaker 02

  I 100% agree. I mean, I think if I was in Cree's position, I would want April to detail a plan. Like, what is the plan? So you got this credit card debt, let's see that gone by this date. And then student loans or the car loan, let's see, what's the plan for getting that? I like goals that are measurable. I'd wanna see like, what, like every so often, how much is the payment that's going towards this? So when is it gonna be finished? What's that date? And I think, you know, as long as those measures get met, we've got like eight months between now and then. Then that looks like a plan and it and you're on track.

• 1:04:11Ramit Sethi?

  And then what happens if those things are hit? What happens?

• 1:04:15Speaker 02

  Then I feel like it's it's we could move forward more comfortably.

• 1:04:19Ramit Sethi?

  Meaning you can move in together?

• 1:04:21Speaker 02

  Yeah.

• 1:04:21Ramit Sethi?

  Okay, and what if those numbers are not hit?

• 1:04:23Speaker 02

  Then maybe we should move in together because April's not holding her end of the bargain.

• 1:04:29Ramit Sethi?

  Love it. How come? How come April's standards for Cree are higher than Cree's standards for Cree?

• 1:04:38Speaker 02

  I think that Cree might be trying to be gentle with me. We've had some disagreements in the last year where I've kinda, we've kinda had some words about how we talk to each other. And so I think she's maybe trying to be a little bit more gentle.

• 1:04:50Ramit Sethi?

  Is that true, Cree?

• 1:04:51Speaker 02

  For sure.

• 1:04:52Ramit Sethi?

  Can I just be very direct? I've never been accused of being too gentle with someone. Okay, first of all, so I'm I'm coming from from the other end of the spectrum. Okay, I've had to learn that. I'm trying, I'm desperately trying. But sometimes I see people who are so gentle, so committed to walking on eggshells. They gentle themselves into a horrible situation. And I have noticed that since the first three minutes of us talking together. And I'm trying to create a space where the two of you can be direct. Direct does not mean rude. I would never want my guests to be rude to each other. But Cree, I can see this. You know, when I say like, hey, so here's what setting a boundary looks like.

• 1:05:36Ramit Sethi?

  And your response was that's extreme. That's actually not extreme. Your detector is off. It is very misaligned. For you to have spent your entire life saving money and being frugal, borderline cheap, as some people told you, and then to potentially be moving in and potentially be getting married to someone who's in hundreds of thousands of dollars of debt and will not pay off her debt repeatedly after you tell her multiple times. That actually cries out for a boundary. That's not extreme. You do not want to be in your 50s, 60s, 70s with tons of debt. That's not extreme. That's actually just reasonable. So your picker or your detector is off. It's misaligned. And that probably needs some deeper work.

• 1:06:21Ramit Sethi?

  I would probably recommend a therapist, individual couples as well. For today, I'm trying to get you to both be candid. And April seems like you're opening the door. You're like, hey, let's. You're being too gentle. Let's lay it all out. Am I reading that correctly, April?

• 1:06:39Speaker 02

  Well, yeah, you know, I came in the door. I know I my finances are a dumpster fire. I they are, and I know there's room for improvement, and I'm here for it.

• 1:06:48Ramit Sethi?

  Cree?

• 1:06:49Speaker 01

  I've come on a lot stronger than that before.

• 1:06:51Ramit Sethi?

  What'd you say before?

• 1:06:53Speaker 01

  Like, you shouldn't have been in that money.

• 1:06:55Ramit Sethi?

  Now we're talking. Keep going.

• 1:06:58Ramit Sethi?

  What else did you say?

• 1:06:59Speaker 01

  I can be like extremely harsh, so I try not to be that because it doesn't get anywhere.

• 1:07:03Ramit Sethi?

  Okay, Cree, what do you expect of a partner who would move in with you?

• 1:07:07Speaker 01

  Uh, well, I would like someone who um has a good grasp on their finances and knows how to save and invest.

• 1:07:16Ramit Sethi?

  Okay, I like that. Can I ask you a question? Because you I ask, what would you expect? And your response is, I would like. Let me talk about myself. I expect that somebody I get married to or or I'm in a serious relationship with is interested in improving themselves because that's what I do. So I would expect that. I would expect that they are going to learn about money to a pretty high degree. That's what I expect. And when I set those expectations, my wife met him. She also expected stuff for me.

• 1:07:56Ramit Sethi?

