251. "We own a $1M house but can’t pay for groceries"

Ramit Sethi of I Will Teach You To Be Rich talks to John and Victoria in a follow-up episode. This couple, in their thirties with three children and a home in suburban New York, is facing severe financial challenges with 97% fixed costs and over $100K in non-mortgage debt. In their last session, Ramit highlighted the urgency of their situation, presenting them with two stark choices: sell their house and clear debt, or double down on income and aggressive cuts. They chose to keep their house, which required Victoria to return to work, both of them to significantly increase their earnings, and drastically cut spending. Ramit challenged them to implement these changes within two months. This episode reveals how John and Victoria fared in those crucial eight weeks. Did they truly embrace change, or did old habits resurface? In this episode we uncover: • Their initial feelings after the first money coaching session • The surprising reason for Victoria's job loss • How they managed to cut $500 from their grocery bill • Why John thinks dry cleaning is a necessity • Ramit's radical advice on debt repayment versus savings • The true meaning of "rich life" for John and Victoria • How their childhood money beliefs impact their present • The hidden challenge of Victoria's student loans • Their struggle with an external vs. internal locus of control • The danger of a financial plan that requires 100% perfection Chapters: (00:00:00) The desperation that led to an application to Ramit (00:03:00) How a hotel bill leads to a missed mortgage payment (00:05:25) The once-a-year money conversation (00:10:47) The devastating results of Victoria’s annual money spreadsheet (00:19:18) Justifying thousands in Amazon purchases with high debt (00:28:15) Understanding their $600K net worth and zero liquidity (00:35:10) The crushing reality of 97% fixed costs (01:10:46) Victoria’s inherited money trauma fuels her avoidance (01:19:40) The importance of taking decisive action (01:21:05) The couple’s future plans This episode is brought to you by: Facet | As of the date of this recording, Facet is waiving the enrollment fee for new annual members, and for my audience, Facet is offering $300 into your brokerage account if you invest and maintain $5,000 within your first 90 days. Head to facet.com/ramit to learn more about which membership option is best for you. Offer expires March 31, 2026. #FacetAd MasterClass | For unlimited access to every class and an additional 15% off any annual membership, go to https://masterclass.com/ramit Fabric by Gerber Life | Join the thousands of parents who trust Fabric to protect their family. Apply today in just minutes at https://meetfabric.com/ramit Netsuite | Get the free guide “Demystifying AI” at https://netsuite.com/ramit 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 If you or your partner get stressed spending $150 on dinner, or are covering up spending, I’d like to help. 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.

• 0:50Ramit Sethi?

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• 1:33Ramit Sethi?

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• 2:14Ramit Sethi?

  Previously on Money for Couples, you will probably lose your house. You're spending more than you make. You're running out of savings.

• 2:21Speaker 01

  We need to make better decisions on how we're spending.

• 2:25Speaker 02

  Anything that doesn't get directly applied to our debt doesn't keep us in this house, basically.

• 2:31Ramit Sethi?

  You're spending 97% of take-home pay on fixed costs alone. You are broke.

• 2:35Speaker 01

  Yeah, we are.

• 2:37Ramit Sethi?

  Severe danger. Red flag. Stop everything. What do you want to do?

• 2:45Ramit Sethi?

  Last week, I spoke with John and Victoria, a couple in their 30s with three kids and a home in suburban New York that they are desperately trying to keep. On paper, they have a net worth of over $600,000, but almost all of it is trapped in their house. And here's the reality. 97% fixed costs, which means they are spending more than they make every single month. Their savings is just $1,155. That's less than one week's of expenses if John loses his job. And they're carrying roughly $100,000 in non-mortgage debt, including $55,000 in high-interest credit cards. I told them the truth. They cannot afford their house. And I gave them two options. Option one, sell the house,

• 3:30Ramit Sethi?

  pay off the debt, and start over. Or option two, keep the house, but that means Victoria goes back to work. They both earn significantly more. They cut spending aggressively, and they grind for years with no margin for error. The decision that they make right now will determine their entire financial future. Please remember, they have children. So today, we're going to see what they choose, and then I'm going to check back with them two months later to see if they actually follow through. Remember, a lot of people claim they want to change, but very few people do. So let's see what they chose.

• 4:09Ramit Sethi?

  So another option is, take the housing costs, sell your house. You actually have equity. You might actually do pretty well on it.

• 4:20Ramit Sethi?

  Take that money, pay off your debt, start fresh, downsize dramatically, radically change your relationship with money. It will be the hardest thing you ever did. It'll be incredibly difficult. The two of you will have to change the way you talk about money. You'll have to involve your kids. You'll have to make this something that you openly talk about, and that will feel incredibly uncomfortable. You'll feel like you're failing as parents. But it also gives you the chance to reset. Now, I'm not telling you to do it. I'm simply painting a picture.

• 4:52Ramit Sethi?

  If, on the other hand, you say, nope, we appreciate the idea, but we want to keep the house. Then the conclusion is, you both got to work. You still got to cut almost all discretionary costs down. There's no room for error. Anything on that list has got to go. There is no more house renovation work being done at all. Because it's too expensive.

• 5:16Speaker 02

  Babe, how would you like to approach our situation?

• 5:19Speaker 01

  I don't have a choice anymore.

• 5:22Speaker 02

  We can maybe worry about that in a few years, but I think now we got to really...

• 5:26Speaker 01

  We don't have a few years. I don't even know if we have a few weeks.

• 5:30Ramit Sethi?

  Okay, how would you tackle it?

• 5:31Speaker 02

  The way I tackle everything.

• 5:33Ramit Sethi?

  Just try harder.

• 5:34Speaker 02

  Just try harder.

• 5:35Ramit Sethi?

  Yeah.

• 5:36Speaker 02

  Hope for next year.

• 5:37Ramit Sethi?

  Trying harder is...

• 5:41Ramit Sethi?

  It intersects different groups of people. Men often just try harder. Brute force it, go out there, work harder. You know, kind of like derived from like, go out and toil the fields for longer, although most men these days are not toiling the field. It also cuts across people who grew up poor. It's go out and work harder, grind yourself to the bone. That's what you got to do. So there's an intersection of these messages. Y'all are not poor. You make $120,000 a year, but the way that you are behaving with money is carrying some of those messages forward. There is no foresight. There is no planning.

• 6:24Ramit Sethi?

  There is simply reacting and letting the world control what happens to you. Now, if the two of you made $25,000, we'd be having a different conversation. The fact is, the world pretty much does control you if you make that much. Very difficult to plan ahead. You've made some choices as well. That narrow how far ahead you can look. But even if you two made triple the amount you made, you'd still be in debt.

• 6:48Speaker 01

  That sucks to hear.

• 6:49Ramit Sethi?

  I'm not the judge of you. I'm not here to judge you. You could actually disagree with me if you go, that's not true, Ramit. If you were to disagree with me, I'd actually love it. If Victoria, if you said this to me, you said, Ramit, I actually don't believe it. You know why? Cause I have a plan for exactly how we're going to get out of our debt. I made a plan. I know our debt payoff date. I know that if John gets another bonus, this is where the money's going. And if and when I go back to work, here's where that additional money's going. And therefore, if we had triple, we are never going to be back in debt. I know it mathematically. Can you tell me that?

• 7:20Speaker 01

  No.

• 7:21Ramit Sethi?

  Exactly.

• 7:22Speaker 01

  I can't tell you that. I don't know our payoff date because I don't know when we can switch over the purchases from or the charges. I should say the charges because they're not all purchases.

• 7:34Ramit Sethi?

  You don't know your debt payoff date because you don't talk about money. You don't talk about money because you have an extremely unhealthy relationship with money. You have an unhealthy relationship with money in part because of the way you were raised, but in part because of the decisions that the two of you have individually and collectively made for years and years and years. You have now created a culture of money in your household where you don't talk about it. You spend on discretionary items. You justify them, you avoid them, and here you are. Who feels resentful about money in this relationship?

• 8:08Speaker 01

  Maybe I do slightly. I could contribute more if I didn't stop working. If there wasn't already a preconceived notion that my son's child support does not support any asset of this CSP that John and I have.

• 8:27Ramit Sethi?

  You feel resentful about that. Okay, John?

• 8:30Speaker 02

  Now, looking at it against all these little Amazon purchases, I mean, for sure. Now, looking back on myself, feel a little bit of that in hurting us.

• 8:42Ramit Sethi?

  You feel resentful of your own purchases as to how it's affected your family?

• 8:46Speaker 02

  Yeah, I mean, the Amazon stuff is just one thing. I know I've become a dreamer, like we've mentioned, and I dream to utilize more of our house. So I bought insulation for the garage and so we can use it. So I feel resentful. In that sense, where I started something I couldn't finish, um, may not have been needed.

• 9:07Ramit Sethi?

  Do you all recognize that you can't afford this house with a hundred thousand dollars of debt on top of that? There is no planet where you can afford that house.

• 9:18Speaker 02

  Yeah.

• 9:18Ramit Sethi?

  Every day you're in it, not only are you losing money, but you're actually spending more money on all these random renovation projects. The way you're spending is like you make hundreds and hundreds of thousands of dollars.

• 9:33Ramit Sethi?

  Like more than triple what you currently make. You don't make that kind of money.

• 9:37Speaker 01

  I think our bigger problem, Lauren, than not talking about the whole picture.

• 9:43Ramit Sethi?

  You think that's the problem? Okay. Should we fix that?

• 9:46Speaker 01

  Well, we can fix that by talking.

• 9:49Ramit Sethi?

  Okay. If, if that's the real problem, it's that, if that's the reason you're in, you know, a considerable amount of debt. Uh, $483,000 of debt, including a hundred thousand dollars of non-mortgage debt. If the problem is you don't talk about money, I feel like there's a pretty straightforward solution.

• 10:07Speaker 02

  Talk to the, uh, credit card companies for, uh, decreased, uh, interest rates.

• 10:11Ramit Sethi?

  Hold on, hold on. I don't care about solutions right now. You're, you're jumping to solutions because you want to avoid the painful process of looking in a mirror and figuring out why you've gotten into this situation. And you will keep doing that for the next 50 years of life and it will not get you what you want. That's why I'm being so honest and direct with you. Victoria, you said that you avoid conversations about money. Why is that?

• 10:34Speaker 01

  Because I guess I know like what I can handle in terms of like a dollar amount, nothing, anything outside of that. It's like, what's the point of talking about it? I can't even handle it.

• 10:44Ramit Sethi?

  Can't do anything, so might as well just not talk about it.

• 10:47Speaker 01

  Yeah.

• 10:48Ramit Sethi?

  Guys, I'm going to be really honest with you. I can't make you care about money. It's like a teacher in a classroom and there are kids who are, you know, they all read, they care about everything. They're already like getting A's. They want to get A pluses. Teacher's not concerned with them. They're going to succeed. There's kids who have.

• 11:09Ramit Sethi?

  A chance at really doing well. Different abilities. And then there are people who just don't care. Can't help somebody who doesn't care about it. I can tell you what's gonna happen. I can paint the picture for you more accurately than you may have thought of yourself. But I can't make you sit up straight and say, we need a plan. Here's the best I've come up with. Poke the holes in it. What should we do? What are we doing wrong? I can't do that. What's your take?

