Pod Insights Money For Couples with Ramit Sethi 262. "We make $167k. Why do we feel poor?" About this episode Ramit Sethi of I Will Teach You To Be Rich talks to Drew and Amanda, a married couple earning around $167,000 a year with a net worth of over $800,000.
On paper, they look financially successful but behind the scenes, their fixed costs are dangerously high, their savings are low, and their spending decisions are causing tension in the relationship.
Drew admits he struggles with spending, while Amanda finds it difficult to say no, leaving them stuck in a pattern where money feels stressful instead of empowering.
In this episode we uncover:
• Their household income of around $167,000 a year
• Why they still feel financially stretched despite a strong net worth
• Their surprisingly low savings compared with their assets
• How fixed costs reached around 89% of their gross income
• Drew’s struggle with spending and impulse decisions
• Amanda’s difficulty saying no without feeling like the “bad guy”
• The hidden relationship dynamic behind their financial stress
• Why eating out 6–8 times a week became a major spending leak
• The role of bonuses in justifying bigger spending decisions
• Amanda’s childhood experiences with financial instability
• Drew’s “you only live once” money mindset
• How their daughter is learning from their financial behaviour
• Ramit’s challenge for them to stop making emotional money decisions
• Why vacations may need to pause while they rebuild savings
• Their plan to create a family money philosophy and emergency fund
⏩ CHAPTERS
(00:03:15) Why Drew applied to the podcast
(00:07:00) The hidden decision-making problem
(00:10:30) Why they don’t feel like a team with money
(00:16:15) Their financial numbers revealed
(00:21:15) The reality of their household income
(00:29:25) Fixed costs are the real problem
(00:33:10) The truth about eating out
(00:35:50) How bonuses fuel spending
(00:39:30) The couple who struggle to say no
(00:45:30) Amanda’s childhood money story
(00:56:30) Their inherited money beliefs
(00:58:20) Starting their Rich Life vision
(01:04:00) Pausing vacations to rebuild stability
(01:10:00) Drew practices saying no
(01:16:30) Amanda’s role changes
(01:20:30) Cutting subscriptions and eating out
(01:29:30) Redirecting money toward savings
(01:36:00) Creating a family money philosophy
(01:44:30) Ramit’s final advice
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Transcript 19,413 words · 3 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Ramit Sethi? Are you feeling stuck with your money? Have you told yourself, "I need to figure it out." But you haven't really done it? I understand that not everyone is going to sit down and read multiple books about money. I get that. That is why I created Rich Life: The Road to 100K. This is a step-by-step program that shows you how to build a money system that works. Like figuring out the date that you're going to have $100,000 invested, how to automate your money, and how to cut through the noise. Plus, you will get access to weekly live events and a community of like-minded people, plus a library of my best materials. This is the program that will finally help you get on track with your money,
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2:10 Ramit Sethi? $167,000. What do you all think of that income?
2:13 Speaker 01 I'm super proud of the work that we've put in, but we don't have enough.
2:18 Speaker 02 It's kind of like always a struggle and it makes me sad.
2:23 Speaker 01 I am the one with the spending problem and I have asked Amanda to make me stop.
2:29 Speaker 02 I have a hard time saying no. Money's just not my thing.
2:33 Ramit Sethi? You have a crisis right now. You're spending more than you make every month and you only have $13,000 in savings.
2:41 Speaker 02 Yeah.
2:41 Ramit Sethi? What do you think is going on?
2:43 Speaker 01 I know what to say to eventually get what I want.
2:46 Speaker 02 With like money, we've seen how each other maneuvers with it. And so we need each other to do the bad things.
2:55 Speaker 01 If I keep spending like this, are we going to have enough to retire at a comfortable age and enjoy my life with Amanda moving forward?
3:04 Ramit Sethi? How are you going to do that?
3:05 Speaker 01 I don't know how people just turn that switch.
3:10 Ramit Sethi? Why is it that you make good money, but you still worry about it? Today, we are going to get into that very question that plagues millions of people. I'm going to speak to Drew and Amanda. They're married. They're in their mid-30s. They have a six-year-old daughter and they make a combined $167,000 a year. But with low savings and high fixed costs, they're basically one emergency away from being in serious trouble. Let's take a look at the numbers. I'm looking at their conscious spending plan, or CSP. If you want my help with your CSP so you can understand your four key numbers, join my money coaching program at iwt.com/moneycoaching. Assets: $925,000.
3:54 Ramit Sethi? Investments: $454,000. Savings: $13,000. Debt: $568,000. Net worth: $824,000. Now let's look at their fixed costs. 89%. Right there, that's the ballgame. That explains so much. Investments at 4%, savings at 2%, that also is very explanatory. Guilt-free spending at 5%, which I pretty much don't believe without even talking to them, but we'll see. Drew writes, "If I lost my job tomorrow, life-altering negative results would happen immediately." Drew's right to be concerned. They have a net worth of close to $1 million, but at the end of every month, they still feel broke.
4:38 Ramit Sethi? And the question is, what is going on here? We're about to find out. Let's meet Drew and Amanda. Andrew, you wrote something in your application that caught my eye. You said, quote, "I am the one who handles the finances, but I'm also the one who has the spending problem. I hold resentment towards her that she never looks at our bank account, yet I am the one who says, 'Let's go out to eat.' I have asked her to tell me no, but honestly, that is not her job. If I lost my job, we wouldn't be able to survive a couple of months with our fixed costs."
5:19 Ramit Sethi? Is that a pretty accurate representation of why you are here today?
5:24 Speaker 01 Yeah, absolutely. It's a representation of why we're here today.
5:27 Ramit Sethi? And Amanda, did you also participate in the application? Or was it just Drew?
5:33 Speaker 02 It was just Drew.
5:34 Ramit Sethi? Ah, that's interesting. Drew, what made you decide to want to apply to speak to me?
5:40 Speaker 01 I wanted to speak to you because I feel like I am the one with the spending problem. I need some help and guidance with how I should spend my money. And I have asked Amanda to make me stop. But again, it is not her job.
5:57 Ramit Sethi? Amanda, what's your take on this?
5:59 Speaker 02 I wish I was more involved. And I've tried, but it always is just like a day or so. And then I'm like, oh, he handles it so much better than I do. And I know that I have a hard time saying no because I like the idea too. And then if someone else is signing off on it, I'm like, sure, because it wasn't coming from me because I'm not a spender. And so I find it harder to make those judgments on my own. And so when I'm like, oh, someone else is on board, let's, let's do it. And so like Drew is the planner for vacations. And I'm always so thankful because if it was up to me, probably wouldn't go.
6:39 Ramit Sethi? Hmm. In a heterosexual relationship, it's almost always the woman who applies. So this is quite unusual and I really appreciate it. How long have you been married for?
6:48 Speaker 01 Almost 13 years.
6:50 Speaker 02 Mm hmm.
6:50 Ramit Sethi? Kids?
6:52 Speaker 01 One, one daughter.
6:53 Ramit Sethi? How about making decisions around major purchases? As a married couple with a daughter, how do you go about making those major purchase decisions?
7:02 Speaker 02 Drew gets an idea. I'll start with a little bit of hesitancy of like, are you sure? Like this seems expensive or because I tend to get very comfortable. Even when we lived in an apartment, he was like, we should buy a house. And I was like, oh my gosh, no way. We can't afford this.
7:20 Ramit Sethi? Let's think of a time in the last six months where you were not on the same financial page. Does something come to mind?
7:27 Speaker 01 Yeah, absolutely. Uh, I kind of like to look around the house to see what could use improvements. Uh, I had this idea that we needed more storage with, with our daughter. And why don't we put in some cabinets in our living room? We could have easily bought in, you know, two things off of Amazon to put on each side that has cabinets. But I decided I wanted to go all out and give a business a call that where they would build the cabinets. We had them come to our house, price it out. I expected it to cost anywhere from 2,000 to 3,000. Amanda was probably shooting in the ballpark of a thousand.
8:12 Speaker 01 It ended up being about 5,500.
8:16 Speaker 01 When I was going through the decision process, I looked at Amanda and I just gave her the head nod and a little wink and said, "Let's do it." And she said, "Okay, sounds good."
8:27 Ramit Sethi? What's that move? I'm married too. I didn't know that move. I could just get my wife to agree on everything by just winking at her? Is that it? Get in tight on this. I could wink on both eyes. Who knew? All I have to do, and I gotta give a little smile. That's a little difficult for me, but let me try. Hold on. I'm imagining, I wanna buy an antique ceramic from Kyoto and it costs $9,500 for a tiny thing in this side of my hand. And I need it. I need it to put right here. Hold on. My wife is looking at me like, "Are you sure?" And I go like this.
9:11 Ramit Sethi? That's it?
9:12 Speaker 02 Yeah.
9:14 Ramit Sethi? I learn something new on this podcast every day. All right. Amanda, what was it like from your perspective? What do you remember him saying? Actually, should we just recreate the conversation?
9:23 Speaker 02 Yeah.
9:24 Speaker 01 All right. Let's do it.
9:26 Ramit Sethi? All right. So, you know, the person is coming over, the vendor, to give the quote. Pick it up from there, Drew.
9:31 Speaker 01 Amanda, I think that these cabinets will look great. Might add an extra little value to the house if we ever decide to sell. I think that we have a little bit of money from taxes that are coming our way. Why don't we pull the trigger and have these put in?
9:47 Speaker 02 Are you sure that we really need those? I mean, I think I've seen something like that in like Amazon or IKEA. Like, maybe we could just do it ourselves.
9:57 Speaker 01 That is true, but they are gonna be built-ins and they can probably do it in a day. And we do have a little bit of cash on hand.
10:06 Speaker 02 Mm-hmm. And we're not very handy. So it'd probably just be a pain and uneven. So, okay, maybe we'll just have them come and we'll like talk to them and see what it is. But, yeah, it's like gonna be like 1,500, right?
10:22 Speaker 01 I was thinking more in the ballpark of 3,000.
10:25 Ramit Sethi? Okay, let's pause right there. Great work. Actually, really helpful to see. Thank you. Would you say that was pretty accurate as to how the conversation went?
10:35 Speaker 01 Yeah.
10:36 Ramit Sethi? Okay, all right. Zoom out. What role was each of you playing in that conversation? Amanda?
10:42 Speaker 02 I was trying to be like the level-headed.
10:48 Ramit Sethi? Okay, against what?
10:50 Speaker 02 Against the spender. And so it's like, oh, I did my part like to say no. So then I can kind of go back and be like, I tried to say no to this thing.
11:03 Speaker 01 For me, I almost kind of feel like the big bad wolf. When she's saying no, her house is made of straw. If I blow and blow, I eventually blow that house down and kind of get what I want.
11:16 Ramit Sethi? I think that's a really good description. I was thinking, when you were talking, I was visualizing. I kind of saw it like, I'm getting, I'm getting pretty, I'm coming at you. Hey, what about this? What about that? Try this. No, we need it. It's going to raise the value. Like lots of arguments. And Amanda is playing her part. Okay, now that we're kind of agreeing to all these things, we're seeing it in a different light. What do you both make of the role that you're each playing?
11:43 Speaker 02 I don't like it. I don't like my role. I don't like the idea of like a big bag of wolf either, though.
11:49 Speaker 01 No, and I didn't mean it as like, oh, I'm angry and you want something. It's more like, I know my way to blow that house down. I know what to say to eventually get what I want.
12:01 Ramit Sethi? What do you think about your role, Drew? Do you like it?
12:05 Speaker 01 No, I feel like we, I need to work more on being a team. But I feel like I need to do a better job of knowing my wife and listening to her instincts. And kind of taking on that role where we are doing it more together. Then just me coming up with something up in my head and trying to move forward.
12:28 Ramit Sethi? Can I ask you both, do you know other couples with this dynamic?
12:32 Speaker 01 I feel like my, my parents have a little bit of this dynamic. My dad usually is the spender and kind of gets what, gets what he wants as well.
12:42 Ramit Sethi? Amanda?
12:43 Speaker 02 Yeah, my mom was in charge of the money and my dad was the spender.
12:48 Speaker 01 In a way.
12:50 Ramit Sethi? It already explains so much. If the only dynamic you have ever known is that one person is trying to convince the other to spend money, and then the other person has this kind of not particularly strong counterargument. And so basically, the person who brings it up pretty much gets what they want. Is it really any surprise that that's what you're gonna do?
13:12 Speaker 01 No.
13:13 Ramit Sethi? Can I ask you something? Do you think that my wife and I have that dynamic?
13:17 Speaker 01 No, I would assume you two discuss big travel, big purchases.
13:22 Ramit Sethi? What's different about us versus the dynamic that you have?
13:29 Speaker 01 Nothing really comes to mind, what difference is. You're in a loving relationship with your wife. You've made a conscious decision to do it together.
13:40 Ramit Sethi? Yeah? Amanda, what do you see?
13:42 Speaker 02 I'm wondering if it's like both having confidence in where you're at, where you stand, and that's like you don't have to convince the other. And you're not, you're not like waiting for the other person to give the green light.