  I gotta talk more about my feelings. I gotta uh talk a lot about stuff that I normally do not talk about. She set that expectation. She set an expectation that we are always unified, especially when we're in public, always. She said that. She said, that's what I expect in a partner. I was like, god damn. I never heard someone talk like that. And it made me rise up to that level. So I I'm calling it out because you use the word like, yeah, I would like to have wings and fly. That's not going to happen. What do you expect, Cree?

• 1:08:28Speaker 01

  I expect uh my partner to be financially sound and care about their credit and how it affects us.

• 1:08:40Ramit Sethi?

  Love that. Love that. Just.

• 1:08:43Ramit Sethi?

  That's a round of applause right there because that took a lot and that was amazing. What did that feel like to say, Cree? It felt pretty good, actually. Wow, I like that. April, what does it feel like to hear that?

• 1:08:57Speaker 02

  It doesn't hurt. I love a challenge. So if this is the standard, come on, let's go. I got it.

• 1:09:02Ramit Sethi?

  Whoa, that is powerful. A lot of people are actually motivated by a big, clear challenge. April's saying that point blank. Okay, April, you've heard what Cree has said. Obviously, this communication is new. It's going to take some work to become crisper, but I love where it's going. April, you know what Cree is asking for. Now I want to ask you, first of all, do you feel you can meet that standard?

• 1:09:26Speaker 02

  Of course.

• 1:09:26Ramit Sethi?

  Love that confidence. Can you meet the standard before you are planning to move in together in May?

• 1:09:33Speaker 02

  Yes.

• 1:09:34Ramit Sethi?

  Wow, love it. Okay. Can we go and actually build the plan right now?

• 1:09:38Speaker 02

  Yeah.

• 1:09:39Ramit Sethi?

  Oh, all right, I'm getting excited. Damn. Okay, so I want you to tell me, conceptually, what will your plan be to meet Cree's standards? And more importantly, the standards that you're going to set for yourself?

• 1:09:53Speaker 02

  Um, so the first thing she said, she talked about credit. I know that my utilization is extremely high and that's one of the biggest things that's impacting my credit right now. So I need to pay off my cards. Like, I need to stop using them and I need to throw money at them.

• 1:10:09Ramit Sethi?

  Okay, so you're going to pay off the debt, stop the spending. What else?

• 1:10:13Speaker 02

  After the credit cards, I need to reach out to my lenders on those student loans. I said I was going to talk to my employer and see if there's a benefit there um, with some forgiveness of my student loans. I don't know, though. I think my hospital is for profit and I don't know that that's a thing. And then somebody else mentioned maybe getting a part-time job at a place that does offer that. It might be worth it.

• 1:10:36Ramit Sethi?

  Okay, that's an option. I agree, you should talk to your employer and your lender, yes. Now, I have a couple of questions. One, what about your savings? You have $0 in savings.

• 1:10:45Speaker 02

  I feel like paying the credit cards off is the priority right now. Now, once those are paid off, then yeah, savings.

• 1:10:52Ramit Sethi?

  Hold on, you have uh $5,430 of discretionary income per month.

• 1:11:00Speaker 02

  Mm-hmm.

• 1:11:01Ramit Sethi?

  You have roughly $10,000 in credit card debt.

• 1:11:05Ramit Sethi?

  It's not like we have to only do one thing. We can do both things.

• 1:11:09Speaker 02

  We could do one thing faster if we put all our eggs in that basket, though.

• 1:11:13Ramit Sethi?

  So if you have $5,430 a month, you should actually be thinking about how to pay off your credit card debt aggressively and build up savings. Because a healthy mindset is doing these things consistently every single month.

• 1:11:28Speaker 02

  I think my extreme approach is part of the reason why I fail a lot at this.

• 1:11:34Ramit Sethi?

  Yes, great insight. That's totally true. So being more reasonable, even if it means you pay a little bit more in interest. So what? At least we got a long life ahead of us. You got to sustain this and actually enjoy it for like 30 plus years. So let's find a way to do it all. All right, you're paying $400 a month to your debt?

• 1:11:56Speaker 02

  Oh, yeah, I have medical, I have like some medical law things and I have some, I had some high like payday type loan things. And so I'm making payments on some of that stuff, too.

• 1:12:07Ramit Sethi?

  How does somebody who makes $192,000, how are you comfortable taking payday loans?

• 1:12:12Speaker 02

  I did, I wasn't always making this money. I just got my nursing license a few years ago. I worked three jobs to get through nursing school.

• 1:12:19Ramit Sethi?

  I appreciate that.

• 1:12:20Speaker 02

  Real struggle.

• 1:12:21Ramit Sethi?