• 11:40Speaker 01

  Oh.

• 11:40Speaker 02

  Accurate.

• 11:41Speaker 01

  My plan is to pay as much as we can in December and then not.

• 11:45Ramit Sethi?

  That's not what I asked. What is your reaction to what I said? That I can't make you care?

• 11:50Speaker 01

  I feel like I care to a certain level. I feel like I do care.

• 11:55Ramit Sethi?

  Oh, you do? Tell me.

• 11:56Speaker 01

  But I can't make them, both of us, care together.

• 11:59Ramit Sethi?

  You don't think John cares?

• 12:01Speaker 01

  I don't know if he does.

• 12:02Ramit Sethi?

  Why not? You're married. You have kids together. How do you not know if he cares or not?

• 12:06Speaker 01

  Because how can he look at all the accounts? And still buy certain things that we probably don't need?

• 12:13Ramit Sethi?

  How can you do the same thing?

• 12:15Speaker 01

  When was the last time I did it?

• 12:16Ramit Sethi?

  How much did that patio furniture cost?

• 12:18Speaker 01

  Yeah. Five grand.

• 12:20Ramit Sethi?

  Five grand when you have a hundred thousand dollars of debt? And you have almost a hundred percent being spent on fixed costs. So how can John avoid it? How can you avoid it? John? What do you think?

• 12:34Speaker 02

  I think I care very much. It may not be the approach that will get us out of debt. Um, but I know I care a lot.

• 12:42Ramit Sethi?

  Can I ask, John? Do you care? Or do you worry?

• 12:46Speaker 02

  What's the difference? I guess.

• 12:48Ramit Sethi?

  Worrying is spinning in your head. It's feeling bad. It's not looking at the numbers. It's whenever you talk about money, it's negative. You worry. Caring is making different choices.

• 13:01Speaker 02

  I guess I worry.

• 13:02Ramit Sethi?

  You worry. I agree. You worry, which, which feels productive, but actually does nothing.

• 13:10Ramit Sethi?

  What does it get you? Does worrying pay off your debt? No. Does worrying invest? No. Does worrying increase your income? No, it's just spinning in place.

• 13:18Speaker 02

  I could see to that now, how I've kind of approached everything, especially with the credit cards, where I worry about being able to get groceries, but I don't care enough to not get the credit card. And so I do get them confused and think I'm doing the right thing. But it's actually a negative.

• 13:35Ramit Sethi?

  Yes. Good insight. Victoria?

• 13:38Speaker 01

  How do I care?

• 13:39Ramit Sethi?

  Do you care? Or do you just worry?

• 13:41Speaker 01

  I'm in a state of worry at the moment. I'm currently using, I feel like, more of my child support to buy our groceries than I think I should be doing.

• 13:57Ramit Sethi?

  Do you care?

• 13:58Speaker 01

  Not enough in the moment.

• 14:00Ramit Sethi?

  Yeah. That's honest. That's honest. I want to give you both kudos for that. Sometimes admitting you don't care about something that is staring you in the face and is incredibly risky, that actually takes a lot of introspection. Because we, our natural tendency, of course I care! Of course, I care so much! But when we're really honest with ourselves, we go, if I cared, I'd be doing different things. I would be spending differently. I would be talking about money differently. We would be doing this together. We'd even be talking to our kids about money if we cared. I think it's pretty honest of you both to admit that. In order to get out of this financial situation, you can't do it by just worrying. I'm being tough on John and Victoria, and I'm doing it for a reason.

• 14:44Ramit Sethi?

  Because every time I push them to face reality, they retreat to the surface. We'll just try harder. We'll talk more. We'll be better. I want you to listen, especially if you've ever tried to change somebody or change yourself. When people say "trying harder", it's actually meaningless jargon. It is truly just random words that people use to escape the discomfort that they are experiencing. Because if that's truly just what they needed to do, they would have already done it. The problem is not effort. This is a structural problem. They are Grasping onto the very thing that has put them into this financial mess, their house.

• 15:25Ramit Sethi?

  Sometimes we need to hear the unvarnished truth and to realize that all these words and jargon and squirming that we have done have actually avoided the key truth. We cannot afford our lifestyle. In fact, John just admitted something that most people never say out loud. He said, "I worry about being able to get groceries, but I don't care enough to not get the credit card." A lot of people, their relationship with money is simply worrying. If you ask them, "What would you be if you were not worrying about money?" They are completely confused. They have no idea. That's all they know. But candidly, worrying accomplishes nothing. It doesn't pay off debt. It doesn't cut your spending. It doesn't change your behavior. Action does. And that's why I'm being so direct.

• 16:10Ramit Sethi?

  Because those surface level solutions like, "We'll try harder." That's not going to work. It's not going to save them. They need to fundamentally make different choices. Not talk about making them, not plan to make them, actually make them. And that's what the rest of this conversation is about. Let's see if they're ready. Victoria, I'd see this as a little difficult for you to hear.

• 16:29Speaker 01

  Slightly, because I'm not working and I feel like me stopping working has put us in a hole.

• 16:37Ramit Sethi?

  Can I ask a question? Let's just explore for a second. What if you went back to work?

• 16:41Speaker 01

  It would fix a lot of problems.

• 16:44Ramit Sethi?

  Okay, just explore with me. I'm not saying you have to go back to work. It's not my place to tell you. I'm just saying, let's explore. Okay, you're saying it would fix some financial problems, maybe? How many problems would it fix?

• 16:54Speaker 01

  I'm hoping it would fix our debt rather quickly.

• 16:59Ramit Sethi?

  Have you tested it to see what would happen to your finances?

• 17:04Speaker 01

  No.

• 17:05Ramit Sethi?

  Are you aware that that is how people make savvy financial moves? They put in some numbers, they kind of model it out and see what would happen. Are you aware of that?

• 17:16Speaker 01

  No.

• 17:17Ramit Sethi?

  Okay, that's an honest answer. Fair enough. Look, if somebody came to me and they're like, "Are you aware that in order to fumigate your house, you do this?" And I don't even know the freaking words to use. I'd be like, "No, I don't know anything about this. Can you just lay it out for me?" So I'm going to do the same for you, okay?

• 17:33Speaker 01

  Okay.

• 17:34Ramit Sethi?

  I'm going to walk you through a simulation of what would happen if, Victoria, you started earning...

• 17:43Ramit Sethi?

  A full-time income. And the reason I'm gonna do this is it's gonna do two things for us. Number one is gonna show us the financial impact on your household finances. Two, it then opens up a conversation about lifestyle. Is it worth it? What about the kids? They're young and all of that. But too often, we skip the numbers and we just let our emotions guide everything. Does that sound familiar? She's saying yes. All right, let me show you. I'm gonna pull up the CSP. Let's take a look. So here we are in the CSP. Lovely, perfect document. Everybody can download it. IWT.com/csp. Download it right now and follow along. So here we have a beautiful little cell. It says zero. That's the potential income that Victoria would make.

• 18:26Ramit Sethi?

  Victoria, what would your gross income be if you went to work full-time?

• 18:30Speaker 01

  Probably between 65 and 80.

• 18:33Ramit Sethi?

  Okay, let's say 65, just to be conservative. Let's move down to net. First of all, how come you have $0 gross and 2,200 net?

• 18:42Speaker 01

  I put in my child support.

• 18:44Ramit Sethi?

  Okay.

• 18:45Speaker 01

  Do clean a friend's office off the books that I make some money from here and there. And then it is the gift, the rest of it.

• 18:55Ramit Sethi?

  All right, fine. You pay taxes on child support?

• 18:57Speaker 01

  No.

• 18:58Ramit Sethi?

  Okay. All right, so 5,400. Let's just say that gives us an extra 3,000. All right, look what just happened. Did you guys see this number change here? The fixed costs number?

• 19:10Speaker 02

  20%.

• 19:11Speaker 01

  Yeah.

• 19:12Ramit Sethi?

  What'd you see, Victoria?

• 19:14Speaker 01

  Dropped a lot.

• 19:15Ramit Sethi?

  To how much?

• 19:16Speaker 01

  77%.

• 19:18Ramit Sethi?

  What does that tell you?

• 19:19Speaker 01

  That I probably need to go back to work.

• 19:20Ramit Sethi?

  Nope, that's not what it tells you. I just wanna know what you see on the document before you spin a bunch of conclusions. What does it tell you?

• 19:29Speaker 01

  That it makes things easier.

• 19:31Ramit Sethi?

  Yes, it it eases your fixed costs quite dramatically from basically 100% to 77%, which is a major, major, major drop in fixed costs. It's still too high, but it gets you moving well in the right direction. Now, that does not say whether you have to go back to work or not. That's not what it says at all. It simply gives you a little bit of information. To make a bigger, broader decision.

• 19:59Speaker 01

  Okay.

• 20:00Ramit Sethi?

  I'm just gonna be really direct with you. The two of you jump right to conclusions and your conclusions are usually wrong. All right, John, what did you see when I put in an extra 3,000 bucks a month net?

• 20:11Speaker 02

  A way to chip away and make, I guess, some freedom to then apply to other categories.

• 20:21Ramit Sethi?

  Yeah.

• 20:21Speaker 02

  For me, that 20% then can be applied to debt.

• 20:25Ramit Sethi?

  Good. Before we move on, Victoria, looking at that number.

• 20:30Speaker 01

  The 77%?

• 20:31Ramit Sethi?

  Yeah, the 77% and, you know, the ability to make between 65,000 to 8,000. What does your gut tell you?

• 20:40Speaker 01

  That I have to work.

• 20:41Ramit Sethi?

  Okay. Would you be willing to?

• 20:44Speaker 01

  It's whether or not we can find childcare at this point.

• 20:48Ramit Sethi?

  Your costs would go up because childcare would be substantial, right?

• 20:52Speaker 01

  Yeah, I mean, I don't know if my mom can do it all with two children. My mom, when I was working, was our babysitter. And now it would be her having to babysit two young children.

• 21:07Ramit Sethi?

  That's pretty difficult.

• 21:08Speaker 01

  It's a lot. She's 70.

• 21:10Ramit Sethi?

  This is a really tough situation because we added the extra income. But if you were, I mean, look, I, maybe you could ask your mom, but that seems like a lot to ask a 70-year-old woman for, to watch two kids full-time. That's not my place. If you were to pay for childcare, those costs are very high.

• 21:31Speaker 01

  Yeah.

• 21:32Ramit Sethi?

  Do you have a sense of how much you, it would cost for childcare per month for two kids?

• 21:36Speaker 01

  I don't know. I mean, I think one of my friends, who was paying for childcare full-time, I think they were spending like 28 grand a year, I think.

• 21:51Ramit Sethi?

  Yeah, so essentially eating up the amount that you would make. At least if you made it at 65K.

• 21:57Speaker 01

  Right.

• 21:57Ramit Sethi?