13:59 Ramit Sethi? Hmm. I like that. Yes, you are totally right. Is there a part of your relationship where there is no convincing one or the other? It's we are both knowledgeable, we are a team?
14:16 Speaker 02 I think in every other aspect.
14:19 Speaker 01 I couldn't agree more.
14:21 Speaker 02 Yeah, we are like such a team, like parenting with friendships. Like, we're always on the same page, so it's really just with money.
14:32 Ramit Sethi? What made you get on the same page with your daughter? That has not happened with money.
14:40 Speaker 01 Sounds cheesy, but love, I guess. The love, like, we love our daughter, and maybe that love of money isn't necessarily there because money's hard to understand fully.
14:51 Ramit Sethi? Okay, Amanda, any other perspectives?
14:53 Speaker 02 I was thinking like the respect.
14:57 Speaker 02 With how like, what we want for her and we like, respect each other in that regard. But with like, money, we've seen how each other maneuvers with it. And so, it's always been kind of this, we need each other to do the bad things.
15:15 Ramit Sethi? Ooh.
15:16 Speaker 01 Hmm.
15:16 Ramit Sethi? Mm-hmm. We need each other to do the bad thing. Give me an example.
15:20 Speaker 02 Like, kind of going through how we went through the cabinets. It's like, Drew needs me to say okay, so that later he's gonna say, "You said okay too." Like, "You didn't say no, you didn't stop me." And then I do the same thing, on the opposite of like, "I gave all the, I said no, and you did it without me."
15:42 Ramit Sethi? In a way, it's like, semi-related to flirting, as I'm seeing. Flirting, like, you send a signal, but you're not too aggressive about it. There's plausible deniability, but the right person can pick up on the clue, et cetera, et cetera, right? It's not written in black and white. It's very murky and gray by nature.
16:02 Speaker 02 Mm-hmm.
16:03 Ramit Sethi? And, you've been married for a long time, and you have a six-year-old daughter, and it seems like things are fine. So, why is it a problem now?
16:11 Speaker 01 As we are getting into our 40s, we're getting closer to the age of retirement, and it's becoming like, "Oh, my goodness. If I keep spending like this, uh, are we going to have enough to retire at a comfortable age? And, uh, enjoy my life with Amanda moving forward?" So, I kind of think that's where, where that came from.
16:34 Ramit Sethi? Okay.
16:34 Speaker 02 Yeah, and I feel like too, maybe for the first time, we've realized the pattern, um, of like, "Oh, we get some money, and then we have fun." And don't get me wrong, I benefit from this. Like, I love it too. But, um, it's just like, we can never just let us have money.
16:57 Ramit Sethi? It's not a good dynamic to depend on your partner to say no, especially when you know they're not really good at it. It basically just allows both partners to create this charade. Hey, I'm gonna kinda ask you what you think. You're gonna kinda say, should we really do it? And then we're just gonna do it anyway. This is not real. If we want to live a rich life, we need to live in reality. We need to be honest about where we're spending our money, what we can afford, what is important to us. And right now, there's a lot of tap dancing around the truth. When I was talking to them, I started to realize, I don't think they know any other way. I think this is what they know. And that actually makes me feel a little bit more compassionate to them.
17:41 Ramit Sethi? Because if they have never seen another couple's dynamic, how could they ever do it? So actually, one of the reasons that I started this podcast, because I wanted to know how other couples talk about prenups. Because we were doing it, it's all behind closed doors. None of this stuff is public. And I'm like, I can't even figure out how people are talking about this. And I'm supposed to know all of this stuff. So when couples struggle with money, I feel a lot of compassion because you can't find this material out unless you listen to these couples on this podcast. We're gonna take a look at the numbers right after this. One of my friends recently had to call her phone provider
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21:15 Ramit Sethi? Should we take a look at the numbers?
21:17 Speaker 01 I think we should.
21:17 Ramit Sethi? All right, um, let's take a look at the CSP. I'm excited. Why don't we start with the net worth box? And I would like Drew to read off the word in bold and then the number in full next to it for this entire box, please.
21:34 Speaker 01 Assets, uh, 925,434. Investments, 454,580. Savings, 13,000. Debt, 568,285. For a total net worth of $824,729.
21:55 Ramit Sethi? What do you think about those numbers?
21:56 Speaker 01 I am very happy and privileged that we've had jobs where our companies have matched our 401K and we have taken advantage of that. So, I'm extremely happy with our total net worth. The only thing that makes me a little taken aback is about half of that is a home. And I don't know, like, how do you ever get that money without selling it?
22:22 Ramit Sethi? And Amanda, what do you think about those numbers?
22:24 Speaker 02 I think they're pretty good, um, based on the limited knowledge that I have. Um, I'm very happy with where we're at. I mean, I know it includes my student loan debt in there and that makes us uneasy. Um, but overall, I think it's pretty good.
22:41 Ramit Sethi? What do these numbers mean to both of you?
22:43 Speaker 01 I feel like we worked really hard to get where we are. Um, getting jobs right out of college in the corporate world and kind of working, working up the ladder and putting away our money in our 401Ks. The only number that really jumps out to me is that savings, uh, being so, so low. Um, I think that would be a month's worth of fixed, fixed costs. So, that number really jumps out at me.
23:10 Ramit Sethi? What about for you, Amanda? What does it mean to you?
23:12 Speaker 02 Mm-hmm. I think, I think the biggest piece is like, oh, we might be able to retire. At a reasonable age, that's kind of where my mind goes.
23:23 Ramit Sethi? I'm guessing you have not like run the numbers carefully on your retirement, compounding, that kind of thing. Would that be fair to say?
23:30 Speaker 02 Um, I've looked at like a projection.
23:35 Ramit Sethi? Okay.
23:35 Speaker 02 And seeing where it's headed, I feel pretty good about it.
23:40 Ramit Sethi? That's good. Wait, you have this. I'm quite surprised right now. The way you're talking about it was like, I feel like maybe we can retire.
23:48 Speaker 02 I think I'm waiting for someone to say like, you're way off. And so that's why I kind of approach it that way, I guess, because I'm just trusting, you know, projections in my Charles Schwab, like, you know, portfolio manager.
24:03 Ramit Sethi? Do you find yourself minimizing your own knowledge a lot?
24:06 Speaker 02 Yeah, oh yeah.
24:07 Ramit Sethi? Yeah. I hate it. I don't like it. I really, I'll give you an example. So
24:13 Speaker 02 Okay.
24:13 Ramit Sethi? There's this thing, when I take pictures with people, it happens when I'm in pictures with women. And you know what women will often do when they're in a group photo? You know, Amanda, tell me, what do you do sometimes when you're in a group photo?
24:28 Speaker 02 Uh, like turn to the side.
24:31 Ramit Sethi? Yeah, and the sorority squat, the squat down, right? It infuriates me. I never allow it. I always say, no squatting, stand up tall. And very, very commonly, someone will say, well, what about the people behind me? I go, let them deal with themselves. They'll figure it out. They're adults. So I have vivid memories of this photo we just took. I was on tour last year and I was with my team and we were taking a beautiful group photo. And what do you know, people start to squat down. I'm like, stand up. We have room for everybody. Stand up, take up space. So Amanda, I'm gonna ask you on today's conversation to take up space.
25:16 Ramit Sethi? Like, I think you might be a lot more knowledgeable than you're letting on. And if that's, if not, that's okay, tell me. I never, never come down on anyone for not knowing something. But if you know, like you're like, oh, I happen to run a compound interest projection for both nominal and real returns for the next 45 years, tell me, I love it. Cool?
25:39 Speaker 02 Got it.
25:40 Ramit Sethi? All right. So you all have a net worth of $824,000. You're in your early 30s, correct?
25:46 Speaker 01 Mid 30s.
25:46 Speaker 02 Mid.
25:47 Ramit Sethi? Mid 30s. All right. We're going to look at what it means.
25:50 Speaker 02 Yeah.
25:51 Ramit Sethi? But first, we need to understand more about income and expenses. So this time I'm going to ask Amanda, Amanda, can you read off the combined gross monthly income number for your household?
26:06 Speaker 02 Gross monthly income combined is $13,911.
26:11 Ramit Sethi? Great. For a household income, annual income of $166,932. What do you all think of that income?
26:20 Speaker 01 I'm super proud of the work that we've put in and our careers. And I couldn't be more proud of Amanda.
26:29 Ramit Sethi? Who's the one who makes 8521 per month? That's Drew and 5390, this is gross, is Amanda. And that's with a new business?
26:41 Speaker 02 Yes. And I think the part that has been hard for us is we used to be more equal. And it's not, we don't care about like breadwinner, but it was like mine took a dip. And so it was like adjusting to that.
26:57 Ramit Sethi? Yeah, that makes sense. When you took a pay cut, Amanda, to start your own business, did you and Drew cut your household expenses?
27:07 Speaker 01 Overall, I would say, no, we did not change our monthly expenses.
27:10 Speaker 02 Okay.
27:11 Ramit Sethi? They never do. They never do. Let's continue on with the fixed costs. Here we go. This is where it gets fun. All right. Let's see here. I'm looking at the fixed cost number. Whoa, what's that number you see, Drew?
27:24 Speaker 01 I just called 89%.
27:26 Ramit Sethi? 89%, that's the ballgame right there. That means that you are...
27:30 Speaker 01 Not having much money afterwards.
27:32 Ramit Sethi? Yeah, exactly. It means you're spending more than you make every month. Because fixed cost is just one component of expenses. So, we will drill down into fixed costs in a minute, but first, let's look at investments. 4% and noting that you are making a monthly contribution of $1,500 a month total to your 401K. And then we go down to post-tax investments and we have 4% or $350. Let's go down to savings at 2%, that's 200 bucks a month. And then finally, guilt-free spending at 5%, but I don't believe that number. Do you?
28:10 Speaker 01 I wouldn't either. Absolutely not.
28:12 Ramit Sethi? It's probably more, but that's concerning because you're spending more than you make every month and you only have $13,000 in savings. This is a real problem.
28:26 Speaker 02 Yeah.
28:26 Ramit Sethi? So what do you think is going on here?
28:28 Speaker 01 I think we have gotten comfortable with going to events, going out to eat.
28:37 Speaker 01 I've also gotten comfortable with telling Amanda that we're good, we don't need to cook dinner tonight and we can go out. We just decided to turn a blind eye to our commitments on our monthly fixed costs and our guilt-free spending overall.
28:55 Ramit Sethi? What about you? Not we, but you, Drew?
28:58 Speaker 01 With me, it sounds like an excuse overall, but I do work from home 24/7, 5 days a week,
29:09 Speaker 01 where I feel like I want to go out after work. And I'm the one that kind of pushes to going to events and going out to eat to feel some resemblance of...
29:23 Speaker 01 Being outgoing and talking to people and I've created that issue on a monthly basis.
29:30 Ramit Sethi? Okay. Amanda, what do you think's going on here?
29:33 Speaker 02 We don't know how to say no. We just do what we wanna do and get what we wanna get. And I think, I mean, maybe it's a lot of me not saying no.
29:45 Ramit Sethi? While I agree, there are definitely relational dynamics here with the two of you. I'm interested in what do you think is going on here from Amanda's perspective? What is your role in this?
29:58 Speaker 02 Maybe having no vision into what's going on. And so I'm just, I'm not taking action.
30:07 Ramit Sethi? You're not participating in the finances. I agree. That's probably a problem. Is there a vision of like what your family finances should be?
30:21 Ramit Sethi? Money rules or policies, philosophies in your family? Do you have those?
30:26 Speaker 02 I'd say no.
30:27 Ramit Sethi? Okay. Do you have them for parenting?
30:29 Speaker 02 I would say yes.
30:30 Speaker 01 Yeah, absolutely.
30:31 Ramit Sethi? Yeah, it's very common. Every parent or a couple of parents has some sort of philosophy. You know, in our house, we take off our shoes or we eat dinner together or we don't use curse words and we clean up our toys, whatever. Every parent has some philosophy. It is peculiar to me that very few people have an explicit philosophy on money.
30:55 Speaker 02 Yeah.
30:56 Ramit Sethi? Part of the problem here is that there's no philosophy. It's just like, hey, what do I want? And when you live in America, you are the downstream recipient of trillions of dollars worth of marketing dollars being spent to get you to spend more money. You have very little shot of trying to brute force your way against these companies unless you have a philosophy. All right. What do each of you do for a living?
31:29 Speaker 02 I'm a marriage and family therapist associate, working towards licensure.
31:32 Ramit Sethi? Great. And Drew?
31:34 Speaker 01 Yeah, I'm a senior onboarding analyst for an insurance company.
31:38 Ramit Sethi? Amanda, as a soon to be licensed therapist, do you bring any of that?
31:46 Ramit Sethi? Skill set to bear when it comes to money and your relationship?
31:51 Speaker 02 Uh, probably more so the relationship. Not bringing it to the money aspect.
31:57 Ramit Sethi? Do you think you could bring those skills when it comes to money?
31:59 Speaker 02 Yeah.