  The way you are treating money now is like you are poor. And you're not poor. I need you to set the standard for yourself higher. Because you, you actually told me you will meet a standard. You love a good challenge. But I think that you, you have not set any standards for yourself, financially speaking, and instead you're just like, yeah, I'm gonna like have a blast. I'm having fun, et cetera. And that's not the standard that Cree wants. And this isn't infinite money. It's gonna stop when you get sick, when you get older, or something happens.

• 1:12:58Ramit Sethi?

  I can't make you see that, but candidly, somebody who make $200,000 a year, they save a lot of money. They invest a lot of money. They have a big portfolio. So you decide if you want to be that or you want to be with a payday loan. All right, I'm gonna pull up the CSP. You tell me how you want to change these numbers, April.

• 1:13:16Speaker 02

  What if we did 2,000 on the credit cards? What if we did 600 for savings?

• 1:13:22Ramit Sethi?

  Okay, stand by. Yep, 600 for savings. You're at 24% for guilt-free spending now.

• 1:13:30Speaker 02

  So that leaves me with $1,400 per pay period to do all those other things that I've been spending 2,500 on.

• 1:13:39Ramit Sethi?

  What do you think about that?

• 1:13:40Speaker 02

  I think it's doable. As a, working in healthcare, I have the capacity to increase my, my income.

• 1:13:48Ramit Sethi?

  That would be great.

• 1:13:49Speaker 02

  I can pick up shifts.

• 1:13:50Ramit Sethi?

  How much more could you make per month reasonably?

• 1:13:53Speaker 02

  I could probably make another $2,000 a month.

• 1:13:57Ramit Sethi?

  $2,000 a month gross, and then when we net it out, how much would it be?

• 1:14:01Speaker 02

  Probably 1,600.

• 1:14:03Ramit Sethi?

  1,600, damn. That's pretty cool. So you can make an extra 1,600. Are, do you want to do that?

• 1:14:10Speaker 02

  Yeah, yeah, and I have, I have a business. I have a side business that I, I work that I didn't put in there. It's inconsistent.

• 1:14:17Ramit Sethi?

  How much does it make?

• 1:14:18Speaker 02

  I, last year, last year I made $25,000.

• 1:14:21Ramit Sethi?

  That's pretty good. Wow. How come everyone's just like pulling money out of their couch and telling me about, what the [bleep] going on here?

• 1:14:28Speaker 02

  Because it's inconsistent.

• 1:14:29Ramit Sethi?

  So what? Inconsistent is still real. Here's the way to do it. You take, it might be 500 one month, 1,500 another month. Doesn't matter to me. You average it out over the course of a year, and that is your number. If you want to be conservative, you're like, look, I don't know, it could be between 25 and $50,000. Maybe you pick 35,000, a number that you're confident about, and then you make a rule for what to do with any extra money that you might get. Like, example rule would be, anything above 35,000, I'm putting 90% towards debt, and 10% I'm gonna use to go have a great time. That's the kind of rules that we're talking about here. All right, so the fact that you can make an extra 1,600 a month,

• 1:15:14Ramit Sethi?

  plus another 1,600 a month net, that's an extra 3,200 a month. What do you want to do with the money?

• 1:15:20Speaker 02

  Potential. I think, I think what you said with the rules would be better. I think maybe 50% towards debt and 50% towards my guilt free spending.

• 1:15:35Ramit Sethi?

  No.

• 1:15:36Speaker 02

  No.

• 1:15:36Ramit Sethi?

  Sorry. Close though. 50% towards debt, I like that. I like that a lot. You can knock this debt out so fast, it's unbelievable. You have a high income. I think you need to put more money towards savings and you can give yourself a little bit of guilt free spending. If it were me, I would do something like 50% to debt, 40% towards savings and 10% towards guilt free spending. That's my take. It's up to you, but what do you notice about the numbers that I chose?

• 1:16:07Speaker 02

  You're more aggressive with the goal and less with the guilt free.

• 1:16:13Ramit Sethi?

  Yes, yes. So you can clearly see my priorities from the numbers I chose. One common mistake people make is they, um, one, they try to sprinkle a little bit everywhere. They're like, I'll do 10%, 10%, 10%, 10%. I like that. That doesn't actually show any clear prioritization. The second is they try to get one over on somebody. Like, let me find a way to kind of like maneuver my way into getting what I want. And I suspect there's a little bit of that happening right now. What do you think, April?

• 1:16:46Speaker 02

  Well, there's a lot of that, for sure. That's my approach to money. I, the things I want to do, I just work more so I can do more of what I want to do.