  At 80K, it may provide. Some profit, basically, we'll call it. Okay, something to consider. I don't know the right answer here, but we're starting to become a little bit more informed. Right? We can't just say, should I do it or not? We gotta get how much childcare would cost? And then factor that in as well. Okay, regardless, we still have things we can do.

• 22:20Speaker 02

  Are you willing to, I guess, start working? And accept that I may have to look for another job? Because we need to make more money.

• 22:31Speaker 01

  I don't think you need to look for another job. I think you have really good health insurance with your current job. And that's an unseen cost that people don't take into account. When thinking about bringing more take home. And I know that means I'll probably have to go back to work. And it's, my mom needs money too. My mom also works. And that's part of the other problem is that if, if I go back to work full time and she's watching the kids full time, I'm probably gonna have to pay her. She's not gonna be a totally free babysitter this time around.

• 23:02Speaker 02

  I could perhaps do my part and see if I can do some childcare from home and work remote. I know.

• 23:09Speaker 01

  It's just working remote, you don't get any, it's just no productivity at home with two young kids. And I wouldn't want you to do that and then potentially lose your job. We can't lose your job. I think the only answer is that I have to go back to work if we're staying in this house. If that's our desire.

• 23:31Ramit Sethi?

  Can I step in for a second?

• 23:32Speaker 01

  Yes, please.

• 23:33Ramit Sethi?

  Okay, first of all, great work. I feel like that was a really honest conversation. When was the last time you had a conversation about money like that?

• 23:41Speaker 01

  Probably never.

• 23:42Speaker 02

  Never?

• 23:43Ramit Sethi?

  Yeah. I felt that the two of you were listening to each other. I felt that you were talking as a team. You're really talking specifics. It's a tough conversation. It really is. Did you feel that you made a decision in that conversation?

• 24:06Speaker 01

  Yeah, the decision is that I have to go back to work.

• 24:09Ramit Sethi?

  Okay, so you go back to work. All right. And assuming you go back to work and let's even assume that instead of 65K, you make 70K. You have to pay childcare in some form. Would that solve your problem?

• 24:23Speaker 01

  Yeah.

• 24:24Ramit Sethi?

  It would?

• 24:25Speaker 01

  Well, I mean, we would be able to make substantial debt payments if I went back to work.

• 24:32Ramit Sethi?

  Really? How much?

• 24:34Speaker 01

  I would hope that we could put sixty to seventy percent of what I'm making towards debt.

• 24:39Ramit Sethi?

  So sixty-five or seventy percent of your take home towards debt, but what about childcare?

• 24:44Speaker 01

  I mean, childcare would be whatever my mom says she would need to stay afloat on her ends. I'd assume she would need at least two fifty or three hundred a week, which is a lot.

• 24:58Ramit Sethi?

  We can run some numbers, but let's just stay at the conceptual level. So you'd get a job that paid, let's just say seventy K. I think you'd end up with a thousand bucks a month or something that you could put towards debt. That's good. That certainly helps a lot. I don't think it really gets you out of the position you're in. You would need more. What would you want to do?

• 25:17Speaker 02

  I think she could do better. I think she's worth more. I don't think we should, she should just take the first offer.

• 25:24Ramit Sethi?

  How much? Just be specific.

• 25:26Speaker 02

  I mean, someone with her knowledge in the fields, I mean, I'm assuming she can make as much as I can. In the financial industry, which she's, you know, excelled in, has knowledge in.

• 25:37Ramit Sethi?

  Can I tell you how my wife and I talk about money in situations like this? Like if there's something we really want, right? We need to have it. We'll sit down. Of course, we're, you know, we always start with a compliment. We do all the stuff in Money for Couples. And when we get down to the numbers, we talk numbers. We go, look, if this is what we want, then you need to be earning this much. And I need to be earning this much. Like point blank. Do you see the difference? What is the difference in how we talk about it versus how you?

• 26:03Speaker 02

  Very vague right now.

• 26:05Ramit Sethi?

  Yeah, being vague is allowing yourselves the ability to escape from reality. If you both are in this together and you have said, we want to keep this house no matter what. Now is the time to get specific with each other.

• 26:20Speaker 02

  She needs. To be looking for something and you know, fight for something around a hundred thousand.

• 26:27Speaker 01

  I just think from experience and looking at jobs and listings and stuff, I just don't know if I can make more than eighty. I think eighty, eighty is probably like a high. And I mean, maybe even eighty-five would be the highest that I could see myself bringing home.

• 26:45Ramit Sethi?

  Victoria, I say you make eighty K. As you said, maybe you can make eighty. Does that solve your problems?

• 26:51Speaker 02

  We have to run the numbers and discuss it.

• 26:54Ramit Sethi?

  No time like now. You could tell me the numbers you want me to plug in. I'll do it for you. Here we go. You wanna say eighty thousand?

• 27:01Speaker 01

  I was gonna plug in eighty-two.

• 27:02Ramit Sethi?

  So that's sixty-eight, thirty-three per month. How much is the net gonna be on that with everything?

• 27:09Speaker 01

  Thirty-seven hundred.

• 27:10Ramit Sethi?

  Yeah, cool. Take a look. All right, your fixed cost number is down to sixty-nine percent.

• 27:15Speaker 01

  And our mortgage.

• 27:16Ramit Sethi?

  Your mortgage is down to twenty-three point five percent. That's good. I think this, this looks pretty good. I do wanna point out that this only works if you two are making a combined income of two-hundred-and-five-thousand dollars. That's a lot of money.

• 27:31Speaker 01

  Yeah, it is.

• 27:32Ramit Sethi?

  Here's what I wanna do. I wanna give you some homework. I'd like to speak to you again. I don't do this that often, but I think that there are some major changes that you both recognize have to happen, and they have to happen now. You cannot wait. Here's what I would like for you to do before we talk again. I would like for you to redo your conscious spending plan. Taking a look at all the changes we made, I'd like for you to make them on your own. And any additional changes that we haven't considered. Those would be things like, how much would childcare cost? I think it's probably time to have a conversation with your mom. Taking a look at the bookkeeper positions or the other jobs that you would apply. How much are they going for? What could you realistically get? Starting to put the feelers out on that. Don't wait. Get those jobs right now.

• 28:18Ramit Sethi?

  Double checking your debt payoff calculations and knowing exactly how much you're gonna put, when you're gonna be debt-free, put that up on your fridge. Okay, this is a lot. I know that. I know this is a lot. I would like to talk to you both again after you make some major changes. All the things we talked about. Victoria, I wanna talk to you when you get another job.

• 28:39Speaker 01

  Okay.

• 28:40Ramit Sethi?

  And I want it to happen soon. I know this is so crazy. It's like, oh my God, we're completely changing our entire life. If you both adopt the frame that we want this to happen. We want to keep our house, so we are going to aggressively make changes. Then you're going to want to do it as quickly as possible. What's your deadline you think is realistic?

• 28:59Speaker 01

  Two months.

• 29:00Ramit Sethi?

  Okay. I like it. Let's go with eight weeks. I think that sounds totally reasonable. Eight weeks to change your life is a very powerful concept. Gosh, once you really got clear on you wanting to keep a house, like it really started to move quickly after that. Did you notice that?

• 29:19Speaker 01

  Yeah.

• 29:19Ramit Sethi?

  It was like, once you made this one big decision, other things became easy. That's the feeling I want for you, to feel easy, to feel like we can move and be decisive, not be stuck like this.

• 29:34Speaker 02

  Sounds like a plan.

• 29:35Ramit Sethi?

  I'm excited to see what happens within eight weeks. And please be in touch. My team will be in touch. I can't wait to talk again.

• 29:42Speaker 01

  Me as well.

• 29:42Speaker 02

  Look forward to it. All right. Big help.

• 29:44Ramit Sethi?

  Thank you so much. Something kind of shifted in that conversation. For the first time, John and Victoria were actually listening to each other. They got specific about numbers. They negotiated honestly. John said Victoria could make a hundred K. Victoria pushed back with 80 K. I think the old John and Victoria would have just agreed to whatever sounded good and then figured it out later. But right now, these two were actually being honest about what's truly possible. And they made a decision. Victoria goes back to work so they can keep the house. Okay. If that's their decision, I understand. So I gave them two months, which is long enough to see how they will handle the inevitable obstacles that will come up. Will they go back to the way they were?

• 30:28Ramit Sethi?

  Or are they ready for change, no matter what it takes? You know, in my experience, most people can change for a week, maybe two. Very few people can sustain true change for eight weeks and then turn those changes into a new way of living. So let me just detail what has to happen. Victoria needs to get a new job. They need to redo their CSP with real numbers, including childcare costs, debt payoff dates, everything. And they need to start talking about money regularly, not once a year in December. So when I check back in, I'm going to know. Are they actually different? Or were they just talking about change?

• 31:05Ramit Sethi?

  Guess what? We're gonna find out right now because it's been two months. All right, welcome back. How's it going?

• 31:13Speaker 01

  Good, how are you?

• 31:14Ramit Sethi?

  Good, good. I'm excited to talk to you again.

• 31:17Speaker 02

  Thank you.

• 31:18Ramit Sethi?

  I have a lot of questions for you. I'm very curious what changes have been made and I want to hear honestly what has changed, what has not. Let's just be an open book today. How did you feel after our last conversation?

• 31:31Speaker 02

  Motivated, energized, refreshed. Sometimes felt good to just discuss it and talk. And it felt like just that initial like elephant on the shoulders was off and felt good.

• 31:46Ramit Sethi?

  Good. Victoria, how about you?

• 31:48Speaker 01

  I agree. I felt like it was eye opening.

• 31:53Ramit Sethi?

  In what way?

• 31:54Speaker 01

  So in for me that like we probably do have certain areas where we both can be cutting back on spending, such as groceries for me. And then secondly, I think that I was like heard in the sense that we are overspending. Yeah, I think it was reaffirming that he realized as well.

• 32:20Ramit Sethi?

  Okay. What kind of conversations did you have after we talked?

• 32:26Speaker 02

  I think we mostly talked about, you know, going through the finances and transactions and going through and categorizing where our lifestyle fits into those TSP categories.

• 32:37Ramit Sethi?

  Do you think that the overspending and the financial situation you got yourself into was a result of purely numbers? Or was it a result of your relationship with money?

• 32:50Speaker 02

  I would say it was a relationship to money. I've survived this two months. I know, speaking on my behalf, with kind of slim, a slim down, I guess, financial freedom. And I survived.

• 33:06Ramit Sethi?

  What do you mean by that? Slim down financial freedom? What is that?

• 33:10Speaker 02

  Well, like not eating out and getting lunch at work or eating what's in the house instead of going to the grocery store and bulking up again in the pantry and stuff. So just making sure I'm aware of.

• 33:25Speaker 02

  What I really need versus what I want. Uh, so in that sense, I mean, slimmed down.

• 33:31Ramit Sethi?

  How did it feel?

• 33:33Speaker 02

  It felt good. Um.

• 33:35Ramit Sethi?

  What? Hold on. That was the least convincing good I've ever heard. It felt good.

• 33:41Speaker 02

  Um, it's good to, to know that I, I don't need what I, what I don't need. Uh, it's just purely, you know, uh, um, wants. So being able to be cognizant of that felt good.