32:00 Ramit Sethi? I bet you could. Why haven't you? If you, if you had to guess, why haven't you?
32:05 Speaker 02 I think it's maybe a confidence piece.
32:09 Ramit Sethi? Yeah.
32:09 Speaker 02 I feel way more confident with relationships. Money's just not my thing.
32:16 Ramit Sethi? Money is just not my thing. I like when people say that. It's like, um, it's like you never hear someone saying like food.
32:24 Speaker 02 It's just not my thing.
32:25 Ramit Sethi? Oxygen is just not my thing. Like money is what allows you to have that plant and that doorknob behind you. It's what allows your daughter to have a roof. So maybe when we think about money, a lot of times, like the word and the concept of money, we immediately jump to all these like arcane concepts. But when I think about money, I think about you all taking a family trip. And I think about the ability for you two to go on a hike and get an ice cream on the way home. Like money can do those simple, beautiful things. I think about if one of you gets sick or injured or a tire pops on your car, to be able to go and get that fixed.
33:08 Speaker 02 Without stress.
33:09 Ramit Sethi? So maybe, maybe there is something here about the way that we envision ourselves. We have Drew who says, I work from home and I need relief. I need some semblance of being with people.
33:26 Ramit Sethi? Well, if that's the way you view yourself and money, then you're going to spend it. Right? You have now automatically given yourself justification. There's Amanda saying, uh, you know, I don't know. I'm not really as confident. Oh, I'm extremely confident when it comes to the relational skills, but money, no, it's just not my thing. But actually, it has to be your thing. It actually has to become a core competence of your relationship. If the two of you want to live a rich life.
33:55 Speaker 02 Yes.
33:56 Ramit Sethi? Simple as that.
33:56 Speaker 02 Yes, and I think that's exactly why we're here.
33:59 Ramit Sethi? Good, good. I'm glad you are. I like being told you need to get good at this.
34:05 Speaker 02 Yeah.
34:05 Ramit Sethi? You need to. I don't think anyone in our adult life tells us this.
34:09 Speaker 02 No.
34:09 Ramit Sethi? You know what? You actually need to get good at this.
34:12 Speaker 02 Mm hmm.
34:12 Ramit Sethi? That's it. There's no other way out. So if we go forward in today's conversation with that in mind, would the two of you be okay with it?
34:21 Speaker 01 Yeah.
34:21 Speaker 02 Yeah.
34:21 Speaker 01 I think it's needed.
34:22 Ramit Sethi? Great. Let's dig into your fixed costs. I want to put these back up on screen. And let's talk about the actual numbers here because your fixed costs are 89%. And this is it right here. If we can fix this, we can fix a lot of other things. If we can't fix this, game over.
34:40 Speaker 01 Okay.
34:41 Speaker 02 Okay.
34:41 Ramit Sethi? So we're looking at your rent or mortgage. Is it a mortgage?
34:46 Speaker 01 It's a mortgage.
34:47 Ramit Sethi? Okay.
34:48 Speaker 01 Yeah.
34:48 Ramit Sethi? $3,235 or 23% of gross. That's not bad. We like to see that number, um, you know, at 28% or lower, even though in high cost of living areas, that's difficult. So the fact that you're at 23 is nice. That gives you some margin to play with. So then, so then I go like, hmm, what else are they spending on to get to 89% of a very high income? Your utilities are 580, insurance 400, car payment is $914 a month. How many cars is that?
35:22 Speaker 01 That is two cars.
35:23 Ramit Sethi? Two cars. And does that include gas and stuff like that?
35:28 Speaker 01 They are electric.
35:30 Ramit Sethi? Oh, okay. All right. Debt payments are 600 bucks for a student loan. Groceries 800. That's pretty reasonable. Clothing and kids activities, 400 bucks a month. And then we have this big chunk here, your phone, which is 30 bucks, but your 15% miscellaneous, including kids' birthday parties, Amazon purchases and random items. That's a lot for $1,120 a month.
35:56 Speaker 02 Yeah.
35:57 Ramit Sethi? And then finally subscriptions for $312 a month. What do you notice about all these expenses?
36:02 Speaker 01 Besides the miscellaneous, they seem like they are actual fixed costs that can't go away.
36:10 Ramit Sethi? Yeah, maybe. Some of it can go away. Subscriptions at 312, we could knock that out right now.
36:17 Ramit Sethi? What else? What do you notice, Amanda?
36:19 Speaker 02 I don't, nothing is like jumping out at me.
36:22 Ramit Sethi? What about the cars?
36:23 Speaker 01 One car is a lease.
36:24 Ramit Sethi? You're leasing? What are you leasing?
36:26 Speaker 01 Tesla Model 3.
36:28 Ramit Sethi? Are you doing it because it was like super cheap?
36:31 Speaker 01 It was, it was super cheap. Yes. And then we have another Tesla that we bought.
36:36 Ramit Sethi? Can I ask you something? When you went in to make the purchase, how did you know how much you could afford?
36:40 Speaker 01 I think we just looked at how much it was a month.
36:45 Ramit Sethi? This is exactly how fixed costs get higher and higher. I don't mind if people go and buy like a bag of candy or they go out and eat once in a while. I really could not care less. That has very little material effect. That's asking a $3 question. That's why if people want to have coffee, get the coffee.
37:06 Speaker 02 Yeah.
37:07 Ramit Sethi? But I am extremely protective of fixed costs because once something becomes a fixed cost, it is nearly impossible to get rid of. Like there is no real easy out for these cars. There just isn't. A house is the ultimate. It's very, very difficult to get out from that. And so while I am super loose and relaxed about candy, buying a drink or whatever, that's a one-time expense. But for something that is either recurring or large and fixed, you have to be very protective. Like in many ways, the default should almost be no unless we plan for it and we know exactly that making this purchase plus all of the maintenance that we need to factor in
37:51 Ramit Sethi? is going to keep our fixed cost below 60%. All right?
37:54 Speaker 02 Yeah.
37:55 Speaker 01 Yeah.
37:55 Ramit Sethi? You didn't do that. Most don't. And that is how most end up with really high fixed costs. Okay, I'm not here to beat you up. I just want to explain how we got here.
38:05 Speaker 02 Yep, absolutely. Makes sense.
38:07 Ramit Sethi? All right. Down to your guilt-free spending, what else are you spending money on?
38:12 Speaker 01 Mostly dining out. I would say 80% of that is dining out and then...
38:16 Speaker 02 Three times a week?
38:17 Speaker 01 No, I bumped that up. I was gonna say six.
38:19 Ramit Sethi? Keep going. It's probably nine.
38:21 Speaker 01 Probably nine.
38:22 Ramit Sethi? If, I don't know, there's some magic number. If we factor in buying a coffee, that counts as eating out because sometimes you buy a coffee and a pastry. If we factor in lunch out or breakfast occasionally, blah, blah, blah, blah, blah.
38:34 Speaker 01 Yeah.
38:34 Speaker 02 Yeah.
38:34 Ramit Sethi? We're talking what? Six, maybe more times a week. What do you think?
38:39 Speaker 01 Yeah, six to eight times a week, absolutely.
38:41 Speaker 02 Yeah, that's a lot.
38:42 Speaker 01 It's a lot.
38:43 Ramit Sethi? Vacation?
38:44 Speaker 01 We just got back from vacation two days ago.
38:46 Ramit Sethi? Oh, wow. Where'd you go?
38:47 Speaker 01 Well, we went to Boston.
38:49 Ramit Sethi? Okay. Let's talk about how you planned the financial part of that.
38:52 Speaker 01 We had a free place to stay for the weekend. So we did have a little bit of extra money from Amanda's taxes, as she puts away a certain amount, and she had leftover. So we were able to purchase the plane tickets. And then it happened to coincide with when I usually get a bonus, and we put a certain amount of money away for the trip itself.
39:20 Ramit Sethi? How much did the tickets cost and how much for the trip?
39:24 Speaker 01 The tickets were $1,200, and the money I put aside was $1,000.
39:31 Ramit Sethi? So the bonus money gets spent pretty quickly. Would you say that happens regularly? It seems like it.
39:36 Speaker 02 Yes.
39:37 Speaker 01 You're kind of catching us at the perfect storm right now, as this is tax season and bonus time for us. And this is usually our timetable of where
39:48 Speaker 02 Things go south.
39:48 Speaker 01 We'll send our money. Yeah.
39:49 Speaker 02 Yes.
39:50 Ramit Sethi? So you get tax money, you spend it, you get a bonus, you spend it. When did this start happening?
39:56 Speaker 01 Ever since our annual bonuses, when we started corporate.
39:59 Ramit Sethi? Yep.
39:59 Speaker 02 Yeah. And I used to get a very similar bonus, and now I don't get that anymore.
40:06 Ramit Sethi? Do you spend less because you don't get the bonus?
40:09 Speaker 02 No.
40:11 Ramit Sethi? Do you know any other way?
40:14 Speaker 02 I don't think so, because I think a lot of it, it comes down to like, we worked really hard, like, we deserve a treat, or we deserve, like, something with this, because this bonus is like, you worked really hard all year.
40:29 Ramit Sethi? You work hard, so you deserve a treat. Who taught you that?
40:33 Speaker 02 I might have learned that from Drew, because I did not grow up going on vacations and...
40:39 Speaker 01 Yeah, I mean, we went on, as a family, we went on yearly vacations that I can assume came from my dad's bonus and taxes. And we went on vacation every single year, and I wanted to provide that for my family as well.
40:57 Ramit Sethi? Did your dad ever explain the finances of these vacations?
41:02 Speaker 01 He never did explain them, but I... On good authority, I would believe that they came from his yearly bonus. That he probably, I'm following in his footsteps.
41:15 Ramit Sethi? You gonna explain this to your daughter?
41:17 Speaker 01 I would like to get some tools and help explain it better and say that we changed our ways.
41:24 Ramit Sethi? Hmm.
41:25 Speaker 01 So she has a better understanding of money and savings. So when she's old enough, I will explain to her the patterns that me and, me mostly, and Amanda had, and I think we can explain to her what we changed and the tools that we learned and how we move forward after this.
41:45 Ramit Sethi? You talk to her about money today or no?
41:47 Speaker 01 We do, a little bit. Um, yeah, we do.
41:50 Ramit Sethi? What do you tell her?
41:51 Speaker 01 Save as much as possible.
41:54 Speaker 02 I think trying to.
41:56 Ramit Sethi? Well, I need to put this CSP back up on screen. Let's just, yeah, let's just, everybody take a look. No, I love seeing cognitive dissonance happen. Hey, what's that number right there? What does it say next to savings?
42:06 Speaker 01 This is a big old 13,000.
42:08 Ramit Sethi? 13,000 on a 166,932 dollar income. God, I love my job.
42:14 Speaker 02 Mm hmm.
42:16 Ramit Sethi? Does she see mom active with the money?
42:19 Speaker 02 No. Yeah, that one hit home a little bit. Cause I don't want her to follow what I'm doing.
42:28 Ramit Sethi? Yeah.
42:29 Speaker 02 And I don't want her to be wishy washy.
42:31 Ramit Sethi? Yes. Yes. I love that you said that. I want her confidence, which can only come from your confidence.
42:41 Speaker 02 Mm hmm.
42:42 Ramit Sethi? And the two of you being confident.
42:44 Speaker 02 Yeah.
42:45 Ramit Sethi? What I would love is for her to build that confidence. For example, by mom saying, money is really important. Here's why. Here's what it means to us. Here are the choices we make. Here's our philosophy on money. She should hear that and she should see mom and dad talking about money and smiling and giving each other a hug after they talk about money. And of course you can make it age appropriate, but she should see that. It should almost be theatrical. Mommy and daddy are gonna go over here. We're gonna talk about money for 15 minutes. We need a little bit of quiet time. Pull out a clipboard, talk about whatever. Have a serious conversation, smile, give each other a kiss.
43:24 Speaker 01 Yeah.
43:25 Ramit Sethi? Great. She should see that.
43:27 Speaker 02 Yeah.
43:27 Ramit Sethi? These are the kind of things that let her know. And of course, when you do this, it's actually not just an act. It actually is mom getting involved and it is dad getting involved and talking together and smiling. And guess what? The more you do this, the more real it becomes and then kids see it.
43:45 Speaker 02 Yeah, yeah.
43:47 Ramit Sethi? Whenever I talk to parents on this show, they almost always tell me that they have a philosophy about parenting. They have certain beliefs about sleep or feeding their kids or reading books at night. But when it comes to money, very few people have a philosophy. Like, what are you talking about? I spend on stuff. I have money in my savings. I don't know. Philosophy, what? And I think there's one crucial reason why. And that reason is that when you have a baby, you have a very urgent need to learn how parenting works. You have to learn it and you have to do it now. But with money, there's no such urgency. Even on this show, I have people who come on, they are a month away from running out
44:31 Ramit Sethi? of money and they're perfectly calm about it. But with a baby, you have to learn. I want you to have just a little bit of that urgency for money because it is so important. If you get it right, you can live a very, very rich life. That's why I'm pushing for them to develop a philosophy on money, just like they have a philosophy on parenting. I don't think he realizes how dangerous of a financial situation they're in. Amanda definitely does not because she's pretty disconnected from the finances. But he, the one who logs into the accounts every day and is in charge of the money, doesn't understand how close they are to financial ruin. That's what I want him to understand.