• 1:16:53Ramit Sethi?

  Yes. That is how people who often work shift work think. They literally will be like, oh, for that vacation, I'll just pick up two more shifts. You think that way, right?

• 1:17:05Speaker 02

  A hundred percent. That's how I plan my vacations.

• 1:17:07Ramit Sethi?

  Yes. I want to elevate the way that you think about money. Because you can think that way. You have been thinking that way, but you will never escape. Your financial current reality today. That way of thinking is actually a small way of thinking. And the rich life way of thinking is I am always going to set aside X percent of my income for investments, Y percent for savings. Any additional money I make, amazing. I'll take a tiny sliver of that and use it for fun. But I'm going to focus overwhelmingly on my goals. So that's what you can see from my numbers, 50, 40, 10. And 10% of additional money is still a lot of money. Still a lot.

• 1:17:52Ramit Sethi?

  I can't tell you what numbers to choose, but just as a litmus test or just a check. What would you choose after hearing my explanation? 50, 30, 20. Okay, all right. I don't mind that. So 50% towards debt of any extra money you make. 30% towards a savings account and 20% towards guilt free spending. Perfectly reasonable. I don't mind that at all. Cree, how do you feel about that? That sounds good to me. Cool. All right. So if we are looking back at the CSP, I do want to add a little bit of that in. April, you said potentially you can make an extra 3,200 a month net.

• 1:18:34Ramit Sethi?

  When we factor in your business and your extra shift, correct?

• 1:18:38Speaker 02

  Yeah, that's, that's, that's reasonable.

• 1:18:40Ramit Sethi?

  So we're going to take 1,600 and put it towards your debt, right? Damn, that debt is getting paid down fast. That's $4,000 a month. And then what did we say for the rest? We said 30% or about $1,000. That's going towards?

• 1:18:56Speaker 02

  Savings.

• 1:18:57Ramit Sethi?

  Yep. Nailed it. Damn, I'm loving that. $1,600 a month going towards savings. Great. And then? 20% for guilt free. $3,430 a month in discretionary spending. That's still a lot of money. But you have to remember, I know you're like, that doesn't sound like a lot of money.

• 1:19:21Speaker 02

  It doesn't feel like a lot of money because I'm spending a lot of money.

• 1:19:24Ramit Sethi?

  Sounds like a lot of money to me. Yeah. What will have to change, April, in order for you to use that money in a way that is rewarding to you?

• 1:19:33Speaker 02

  I'm gonna have to be more conscious of my spending. Like, when she asked me, like, what did I buy last weekend on Amazon? I don't know. Like, it's unconscious spending.

• 1:19:42Ramit Sethi?

  Mm-hmm. There's two ways you can do this. One is like you sit there with a freaking magnifying glass and you look over every transaction. It sucks. Nobody wants to do it, especially somebody who's spending like $6,000 a month previously. They're just not gonna do it. Another way is to say, what are my money dials? What are the important things that I actually love to spend money on? And let me actually prioritize those and spend more on the things I love and then cut costs mercilessly on the things I don't. So what is the one thing you love to spend money on?

• 1:20:15Speaker 02

  Food, travel.

• 1:20:17Ramit Sethi?

  Okay. If you had to pick one of those, which one's more important to you?

• 1:20:21Speaker 02

  Let's make my priority travel.

• 1:20:23Ramit Sethi?

  Okay. Cree, would you agree with April's priority being travel? That's her money dial?

• 1:20:31Speaker 01

  I think so, yes.

• 1:20:32Ramit Sethi?

  Okay. Can I just point something out? You have $3,430 a month in discretionary spending, April. If you decided this was truly your money dial and you were gonna cut back mercilessly on other stuff, you could theoretically spend like $20,000, $25,000 a year on travel.

• 1:20:53Speaker 02

  Wow. That's impressive.

• 1:20:55Ramit Sethi?

  What does that tell you?

• 1:20:57Speaker 02

  That I need to figure my stuff out.

• 1:20:59Ramit Sethi?

  You can do that. April, especially in your situation, you can pay off the debt, which is what Cree wants. That's her expectation. You can take control, but you have to actually be honest about what's important to you. How are you gonna make the changes that will allow you to travel but not spend as much on other areas?

• 1:21:19Speaker 02

  Like, I need to automate the savings, like, the dollar amount that we agreed on. Like, I need to just automate that as a direct deposit.

• 1:21:26Ramit Sethi?