• 33:56Ramit Sethi?

  Yeah.

• 33:57Speaker 02

  And that making that connection.

• 33:58Ramit Sethi?

  And then Victoria, how about you?

• 34:00Speaker 01

  One of the other homework assignments was to go back to work. Correct? So I was working. I worked three weeks and then I was like, oh, on Friday. So, um, it just wasn't working out to be a good fit.

• 34:13Ramit Sethi?

  What's the story there?

• 34:14Speaker 01

  Um, they didn't think it was a good fit. Uh, the fast paced, moving environment, office, their words. And that they didn't think I was being accurate enough with the payroll.

• 34:28Ramit Sethi?

  What do you make of it now that you look back?

• 34:30Speaker 01

  I do feel like that it was a fair, an unfair and very quick judgment. Or, uh, potentially two minor errors in my opinion, but I also am not entirely upset regarding it because literally the night prior on the way home from work, I had called John and said, I think I'm going to start applying to places again because I don't know if I'm going to last year. It was turning into the fact that I was there until six o'clock every, almost every night. And I was not okay with that. Um, and not being able to leave at five, it was like not, it was not encouraged for me to be leaving by five o'clock.

• 35:16Speaker 01

  There were some reasons why I don't, I didn't want to be there anymore anyway, but obviously wasn't going to quit and, you know, with our financial situation at home. So, uh, until I had found another job, I wasn't going to quit. But, um, they did let me go then the very next day.

• 35:34Ramit Sethi?

  How did you? Work childcare out while you were working there?

• 35:39Speaker 01

  Uh, my mom was watching them. My mom was watching the boys and we were paying her $250 a week.

• 35:45Ramit Sethi?

  Do you think that you'll be able to do the same thing if you go work at another job?

• 35:49Speaker 01

  Uh, yeah, I mean, the deal is that, you know, if I go back to work, then I pay her $250 a week because she can't do her own work.

• 35:58Ramit Sethi?

  All right. Are you applying for other jobs right now?

• 36:01Speaker 01

  I have been looking. I looked yesterday, but I didn't see anything that I wanted to apply to.

• 36:06Ramit Sethi?

  Okay. Can we take a look at your numbers? Your CSP? This was your previous conscious spending plan, if I recall. You had 97% fixed costs. And then I see that you created a bunch of tabs up here, which I'm curious about. Should I go to conscious spending?

• 36:23Speaker 01

  Uh, yeah.

• 36:24Ramit Sethi?

  Okay, cool. Whoa! Oh my God, what is all this? Okay, I'm, I'm excited to find out. So just so everybody listening, I'm gonna describe what I see on screen. I see the typical CSP, which has some changes. I also see some, it appears to be a debt payoff plan, which is cool. I love seeing this. And I see some total amount of debt broken down. You know, PayPal, Klarna, Amex, et cetera. Basically, a lot of details are broken out here. Okay, I'm already excited. So here's my question for you.

• 37:01Ramit Sethi?

  At a high level, what changed in the conscious spending plan?

• 37:06Speaker 01

  The amount that we're gonna put towards debt, I think, is the main area. And then the number in the subscription box.

• 37:16Ramit Sethi?

  Okay, so take me through it here. Originally, you were paying $1,836 a month towards debt. Now, you are paying how much?

• 37:27Speaker 01

  $2,800.

• 37:28Ramit Sethi?

  So like a full $1,000 a month more towards debt?

• 37:32Speaker 01

  Correct.

• 37:33Ramit Sethi?

  Okay, I, I'm loving that overall. And then subscriptions in the past were $394 a month. Now they are?

• 37:42Speaker 01

  $236.

• 37:44Ramit Sethi?

  Yeah, $238. Okay, so about $150 less per month. That's great. Take it. What'd you cut there?

• 37:51Speaker 01

  We stopped ordering the dog food on subscription and we're getting that from Costco now instead. Cut out our chat GPT subscriptions. I'm pretty sure John canceled the Amazon Prime. The Disney account we added in the ad level, so the savings there.

• 38:12Ramit Sethi?

  All right. Good work. So you cut about 150 bucks off subscriptions. How did that feel?

• 38:15Speaker 01

  It felt good.

• 38:16Speaker 02

  It felt good.

• 38:17Speaker 01

  It felt relieving.

• 38:19Ramit Sethi?

  Wow. That's pleasant.

• 38:21Speaker 02

  We can do more though.

• 38:22Speaker 01

  I disagree. I don't know if there's anything more that could be cut off that list. There's a

• 38:29Ramit Sethi?

  Oh, not a subscription, I guess. Hold on. You don't think so?

• 38:32Speaker 01

  I don't. Well, I guess.

• 38:33Speaker 02

  I mean, we can cut.

• 38:34Ramit Sethi?

  You want me to tell you? Because I'll break it down right now.

• 38:37Speaker 02

  Yeah.

• 38:37Ramit Sethi?

  I mean, water pitcher, filter, Apple services, recycled sponges. I'm not even going to get into that. Delete. Price efficient matcha. It's not that price efficient.

• 38:50Speaker 02

  That's a guilt free spending.

• 38:52Ramit Sethi?

  Then it shouldn't be here in subscriptions.

• 38:54Speaker 02

  Well, it technically is a subscription.

• 38:55Ramit Sethi?

  I just cut off like 50, 70 bucks. There you go. You're welcome. Now, I'm not saying you have to do it. I am saying sometimes it's helpful to have a third party look at what you consider essential and be like, no, do you need price efficient sponges or whatever? So you take it as you will, but I appreciate that you cut 150 bucks off. I think that's awesome. Big round of applause. Can we look at the rest?

• 39:19Speaker 01

  Yeah.

• 39:20Ramit Sethi?

  Okay, I'm loving it so far. I do want to point out that your fixed costs are still 91%. All right, let's just take a look at the rest of this. Investment zero. Savings are at 9%. Huh? What's this?

• 39:31Speaker 01

  So I had split my paycheck to go 70, I think it was 75, 25 into checking and then savings. So this way we do have that extra $1,000 to put towards debt.

• 39:44Ramit Sethi?

  Hold on. The extra thousand that you're talking about up here, right?

• 39:48Speaker 01

  Right.

• 39:49Ramit Sethi?

  You also put it here?

• 39:50Speaker 01

  Um, yeah, I might have.

• 39:52Ramit Sethi?

  Okay. Hey, good news. You double counted in a way that's going to help you. You actually do not need to put it here in savings. So I'm going to take this out. Okay? That's gonna drop your savings to 2%, which it realistically is. And that's gonna bring us down to 7% of guilt-free spending, or $931 a month. Is this accurate?

• 40:15Speaker 01

  Um, no, because I don't, we're not gonna actually have that left over. Because that guilt-free spending is what we were gonna use to pay off the debt.

• 40:25Ramit Sethi?

  All right, that's okay. Let's take a look at it now. So right now, you know, the numbers do add up. 91% on fixed costs, 2% on savings, and 7% on guilt-free spending. So at least they add up to 100.

• 40:38Speaker 01

  So then there is extra?

• 40:39Ramit Sethi?

  Yeah, there's an extra $931 per month for guilt-free spending. Although, I propose, uh, maybe you wanna put that money somewhere else. You tell me, what do you think?

• 40:49Speaker 02

  Right into the debt?

• 40:51Speaker 01

  No.

• 40:52Ramit Sethi?

  I love a good disagreement.

• 40:53Speaker 02

  I mean, we can't do it now, obviously.

• 40:56Speaker 01

  I mean, we can't do it anyway, regardless, because things come up. The bigger point is that there's unforeseen things that come in the mail. And that's always been one of my challenges in terms of keeping to a money plan. Is that there was never any wiggle room to pay the unexpected expenses. So that's why we can't take the $900 and put it all back into debt. As, as nice as it would be to pay everything down faster, it's not the best plan.

• 41:28Ramit Sethi?

  I think that was a very good explanation. That was outstanding. Crystal clear, great examples, nice firm conclusion, Victoria. Well done. Great. That's great communication. I agree.

• 41:43Ramit Sethi?

  There will be unexpected expenses. You need some liquidity. Liquidity meaning you need some cash. You cannot run skating so close to the line that you have $0 left over every single month. You'll be destroyed. How long until your debt is paid off?

• 42:00Speaker 01

  I think it was November 2026, if we keep to this schedule.

• 42:04Ramit Sethi?

  Guys, a year is not bad at all. What the hell?

• 42:06Speaker 01

  No, it's great.

• 42:08Ramit Sethi?

  Okay. Wait, are we smiling or are we depressed? I can't tell. What's happening?

• 42:11Speaker 01

  Good, it's good. It's just now, obviously, I don't have a job that's attributing to all this paycheck decision-making in the CSP, so I have to get back on it. And it's obviously contingent on me working. So it's, the plan is great and once we start the action, it's great. But for now, I personally feel like in a limbo from Friday to today.

• 42:34Ramit Sethi?

  Okay, cuz the layoff or the

• 42:36Speaker 01

  Right.

• 42:37Ramit Sethi?

  Your job loss happened on Friday.

• 42:39Speaker 01

  Correct.

• 42:39Ramit Sethi?

  All right. John, how do you feel about about a year to pay off this debt?

• 42:43Speaker 02

  This is awesome. I'm ready to do whatever needs to be done. If I need to keep cutting and I'm in it for the long run, so.

• 42:52Ramit Sethi?

  Good. Okay, okay. I like this. Um, I'm getting excited now. Hold on, I'm excited and I'm concerned.

• 42:59Speaker 01

  Okay.

• 42:59Ramit Sethi?

  Okay, we work through them both. I have a lot of feelings. I need to work through them with you. Okay. I'm excited that you have a debt payoff plan, which is awesome. Let me remind you, 90% of people I talk to who are in debt don't even know how much debt they owe. 95 plus percent of people do not know when their debt will be paid off. You know both. In fact, you have, I'm gonna show it on screen cuz there's a lot of numbers here. And you put a lot of work into this. It deserves to be seen by the world. You have a debt payoff plan here. You're paying off the minimums. You're paying a little bit more aggressively. You got them broken out by Apple and Amex and PayPal and Klarn, all these different things. And it shows when things are gonna be paid off. I love it. November 2026, fantastic. So great work on that.

• 43:44Ramit Sethi?

  What I'm concerned about, can you guess?

• 43:48Speaker 02

  The implementation?

• 43:50Speaker 01

  No.

• 43:51Ramit Sethi?

  What is an example of implementation first, John? I wanna hear from you.

• 43:54Speaker 02

  I guess just, I mean, it's a year, a year away is a long time.

• 44:00Ramit Sethi?

  No, it's not.

• 44:01Speaker 02

  Well, anything can come up, I think, like we were just discussing. So I, my point was, you know, in that year, anything can come up again. So that can be very worrisome for, you know, for, for me, for anyone.

• 44:14Ramit Sethi?

  That I agree with. I'm not concerned with one year. If anything, I think one year is like really fast, like maybe too fast.

• 44:21Speaker 02

  It's definitely gonna happen fast.