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48:04 Ramit Sethi? I want to understand a couple more things, the debt. So we have $568,000 of debt. How much of that is the mortgage? How much of that is student debt?
48:13 Speaker 01 Yeah, 470 on the mortgage, 68,000 on the student loan, and then 28,000 on the car.
48:25 Ramit Sethi? All that sounds reasonable to me. I noticed there's no childcare. How are you managing that?
48:30 Speaker 01 Elementary school, public school system.
48:33 Ramit Sethi? Great.
48:33 Speaker 01 Which, amazing.
48:34 Ramit Sethi? Have you thought about what expenses might happen from now until later? I do see that you're putting money aside. I believe it's a 529.
48:42 Speaker 01 Yeah.
48:43 Ramit Sethi? What about between now and college? Are there any big expenses that you're thinking?
48:47 Speaker 01 Me and Amanda did discuss private school. So that would be a big expense. And also, as children get older, the sports and activities also get more expensive.
49:00 Ramit Sethi? If you kept things going the way they are now, you know, and we just fast forward like five years, how would you handle it?
49:07 Speaker 01 I think Amanda and I would just pay for it to the detriment of our own finances.
49:15 Ramit Sethi? Has anyone ever told you no?
49:17 Speaker 01 Uh, no. I had a very privileged life. I was able to, my parents were very generous and gave me an amazing childhood. Nike employee store, shoes, vacations. So overall, I'm not used to hearing no.
49:41 Ramit Sethi? You ever tell yourself no today?
49:42 Speaker 01 Not often, not often.
49:45 Ramit Sethi? How about your family?
49:46 Speaker 01 I do not tell them no, no.
49:49 Ramit Sethi? There are no no's in your life. What has the result been?
49:55 Speaker 01 The result has been reaching out for help because I...
50:02 Speaker 01 Couldn't do it on my, my own, put me and my family in a predicament that we don't have enough savings if something were to happen and it's not a good feeling.
50:15 Ramit Sethi? You would run out of money in under two months.
50:17 Speaker 01 That's correct. Yeah.
50:19 Ramit Sethi? Do you think about that?
50:20 Speaker 01 Yeah, it's something I think about often.
50:23 Ramit Sethi? To push on that gently, like if you think about it, it's one thing, but you know, you have this tax refund. Thousands of dollars. You have this bonus, thousands of dollars.
50:33 Ramit Sethi? Why not go, let's take that money and put it in a savings account?
50:37 Speaker 01 We try to have fun in the moment, which is sad to say, we try to go out and go to events and materialistic items, just to kind of feel good in the moment. It feels like that's something that I should do is take them out. Even though putting money away is probably showing more love to my family.
50:59 Ramit Sethi? What do you think, Amanda?
51:00 Speaker 02 It makes me feel like, what is missing that we're just trying to fill? With either stuff for food or I know we are very bad at being bored.
51:14 Ramit Sethi? Really?
51:15 Speaker 02 Very bad. And so like the weekends, it's like, we can't just sit here. We gotta go take our daughter to Topgolf or something like, we gotta get out of the house.
51:28 Ramit Sethi? That's quite interesting. What else?
51:30 Speaker 01 We are both terrible cooks.
51:32 Speaker 02 Yes.
51:33 Ramit Sethi? So what's the conclusion? You go out to eat?
51:35 Speaker 02 Yep.
51:35 Speaker 01 That's correct.
51:36 Ramit Sethi? Okay.
51:37 Speaker 01 We just love being with each other out and about. It gives us joy to go out.
51:46 Ramit Sethi? Drew, you mentioned that you grew up privileged. I'm curious if you can take me back in time. What do you remember your family saying about money back then?
51:58 Speaker 01 I don't recall my parents ever talking about money in front of my sister or myself. I just remember asking for an item.
52:14 Speaker 01 And that answer was usually yes.
52:16 Ramit Sethi? What'd you ask for?
52:17 Speaker 01 Jordans, uh, almost every month, my parents were all, would always get me the, the new Jordans.
52:26 Speaker 01 Snowboards, all that. And so it's like, none of my hobbies were cheap. They were always expensive.
52:34 Ramit Sethi? What else do you remember your family saying about money?
52:36 Speaker 01 They just didn't talk about it. We just did stuff. We just went on vacation. We just bought the items. My dad bought the new cars, but no ramifications of me or my sister hearing it.
52:50 Ramit Sethi? Are your parents both still alive?
52:52 Speaker 01 They're both still alive and still together.
52:54 Ramit Sethi? Okay. And how are they doing with money?
52:56 Speaker 01 My dad is 69 and he does still work like a couple of days a week. I don't feel like they're maybe as well off as peers around the same age.
53:07 Ramit Sethi? How do you know?
53:08 Speaker 01 Because my dad always tells me to save now, because he doesn't want me to be in the same situation.
53:15 Ramit Sethi? Your dad tells you to save, which he didn't. You tell your daughter to save, which you don't.
53:22 Speaker 01 Yeah, definitely a pattern I would love to break here and now.
53:27 Ramit Sethi? I like that. I think that one of the joys, one of the responsibilities that we get, especially if we grow up educated, we, we grow up privileged, is that we can dispassionately look at our family upbringing and we can appreciate the things that our parents did that were awesome. And we can also say, hey, you know what? I didn't love that. Or there's a different way now that I think I would like to integrate better. Maybe it comes from my spouse. Maybe it comes from a different culture. Maybe it's from a religion, whatever. There's something I want to do differently and it's going to be hard.
54:03 Ramit Sethi? Because it's easy to glide into doing exactly what your parents and their parents did. But we are going to make this change as a family. To me, I think that's actually one of the most powerful philosophies and visions that you can have. We are doing this as a family.
54:20 Speaker 02 Yeah.
54:21 Speaker 01 Yep.
54:22 Ramit Sethi? Amanda, would you be on board with changing that pattern that has happened?
54:26 Speaker 02 Absolutely.
54:27 Ramit Sethi? Okay, cool. Drew, anything else you want to highlight about how you were brought up?
54:31 Speaker 01 Yeah, I think the biggest thing that I've taken from them is the yearly vacations, which I don't know how expensive they were back then, but I've been tending to do the same thing with, oh, wow, we need a yearly vacation.
54:46 Ramit Sethi? Because what?
54:47 Speaker 01 You work all year round and you feel like you deserve an escape, but maybe it doesn't need to be an extravagant vacation. It could just be a weekend or camping or anything like that. It doesn't need to be a $10,000 Disneyland trip.
55:07 Ramit Sethi? This is why I really love having a diverse group of people to hang out with and actually talking about this stuff. So for example, my upbringing with my parents who immigrated from India, you know, we grew up with a lot of Indian friends and a lot of the parents had come at the same time. And so they were like making their way in a new country, but bringing a lot of their upbringing from India. It was really common that we all ate at home for months at a time. Like going out was a really big treat. I think that is very different than how we are all now.
55:45 Speaker 01 Yeah.
55:45 Speaker 02 Yeah.
55:45 Ramit Sethi? I'm saying all this to say that in the, if you only index on the upbringing you had, which was fairly, let's call it privileged.
55:56 Speaker 01 Yeah.
55:57 Ramit Sethi? Then it becomes totally normal. It's abnormal to not take an annual vacation, but for millions of Americans, that's totally normal.
56:04 Speaker 02 Yeah.
56:05 Ramit Sethi? Now let's go to your upbringing. Amanda, take us back in time. What do you remember your family saying about money when you were a kid?
56:14 Speaker 02 Money was always a stress.
56:19 Speaker 02 Always talking about bills and how we're gonna make it and refinancing the house several times, needing grandma and grandpa to bail out. So there was just a lot of unease. I did get a lot of stuff and, you know, I didn't feel like I was going without. I did hear a lot of like, not today, maybe next time. I heard that a lot. And I say that now to my daughter a lot. And I'm like, oh, I remember being like, it's never next time. So I don't want my daughter to feel that way either because it was just kind of like, you're
56:59 Speaker 02 just lying to me. My dad was a spender and like, couldn't really be allowed to have like a debit card, or my mom would give him like, an allowance because he would just spend it if he had it. And so I think maybe my mom kind of got forced into the role of managing the money. But my grandparents were like, well off. So it was kind of confusing because it was like, oh, when we're with grandparents, things are great. And then it'd be like, at home, struggle. And then it would be like, oh, we refinanced. And so they would get like, a big chunk of money through the refinance. And then that would
57:43 Speaker 02 like, save us, you know, like, oh, we're gonna pay off all our debts and we're gonna start over. And then, so it kind of mirrors a little bit, not, we don't like, do that. But like, if we get a chunk of money, it's like, okay, we're good. Now we can do the right thing. But then you kind of fall back in the old patterns.
58:02 Ramit Sethi? Yeah. When you took me on that journey, if you just notice how you're feeling right now, how do you feel describing your job?
58:11 Speaker 02 Uncomfortable.
58:15 Speaker 02 Anxious?
58:16 Ramit Sethi? Yeah.
58:17 Speaker 02 Mm-hmm.
58:18 Ramit Sethi? You feel that way today about money as well?
58:20 Speaker 02 Yes.
58:20 Ramit Sethi? Yeah. Are they still alive? Are they still together?
58:24 Speaker 02 Yeah.
58:24 Ramit Sethi? Okay, and what's their financial status now?
58:27 Speaker 02 Not great.
58:28 Ramit Sethi? Not great?
58:29 Speaker 02 Yeah, it was kind of like always a struggle and I think it's still a struggle and it makes me sad. Um, and I don't want that for my family or for me. And it's not like I'm making these like big, great decisions. I think it was just kind of like snowballed for them and it's been hard to get out of.
58:52 Ramit Sethi? Look, we can't control our parents. They are their own adult people.
58:55 Speaker 02 Yep.
58:56 Ramit Sethi? But how do you think that that affects you, Amanda, and the two of you in your relationship with money?
59:03 Speaker 02 I'm scared and I approach it with that. Um, and then also I didn't get the luxuries like Drew did. And so when I have, now I have an opportunity to go on vacation. I'm like, I want to go on vacation because we didn't, we did one vacation like my whole childhood. And so to me, I'm like, oh, this is possible. Like I can do these things. And so I think there's that novelty.
59:37 Ramit Sethi? Do you ever say no?
59:38 Speaker 02 I, yes, to myself.
59:40 Ramit Sethi? Oh, okay. To your daughter?
59:44 Speaker 02 Yes, I do. I'm, I'm working on it, actively working on it. Yeah.
59:48 Ramit Sethi? Do you ever just point blank say no to her? We are not going to get that or that's not something we choose to spend our money on. No.
59:55 Speaker 02 I usually prom, like have a, it's like a sentence. It's not just no. Mm-hmm.
1:00:00 Ramit Sethi? Do you say, no, we'll get it next time? Or do you say, no, that is not something that we spend our money on?
1:00:08 Speaker 02 I probably say, oh no, we're not buying that today.
1:00:11 Ramit Sethi? Yeah.
1:00:12 Speaker 02 So there's maybe hope for.
1:00:13 Ramit Sethi? There's hope.
1:00:15 Speaker 02 Yeah.
1:00:16 Ramit Sethi? You ever had like a creep hit on you and they're like trying to get you to go out on a date or whatever? And then, you know, like sometimes somebody will say like, oh, I'm not really looking for somebody right now. And the only thing that that guy hears is like, she said right now.
1:00:34 Speaker 02 Yeah.
1:00:34 Ramit Sethi? Are you talking about me again? Are you talking about me? Yeah. But like, sometimes it actually just pays to just be like definitive.
1:00:43 Speaker 02 No.
1:00:43 Ramit Sethi? No, I'm not interested. It is about both of you and your relationship with money and the ability to actually close certain doors.
1:00:54 Speaker 02 Yeah.
1:00:55 Ramit Sethi? No, we are not going to leave every door open. No, we are not going to take this vacation. Or no, we are not going to spend our bonus money. Just no. Because right now, at the level you're at where you are spending more than you make every month and you are winnowing down your savings account, to have a whole bunch of nuance, you are only tricking yourself into going right back to your old ways. In your situation, the most helpful thing you can do is have extremely clear, thick lines that say yes or no. Like, there's no question, no equivocation, no negotiation whatsoever.
1:01:34 Speaker 02 Yeah.
1:01:35 Ramit Sethi? And when you do that, which I'll help you do.
1:01:37 Speaker 02 Okay.
1:01:38 Ramit Sethi? It flows to your conversations for something as simple as, should we go out to eat? It's Friday. Into larger things like, hey, you know, this vacation, we got these good deals on flights. And even down to when you talk about money with your daughter. It goes everywhere.
1:01:54 Ramit Sethi? But the only people who can decide that are the two of you.
1:01:58 Speaker 01 I love that.