  So this is gonna be automated right here. Look at the emergency fund. That needs to be automated immediately. $1,600 a month, boom. One of the characteristics of people who live a rich life is they Have clarity and simplicity. Clarity means they know exactly what all this means. Simplicity means they simplify things. They do not overcomplicate it because they're not going to remember what the means two months from now. And they have control over their income as much as possible.

• 1:21:53Speaker 02

  I feel like once I really hone in on my priorities and like really focus on the goal, um, the challenge that has been laid out and the goal that needs to be met. I think I'll feel better about not spending so much.

• 1:22:10Ramit Sethi?

  Yes, I think that's true. I love that. And I actually think, um, being able to see every single month in a separate account called, you know, Thailand trip or, or whatever it is, seeing that number go up every single month by $800, possibly more is very, very powerful. One other thing, if this all works and you move in together, a lot of these costs come down, right?

• 1:22:36Speaker 01

  What do you think? No, I mean.

• 1:22:38Speaker 02

  I still gotta pay rent.

• 1:22:40Speaker 01

  Yeah, but you were gonna rent your spot out.

• 1:22:42Speaker 02

  Yeah, I was.

• 1:22:43Ramit Sethi?

  So that, that goes way down.

• 1:22:45Speaker 02

  Mm hmm.

• 1:22:46Ramit Sethi?

  That's a lot. 1,700 a month, assuming you can get that. How much can you get to rent your place?

• 1:22:51Speaker 02

  I could probably get 2,000.

• 1:22:53Ramit Sethi?

  All right, so there you go. I can just see the milestones in this plan. The credit card debt gets knocked out very quickly, like two and a half or so months, three months. Then you're moving on to the next high interest debt, probably the car. Simultaneously talking to the medical debt folks, buy now, pay later. That gets paid off immediately and you get rid of those apps. Stop using the cards until it's paid off. Yes, I said it. Then you take that money as you kind of fix one and pay it off. Then you move on to the next and the next. With the amount of money you have, you could become so aggressive with this debt. You could even pay your mortgage off and student loans off quite quickly. It's really amazing.

• 1:23:37Ramit Sethi?

  There is one thing missing from this, which is your investments.

• 1:23:40Speaker 02

  My 401k doesn't count as an investment?

• 1:23:42Ramit Sethi?

  It does count. It actually is great that you have 800 bucks a month, but that's not enough. You know, you're starting to invest aggressively in your 40s. You need to invest a lot of money and quickly. So getting rid of the high interest debt makes a lot of sense. But after you finish the high interest debt, which I define as anything over 7%, putting the majority or a lot of that money into your investments will be critical. You actually have the ability to invest over $5,000 a month. And candidly, you're going to need it because you don't have a lot of time for that money to compound. Now, as for the two of you, there's a relationship question here as well as a money question. You have this concept of moving in together in May and then potentially getting married.

• 1:24:27Ramit Sethi?

  Can we come to a decision on what that looks like? Like, is it going to happen regardless? Are there things to talk about? Let's do it right now.

• 1:24:37Speaker 02

  Yeah, I definitely think that I want to make sure that I meet the challenge that she has put out in terms of my credit, in terms of a plan to reduce my debt. Because I feel like when I can show that, I feel like she maybe will feel less of the need to grandma my spending if it looks like I'm managing my finances more effectively.

• 1:25:08Ramit Sethi?

  I love that. April, can I say something for you as well? You know, it's okay for you to have standards too. I encourage it and for you to have boundaries. And like, one of them might be, I don't want you to question my spending. Once we agree on a plan, I'm going to show you the plan. I'm going to update you every Friday or every other Friday, whatever you decide. But what I need is for you to be supportive. And if you see me making a purchase, I need you to trust that it is part of the plan that I am already updating you on. And I don't want the questions about, why did you buy that? That's a perfectly acceptable boundary. How do you feel about that?

• 1:25:45Speaker 02

  I love it.

• 1:25:46Ramit Sethi?

  Okay. Then you should put it into play because it's not just one person who gets to set boundaries. Both people. And that actually makes a really healthy relationship. You both are just sharing, here's what I need. And it's totally okay and you can discuss it and you can negotiate if you want to, but it's both. Okay, cool. Cree, was there anything from your end that I didn't capture already?

• 1:26:07Speaker 01

  As far as on my end, I definitely need to get way more aggressive on my investments. Like I've been putting all this money towards paying off the car, but investments are just as equally important.

• 1:26:20Ramit Sethi?

  Yes. Like you can end up debt free and you can lose the entire game.

• 1:26:26Speaker 01

  Right.

• 1:26:27Ramit Sethi?