• 44:23Ramit Sethi?

  Yeah, so I'm not concerned that it's taking too long. If anything, I'm like, damn, this is like really fast. Almost to the point of a detriment to you.

• 44:32Speaker 02

  Yeah, I mean, like, um, things come up, like the holidays that need to be accounted for, school stuff, all these little things.

• 44:40Ramit Sethi?

  There's no holiday spending this year.

• 44:42Speaker 02

  That's one thing we did. Discuss where uh it's gonna be very slim this year.

• 44:49Ramit Sethi?

  Yeah, that's okay.

• 44:52Speaker 02

  Just one year.

• 44:52Ramit Sethi?

  My point is, I love that you've discussed that you're gonna have a smaller, shall we say, much more conservative holiday. My concern is what's gonna happen for the next year, two years, three years, cuz things are gonna come up. Traffic tickets, kids expenses, things happen when you have a family. So I'm a little concerned about that. I want you to give yourself the ability to withstand life. Right now, it's really freaking tight. Like if one bad thing happens, what do you do?

• 45:25Speaker 01

  Right.

• 45:25Speaker 02

  Can't imagine.

• 45:26Ramit Sethi?

  Now, Victoria, what do you think? What's your take? What do you think I'm concerned about?

• 45:31Speaker 01

  Sticking to it, sticking with the plan.

• 45:34Ramit Sethi?

  Yeah, yeah, like this plan only works if everything goes 100% perfect.

• 45:40Speaker 01

  Right.

• 45:41Ramit Sethi?

  How often has that happened?

• 45:42Speaker 02

  We wouldn't be here if it was higher than 50%.

• 45:45Ramit Sethi?

  Yeah, exactly. So like, the good news is you built a plan. That's great news. The bad news is your plan is based on you being 100% perfect in a way you never have for your entire lives. We need to build a plan that's a little bit more realistic. What do you say?

• 46:01Speaker 01

  Okay, how do we do that?

• 46:02Ramit Sethi?

  Okay, great. That's the question I was hoping for. So, first of all, we got the income issue, which is the biggest issue of all. Let's just tackle that. Your income, Victoria, on this CSP was what, 64, 17 a month?

• 46:14Speaker 01

  It was 77,000 for the year, whatever that divided out to.

• 46:18Ramit Sethi?

  So that's now zero.

• 46:20Speaker 01

  Right.

• 46:20Ramit Sethi?

  How long until you think you can get another job, realistically?

• 46:24Speaker 01

  Well, it took me three weeks to find that job, 21 days and 61 applications.

• 46:28Speaker 02

  Yeah, I was, I wanted to make it clear, Victoria was the beast applying for jobs.

• 46:34Ramit Sethi?

  Um, I just wanna say, what a great answer that was. You knew your numbers like that. Hey, everybody listening, that's the kinda answer you need to have when it comes to, when is it, when are you gonna find your job? When are you gonna pay off your debt? When, when, when? You better have your freaking numbers down. That is a great answer. It took me three weeks, 61 applications, blah, blah, blah. Boom. Okay, so can we assume three more weeks, Victoria?

• 46:58Speaker 01

  Yeah, we can assume three more weeks. And in the interim, I do still have my friend's office to fall back on. So I can always bring in some, something.

• 47:08Ramit Sethi?

  How much?

• 47:09Speaker 01

  Maybe 500.

• 47:11Ramit Sethi?

  I think you should do it. You need the money.

• 47:13Speaker 01

  Yeah, well, I'm, I'm going tomorrow.

• 47:15Ramit Sethi?

  Perfect. Fantastic.

• 47:18Ramit Sethi?

  Here's what I'm seeing. John and Victoria did some of the work. They built a debt payoff plan. They now know exactly when they'll be debt free, which is November 2026. Candidly, most people in debt can't even tell me how much they owe, much less when it will be paid off. So I, I think that's real progress. They cut subscriptions by $150. They're putting an extra $1,000 a month towards debt. John stopped eating out for lunch. All of those are positive. They're real change. But here's the problem. Their plan only works if everything goes perfectly. And for John and Victoria, things never go perfectly. Victoria lost her job after three weeks. Their fixed costs are still at 91%. And when I asked if they could cut more subscriptions,

• 48:03Ramit Sethi?

  they immediately started defending matcha and water filters. You see what's happening? It's that old pattern creeping back in. Justifying, defending, we need this. The good news is that Victoria knows her numbers. She got a job in 21 days with 61 applications. Tomorrow, she's going to clean her friend's office to bring in $500. But if I'm being honest, I'm worried. Because this plan requires Victoria to get another full-time job in three weeks. It requires them to stick to aggressive debt payments for a full year. And it also requires nothing unexpected to happen. That's not realistic. What happens when life throws them a curve ball?

• 48:47Ramit Sethi?

  What happens when the car breaks down or their kids need something they didn't anticipate? By the way, Victoria's student loans are yet another thing they haven't planned for. These are the ones that got her wages garnished, the ones she's been avoiding for years. So listen in now as I ask about those student loans. Speaking of income and loans, Victoria, last time we talked, you mentioned your wages have been garnished for student loans. What is this balance and the plan for student loan repayment?

• 49:18Speaker 01

  Well, currently I am waiting. I assume something's going to be coming in the mail that I, um, giving me an option to pay it before they go against. I mean, this is what I looked, I like did a Google search, what happens when, um, these types of things are in place? Because it was our tax return that was garnished, so it wasn't like wages that have ever been garnished from me prior. So I wasn't sure the exact course of what was going to happen when I started to work. Um, so I just, you know, did a Google search and kind of tried to look into it a little bit. And, um, from what I saw that they initially will contact the, you know, person, so me,

• 50:04Speaker 01

  to start a payment plan versus garnishing the wages. So right now it's a waiting game to get something in the mail and hopefully set up a payment plan, even if it's like $50 a month, just so we stay in good standing and then.

• 50:17Ramit Sethi?

  Why don't you contact them yourself?

• 50:19Speaker 01

  I don't know who to contact at this point. I don't know how many times a loan has been sold. I don't know who's responsible for it. I tried actually looking for this information when John and I bought the house, because we were going to potentially pay it off then. Um, but I was unsuccessful in finding.

• 50:39Ramit Sethi?

  You have a bill?

• 50:40Speaker 01

  I don't.

• 50:41Ramit Sethi?

  You don't have any bills?

• 50:42Speaker 01

  I don't have anything recent, which is part of, part of, part of the problem that got us here.

• 50:47Ramit Sethi?

  When was the last one?

• 50:48Speaker 01

  Uh, pre-pandemic.

• 50:50Ramit Sethi?

  Okay, you have the bill?

• 50:52Speaker 01

  I might have the last one, but I think it was sold that. I didn't get anywhere when I called them.

• 50:58Speaker 02

  What did they tell you? We sold it.

• 51:00Speaker 01

  I don't remember. It was when I spoke to them, this was back in 2022. So I don't remember the conversation, to be entirely honest. I just remember being not being successful.

• 51:10Speaker 02

  Okay. Well, I know they said, oh, this reference number they had didn't match with someone else's. Um, and the account numbers were just, it led into nowhere, basically.

• 51:19Ramit Sethi?

  Guys, I'm gonna be really direct with you. You cannot wait to get somebody to message you about student loans when you've already had wages garnished. You cannot wait. You need to be, you need to find it. I know you're resourceful enough, Victoria, because you got a job in three weeks. So apply that same approach to finding out who owns your loan. Trust me, people want to answer the phone when you owe them a lot of money. I guarantee they will not make it that hard. Okay, somebody's picking up the phone when you're like, hey, I'd like to pay you money. They'll pick up. Find them, set up a payment plan proactively, do not wait.

• 51:53Speaker 01

  Yes, sir.

• 51:54Ramit Sethi?

  The whole principle of what I am talking about with you guys is stop waiting for something to happen to you and start going on offense with your money, with your conversations with each other, with your student loans. Stop waiting. Go on offense. Okay. Moving along. Grocery spending, it used to be $1,800 a month. What is it now?

• 52:20Speaker 02

  1350, I think.

• 52:22Speaker 01

  No, that's what we planned, but it's 1,300, I think, on the CSP because we've replaced the $50 in the CSP for, uh, the mantra subscription. So we lowered it slightly there, but in terms of actual spending.

• 52:39Ramit Sethi?

  What's the number? Please, just tell me the number.

• 52:42Speaker 01

  1175.

• 52:44Ramit Sethi?

  That's, why you bury the lead like that?

• 52:48Speaker 01

  Because in August, it was 368, but that was.

• 52:53Speaker 01

  heavily cash that month.

• 52:55Ramit Sethi?

  Why do you use cash? Because you don't want to charge it on the credit card?

• 52:57Speaker 01

  When I go to my friend's office, I get paid in cash. So um, that's one place that I can spend the cash. Yeah.

• 53:05Ramit Sethi?

  I don't love using cash because it makes it harder to track, but are are you tracking it carefully?

• 53:10Speaker 01

  Uh, I we keep all of our receipts and I mark the back of the envelope that we keep it in with what store I paid. Uh, what store I went to, how much I paid and what payment method.

• 53:23Ramit Sethi?

  Fine.

• 53:24Speaker 01

  And then I feed it into ChatGPT and it gives you totals.

• 53:26Ramit Sethi?

  It's not my preferred, but if that works, fine. I'm fine with it. Sounds like you are either at thirteen hundred or lower than thirteen hundred per month on groceries. Is that correct?

• 53:37Speaker 01

  Yeah, the last two months, we've really been. And to that, I've been shopping the store with a calculator.

• 53:45Ramit Sethi?

  Amazing. Holy. You know, we need to create an I will teach you to be rich calculator, like literally. It it's magnetic, so it sticks to the shopping cart. And then everyone can see they're like, what is this person doing with a calculator looking at Thousand Island Ranch Dressing? And you're like, you don't. And then when they come up to you, like, excuse me, ma'am, what are you doing? You go, you look at them blankly, you go, you don't shop to a number? That's the phrase I want spreading across America. Can you guys help me do that?

• 54:16Speaker 01

  Yes, definitely.

• 54:18Ramit Sethi?

  I seriously love it, though. Good job. That's amazing. Okay, great job. You brought your groceries down by over five hundred dollars a month. Incredible work. Incredible. And that's what helped be able to pay the loan off even more aggressively. I love that. All right, you still got a hundred bucks a month on clothes. What's that for?

• 54:38Speaker 02

  I think it's just to allocate if we need something that comes up for the kids. Yeah.

• 54:42Ramit Sethi?

  Do they need it?

• 54:44Speaker 02

  Um, no.

• 54:47Speaker 02

  No, I'll answer that. No.

• 54:50Speaker 01

  Well, okay.

• 54:51Ramit Sethi?

  Answers. I love it. Victoria, let him, let him write. He just gave us a crisp answer.

• 54:55Speaker 01

  I want to correct him because when we had our current spending, it was $50 a month. And I upped it to 100, thinking our dry cleaning was going to like pick up again with both of us working. And so I up-

• 55:06Ramit Sethi?