1:01:58 Ramit Sethi? Yeah. I think it's really easy to come on a podcast and get blasted for saying something dumb or having a... Inappropriate belief about money. But for me, the more I have done this and the more successful I have become with my own money, the more compassionate I am in terms of like, if I were in their situation, might I be doing exactly the same thing? So when I hear Drew saying, "I never said no, I never got told no." I'm like, "Well, if my parents never told me no, I'd probably be doing exactly the same thing you are right now." Doesn't excuse it, helps me understand it a little bit more. Drew's parents did not do him any favors by not talking about money.
1:02:42 Ramit Sethi? They definitely did not do him any favors by giving him everything he asked for. What happens when you go 10 years, 20 years, 30 years, never being taught about money, never being told no, is that you simply do not develop the capacity to make carefully nuanced decisions about money. You see it, you want it, you get it. That might work if you make a ton of money. But it stops working when you have a family. It certainly stops working when you have kids. For Amanda, money is anxiety. It is a source of tension. It is chaotic. It's also a source of control that came from her grandmother to her mom.
1:03:27 Ramit Sethi? If you have the choice of being around something that causes you anxiety and stress makes you feel incompetent, what would you do? Most people go, "Oh, I'd read a book and I'd learn about it." No, you wouldn't. You would just avoid it. And that's exactly what Amanda is doing. That might work if you're 12 years old. It does not work when you are a mother and a wife. You have to engage with money. You have to turn and walk straight into the fire and learn how money works. It can cause anxiety right now, that's okay. But it also is a source of your rich life. That is why I'm pushing her to stand up, to take up space, to acknowledge. She actually knows some of this stuff. It's pretty impressive what she's doing.
1:04:08 Ramit Sethi? But she needs to go into it full force, not depend on her husband. What money messages do each of you bring from your upbringing to this relationship?
1:04:21 Speaker 01 I think the money message that I've brought to this relationship is, "You only live once, just do it." And I mean, I've heard like my grandfather would say it's only money. I guess that is easy to say when you are a grandpa and you're retired and you have money to to spend. You can't take that when you're 35. It's it's only money.
1:04:46 Ramit Sethi? Really good insight. Amanda?
1:04:49 Speaker 02 That money is scary.
1:04:51 Ramit Sethi? Hmm. What money messages are you passing along to your daughter?
1:04:55 Speaker 01 That you only live once and spend it. But overall, we do only live once and I want my retirement to reflect that. So I need to save so we are happy and in a great place for me and Amanda as we move forward into that chapter.
1:05:15 Ramit Sethi? Okay. Amanda, what money messages are you passing to your daughter?
1:05:19 Speaker 02 That you have to be buying stuff or doing stuff to enjoy life.
1:05:24 Ramit Sethi? Nice.
1:05:25 Speaker 02 That you get everything you want.
1:05:27 Speaker 01 Uh huh. And that's not life.
1:05:29 Speaker 02 No.
1:05:30 Ramit Sethi? I think you actually get whatever you want and you don't look at the numbers at all.
1:05:36 Speaker 02 Yeah.
1:05:37 Ramit Sethi? You also don't have a vision.
1:05:39 Speaker 02 Yeah.
1:05:39 Ramit Sethi? Do not have a vision of your money. If you want to change the money messages that are passed on, you could blah, blah, blah, talk all you want, but the only thing that matters, as you know, as parents is?
1:05:50 Speaker 02 Action.
1:05:50 Speaker 01 Showing action.
1:05:52 Ramit Sethi? Action. She's got to see it and she's even got to see mom and dad not getting everything they want, but more importantly, having a powerful vision that they are getting.
1:06:03 Speaker 02 Yeah.
1:06:04 Ramit Sethi? Okay. I'm actually curious what that rich life vision is for both of you. Have you ever talked about what your rich life is?
1:06:13 Speaker 01 We've had conversations of what we'd like to do when we're older, but I don't think we've looked at each other in the eyes and said, here is my rich life.
1:06:21 Ramit Sethi? Should we do it right now?
1:06:22 Speaker 01 Let's go for it.
1:06:23 Ramit Sethi? Okay. Who wants to go first? But the question is, what is your rich life?
1:06:27 Speaker 01 Amanda, my rich life is, one, being with you, no matter what. Even though I know we just talked about vacations, but if we could limit those and me and you are.
1:06:45 Speaker 01 Together on vacation, providing our, our daughter, the life that I know that we would love for her, which is to grow up as a, a confident woman, who doesn't necessarily depend on money would be amazing. My rich life also include being able to do the, the hobbies that I like without having to think about money and then limiting going out to eat, but still, still being able to go out, uh, out to eat with you.
1:07:15 Ramit Sethi? Okay. Thank you very much. Amanda, what's your rich life?
1:07:19 Speaker 02 For me, it's definitely doing this together. And I think creating that philosophy where it becomes like second nature to us of making those easy decisions to take out that decision aspect of like, oh, maybe, maybe not. It's more of that confidence, I think, without fear. And knowing that we can handle the life experiences that are bound to come without it wrecking us.
1:07:47 Ramit Sethi? How do you both feel expressing what your rich life is for the first time?
1:07:51 Speaker 01 It does feel a little weird, like
1:07:53 Speaker 02 Yeah.
1:07:53 Speaker 01 expressing what you want in life. It's not usually a dinner conversation, but it's a great one.
1:08:01 Ramit Sethi? Yeah.
1:08:01 Speaker 01 And it's one that we should continuously have, to be honest, as, as life continues.
1:08:07 Ramit Sethi? Amanda?
1:08:08 Speaker 02 It felt really good because I could see how well they intertwine. And that they align really well and that we're wanting to do it together to create that different outlook. I guess change a cycle.
1:08:23 Ramit Sethi? I like that. What, what I noticed is without this type of discussion, what is our rich life? What's our philosophy on kids' activities or eating out, et cetera? Without any of that, you simply look down at the day to day. And the day to day is stressful and busy and often filled with materialistic escapes that are not even part of your rich life. Like, somebody sitting here buying $500 worth of freaking crackers. I go, are crackers part of your rich life? If so, I don't mind. If you can afford it and you love it, God bless. They go, I hate crackers. I don't even lie, I just eat them because they're buttery and they're in front of me. Yep. Then why are you buying it? Because you have no philosophy.
1:09:08 Ramit Sethi? Drew, you made a really good point. We don't really talk about this stuff. We probably should. Yeah, it's actually probably the first thing you should talk about. And you should talk about it regularly because it elevates your purchase decisions and your relationship to a much higher level than where should we eat out this Saturday? Okay, now I want to point something out. Knowing what you both said, do you know specifically what you would not spend money on now?
1:09:34 Speaker 01 I would probably need to limit the amount I go to nicer golf courses and limit our eating out.
1:09:44 Ramit Sethi? Okay.
1:09:44 Speaker 01 Dining out.
1:09:45 Ramit Sethi? Amanda?
1:09:46 Speaker 02 A lot of it is the eating out and just like random, like more expensive things, like maybe tickets to a show or like those random like.
1:09:57 Ramit Sethi? How come none of these things showed up on the CSP, by the way? I haven't heard the word golf before. Haven't heard the word concerts. Haven't heard any of these words. What is this? 89% fixed costs, you cannot afford to golf. Simple as that. End of story. There is no discussion. I don't know what to tell you. It's it, that's it, it's over. What I really want to get to is, I like your rich life vision. I think it's a good first step. But when I am hearing somebody describe an effective, personal, rich life vision, it cuts like a knife. It is sharp. Sometimes it's a little abrasive. Sometimes it is bewildering. That's what I want to hear from you on your rich life.
1:10:39 Ramit Sethi? I want you to be so tuned in to what your rich life is, so specific that it could only be yours. So, if you were to say, I am going to play golf once a month? Okay, I can work with that. But I didn't even hear golf until just now. If you want to say, we are going to take our daughter to art classes three times a month? Great. But right now, what I'm hearing, really general.
1:11:10 Speaker 02 Yeah.
1:11:10 Ramit Sethi? I actually don't know how to take what you told me and change the CSP. So can you try it again and tell me what your rich life is? What is important to you and what is not?
1:11:20 Speaker 02 Definitely activities for our daughter. That's definitely on there. I like to get my nails done.
1:11:28 Speaker 01 He's absolutely correct that I do do not need to do golf that much. It is a very expensive hobby. But for my rich life is with working from home five days a week. I would like to at least go out once a week with you and our daughter is a family.
1:11:49 Ramit Sethi? I like that. I want to go out once a week with the two of you to do some sort of activity.
1:11:57 Speaker 02 Yeah.
1:11:58 Ramit Sethi? We can make that work. So then can I extrapolate that vacations are not part of your rich life?
1:12:04 Speaker 02 I feel like I feel like they are because the experience with our daughter.
1:12:12 Ramit Sethi? Oh, wow. Okay, then if that's the case, what if I were to say, I feel like you have to double your income?
1:12:21 Speaker 02 That's the goal.
1:12:23 Ramit Sethi? Could you put a hold on vacations until you do that?
1:12:26 Speaker 02 Yes, I think that it makes complete sense.
1:12:29 Ramit Sethi? Now we're talking. Now we're talking. See, part of your rich life, there can be many things in your rich life. You can't afford all of them today, but they should still be listed. I want to stay at this hotel. I want to go to this, whatever, put them there. But you also have to know what is the moment where we can afford to do that. And this is where you start to get honest. And this is where you start to say, okay, we can't do this until that. That actually I find for high achievers is very, very motivational. And I actually think that the two of you can can do that. I could tell the way that you talk, you can achieve. So if you were to be like, all right, we're not taking a vacation until X, Y, and Z are reached. Then I bet you you would reach X, Y, and Z pretty fast.
1:13:13 Speaker 02 Yeah.
1:13:13 Ramit Sethi? Which is incredible. I still set financial milestones for myself.
1:13:19 Ramit Sethi? Yeah. It motivates me. And then when it happens, it feels like incredible because I know how many years of work I had to put to get that.
1:13:30 Ramit Sethi? All right. So we have a rich life vision. And then the last question before we go back to your CSP and change the numbers is, how are you going to make sure that you do this together?
1:13:38 Speaker 01 Absolute communication. I think me and Amanda will set a schedule to talk at least twice a month. Sunday evening, we will have that conversation. I love where you said having our daughter, not be present in the conversation, but seeing that conversation happen. So we will, we will set up two days a month where we go through our finances. And I also love the setting those future goals. So we will write down our future goals, talk about our finances, finances and our goals and show that that affection in front of our daughter.
1:14:23 Ramit Sethi? Drew, what do you think is going to be the biggest challenge in these conversations?
1:14:27 Speaker 01 I need to do a better job at listening.
1:14:30 Ramit Sethi? Yeah.
1:14:31 Speaker 01 Where no means no.
1:14:34 Ramit Sethi? Who's going to say no?
1:14:35 Speaker 01 I need to come to the realization that we can't afford it either.
1:14:39 Ramit Sethi? How are you going to do that? You've never done it in your entire life.
1:14:43 Speaker 01 I don't know how people just turn around, like turn that switch. I need to do a better job investigating tools to turn off that switch.
1:14:53 Ramit Sethi? I don't like the word tools. When people use the word tools, they especially guys, we're looking for some magical AI solution. Those tools don't exist. I'm talking about you, Drew. You are the big bad wolf, as you yourself described it, which if we can bring it back down to earth, what that means is you don't know how to say no. You've never had to say no. You hate saying no. You actually hate it. You know exactly what to say to convince Amanda to agree with you. She is not knowledgeable about money in the way that you are, although Drew, candidly, I don't think you're that knowledgeable about money either. You're 89% fixed costs. You're not doing a great job. But in your relationship, you are, quote, "the knowledgeable person in charge of money."
1:15:38 Ramit Sethi? And you basically, as you put it, can maneuver to get Amanda to agree with whatever you want. How are you gonna change that?
1:15:48 Speaker 01 Have a collaborative conversation with your spouse and come to an agreement. I need to learn to hear the word no and let that sink in. I need to say no to myself and I, overall, I just need to do a better job. And this self-reflection has really helped.
1:16:15 Ramit Sethi? That's good. The most important thing you just said right now was you need to say no to yourself. Best way to change the dynamic of your relationship is for you to take the first step and change it for yourself. So tell me, what could you say no to today?
1:16:33 Speaker 01 I was asked to go to a basketball game that would cost a couple hundred dollars for tickets, and I will say no to that. I will not be going.
1:16:44 Ramit Sethi? How are you gonna say that? Should we practice?
1:16:47 Speaker 01 Sure, yeah.
1:16:47 Ramit Sethi? Am I your friend? Okay, let's go to a Pacific Northwest basketball game. Please don't ask me to name any teams, because I don't know any of them. Some Pacific Northwest team. Would you like to go? These tickets are great and they're pretty cheap.
1:17:03 Speaker 01 How cheap are they?
1:17:05 Ramit Sethi? They're 200 bucks.
1:17:07 Speaker 01 Where are the seats?
1:17:09 Ramit Sethi? 5B.