  And most people who grew up without a lot of financial education, the only thing they were told, same as your parents, money doesn't grow on trees. Save, save, save, pay off debt. But the point of life is not to end up debt free. The point of life is not even to save a huge amount of money. The point of life is to use our money to live a rich life. And that means we gotta save, we gotta invest, we gotta manage our debt. Even if we have a lot of debt, you can still live a rich life because you have a plan. You know, the exact month and year you're going to be debt free. But you can't just pay off our debt and go, I won. No, you didn't. Winning is looking at all of these things in its totality.

• 1:27:07Speaker 01

  Could we look at my spending plan?

• 1:27:10Ramit Sethi?

  Yeah.

• 1:27:11Speaker 01

  And I kind of want to do some plug and play like she did.

• 1:27:14Ramit Sethi?

  Hell yeah, let's do it. I love that you're asking. I'm going to pop it up here. All right, tell me.

• 1:27:20Speaker 01

  Okay, so if we're looking at the extra 1,200 a month.

• 1:27:25Ramit Sethi?

  You mean this?

• 1:27:26Speaker 01

  That's what I'm working with. Okay, so I'm putting like a thousand towards the car.

• 1:27:32Ramit Sethi?

  What's your car loan interest rate?

• 1:27:33Speaker 01

  Uh, 7%.

• 1:27:35Ramit Sethi?

  All right. What do you want to do?

• 1:27:36Speaker 01

  I still want to put a lot towards that, like maybe 700 and then do 300 in investments.

• 1:27:44Ramit Sethi?

  You're currently paying 484 for your car payment, right?

• 1:27:47Speaker 01

  Correct.

• 1:27:48Ramit Sethi?

  And how long will it take you to pay it off?

• 1:27:49Speaker 01

  Six years, but I was trying to aggressively pay it off in three.

• 1:27:53Ramit Sethi?

  Why?

• 1:27:54Speaker 01

  7% is ridiculous. I've never paid that much for a car. It's just because rates are crazy right now.

• 1:27:58Ramit Sethi?

  How about making 7% in the stock market?

• 1:28:01Speaker 01

  You're right. Yeah, you're right. There's that.

• 1:28:03Ramit Sethi?

  I don't mind if you want to put a little bit extra towards it. That's fine. Let's add 100 bucks. All right, that's fine, but let's put more towards investments.

• 1:28:12Speaker 01

  Okay, so what do we think, 800 there?

• 1:28:15Ramit Sethi?

  Let's try it. Watch this. This is the number to keep an eye on. The number is typically between 20 to 35 percent. You are behind on retirement investments. So we need to get aggressive. I don't mind seeing that number come down to 15 percent. So let's try 800 bucks. That's about right. That takes you down to 17 percent. You have your emergency fund, which, you know, you can aim for maybe 12 months if that's what you want to do. I think that's

• 1:28:39Speaker 01

  That's what I was doing.

• 1:28:40Ramit Sethi?

  Great. I think you have a nice cadence. You already have 10 months. And it'll take you a little while to make it 12, but that's perfect. $50 for gifts. Okay, fine. 125 for vacations, also fine. What do you think about this?

• 1:28:54Speaker 01

  Yeah, I can work. I can work with that.

• 1:28:56Ramit Sethi?

  Look at April's face. April?

• 1:28:57Speaker 01

  That's, that's $200 a week. I usually get by on $100 a week.

• 1:29:02Ramit Sethi?

  Okay, timeout. We don't talk about anything on a weekly basis. Weekly is for people who don't make a lot of money at all. We don't ever do that. Another way I want you to elevate, we talk about monthly and more commonly yearly. You cannot get ahead. You can't drive to work if you're only talking about what happens five feet in front of you. It would be ridiculous. We talk about miles when we're driving. That's the same way you talk about building a long-term plan. Now, I agree, $794 a month is not a lot for guilt-free spending, and that's what April's reacting to. April also is probably thinking, holy [bleep]. My partner only can spend $800 a month? What kind of lifestyle does that leave for me, right? April?

• 1:29:47Speaker 01

  Date nights looking real slim.

• 1:29:49Ramit Sethi?

  Bingo. So can we talk about this? Because I think this is the real stuff.

• 1:29:54Speaker 01

  Yeah.

• 1:29:55Ramit Sethi?