  Dry cleans when they have 91% fixed costs. What are you talking about?

• 55:10Speaker 02

  I am putting it off for a while, so.

• 55:13Speaker 01

  Um, but yeah, so I did inflate that number for his dry cleaning. But if we're talking about spending clothes on children, then yeah, no, they don't need the clothes.

• 55:23Ramit Sethi?

  Guys, am I, is this like a, do you not realize the severity of the situation you're in? Like, dry cleaning for a couple where you have 91% fixed costs. You do not have enough savings to last, last time we spoke was a week. Like, dry cleaning is not in the universe of what's possible. I'm sorry. That's just reality.

• 55:46Speaker 02

  Well, my thinking and my validation for it was it saves time because-

• 55:52Ramit Sethi?

  What time?

• 55:53Speaker 02

  All I'd been putting in was the stuff that needs to be like ironed and, you know, has specific conditions that I can't put to and get ruined. Like, if I ruin my shirts, I only have a couple of them. Um, then I have to pay more for-

• 56:07Ramit Sethi?

  Did you seriously think that was gonna work?

• 56:08Speaker 02

  Was I close?

• 56:09Ramit Sethi?

  Not even close, not even in the same universe. First of all, you're speaking to an ironing master here, okay? Second, you're speaking to someone who created a 30-minute video on YouTube on how to iron clothes. You never watched-

• 56:19Speaker 02

  I'll watch it right after this.

• 56:20Ramit Sethi?

  Yeah, okay. And third, I'm sorry, guys. Dry cleaning is a luxury service. You cannot afford any luxuries right now. We need to get honest.

• 56:30Speaker 02

  Well, I did, I, I did cut that. I only did the shirts, like I mentioned. So I have been sort of proactive, but yes, I acknowledge that it can be cut and I'll do it.

• 56:43Ramit Sethi?

  Okay, I appreciate that. I guess what I'm looking for is instead of me having to pull you to make these decisions, that rather you actually pull me. Right now, it's like there's a tug of war happening. I'm trying to pull you into financial safety and you keep pulling back with things like matcha and dry cleaning.

• 57:08Ramit Sethi?

  Guys, I don't mind if you want to spend on matcha if you're making $175,000 and you have no debt. You know, and maybe a mortgage. Okay, you are broke. And we're talking about all these luxury services. Do you want to stay in this financial situation for the rest of your lives?

• 57:25Speaker 01

  No.

• 57:26Ramit Sethi?

  No. Then it can't be me pulling you along. It's gotta be you pulling me. I'm gonna change your clothing to zero cuz you can't afford new clothes or any services around clothes. Cool. You went from 91 to 90%. Okay. Subscriptions are still at 238. No way. $100. Cut the rest. You're at 89%. Miscellaneous 102? Okay, I'll keep it. Childcare, we talked about, and you're gonna get the job within three weeks. That's the plan. Great, fine. Utilities, 1008?

• 57:57Speaker 01

  Utilities are, yeah, they're propane.

• 58:00Speaker 02

  Electric, water.

• 58:02Speaker 01

  And internet.

• 58:03Ramit Sethi?

  What do you guys keep your air conditioning at, out of curiosity?

• 58:06Speaker 02

  Nowadays, it's usually off.

• 58:09Ramit Sethi?

  But like, when it gets hot?

• 58:10Speaker 01

  That's not what he asked. Yeah, it's usually too low, in my opinion. And I think it's like 69.

• 58:17Speaker 02

  It honestly, it fluctuates depending on the humidity, all sorts of things, how it is at night.

• 58:23Ramit Sethi?

  How come Victoria's just giving me a number over and over and John's going like this? John?

• 58:27Speaker 02

  I can't get, I can't give you an answer.

• 58:29Ramit Sethi?

  Why not?

• 58:29Speaker 02

  It depends on a lot of things.

• 58:31Ramit Sethi?

  No, it doesn't. John!

• 58:32Speaker 02

  72, 76.

• 58:35Ramit Sethi?

  Okay, it depends. I guess we'll depend ourselves into being broke.

• 58:38Speaker 02

  But we'll put it to 70, 70 when we need it.

• 58:41Ramit Sethi?

  Victoria, what am I really asking when I ask about the AC?

• 58:44Speaker 01

  How much of our electric bill is being overspent on AC?

• 58:49Ramit Sethi?

  Yes, and if I asking about that, then I'm asking about that for food and for clothes and for phone and for all of this stuff. The real question I'm asking, if you listen to the question, behind the question, is how much control do you have over your fixed costs? And I actually think the two of you don't believe you have any control. I think the way you see the world is the world happens to us and we just simply deal with it one thing at a time and we're never gonna get ahead. Look at the nods coming from both of you. You don't believe you have control over it, do you?

• 59:21Speaker 01

  Uh, not entirely, no. I like to think we have control over it, but I don't think we have full, actual control. One thing I would like to say about the electric, though, is I feel like this summer in New York at least, I don't know how.

• 59:38Ramit Sethi?

  It's not about New York, it's not about air conditioning, it has nothing to do with that. It's not about that. It's about the way that you look at your relationship to the world. Do you believe you have any control over it or not?

• 59:50Speaker 02

  We can, yes.

• 59:51Speaker 01

  No, I mean, historically, I think you deal with what you dealt. And if you think that way, then you don't think you have control.

• 1:00:00Ramit Sethi?

  Which way do you think, Victoria?

• 1:00:01Speaker 01

  Well, that is how I think.

• 1:00:03Ramit Sethi?

  Victoria just said something that actually shines a really powerful light on what's going on. She said, "I deal with what I'm dealt." That is the belief that has been keeping them stuck. When the AC is expensive, they deal with it. When groceries are $1,800 a month, they deal with it. When they rack up credit card debt, they deal with it. The world happens to them and they just react. In psychology, this is called having an external locus of control. It's the belief that your life is controlled by outside forces. The economy, the weather, circumstances, things just happen to you, but you have very little control over what happens. The opposite is an internal locus of control.

• 1:00:46Ramit Sethi?

  The belief that you control your future through decisions and actions. And here's what's interesting. Victoria and John actually do have some control, they just proved it. Victoria cut groceries from $1,800 to $1,300, that's over $500 a month. She shops with a calculator now, she did that. The world didn't force her to, she did it. So they can change their behavior when they decide to. The problem is, they don't believe they can. And the moment something feels hard, like giving up dry cleaning, or setting the thermostat to 72 instead of 69, they retreat back to, "Well, we need this, and it depends." Do you see the pattern? Make a change, hit resistance, justify why they can't do more.

• 1:01:31Ramit Sethi?

  "It's hard, I've never seen it done, it would threaten my identity." These are all manifestations of their money psychology, that external locus of control.

• 1:01:44Ramit Sethi?

  It's actually a lot easier to believe that the world controls you. Because then you're not responsible for it. You're just a product of circumstances. High grocery costs, hot summers in New York, needing dry cleaning for work shirts. To be really blunt, they control the thermostat, literally and figuratively. They can set it to 72 and save money. They can iron their own shirts. They can cut their matcha subscription. And they can be proactive about their student loans instead of waiting for someone to contact them. You guys actually don't realize how much control you have over your life. Even things that you think are solely biological. You can change what you like to eat. You can change what time you wake up. You can change your energy level. But none of this happens if you don't believe you can change.

• 1:02:30Ramit Sethi?

  So the real question is, will they choose to take control? Or will they keep believing that life just happens to them? Do you think that you deal with what you're dealt?

• 1:02:40Speaker 01

  Yeah.

• 1:02:40Ramit Sethi?

  Yeah, I think that's really honest. And I think that is the fundamental issue going on here. You look at your spending. You both have a litany of reasons why. You're very good at explaining things. Well, we need this and then there's that. And then there's this one thing, but this exception because of summer in New York. When I look at this, I say you have 89% fixed costs and you are broke. And you've already experienced what happens when bad things occur. Wage garnishment, all kinds of stuff. If it's me, I take a freaking hatchet to this spending. If it's me, I go, wait a second. We can change everything in our environment.

• 1:03:25Ramit Sethi?

  We can get rid of some of this spending. We can increase our earnings. We can change the air conditioning even.

• 1:03:31Speaker 01

  I do feel like I tried this summer to actually turn the AC off a lot that I was home. And it was one way that I tried to help not make the AC cost us as much money as it had been in the two summers prior by keeping it on 24/7.

• 1:03:52Ramit Sethi?

  Okay.

• 1:03:52Speaker 01

  So.

• 1:03:53Ramit Sethi?

  I don't think this conversation is really about the AC. This conversation is about, do you believe you can control how much money you spend? If you told me, we care about AC and we want to keep it at this temperature and we're going to find other ways, I would say fantastic. Doesn't matter to me. But I'm not hearing that. What I'm hearing is a lot of justification for why you cannot change things. I can't change that. It's not my money. It's not my family. You decide. What you can't do is simply

• 1:04:27Ramit Sethi?

  relitigate all the decisions you made, which got you here. You can't do that and expect to change because it's not going to change.

• 1:04:34Speaker 01

  Right.

• 1:04:34Ramit Sethi?

  What about your savings? Last time we talked, your savings were at $1,155. That's one week's worth of savings for John. What is it now?

• 1:04:44Speaker 01

  It hasn't changed.

• 1:04:46Ramit Sethi?

  How come?

• 1:04:47Speaker 01

  Actually, that's a lie slightly, right? Didn't we open that high yield savings account?

• 1:04:52Ramit Sethi?

  Yes.

• 1:04:52Speaker 01

  And something's going there.

• 1:04:53Ramit Sethi?

  Tell me.

• 1:04:54Speaker 02

  I think it's a hundred dollars every two weeks is going to the high yield savings account that we opened upon reading, I think, your first book.

• 1:05:01Ramit Sethi?

  Good.

• 1:05:02Speaker 02

  Yeah.

• 1:05:02Ramit Sethi?

  Repeat the number again, how much?

• 1:05:04Speaker 02

  A hundred dollars every two weeks.

• 1:05:06Ramit Sethi?

  Great. So you have about 1,300 or 1,400 bucks total.

• 1:05:10Speaker 01

  Correct.

• 1:05:11Ramit Sethi?

  Okay, it's going the right direction. I really like that. What do you guys think about that? Were you, when I told you last time, you have less than one week's worth of savings? How did that strike you?

• 1:05:24Speaker 01

  I mean, it wasn't surprising. I know that. I know that we don't have any foot to stand on.

• 1:05:30Ramit Sethi?

  Okay.

• 1:05:31Speaker 01

  But it's scary. Yeah. I mean, I just have to hit the ground running with the same energy that I did the last time when we got off the call the first time and have a job within the next three weeks so that we can get that savings number to be higher.

• 1:05:44Speaker 02

  I think, yeah, we were very, uh, a lot of energy. I think, uh, we can keep it going.

• 1:05:52Speaker 01

  I think another thing that, um, I was trying to plan out in some of our number planning and discussing was how long will it take to build up like a six or 12 month savings plan?

• 1:06:08Ramit Sethi?

  What was your, what did you initially discover?