1:17:10 Speaker 01 Oh, those are really good seats. I'll have to take a look. But so that's how it would usually go. I would usually say, okay, sounds good. But for this conversation, sorry, me, I don't have the funds to do that at the moment. If you would like to come over and watch the game, I'd be more than happy to have you here.
1:17:31 Ramit Sethi? Whoa. Okay, first of all, round of applause. That was really good. I love, that was great. And I love the offer, hey, come on over anyway, like, we can do it here. I thought that was really good. Would you actually say that?
1:17:46 Speaker 01 Can text him right now and say no.
1:17:48 Ramit Sethi? Really? Okay, do it. Text it. Let's take a second. I don't mind, take a second.
1:17:53 Speaker 01 That's fine.
1:17:55 Ramit Sethi? I like this.
1:17:56 Speaker 01 I can show you.
1:17:57 Ramit Sethi? Take your time.
1:17:58 Speaker 02 I'm very proud.
1:17:59 Ramit Sethi? What are you seeing? Amanda, as Drew is typing this, tell us what you're seeing. What are you noticing?
1:18:03 Speaker 02 He said no to himself. And, because I know he, we talked about it earlier. And I was like, oh boy.
1:18:12 Ramit Sethi? Hold on, was that what you said? Oh, boy?
1:18:15 Speaker 02 Mm-hmm.
1:18:15 Ramit Sethi? Okay, we're gonna get to you in a minute, okay? Hang tight on that.
1:18:20 Speaker 02 Yeah.
1:18:20 Ramit Sethi? Oh, boy. Did you send it?
1:18:23 Speaker 01 I did.
1:18:23 Ramit Sethi? Okay, re, okay, hold it up tight to the camera. Wait, what, what are we looking at? Uh, can you read it out loud?
1:18:30 Speaker 01 Uh, I can't make it to the playoff game, sorry, Holmes. We should still try and watch it together.
1:18:36 Ramit Sethi? Nice. Round of applause. Really good. Okay, great, great, great. How did that feel?
1:18:44 Speaker 01 Honestly, it feels, this is what I would feel like if I had said no to myself more often. Instead of going to bed like, oh shoot, I spent another $200.
1:18:56 Ramit Sethi? Hmm.
1:18:57 Speaker 01 That guilt that sticks with you after you make a purchase.
1:19:00 Ramit Sethi? Nice. That's the first time I've heard you mention that guilt.
1:19:04 Speaker 01 Yeah.
1:19:05 Ramit Sethi? I don't like guilt with money. I don't like men to feel it. I don't like women to feel, I don't like anybody to feel it. When I spend money, I feel [bleep] great. I feel awesome.
1:19:16 Speaker 01 Yeah.
1:19:16 Ramit Sethi? I want you to feel like that. The only way your daughter can learn healthy relationships with money is if her parents feel good about money. How many people do we know, including the two of you who grew up with parents not feeling great about money, or confused about money? And then you internalize it, and you gotta make your own way in this world? No. We have to feel good, which means we need to develop a philosophy and then live it. And sometimes that philosophy means we're not doing that.
1:19:48 Speaker 01 Yeah.
1:19:48 Ramit Sethi? And then we start to be congruent. We start to be living our values, and it feels awesome. You know people like this, who are living their values, and you're just like, Jesus. Like, you can just see it in their alignment. Some people would describe it with their energy. They are living their values. That is how you transmit.
1:20:10 Ramit Sethi? Money in a healthy way and your kids, your loved ones, they pick up on that. Okay. Thank you, Drew. That was awesome. Amanda. Now to you.
1:20:22 Speaker 02 Yeah.
1:20:22 Ramit Sethi? Same question.
1:20:24 Speaker 02 How I'm gonna change.
1:20:26 Ramit Sethi? Yep.
1:20:27 Speaker 02 Yeah, saying no. And being confident in like, no, that's not part of our plan, or that doesn't align with our philosophy.
1:20:39 Speaker 02 Being able to, I guess, say why I'm saying no, without like getting in the nitty gritty, but more of like, hey, we're getting off course. Yeah.
1:20:49 Ramit Sethi? The way you build confidence is deep competence. That's why I'm confident about money. I'm very confident because I know my numbers. I know how compounding works. You can do exactly the same thing. Okay, start with my book. Then I, what I heard you say was, you said, I gotta say no, but what I think I really loved you say is, we've got to stay on a plan. So you're not, you're not Mrs. No. That's not your role. That's actually not fair to you. Okay, neither of you are the no person because if you are the no person, then the other person's the yes person and you're right back to the way you were.
1:21:27 Ramit Sethi? Instead, you need to radically reconceptualize the dynamic here, which is, what is our plan? We're going to come up with it together. Do we both agree? And now we're going to stick to it. We can always reevaluate every six months, six to 12. But we are sticking with our plan and we're going to gently remind one another if one of us goes off plan.
1:21:47 Speaker 02 Yeah.
1:21:48 Ramit Sethi? Not about saying, no, you're a bad person. It's about, hey, we have this plan that's actually more important than any individual desire that we want. Got it?
1:21:56 Speaker 02 Yep.
1:21:56 Ramit Sethi? You're living our rich life plan. Okay. Now with that all laid out, we're going to go back to the CSP and you are going to tell me what changes you want to make. Are you ready?
1:22:05 Speaker 01 Great. Let's do it.
1:22:07 Ramit Sethi? Are you surprised that they have never talked about what their rich life is? I'm not. Most couples do not talk about philosophy, about the big picture. If anything, they'll say, "One day I would like to go to space. One day I'd like to go to Bali." But it is so much easier to live in the day-to-day, an endless series of one to-do after another. And hey, that's life. We do have to manage the household fine, but what's it all for? This is why I want every single person to put out your hand, just go ahead and put out your hand right now, and go, "What do I get?
1:22:49 Ramit Sethi? All this work, all this automation, all this stuff we're doing with our time and our effort, what do we get? Do we get to go on vacation for three weeks a year to this very specific place? Do we get to buy a beautiful car or beautiful clothes? Do we get to put our kids in activities? What tangible, specific things do we get? If you don't have a list of the things you want now and at your next milestone and when you turn 45 or 60, what are you doing? What I'm trying to get across is that you could spend the rest of your life going through your email to-dos, and you're just gonna end up with an inbox full of emails. Or you could zoom up.
1:23:34 Ramit Sethi? Use the questions in my journal. Ask yourself, "What is our rich life? What do we want that would be a 10 out of 10 magical life?" And now, can we start adapting our money to be able to get there? It is an incredibly powerful, counterintuitive way to live. It also gets you a rich life like nobody else. Looking now at the CSP, your fixed costs are 89, almost 90%. Your job is to get this number down to 60%. Your job is to also... Change the investment savings and guilt free numbers to reflect your rich life values.
1:24:17 Ramit Sethi? So we're going to start and the pattern I would like to take is each of you are going to suggest one thing back and forth like a ball you each have tossing back and forth. Who wants to go first?
1:24:27 Speaker 01 I can go first.
1:24:29 Ramit Sethi? No, we're not going to do that. Drew, you know why we're not going to do that? Not only do you need to chill as that former big bad wolf, but you actually need to give Amanda the space to rise up and take some space. Amanda, go ahead.
1:24:43 Speaker 02 Subscriptions?
1:24:44 Ramit Sethi? Great. What's the current number here?
1:24:46 Speaker 02 312.
1:24:47 Ramit Sethi? What do you want to take it to?
1:24:48 Speaker 02 Definitely can cancel Netflix. That one's.
1:24:51 Ramit Sethi? Okay, 15 bucks a month.
1:24:53 Speaker 02 I know.
1:24:54 Ramit Sethi? Can I, can I point something out? So you're doing what everybody does the first time they do this. They jump right into the weeds and they try to fiddle and, and it's rational. That's what I would do myself, but I'm going to ask you to think about your vision first. What is our vision? If we had a blank page, what is important to our family?
1:25:16 Speaker 02 That we're not spending more than we make a month?
1:25:19 Ramit Sethi? Yes, we are building savings. That's good. That's a great philosophy every month. And what else?
1:25:26 Speaker 02 Yeah.
1:25:27 Ramit Sethi? What'd you say is important to you for spending?
1:25:29 Speaker 02 That it aligns with that plan.
1:25:32 Ramit Sethi? Yeah. What, what specific things do you want to spend money on?
1:25:36 Speaker 02 Our daughter's activities.
1:25:38 Ramit Sethi? Yeah, her activities and what else?
1:25:41 Speaker 02 Healthy meals that we can have at home.
1:25:43 Ramit Sethi? Really? Sounds very aspirational. Didn't the two of you say you hate cooking? You're not good at cooking, et cetera. You want to learn how?
1:25:51 Speaker 02 Yes.
1:25:53 Ramit Sethi? What the, what was that? The way you said it just tells me everything I need to know. Yes, I want to learn how to cook. Look at my head. Yeah, I want to, that's a no.
1:26:03 Speaker 02 If we're not eating out, that's something that's not going to be part of that.
1:26:09 Ramit Sethi? Ooh.
1:26:10 Speaker 02 Then what are we going to have to do?
1:26:11 Ramit Sethi? Good. That is good. Now you're, I like that. I didn't believe you before. Now, the way you said it, you're like, well, look, you got to do this. What's our other choice? Yes, decisive. Okay. Now you've told me what's important to spend and what's not.
1:26:27 Speaker 02 Yeah.
1:26:28 Ramit Sethi? Can I suggest that when I pop this back up on screen, I want you to become a little bit more ruthless, a little bit more like a mercenary. Okay? We're doing that with your expenses. All right, here we go. Fixed costs, what do you want to do?
1:26:43 Speaker 02 Cut subscriptions.
1:26:45 Ramit Sethi? What do you want to take it to?
1:26:46 Speaker 02 Uh, half.
1:26:47 Ramit Sethi? Half of that, so from 312 to let's just say 160. Okay, look at the number, what changed here on the fixed costs?
1:26:53 Speaker 02 It went down one.
1:26:54 Ramit Sethi? It went down from 89 to 88%. Okay, it's a start, but what does that tell you?
1:26:59 Speaker 02 I'm not doing big enough.
1:27:00 Ramit Sethi? Yes, we need bigger changes, go ahead.
1:27:02 Speaker 02 I know the phone and miscellaneous section is a problem.
1:27:06 Ramit Sethi? Yeah.
1:27:07 Speaker 02 And I think this is probably points to the issue is I don't know what falls in there.
1:27:14 Ramit Sethi? Okay, actually, it's Drew's turn anyway, so why don't we kick it over to Drew?
1:27:17 Speaker 02 Perfect.
1:27:19 Speaker 01 I know Amanda had talked about healthier meals with groceries. I do feel like ChatGPT has the ability to make us six days a week meal plan. So I think that we would have the ability to cut groceries from 800 to 500 to 600 if we are able to find a meal plan and kind of shop for what we need instead of going into the store with no plan.
1:27:49 Ramit Sethi? Okay. I like, I like your energy, I like it. And I am going to cut the groceries. Can I just point out, y'all are starting from a place where you don't really cook at all. And I need you to create a plan where you don't have to be perfect to win. You are not going to be perfect at cooking.
1:28:06 Speaker 02 Yeah.
1:28:07 Ramit Sethi? 25% of your vegetables are going to go rotten for the first month. It's just gonna happen. You're gonna hate the dish and you're gonna slip up and go eat out. It's gonna happen. We still need you to win even though you are human. So I'm never going to set you up with a plan where I expect you to be perfect, especially the first time you're doing this. All right, so let me suggest, I'm going to take the groceries down. Like, really, really, a little bit, okay? But what I'm gonna suggest to you is that instead, you focus on creating a rule of how often you are eating out. I'm gonna take your groceries from 800 to 750. That's it, okay? How often you're eating out, like, let's just say nine times a week, okay? Seven to nine, whatever. How often are you gonna eat out now?
1:28:52 Speaker 01 We are gonna create a philosophy and a goal, and follow it, of eating out once a week. Does that work for you, Amanda?
1:29:00 Speaker 02 Yes.
1:29:01 Ramit Sethi? Okay. Ooh, I like that last line, Drew, good job.
1:29:05 Speaker 02 Yeah.
1:29:05 Ramit Sethi? Okay, so what's the number we're putting down for eating out? How much per week?
1:29:09 Speaker 01 Uh, if we're only going once a week for 40, $45 per going out?
1:29:16 Ramit Sethi? Amanda, where are you on this? Speak up.
1:29:19 Speaker 02 I think we would enjoy it, and it's a break, too, from having to make stuff at home.
1:29:28 Speaker 02 So I think once a week at the 50?
1:29:32 Speaker 01 50.
1:29:33 Ramit Sethi? Yeah. So 50 bucks a week on eating out? That's two $25 meals. I wish I could see the face of all the immigrants listening to this. And they're, like, people who are, especially the people in other countries, and they're just like, what the [bleep] is this couple talking about right now? $50? Meanwhile, I'm remembering, like, when we ate out, I can't believe the [bleep]. Six of us in my family, right? We go out, we get two Cokes, two.
1:30:00 Speaker 02 Okay.