  Here's the fact. One of you makes 56, 75, some number like that. The other makes almost $200,000 a year. We're not talking about like a difference of 10,000. We're talking about over $100,000 a year. That is a different level of income. The two of you are going to need to discuss how this works. Because purely based on income, you're not at the same level. But what's interesting is that the lower earner has way more net worth. So that really shows the power of consistent investing and saving, et cetera. If you were strictly going off of 50/50, you cannot afford to take the same type of vacations. Just think about it, April's putting aside like 800 or so dollars a month for vacation. Cree's putting aside 125.

• 1:30:38Ramit Sethi?

  That's not at the same hotel, that's not the same destination at all. You all realize that, right?

• 1:30:44Speaker 01

  Yes.

• 1:30:44Ramit Sethi?

  So you will need to figure out a solution. It might be that you travel less frequently. It might be that you stay at cheaper hotels, or it might be that one person pays more.

• 1:30:54Speaker 01

  I don't see that it's been an issue so far, though.

• 1:30:57Ramit Sethi?

  Great, then let's not make it an issue. Life is hard enough.

• 1:30:59Speaker 01

  I really don't. Like, like, I know how to, if I, if I know in enough time that we're going somewhere, I can get the money.

• 1:31:05Ramit Sethi?

  I love that. God, that's the kind of attitude I love. It's like, look, I don't.

• 1:31:09Speaker 01

  We're not, we're not taking a step back in our lifestyle, no.

• 1:31:12Ramit Sethi?

  Whoa, alright. That's kind of cool. That must be cool for you to hear, April, right? So Cree's like, look, it's not all you who has to do work. Cree's like, I'll do it. I'm willing to put money aside.

• 1:31:25Speaker 01

  I can pick up more shifts too.

• 1:31:26Ramit Sethi?

  Can you pick up more shifts and invest more?

• 1:31:28Speaker 01

  I can, yeah.

• 1:31:29Ramit Sethi?

  Then, please do.

• 1:31:30Speaker 01

  And, and, and I'm gonna be getting some raises at my, my, my other job that's coming soon, so.

• 1:31:35Ramit Sethi?

  Alright, listen. Invest a lot more, okay? By the way, when the two of you work on this, I wouldn't mind if April goes, hey, listen. Cree, I respect you have your standards for what it's gonna take, but April's like, suddenly April goes, and here's my standards. I need you to be investing even more than you're currently investing. You can both set standards. And the type of lifestyle you want, this is the time to be honest about it. Because if you truly combine your income, which I highly recommend. Certainly you should combine some of it when you move in together for your joint expenses. But then when you get married, I would highly recommend doing it as I describe in my book. You're all gonna make almost $300,000 a year. That is a lot of money.

• 1:32:17Ramit Sethi?

  At $300,000 a year, you should be investing a huge amount, massive, tens of thousands of dollars per year, massive. You should be saving massive amounts, and you can afford to spend, but not as much as you think upfront, because you have a lot of debt.

• 1:32:33Speaker 01

  Right.

• 1:32:34Ramit Sethi?

  Something to think about. What else, Cree?

• 1:32:36Speaker 01

  Well, once I get the emergency fund up to a year's worth of expenses, then you know, that money can go to investing as well.

• 1:32:45Ramit Sethi?

  Yep, agreed. That's your $100 a month.

• 1:32:49Speaker 01

  Right.

• 1:32:49Ramit Sethi?

  Yep. You know what's going to be the problem? The problem is going to be eating out. That's what it almost always comes down to. It's literally people spending a ton of money, like 10, 20, 30 times a week, eating out, and it's not even part of their rich life. That stuff is going to be your trap for both of you. And so you will have to make a plan. Cree, did I answer your question for you?

• 1:33:13Speaker 01

  You did. Yes, thank you.

• 1:33:14Ramit Sethi?

  Well done. All right. April, did you have any questions that you wanted an answer to that I didn't get to?

• 1:33:19Speaker 02

  No, I think we got deep into April's numbers. We plugged and played. We.

• 1:33:26Ramit Sethi?

  Okay, I like that. When the two of you talk, I would like for you to have a crisp answer on what will it take for the two of you to move in together and both feel good about it? And if that is the first major milestone, then I would encourage you to break it down into sub milestones. Because you don't want to get to April and be like, April or May, and be like, oh, like, is it happening? I thought it was. Well, it's not. And you have a big argument. We don't want that. We want to know on a regular basis, monthly, there's like a scorecard on the fridge. Here's what we're aiming for. How are we both doing and performing? Don't worry if it feels a little weird, like we've brought the workplace into our home.

• 1:34:11Ramit Sethi?