• 1:06:12Speaker 01

  If we were. To do it like after paying off debt and we have money like that $3,000 to put towards it. I think it was just over a year, if I remember correctly, to get to six months.

• 1:06:27Ramit Sethi?

  I think it probably take a bit more than that because if you're saving $3,000 a month and you're trying to get to six months, that's $66,000. Take a long time, years. I don't mind it. I don't mind. It usually takes years to get to six months of emergency fund savings. It's totally normal. I do mind that right now you still only have a week's worth of savings. It's really scary to me. I will tell you what I would do if it were me. What I would do is I would take all the savings that we just did. Taking a look at this, you now have $1,172 a month that has flowed all the way down to guilt free spending.

• 1:07:13Ramit Sethi?

  And what I would do is I would redirect a lot of money towards emergency fund. So right now it appears you're doing about 220 bucks. I would put 500 bucks towards savings, leaving you with $672 in guilt free spending. That's pretty low. That's 5%. But the fact is, you need savings. I would furthermore probably reduce the amount I paid towards debt.

• 1:07:42Speaker 02

  Reduce it?

• 1:07:44Ramit Sethi?

  Yes. Shocking, right?

• 1:07:45Speaker 02

  Yes.

• 1:07:46Speaker 01

  Yeah.

• 1:07:46Ramit Sethi?

  Why do you say that? Why is it shocking to you?

• 1:07:48Speaker 02

  I just, I mean, everyone, everyone fears debt, so.

• 1:07:53Speaker 01

  Well, not fears, but it's.

• 1:07:55Speaker 02

  Okay, improper.

• 1:07:58Speaker 01

  We shouldn't, we shouldn't be in debt. If we don't have the cash to pay for it, then we shouldn't be buying it. At the end of every month, we should be paying the statement balance if we are carrying debt. So.

• 1:08:11Ramit Sethi?

  Here's why I think that you should consider reducing the amount you put towards debt. I certainly would. You have a family.

• 1:08:22Ramit Sethi?

  Expenses come up. You two have shown repeatedly over many years that you are not properly planning for the future. Like, simple things, expenses come up and derail you. And you haven't come up with an effective solution for it. You need savings. You need it. So, I love the fact that you're being super aggressive about paying off debt, but my question is, why? Why be so aggressive that you're putting all this money, almost $3,000 a month towards debt to pay it off in one year? Why?

• 1:09:02Speaker 01

  Because they're paying $845 a month in interest on the AMX.

• 1:09:06Ramit Sethi?

  I understand that. It sucks.

• 1:09:08Speaker 01

  Yeah, that was why.

• 1:09:10Ramit Sethi?

  But what about if something happens? What about if John loses his job?

• 1:09:13Speaker 01

  Yeah.

• 1:09:13Speaker 02

  I think to your point, you know, if we paid off the AMX, for instance, in extended three more months, at least the limited payments amount that's going towards saving now would be more beneficial than that three extra months. So, we'll eat the three months, but have a cushion.

• 1:09:33Ramit Sethi?

  That's the way to think about it. It's like, yeah, we're gonna have to eat some [BLEEP] and pay extra interest. That sucks. We need to take accountability. We messed up in racking up all this debt, and so we're gonna have to pay for it. Fine. But, we need to protect ourselves as well.

• 1:09:47Speaker 02

  Right.

• 1:09:49Ramit Sethi?

  That's how we think about it.

• 1:09:50Speaker 02

  So, like- Offense is a good defense, is that the phrase?

• 1:09:53Ramit Sethi?

  Go on up. Yes. Okay. Let me show you what I mean. I'm not gonna tell you the exact numbers, because you need to decide for yourself. But, take a look. Right now, you're paying $2837 a month in debt. Okay, maybe that's a good idea, maybe not. I don't know. Let's say we take it down to $2,000. We got $837 extra dollars to put in. So, just to simplify things, I'm gonna put $1,000 here. $220 plus $837, we'll just call it $1,000 bucks. I just added it straight here into your savings. Now, you are saving $1,500 per month. That's a lot.

• 1:10:29Speaker 01

  That's a lot.

• 1:10:31Ramit Sethi?

  So, by the end of the year, at least you will have one month worth of fixed costs.

• 1:10:37Speaker 01

  Yeah.

• 1:10:38Ramit Sethi?

  Guys, you need it. You need it. You need savings. You are too exposed right now. How does it feel?

• 1:10:48Speaker 01

  Feels wrong.

• 1:10:51Ramit Sethi?

  You know why it feels wrong to you?

• 1:10:52Speaker 01

  Why?

• 1:10:54Ramit Sethi?

  Two reasons. Number one, you've been taught that debt is bad, which is ironic because you actually ran up a ton of debt. So what kind of lesson is that? Second, it feels wrong because you are used to only tackling the thing directly in front of you. You are not used to planning further out. Look at John nodding his head.

• 1:11:15Speaker 02

  That makes sense.

• 1:11:16Ramit Sethi?

  So I will say kudos to you for creating this debt payoff plan because it's very, very sophisticated to be looking ahead and planning a year. But what you did was you basically said like, this is bad, debt is bad. I want to make the bad go away as quickly as possible. That was essentially what you did, right?

• 1:11:33Speaker 01

  Yeah.

• 1:11:33Ramit Sethi?

  Exactly. And so what I am encouraging you and challenging you to do is like, hey, yes, debt is bad, but we also need to look even longer. We need to look bigger. We need to realize that we're going to have to pay interest. It's going to suck. And also, the worst case that would happen for us is not paying an extra 500 bucks in interest. It's that we get laid off and our family is destroyed. That is the worst.

• 1:11:58Speaker 01

  Yeah, that is definitely worse.

• 1:12:01Ramit Sethi?

  All right, so that's up to you, but that's something I would consider. The difference between paying off debt in one year versus two, or two years versus three, in the grand scheme negligible. But having a fat savings account so that you can sleep well at night, especially as parents, very, very powerful. John and Victoria are learning to think bigger, not just about paying off debt, but about building real financial security. If I can be really honest here, there has to be more to life than just getting by. So when do they actually get to live? When does this stop being about survival? Let's talk about their rich life right now. When do you get to think about a rich life?

• 1:12:45Speaker 02

  When I have the funds where I'm not worried about debt. So I don't know when that would be.

• 1:12:52Speaker 01

  Well, why don't you know when that would be? Because if we have a debt payment payoff payoff date, why wouldn't that occur in a year?

• 1:13:00Speaker 02

  That's a good point. I mean, yeah, I mean, two years was the plan. I guess because we just we haven't gotten there yet. So for me, that wasn't that wasn't real.

• 1:13:11Ramit Sethi?

  You can't think about a rich life until you're debt free.

• 1:13:13Speaker 02

  I was able to think about it before, but I mean, my rich lifestyle right now is sad to say, being debt free and.

• 1:13:23Ramit Sethi?

  Wait, that's not sad. I think that's cool. That's very mission oriented. Hey, we got it's taking accountability. Hey, we got ourselves into this situation. We are creating an aggressive plan to pay it off. We are being thoughtful. So when we get this gift money and when we have these monthly transfers, we are being very thoughtful. Do we need to pay it off in one year? Can we extend it to 16 months, 18 months, 24 months? What is right for our family? So I actually find this very exciting to think about what is our rich life? It's being debt free right now, but how are we going to get there in a way that's right for our family?

• 1:14:03Speaker 02

  And I guess my rich lifestyle, I guess to go on that now that we're talking about it is kind of a little bit more clear is is being able to have these things in in progress where I can know. Okay, we've got this plan for to be, you know, have the property tax paid and be doing it on our by ourselves. And have those motions going and knowing that all that is set. I think, I mean, I don't know if that could be a good rich lifestyle, but knowing that that's available.

• 1:14:32Speaker 01

  It doesn't do anything for you. That is just things that need to happen, but it doesn't give you anything. There's nothing about you specifically in that statement.

• 1:14:43Ramit Sethi?

  Victoria, you want to elaborate?

• 1:14:45Speaker 01

  He says in the book that moms and dads don't ever do anything for themselves. So right now you're being dad and you're being a provider and you're making sure everything is being accounted for. But like I did last year, after having Luca, I went to ballet class on Wednesday nights once a week. And that was mine. Like, that was something that I got to do. That was me. It was something I enjoyed and I'm grateful that I got to go. I do think it was money well spent because postpartum depression is real. But what Ramit is saying is that everything that you just said doesn't give you anything in return.

• 1:15:26Speaker 02

  I may not have said it enough or at all, but for me, knowing that you were able to do that stuff.

• 1:15:32Speaker 01

  There's nothing specific that you are saying. You need to find something specific.

• 1:15:36Speaker 02

  Oh, everything can go into savings for all I'm concerned.

• 1:15:41Ramit Sethi?

  Hold on a sec. This is very interesting. So, John, you're getting emotional talking about Victoria being able to do ballet classes, right? Why?

• 1:15:50Speaker 02

  Because I love her and that's what she likes to do.

• 1:15:53Ramit Sethi?

  There's something pretty beautiful about that.

• 1:15:57Ramit Sethi?

  You are working hard. You want Victoria to be able to do that or whatever she wants. There's something beautiful about that. Do you hear what Victoria is saying?

• 1:16:12Speaker 02

  Focus more time on myself.

• 1:16:14Ramit Sethi?

  Why do you think she's saying that?

• 1:16:16Speaker 02

  It's needed.

• 1:16:17Ramit Sethi?

  Think about your son.

• 1:16:19Speaker 02

  I guess, yeah.

• 1:16:22Speaker 02

  If I'm being a role model for them and then that's all they see. I mean, I've thought about it, but right now it's just business is business.

• 1:16:31Ramit Sethi?

  Can I, can I gently push you on that? This idea that right now I'm just going to be heads down. I'm just going to focus on the thing in front of me and later I will deal with this vague, ambiguous, rich life stuff. Never happens. And men, particularly men who find control in systems and numbers, men like you and me who are optimizers, we are the ones who end up living only for some distant future. And the loved ones around us are like begging us, please be present right now.

• 1:17:12Speaker 02

  That's, that's the, uh, the family I grew up in. That's all I know.

• 1:17:18Speaker 02

  My uncle passed away before he got to enjoy.

• 1:17:23Speaker 02

  Retirement and it's one thing his wife keeps mentioning is, you know, they were just about to get to enjoy that part of their life. And he didn't get that far.

• 1:17:39Ramit Sethi?

  How does that apply to you? How do you take that in?

• 1:17:42Speaker 02

  That's something I have to just accept in terms of just how I've seen things. So it has been pretty tough, but I know this family that he's giving up so much for.

• 1:17:56Speaker 02

  We all have so much benefits.

• 1:18:00Speaker 02

  It may just be worth it.

• 1:18:02Ramit Sethi?

  Take your time. Take your time. We're in no rush.

• 1:18:05Speaker 02

  Sorry.

• 1:18:07Ramit Sethi?

  I actually really appreciate you being so open. Money is very emotional. I really appreciate you being this candid with me. Keep going.

• 1:18:19Speaker 02

  That's really all that is to it is he put in the hours and I mean, my grandfather put in the hours till the day he died.