1:30:00 Ramit Sethi? And then we, like, share them. That will, I know, I'm sorry to all the pizza places that we defrauded. That was not, that's what we did. We only ate out with a coupon, and we would under-order, and like, we're not getting full. Like, that's just life, that's what we did. So, I guess what I'm trying to show you is other examples of what's possible. Like, you ever see families, it's striking with their kids, right? The kids get their own freaking adult-sized meal, and I, I'm looking at them like, what the [bleep]? That could feed four kids.
1:30:37 Speaker 02 Yeah, yeah.
1:30:38 Ramit Sethi? I'm trying to stretch the possibility, the imagination of what is possible for you.
1:30:43 Speaker 02 Yeah.
1:30:44 Ramit Sethi? So if you want to start at 50 bucks, fine. I don't mind. But I want you to start thinking there are other ways. Let's like, look at other people's dishes. What are they eating? Let's talk to our friends. Where do they go? Do they not go? How do they save money? Okay? Great. All right. 200 bucks. Now I'm gonna put that up on screen and show you because guess what? That needs to go down here. Yield free spending, that's where it goes. So that's included right there. We're not gonna change anything on your fixed costs. Okay? All right, so we're going back up here. Can somebody just tackle the big expense here, please?
1:31:18 Speaker 02 Yeah.
1:31:19 Speaker 01 Yeah.
1:31:19 Ramit Sethi? $1,120 for kids' birthday parties, Amazon purchases and random items? No, fix this.
1:31:26 Speaker 01 All right, I would say 650.
1:31:28 Ramit Sethi? No way. I'll show you why. Cause watch, I'm dropping it from $1,120 to $650. Look at this number up here, your fixed cost number. Ready? What did the number drop to?
1:31:39 Speaker 01 82%.
1:31:40 Speaker 02 Not enough at all.
1:31:41 Ramit Sethi? How are you gonna spend $650 a month on random kids and Amazon purchases? No, we're not doing that. Y'all can't afford it. You realize you're going broke every month, right?
1:31:55 Ramit Sethi? What's happening here, and what I want you to pay attention to is you are, what you're trying to do is you're still trying to live in the past and just like squeeze out a little bit here and a little bit there. No, you actually need to start completely fresh. In your rich life, did you tell me Amazon purchases were part of your rich life? No, you didn't. Did you say kids' birthday parties and getting them all these big ass gifts were part of it? No, you did not. You said activities with your daughter. I haven't seen that anywhere.
1:32:22 Ramit Sethi? But you're living in the past and trying to tinker around the edges. That is a recipe for failure. You will always hate it, you will resent it, and you will go right back to spending the way you were. My job is to help get you where you want to go, even though you may not want to get there yourself. Okay? So fix this. Let's put it at 100. Honestly, it's gonna require the two of you talking about money every single week. There cannot be. Mistakes, there cannot be like, oh, we should get this thing because it's on sale. Nope, it's not happening. Guys, I'm gonna put this, but I have to give you like, this is a red alert. This is asking a lot from a couple that has not really paid close attention to spending for a long time. Okay?
1:33:02 Speaker 02 Yeah.
1:33:03 Ramit Sethi? All right, I'm taking this down to 100. Look at the fixed cost number. Whoa.
1:33:08 Speaker 02 Nice.
1:33:09 Ramit Sethi? That dropped to 76%. We're going in the right direction. I really like this. Okay.
1:33:14 Speaker 02 Okay.
1:33:14 Ramit Sethi? What else we got? Clothes and kids activities, 400 bucks a month.
1:33:18 Speaker 01 Yeah, that needs to be cut in half.
1:33:20 Speaker 02 Her art class that she does it with after school is, I would say it was like 220.
1:33:28 Ramit Sethi? That's her activity? Because if so, great, 220 a month.
1:33:31 Speaker 01 Yeah.
1:33:32 Speaker 02 And like, do we pay for anything else?
1:33:34 Speaker 01 No.
1:33:35 Speaker 02 Like, she's in soccer, but we were, it was like 60 bucks, but it's like a one time. But it's like, she keeps doing stuff, so cheer is coming up.
1:33:46 Ramit Sethi? Let's call it 250.
1:33:48 Speaker 02 Yeah, I think that, because things will fall off and things get, yeah.
1:33:52 Ramit Sethi? Let's call 250. Watch the number. We're down to 75%. Subscriptions, that, I'm just gonna start making changes because you guys are not. 160 for a couple that's losing money every month, not in my world. Pick one, what do you want to have?
1:34:06 Speaker 01 We will keep the, the Apple subscription at $45.
1:34:10 Ramit Sethi? All right, watch the number. I'm changing it from 160 to 50. Fixed cost down to 73%. Not bad.
1:34:16 Speaker 02 We're chugging along now.
1:34:18 Ramit Sethi? Do you have investments at $200 a month in addition to your 401k? And then you have a 529 at 150 a month.
1:34:27 Speaker 02 Yeah.
1:34:27 Speaker 01 Maybe we need to hold off a little bit on the 529 because this is our future currently. I know we want the best for our daughter, but we need to kind of take care of ourselves at the moment. And I think if we are able to kind of... Cut that for the time being. That would help out.
1:34:49 Ramit Sethi? Agreed. So let's take a look. We're gonna drop the 529. I totally agree. Your daughter needs you to be financially stable more than she needs money 20 years from now. Also want to go back up here to the kids' activities because we did drop it.
1:35:07 Ramit Sethi? But what about clothes? She's growing.
1:35:10 Speaker 02 Yes, she needs clothes all she's getting. Yeah.
1:35:13 Ramit Sethi? Where do you buy those clothes?
1:35:14 Speaker 02 We did get blessed with a lot of hand me downs.
1:35:17 Ramit Sethi? Can you keep getting hand me downs?
1:35:19 Speaker 01 We keep getting them.
1:35:20 Ramit Sethi? All right, so we don't need a lot more, but maybe once in a while we do need something. Would that be fair? I don't want to.
1:35:25 Speaker 01 Yeah.
1:35:26 Ramit Sethi? I don't want an unrealistic plan. Okay.
1:35:28 Speaker 01 It's fair.
1:35:29 Ramit Sethi? What do you want to do for this number? It's 250 right now.
1:35:31 Speaker 01 Probably bump it to 300.
1:35:32 Ramit Sethi? Okay, 300.
1:35:34 Speaker 02 Yeah, we I think we're pretty mindful with our spending for her because we know how fast she grows.
1:35:41 Ramit Sethi? I like that you're both so mindful about her spending, spending on her, but not for yourselves. You're like, yeah, she's fine. She's sick.
1:35:49 Speaker 02 She can wear those pants.
1:35:50 Ramit Sethi? But we need to go golf. We need it. All right. Speaking of that, where is the golf expense in here?
1:35:58 Speaker 01 It was in the miscellaneous.
1:36:00 Speaker 02 It got wiped out.
1:36:01 Ramit Sethi? It's really quite peculiar that there's no word saying golf in here. Anybody noticed that?
1:36:07 Speaker 01 It was I took what was there.
1:36:09 Ramit Sethi? Yeah, sure. All right, bye.
1:36:12 Speaker 02 Oh, and then I think that's a good question is are my nails in miscellaneous?
1:36:17 Speaker 01 They were.
1:36:18 Ramit Sethi? How often you get your nails done, Amanda?
1:36:20 Speaker 02 Once a month, but I can switch to the like press on ones. That's fine.
1:36:26 Ramit Sethi? It might be the case that that's what you do. That's really up to the two of you to decide as you get more into the nitty gritty. But what I want is actually for you two to have a discussion about it. And I want you to do it not based on feelings.
1:36:40 Speaker 01 Yeah.
1:36:41 Ramit Sethi? You all should not be talking about your feelings that much right now. You should be talking about math. Here's what we have. We have a finite amount of money. How are we going to distribute it? What I notice is that there's been an over focus on feelings and your feelings have actually led you astray. Your feelings are why that you don't have enough in savings and why each of you has adopted this role. And we need to make feelings secondary right now and make the math primary.
1:37:13 Ramit Sethi? Okay, let's keep moving. $100 a month for vacations.
1:37:19 Speaker 01 Those need to be wiped out, Amanda, if you feel the same way and transferred to emergency or long-term savings.
1:37:26 Ramit Sethi? You good?
1:37:27 Speaker 02 Yeah.
1:37:27 Ramit Sethi? Amanda, are you sure?
1:37:29 Speaker 02 Yes, because we agreed that the vacation should wait.
1:37:33 Ramit Sethi? Good, yeah. Agreed. So we're at 200 a month, which is 2%, which is low. Oh, well, guess what? We have margin to play with because look at your guilt-free spending. See all those cuts you made at the bottom? They flow to the bottom automatically, so you have 22% to play with. That's $2,052 a month. Why don't you say we put that money to work? Where do you want to put that money?
1:38:03 Speaker 02 Definitely the emergency fund.
1:38:05 Ramit Sethi? How much?
1:38:06 Speaker 02 Make that 400?
1:38:08 Ramit Sethi? Okay, if we put 400 more here, okay, watch what happens to the numbers. So 600 bucks, this turns into 6%. This number, I typically like to see it at 5 to 10%, but in your case, do you think that number should be higher or lower?
1:38:25 Speaker 01 I think it should be higher as I do have a solid contribution to my 401k, but not in our savings, so it should be higher in our savings to kind of bump those up.
1:38:35 Ramit Sethi? Okay, and Amanda, why do you think it should be higher?
1:38:38 Speaker 02 Because we're kind of behind.
1:38:41 Ramit Sethi? Good.
1:38:42 Speaker 02 Yeah.
1:38:43 Ramit Sethi? You have a high income and you've had it for a while and you don't have great savings. And you have very high fixed costs, so if something goes wrong for one of you, you're in trouble. So that is why I'm like, guess higher, right? So at 6%, you're kind of like near the bottom. I'd like to see that number at like 14, 15%. So let me, let me actually try to like pump that number up a bit. Watch this. I'm gonna go to 800. We're now at 9% and look how much you still have down here. 15% guilt free spending. What, what does your immediate intuition tell you? What should you do?
1:39:18 Speaker 02 Add more to that?
1:39:19 Ramit Sethi? Yeah, I agree. Your guilt free spending should actually come down. You've been guilt free spending a long time. It's actually causing you guilt at how much you've been spending. So we need to take that down and we need to redirect it into savings. So let's pump this number up a little more. I'm just going to go a little faster. 1200.
1:39:34 Speaker 02 Yeah.
1:39:34 Ramit Sethi? Oh, 13% savings. That's $1,200 a month. Guilt free spending is at 1,052, which is good. Good. I think we could cut that down even a bit more. It's starting to feel a little bit more rational, a little bit more aligned with the goal of a couple that told me they want to spend less every month and build up savings. One last thing I want to talk about, which is investments.
1:40:05 Ramit Sethi? Have you run a compound interest calculation?
1:40:07 Speaker 01 Yes, we have.
1:40:08 Ramit Sethi? What do you find at the end? How much are you going to have?
1:40:11 Speaker 02 I think mine was like 1.25 million.
1:40:16 Ramit Sethi? And for you, Drew?
1:40:18 Speaker 01 1.4.
1:40:19 Ramit Sethi? 1.4. Okay. Well, we calculated if you continue on the current path you're on, no raises, which I suspect you will both get. That when Andrew is 65 years old, that's 29 years from now, you will have not 3 million, like the two of you said combined, no. 5.58 million dollars.
1:40:43 Speaker 02 Oh.
1:40:44 Speaker 01 Okay.
1:40:45 Ramit Sethi? That's a safe withdrawal at 4% of $223,000 per year.
1:40:54 Ramit Sethi? That's a lot of money.
1:40:55 Speaker 02 Yeah.
1:40:56 Ramit Sethi? Does that surprise you?
1:40:58 Speaker 02 Yeah.
1:40:58 Speaker 01 It does surprise us. Yeah.
1:40:59 Ramit Sethi? Why is our calculation different than yours?
1:41:02 Speaker 01 I think I might've put in only half of my paycheck investments in there. Instead of a full month's investment.
1:41:10 Ramit Sethi? Why?
1:41:11 Speaker 01 I think I looked at one paycheck and I grabbed, since I pay bi-weekly, I think I accidentally grabbed.
1:41:16 Ramit Sethi? Oh.
1:41:17 Speaker 01 Only one paycheck.
1:41:18 Ramit Sethi? You know, I'd rather make a mistake in the good direction, not the bad direction, but.
1:41:21 Speaker 02 Yeah.
1:41:22 Ramit Sethi? That's kind of a big mistake. That's like $2 million, $2.5 million wrong. Yeah.
1:41:27 Speaker 02 Yeah.
1:41:28 Ramit Sethi? All right.
1:41:29 Speaker 02 Like, I'm looking at my Charles Schwab with what's in there, because nothing's getting added to that. Because I'm not at that job anymore. It says by the age of, so by the year 2060, it'll be 1.9.
1:41:45 Ramit Sethi? 1.9, almost $2 million.
1:41:48 Speaker 02 Mm-hmm.