  In a relationship, we are building a business together, the business of running a household. And that means we need to pay attention to certain numbers and make it work. I think it would be super constructive, especially in this journey from here until moving in together, and then maybe afterwards as well. But like, what a way to amplify this journey you're about to go on.

• 1:34:29Speaker 02

  I feel relieved that I got through this and that I got something out of it, something that I can work with. I have like a. I have a blueprint.

• 1:34:40Ramit Sethi?

  Great. Cree?

• 1:34:41Speaker 01

  I feel like I have a better understanding of where my money needs to go. And I need to not be scared to invest.

• 1:34:50Ramit Sethi?

  Beautiful. Beautiful. A lot of changing the way you both feel about money. What I really wish for the two of you is to go from hot to cool. Cool, the way I describe it is, cool is in control. Cool is, sure, I could buy that thing. I could, but it's not for me right now. I have a bigger vision. And then when you do go and buy that thing or take that trip, you truly enjoy it. Because you know you've saved for it, you've planned for it, and you can be there and you don't have to order the cheaper thing on the menu when you're on vacation. You can get the stuff you want. That's the rich life that I wish for both of you. Cree and April thought that their problem was that one's a saver and one is a spender,

• 1:35:34Ramit Sethi?

  but that was not really the story. Cree saves out of fear. She worries that if she lets go, everything could collapse. April spends to feel good. Comfort, control, even if it pushes her deeper into debt. By the end of our conversation, I was very pleased to see that they finally got real with each other. Cree said that it scares her to build a life with someone who doesn't take money seriously. April admitted, I need to change. If April sticks to her plan, she can change her financial future. And if Cree sets clear boundaries, they could actually use money as a way to come together, not as a wedge that's keeping them apart. Most couples never get this far.

• 1:36:18Ramit Sethi?

  They stay stuck at level one or two, they fight about some random item, and they never talk about going deeper. But I have to say, these two took the first step. So now, let's check out their follow-ups.

• 1:36:30Speaker 01

  Hey, Ramit. Cree checking in. I've been just kind of finalizing some of my numbers. April and I decided to do a weekly financial check-in. So that's coming up on Sunday. So I'm getting prepared for that. Looking at my numbers, I have raised my 401K up about 13%. On my Roth IRA, I've gone from $100 a month to 800 a month. And I'm still going to contribute some extra money towards my car loan because I really do want to pay that off early. But the bulk of things that I'll be contributing to will be my Roth IRA and my 401K. I'll put a little in my savings and then some towards the car.

• 1:37:13Speaker 01

  So I feel like that's a good, a good place to start. And I like the way these numbers are looking. So also, just wanted to thank you for taking the time to meet with us. We've really appreciated your advice and we've kind of taken it to heart. And I really feel like we have the tools that we need now to grow together as a couple in our relationship and moving in together and just continuing to live our rich life and, you know, do the things that we love to do, but also meet our financial goals. So thanks a lot for that and we'll be talking soon. Thanks. Bye.

• 1:37:50Speaker 02

  For me, the biggest insight that I took away from our time with Ramit was that my financial issues are fixable. When he broke down the numbers for me of what the monthly payment could look like and that it's a monthly payment that's within my budget and the timeframe that it would take for me making those payments to be debt-free, I was really surprised because I really thought my student loans were so big that I was just going to die with them. I had zero hope of ever getting debt-free. So that was a huge insight for me. As far as changes I made with my finances, now I contribute $1,000 per pay period toward

• 1:38:29Speaker 02

  my credit card debt and I've been contributing $500 per pay period towards savings. So that's huge for me because I had zero savings. To make, to create that money, I've been eating out less. You know, I didn't ever cook at home. And so now I've been trying to make eating out my big win. Um, and but as far as me and Kri go, we have been having more money conversations, small ones. And it's been a lot less uncomfortable for me. I used to really dread the topic of my finances because I felt like they were such a dumpster fire. But now, um, that I have a plan that I'm implementing, I feel less defensive, less embarrassment.

• 1:39:12Speaker 02

  Um, I almost look forward to those conversations because it's like a chance for me to say, hey, I said I was going to do these things and look at me, I'm doing it. Thank you so much for seeing us, Rameet, and everything that you've done to help us.

• 1:39:26Ramit Sethi?

  Listen up. If you want my help with your specific money questions, there are only two ways to get it. First, you can apply to be on this podcast at iwt.com/apply. Or second, you can join my money coaching program instantly at iwt.com/moneycoaching. In that program, you get access to live virtual events, monthly group coaching calls, live Q and As, and an amazing, huge community of other people like you. Check it out at iwt.com/moneycoaching.