• 1:18:30Speaker 02

  Had the same clothes, same minimal lifestyle, but they've given up so much for, I guess, allowing our family to have things.

• 1:18:39Speaker 02

  That's, that's a rich lifestyle.

• 1:18:43Ramit Sethi?

  That's a hero that if they work hard, if they buckle down, if they provide for their family, that's a good man. Is that what you're telling me?

• 1:18:50Speaker 02

  Yes.

• 1:18:52Ramit Sethi?

  I agree with you. I think that being able to help your family, being able to be solid, being able to be there for your family. I think that's a great man. I agree. But I also hear Victoria saying something in addition. Victoria, what are you asking for?

• 1:19:08Speaker 01

  For him to go find time to work out. I know that's something he wants to do. If it means spending some of this less debt payment money on a gym membership because it gets you out of the house. It gets you away from the kids. It gets you concentration to actually work out.

• 1:19:28Speaker 01

  That might be worth it.

• 1:19:29Ramit Sethi?

  What do you think, John?

• 1:19:31Speaker 02

  I, I mean, I appreciate that. And an adjustment, I don't know if.

• 1:19:39Speaker 02

  It's gonna be so easy cuz you know it's still something that's gonna preoccupy my time wherever I am.

• 1:19:45Ramit Sethi?

  What does that mean? You're you're at the gym doing lateral raises and you're like, this could be my MX bill paid off three days earlier.

• 1:19:51Speaker 02

  No, but in a certain sense, yeah, it just may be a distraction. You know, if you're distracted, you don't enjoy things or you can't get the full experience.

• 1:20:04Ramit Sethi?

  John, are you all or nothing?

• 1:20:05Speaker 02

  Yeah.

• 1:20:06Ramit Sethi?

  Like if I if I don't have, if I'm not perfectly debt free, I can't enjoy my time.

• 1:20:12Speaker 02

  I'm pretty extreme. I usually am zero to or 100.

• 1:20:16Ramit Sethi?

  How's that work out for you?

• 1:20:18Speaker 02

  I mean, right now, not well. For work, it's going well.

• 1:20:23Ramit Sethi?

  I like the honest answer.

• 1:20:26Speaker 02

  I mean, people, I'm, I do my work pretty well. It's, you know, like I said, stuck to that and.

• 1:20:34Ramit Sethi?

  Yeah, John, you do the work well for other people. But the question is, what about yourself? What I would really love for you to internalize is you can create a powerful debt payoff plan. No doubt, you need to pay off your debt. I agree. You can create a powerful savings plan. You definitely need more in savings. Okay, yes. And you can go to the occasional gym or like, I like chips. So if I were in your situation, I would say, once a week, I'm gonna go out and eat chips and salsa. Five bucks, but it's just something I enjoy. Whatever. The point is not about spending 50 bucks or five. It's not about that.

• 1:21:16Ramit Sethi?

  It's about you not grinding yourself into the husk of a man that so many men turn themselves into. And it's not just about you. It's about your wife. It's about your kids. It's about everyone seeing that you are not going to do the same exact thing that your uncle and your grandpa did. You can pick and choose. Victoria, what do you think?

• 1:21:38Speaker 01

  I would love it for him to go do something because I feel like. He would be a little stress free, a little less stressed. If he did something that wasn't just the everyday always has to be done hustle around working and a family.

• 1:22:03Ramit Sethi?

  If the two of you did not make any more changes after we talked today,

• 1:22:09Ramit Sethi?

  where do you think you would end up?

• 1:22:11Speaker 02

  Not in this house.

• 1:22:12Speaker 01

  Well, we would probably end up eventually back in the same place because we're not dealing with, I think, the initial problem, right? If we're sole focused right now is paying down debt so aggressively and getting rid of it and everything can be dealt with after. Are we going to deal with it after? No, that's the whole point of making the rules now while we're in the thick of it. So that once we're out of it, we have a plan

• 1:22:43Speaker 01

  for our money and that we know what we're going to do and that we're not in the same spot again in three years, two years, whatever timeframe that works out to be.

• 1:22:52Ramit Sethi?

  Powerful realization, Victoria. If I were in your situation, I would never want to be back in this situation, ever. And it would not just be a desire. It wouldn't be like, oh, I hope we never end up back here. I would put systems in place to guarantee

• 1:23:14Ramit Sethi?

  that we are never back in this situation. I would build up a fat emergency fund. I would have automated transfers going here and there. I would have rules on spending and owners for different categories. I would be talking about money on a weekly basis until we became extremely comfortable and then maybe moving it to a monthly basis. And I would be using money not just to save and invest, ensuring that we never got back into debt, but also be taking a little bit of that money for guilt free spending, modeling it for each other and for the kids. That's how it becomes systematic. It's not about hopes.

• 1:23:51Ramit Sethi?

  It's about building a system.

• 1:23:52Speaker 01

  So I think if we just commit to a weekly meeting, then things will change because every week we're going to be discussing thoughts and money and bringing things up that maybe the other has done that we want to talk more about. Like how did we get here? How did this happen? How did that happen? Why did this happen? So obviously you can't name all the specifics to that right this second, but just taking, like John said, more accountability for everything that's going on.

• 1:24:22Ramit Sethi?

  I like it. I think it's a good start. Until now, a lot of your financial life has just been one game of whack a mole after another. That's it. One game of whack a mole, whether $10 or $10,000, just whack a mole. I would create rules so I never have to play that game again. I just hate it. I refuse to play it. And because I know that I have control over my life, if I don't want to play a certain game, I'm not going to play that game. I will create rules so that I can play the game I choose to play, not the game that the world assigns me. That's something I would think about. Since you both said that you would like accountability, then here's what I would like to see from you. I would like to see updates from you over the next month. In fact, I'd like to see them after each money meeting. We're trying to

• 1:25:08Ramit Sethi?

  stop playing whack a mole, start living a rich life. I would be very interested to see your revised CSP, which I think we made some pretty interesting changes to. I'll be very interested to see any rules that you create to make your life easy. Remember, you create the rules, nobody else. So the rules are meant to make your life better and easier. I'll be very interested in all that. I think that's going to be absolutely incredible. With that, I'm very excited to see what the future holds for you. Very excited. Trust me when I say that if you do this for four weeks and you both show up, you have an agenda, each of you contributing something to the agenda beforehand, you show up with a plan and you practice your communication,

• 1:25:53Ramit Sethi?

  you will be shocked at how much you can improve in four weeks. All right, John, Victoria, I want to thank you both. It's a real pleasure to get the chance to follow up with you and to talk more. Keep me updated, okay? Thank you.

• 1:26:06Speaker 01

  Well, dear, thank you.

• 1:26:08Ramit Sethi?

  John and Victoria are learning that changing your relationship with money isn't just about budgets and spreadsheets. It's actually about building new systems and having hard conversations and shifting how you see yourself in each other and money. If you want help doing that work, whether you're buried in debt like John and Victoria or you just want to get to the next level, my money coaching program can give you the structure and accountability to make real changes and make them fast. Go to iwt.com/moneycoaching to sign up. I will see you in the program. Now, here's what I think is going to happen with them. I think Victoria will get another job. She's proven that she can hustle. She did 61 applications in 21 days, so that's not the issue.

• 1:26:52Ramit Sethi?

  The issue is what happens when they hit their next obstacle. I'm talking about when the car breaks down or when one of the kids needs something expensive or Christmas rolls around and they're tempted to make it just a little special day. That's when I'll know if anything has actually changed. I noticed that John cried when he was talking about his uncle, a man who worked until he died and never really got to enjoy his life. I think John is starting to recognize the trap that he's been building for himself, but we have to acknowledge that he's been building that trap since he was a child. And I don't think Victoria is going to let him off the hook. She's also pushing him to have a life beyond just grinding.

• 1:27:34Ramit Sethi?

  Personally, I'm rooting for them, but I also know that change, real change, is hard. Now, let's check out their follow-ups.

• 1:27:42Speaker 01

  Hi, Ramit and team. It's Victoria and virtual John, just checking in with a quick update since our filming. Some of our biggest takeaways from our first filming in August was for me to find work, which we updated in September, that I very quickly found work within three weeks after 60-something applications and one interview. I was ultimately like, oh, after three weeks from that job, it wasn't the right fit for either of us. I realized after that, um, that a full-time job may not be the best thing for our family right now. And so I ended up accepting a office manager role at my friend's medical practice.

• 1:28:26Speaker 01

  I work there three days a week and then the other two days a week I do stuff for the family and the kids. And it's been working out quite nice. Um, one of the other assignments for us was to do weekly money meetings. And we'll be honest, we did not hit that goal. Uh, since the end of September, we've had about three meetings, um, not weekly, but it did start a habit of trying to sit down and talk about money instead of avoiding it. Um, one of the responsibilities was for John was to be taking over some of the mailed bills, which was an idea that was great in theory. Um, just with him working a full-time job out of the house and being the one who cooks dinner mainly. It, um, did not come to fruition.

• 1:29:06Speaker 01

  So I, um, basically reorganized our filing system because I realized it was a heap of a mess. And there was papers all over the place and backlog. As I said, I'm terrible at opening mail, so I took care of all of the backlog. I took care of all of organizing. We take care of all the mail as it comes in now. And also another takeaway was to work on our grocery spending, but we have realized that food is one of our yes dials, which is something that we tried to say in our update. You do like cooking. We like eating well. We buy wholesome ingredients. Um, so one of our yes dials is food and we are becoming more intentional rather than trying to drive the number as low as possible.

• 1:29:49Speaker 01

  Um, we did see a big savings initially. As we said, we used up a lot of our stock pantry. We do continue to use ChatGPT for our grocery planning and, and meal prep. And so that does help. Sorry, I had to pause the videos when woke up. Part of our takeaway was to make a debt payoff plan. Um, and without a full-time second income, it's hard to um execute. So we were still treading water till December. So we have decided as a family that we are gonna make better decisions this year. And so one of those better decisions is we put our house up for sale.

• 1:30:32Speaker 01

  Um, and we are listed, we have had open houses, we have had scheduled showings, we've had offers made, we've had an inspection done. So we have contracts on the table, we are basically almost at the signing point. So we are looking to put about five fifty down on the house. We are looking to stay in district for a teenager. Depending on the final house that we end up, you know, securing and having a winning bid for, will determine um what our final all-in housing cost in percentage of income looks like.

• 1:31:14Speaker 01

  But I'm bearing in mind the property taxes, trying to keep it under ten. We're not looking to go over our max budget. Our max budget does include, I believe, our debt currently, which we are looking to obviously wipe clean when we switch houses. Money talks will have to happen weekly in our new house. Twice a week, more than twice a week, just to get into the habit. So that we can keep on top of making sure that we stay debt-free. All the things that we have to bear in mind, habits that we have to continue to forge. The dreamer mentality and the overspending is an old habit.

• 1:31:59Speaker 01

  That will die hard. We are still learning our lesson, but we're learning it and we're growing.

• 1:32:05Ramit 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 A's, and an amazing, huge community of other people like you. Check it out at iwt.com/moneycoaching.