1:41:49 Ramit Sethi? That's pretty impressive.
1:41:50 Speaker 02 That's good.
1:41:51 Ramit Sethi? And remember, that's if you don't add anything else.
1:41:55 Speaker 02 Yeah.
1:41:55 Ramit Sethi? You're gonna add more. Of course, you're gonna add more.
1:41:58 Speaker 02 Yeah.
1:41:59 Ramit Sethi? Can I, in light of all this, what does this suggest to you for your CSP?
1:42:04 Speaker 02 There was this big pressure on me mainly because I've been contributing to a 401(k) this whole time, and company was matching it, and so I was worried that, like, oh, my gosh, I don't have that anymore. But when we look at the, like, projection, it's like, do I need to be adding as much? Or worrying about it as much right now?
1:42:26 Ramit Sethi? These are the questions you should be asking. These are valuable questions. So let me share what's going on here. First, your fixed costs were way too high. So we went through the fixed costs and we tackled them, and we brought them down to a level I think is reasonable. I actually think these numbers are pretty aggressive. Okay? Like, you need to really be dialed in every week. Okay?
1:42:51 Speaker 02 Mm-hmm.
1:42:51 Ramit Sethi? With that said, we're still at 74%.
1:42:54 Speaker 02 Yeah.
1:42:54 Ramit Sethi? It's high. It's really high. And so what we did was, we went down to guilt-free spending, and we took that to about 11%. That number needs to go down a little bit more. Okay? Because the money has to come from somewhere, and you simply cannot be spending as much as another couple on guilt-free spending, because you have locked yourself into high fixed costs. That's it. So we have to accept that. Your guilt-free spending number will probably have to be something in the zone of, like, 8%. And what that really means is, there are no more ad hoc, last-minute decisions about spending and eating. It just doesn't exist anymore. That is not the type of couple you are. Instead, it is planned ahead of time.
1:43:41 Ramit Sethi? Each of you will decide how you're going to take responsibility. What is the number allowed? And you're going to leave buffer in case something goes wrong or you know, there's a breakdown or something you need to spend a little bit of money. But the automatic days for now are over. Cool.
1:43:56 Speaker 02 Yeah.
1:43:57 Ramit Sethi? Savings, you have put more towards it. 1,200 bucks a month, which I think is a good start. Investments, you're at your Roth IRA for 200. Personally, that's $2,400 a year. I might just redirect that to savings. Boost that savings up. And then finally, if we look at your 401k, I just want to point this out. Another option you should calculate is, do you need to be putting $1,400 a month into a 401k? I'm not so sure.
1:44:27 Speaker 02 That's a lot. Yeah.
1:44:28 Ramit Sethi? That's a lot, especially if there's, you know, an additional match and blah, blah, blah. Of course, that's the best place to make a lot of money 20, 30 years from now. But you have a crisis right now. And so if it's me and I am truly dialed in with my partner and I'm confident that I can follow a system, I probably take some of that money and I would redirect it to savings and quickly, as aggressively as possible, build up that savings account to at least six months of fixed costs.
1:45:00 Speaker 02 Okay.
1:45:01 Ramit Sethi? Do you know how much that is? $42,000. So you're partially there, but you can see that even an extra $100 a month is $1,200 a year. So like, when you put it in that perspective, like finding 300 bucks a month actually really adds up.
1:45:20 Speaker 02 Yeah, it does.
1:45:21 Ramit Sethi? Where do you think that the biggest opportunity that this plan falls apart might be?
1:45:28 Speaker 01 The biggest opportunity would be having a rough day at work and you're like, we're going out. We, we deserve this.
1:45:38 Speaker 02 I was gonna say stress.
1:45:40 Speaker 01 Yeah.
1:45:40 Ramit Sethi? Good. I agree. What's the antidote to that?
1:45:44 Speaker 01 I think it's me and you sitting in the backyard with,
1:45:51 Speaker 01 with a drink and watching our daughter play and,
1:45:55 Speaker 01 you know, instead of an $8, $12 drink at a place, it's, you know, one that we got at the grocery store. That's $2, you know? And I think, I mean, we go out to talk to each other in a different environment. We can.
1:46:10 Speaker 01 We can still have that same vibe and conversation together at home.
1:46:16 Ramit Sethi? It's really good. I love the way you two are almost coming up with this new way of relating to each other. It reminds me of when my wife and I changed our diet and we didn't eat out as much. We're like, what are you supposed to do? What do we do with our friends? And we had to invent a whole new way of being with our friends. And it's like, let's go for a walk. Let's go check out this new park in the city we haven't been to, that kind of stuff. Different. But like, cool. Cool for the phase of life that we're in. Same for you.
1:46:48 Speaker 02 Yeah.
1:46:49 Ramit Sethi? What can each of you commit to? In terms of your rich life vision? To make sure that your plan stays on track. Amanda?
1:47:01 Speaker 02 Writing down or like putting it somewhere like this is our plan. And this is why, like this is why we're making these tough decisions.
1:47:11 Ramit Sethi? Nice.
1:47:12 Speaker 02 And so, yeah, I think like, we're saying no because this other.
1:47:17 Ramit Sethi? Love it. Beautiful. Get your daughter involved too.
1:47:20 Speaker 02 Yeah.
1:47:20 Ramit Sethi? Tell her.
1:47:21 Speaker 01 Yeah.
1:47:21 Ramit Sethi? Hey, this is what we're doing. We want to build up our, we need your help. Get her involved in the way that is appropriate for her. Drew, what about for you?
1:47:29 Speaker 01 Yeah. I think making that commitment to talk as a family, listen, write out those goals. Stick to it. Be each other's partners throughout this whole process. Lean on one another.
1:47:46 Speaker 01 I, I think as long as I'm with Amanda and my daughter, knowing what we talked about today. I think our, our rich life will, will grow and we'll, we'll have that opportunity in the future.
1:47:59 Ramit Sethi? Really good. I want to remind you that
1:48:04 Ramit Sethi? the changes you're making, especially the aggressive changes. First, I don't expect you to be perfect. You shouldn't expect each other to be perfect either. I do expect A level results. A plus, it's going to take a while. It's going to take some mistakes and that's okay. You will get there. But if and when a mistake happens.
1:48:28 Ramit Sethi? Give each other a little grace and get right back on the plan. Okay, that's just normal. The other thing I want to point out is that as you develop this plan more, which I want to see, by the way, I want to see a full plan with numbers. You should remember that a lot of this is temporary until Amanda's income goes up. So you should make a plan for what do you get once that income goes up? And that is a really fun exercise. For example, we get to accelerate our savings account by double. So that's going to shorten the time from six years to fill it up to two years. If the salary increases by this much, we're going to increase our guilt free spending by an extra $150 a month.
1:49:13 Ramit Sethi? That's going to allow us to go out to a nice meal with drinks. And we are going to start putting aside, you know, 100 bucks a month for a vacation. Like, these are the kind of things where you plan it ahead of time. You plan for the worst, like term life insurance, savings account. You also plan for the best. Of the next extra money we get, 50% is going to go to savings, 20% here, et cetera, et cetera. And that's how you always have a plan.
1:49:42 Speaker 02 Yeah. Yeah.
1:49:43 Ramit Sethi? Okay. What surprised you in today's conversation?
1:49:48 Speaker 01 I think what surprised me the most was how dire our situation was.
1:49:55 Speaker 01 I didn't know that we were out on the Titanic with like, without a floaty or a door. And secondary was that retirement number that you had thrown out.
1:50:05 Ramit Sethi? Nice. Amanda?
1:50:07 Speaker 02 I definitely agree with like, the crisis. Because I think we've always just kind of told ourselves that we're doing pretty good. You know? And I think too, how we were bringing each other into the pattern and using each other. I think that was a big piece for me. And I like the new. Like take on, this is what we really want to do. So this other stuff, what are we really getting out of it?
1:50:41 Ramit Sethi? Yes, yes. A rich life is unique and personal and it fits you like a glove. The two of you and your daughter. That's what it is. And often when we look at where we are spending our money, it's not reflective of our vision at all. And that's okay. That's just an opportunity to clean things up and get back on our vision. And how are you both feeling now as opposed to when we started talking? Amanda?
1:51:11 Speaker 02 I feel hopeful and actually excited to take action and be like, actually, this isn't part of our plan. And I think having those guardrails are so helpful and take away a lot of anxiety for me.
1:51:31 Speaker 01 I am so excited and appreciate your time and the hard truths that we were told today. Because I kind of have to agree that we thought, oh, we make X amount of money. We're doing just fine, like with our total amount. But really, when you get into the nitty gritty, it's just not, not that way. So I'm super hopeful and excited to take what we learned today, set those goals and talk to each other and continue to strive for our rich life.
1:52:01 Ramit Sethi? Love that.
1:52:02 Speaker 02 Yeah, and to have our daughter actually see us save, not just say we're saving.
1:52:07 Ramit Sethi? Yes. That is going to change everything. I think that Amanda and Drew are really smart. I think that they're going to make some changes. I think the biggest challenge for them will be their mental vision of what money is. For Drew, this idea that I want what I want, and I don't want to say no. I think it's going to be really challenging for him to see money in a different way. In other words, money is not just about whatever I see around me that I want right now. Money can be put aside to get something even bigger and more meaningful. And I think for Amanda, her biggest challenge will be becoming a true partner,
1:52:51 Ramit Sethi? stepping up into her own knowledge and power, becoming competent to build that confidence, and actually saying, you know what, that might not be part of the plan. Or this is what I want for our rich life. Those are the challenges, but I do feel confident that they can get there. This is why creating a rich life is so important. It goes way beyond where you should spend your money on Friday night eating out. It's about creating a vision for yourself and maybe your partner that fits you individually like a glove. If you need help developing your rich life vision and making your money work for you, you can get help in my money coaching program.
1:53:35 Ramit Sethi? You can join right now. Within 24 hours, you will have your vision on the way being developed. You can join at iwt.com/moneycoaching. And now let's take a look at their follow ups.
1:53:50 Speaker 02 Hi. So one of the biggest surprises from our conversation was realizing that we were stuck in a pattern we generally thought was the right thing to do. Hearing that we were actually in desperate need of a larger emergency fund was really eye opening. It shifted the way we see our dating routines and choices. My biggest takeaway was learning how to signal more intentionally and how using a shared philosophy can keep us on track. Now we actually have a reason behind our no instead of feeling random or restrictive. It gives us a sense of direction and something that can kind of keep calling us back and see like, oh, if we follow this philosophy or path,
1:54:30 Speaker 02 we're going to actually be able to do the things that are important to us that give us our rich life. So we've already made several changes. We've canceled multiple subscriptions and we called to negotiate and lower our internet current insurance and even pet insurance. We also decided to limit eating out once a week as a family, making it more of an important outing instead of just doing it to get.
1:54:56 Speaker 02 And we're starting daily meeting twice a month to make sure we stay aligned and keep checking in on our goals, our progress. So overall, this was a great experience. It gave us some clarity, motivation, and a better path forward that we really needed. So, thank you so much. Bye.
1:55:14 Speaker 01 One of my biggest surprises from the conversation was realizing just how much our day-to-day decisions were driving our financial picture. It wasn't one big mistake. It was a lot that's continuously developed, like eating out too often in our miscellaneous spending that added up each month. That was really eye-opening for me. That made it clear that awareness alone isn't enough. We need clear boundaries. My biggest takeaways were the importance of being intentional and aligned as a family that was developing a shared rich life vision and a family philosophy. So our spending actually reflects what matters to us. I also learned how powerful it can be by practicing saying no in real time. I did not attend the NBA playoff game, and I have been saying no to invites
1:55:56 Speaker 01 to golf as well. First, specific changes that we decided to make. As a team, we've been really intentional in our changes. First, we called and negotiated with a few of our utilities companies, and we were able to lower our monthly payments. We also went through all of our subscriptions together and canceled everything that wasn't really adding value to our life. Just those two steps alone cut out a little over $2,000 in bills over the course of the year. We also decided to temporarily reduce my 401k contributions down to the maximum company match, and we also put a pause on our post-tax investments and our 529. The goal there is to really increase our savings right now, and we've committed to putting $1,400 a month into our
1:56:41 Speaker 01 emergency savings account. On a more day-to-day level, we are limiting eating out to once per week. We know that there might be a few slip-ups, but we are trying to set up ourselves for success by using ChatGPT to create weekly meal plans and keeping that grocery budget to about $150 per week. Finally, we've set aside a specific day and time twice a month to continuously talk about our rich life vision and our family's philosophy. We plan to include our daughter in those conversations as she grows, so this really becomes something we're building together as a family. Overall, this conversation gave me clarity, competence, and a clear plan moving forward. Thank you.
1:57:22 Ramit Sethi? Listen up. If you want my help with your specific money questions, there are only two ways to get it. First, you can apply to be on this podcast at iwt.com/apply. Or second, you can join my money coaching program instantly at iwt.com/moneycoaching. In that program, you get access to live virtual events, monthly group coaching calls, live Q and As, and an amazing, huge community of other people like you. Check it out at iwt.com/moneycoaching.
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