278. "We spend 108% of what we make. Are we screwed?"

0:00I feel like I'm crying for help on a sinking ship and no one is coming to help me.

0:04Ramit Sethi: Whoa, what's that number, Grace? Way too high. 108%, what does that tell you? That we spend more a month than we make. You have no mortgage. Correct. So where's the money going? We're going out, Amazon packages are coming to the door and we're going out to eat and then that just kind of stacks up. We had a conversation, I need this amount and this amount for the taxes and the monthly bills from your paycheck, but then I'm watching them get beer after beer, buying other people drinks. You two are skating on very thin ice. If I looked at these numbers, I go, give me a machete. I will cut this so aggressively.

0:36I would try and sit down and have conversations about it, and he wouldn't engage in it. I don't know exactly how to talk about it or what's really going on.

0:45Ramit Sethi: You all are on the path to losing what you've got and potentially having to sell the house in the future. But that still has not made you have honest conversations about money. and you're married and talking about starting a family. Can I take a sec?

1:03Ramit Sethi: How many times have you watched couples argue about money on this show? Might even be the reason that you watch. And I don't mind because I think arguing about money is natural. It is the way that most of us relate to money. And I would rather have you disagree, even argue about money, than not talk about it at all. Today, I'm speaking to Grace and Chris. They are 30 and 29 years old. They've been married for six months. They want to start a family, and they can't even bring themselves to have healthy conversations about money. They don't argue. They don't disagree. They simply do not talk about money at all.

1:41Ramit Sethi: I'm going to pull up their conscious spending plan. Assets,$390 ,000. Investments,$119 ,000 at age 29 and 30. That's very good. Savings,$7 ,350. That's lower than I want to see. debt is 22K, total net worth$494 ,000. Okay, so far so good, but look at the next number. Fixed cost, 108%. What's going on here? Let's meet Grace and Chris. Let me take a look at the application because Grace, you wrote something that caught my attention. You wrote, we are unable to make big life decisions like starting a family because he refuses to engage or participate in any of the money management while I know that we are struggling and need to make changes.

2:32Ramit Sethi: Do you remember writing that? Mm-hmm. Yeah. What was going on at the moment that you wrote that? That was a tough day for me. I think we had had a really great conversation about where we wanted our life to go next and that we are 100 % on the same page about starting a family. But whenever I try and have conversations with Chris about it, it's usually, I know what the situation is. I just need to make more money. And I feel like I'm crying for help on a sinking ship and no one is coming to help me. And it feels very chaotic, which causes a lot of stress. And then when you have a partner who isn't really ready or unable to have those conversations, it makes it really hard to kind of offload and partner on things.

3:11Ramit Sethi: You said it feels chaotic. What feels chaotic? Our day-to-day living expenses, our monthly expenses. Like just the financial aspect of our life feels chaotic and very unstable. Okay. Chris, what's your take on what Grace just said? We don't really set checklists. We don't really have plans. And I do take responsibility for that too because I don't know exactly what to do or how to talk about it or what's really going on. then we're going out and doing this and amazon packages are coming to the door and we're going out to eat and friends family and then that just kind of stacks up and then we look back at it and we're kind of sinking so do you want to have the conversations about money yeah i i'm very open to it um open to it or do you want to have them i want to okay i want to she makes more money than i do in our situations um so i feel like i feel like i don't have a whole lot of like control in it necessarily it's like i i you know paycheck to paycheck she asks me for money and i give it to her and that's kind of it in my role i just feel like i'm just kind of like the side like the side person.

4:38You know, she, she asks for what she needs for our, you know, taxes and our monthly stuff. And I just kind of give it to her. And that's just kind of how it goes.

4:47Ramit Sethi: That's the role, as you put it. Yeah. Who created that role? She did. Well, I did, but it was because I would try and sit down and have conversations about it and he wouldn't engage in it. So I'm like, okay, well, if someone needs to figure out how to manage it, I'm going to manage it. Is it working? um it's working in the sense like I'm good at numbers and I know what needs to go where it's not working in the sense that I know what needs to go where but I also am not a good person to say no to things um and we also prioritize social and like experiences beyond what we can what does that mean like we for example are we had family in town and they wanted to go to a baseball game and so we're like yeah let's go knowing farewell we had a hundred dollars to spend for the whole weekend and that was not going to cut it oh and we still went how'd you pay for it i pulled out of the money that we used to pay our taxes at the end of the year oh yeah okay so are you good at it no chris is she good at it she is very good at writing the plan i see her do it all the time she has her sheets out she this goes here this goes here this goes here and And life happens.

6:03Execution is poor.

6:04Ramit Sethi: Planning is good. Execution is poor. Planning is great. And then are you skilled at money, Chris? No. I, no. Okay. When was the last time you talked about money in a substantive way? I wouldn't say really ever. From my perspective, whenever I try and bring up like, hey, I want to sit down and go over this plan. Like I'm stressed about this. I want to talk this through. This is where we're at. How it's kind of like, I know it's bad. I just need to get a new job with more money. It's fine. And that'll fix it. And I'm like, what's behind that, Chris? I think it's on me. I think I just kind of curl and do a little shell and don't talk about it.

6:41Because? Because I'm just avoiding it. Okay. I honestly, yeah.

6:46Ramit Sethi: Have you ever acknowledged that before today? Probably not. No. I guess I just don't feel like stable enough. I just, maybe it comes more of like an embarrassment that she, Talk to her. Yeah, that you make more money than me, and I'm lower than you on that pole. And yeah, it's kind of embarrassing being the male in the relationship. And so. And that's something, sorry. That was powerful. I appreciate that. Can I ask a couple questions about that? Yeah. Okay. Did you ever make more than Grace? No. And you mentioned it's kind of embarrassing as a man. Yeah. What's that? You're supposed to be the man of the house, the taking care of everything.

7:39What does that mean? Taking care of what? You know, bills and the house. The main thing is just the bills.

7:47Ramit Sethi: Okay. So that's what a man does. And then what does a woman do in this vision? well she can my goal would be for her to do whatever she would like to do oh um stay home have a job do whatever just whatever she would like to do you ever play a sport soccer football yeah i played baseball basketball football growing up okay that's a lot of sports now i'm like i don't know anything about baseball baseball was his main one which one baseball baseball okay hold Hold on. Poor football. I need to put, I know even less about football. Let me just put myself in the mindset. Okay. You all are on a baseball team and you play first base.

8:29Ramit Sethi: She's on your team and I go, hey, what position does she play? And your answer is, I just want her to do whatever she wants. Have you ever heard that said on a team? No, because normally people have like certain skill sets for different positions. Agreed. So she's playing shortstop or she's outfield or whatever, right? Grace, what do you think about this team metaphor? I like the team metaphor. And that's what I want. And that was what I was going to kind of chime in. I'm not so much of like, I make more, you make more. It just doesn't really matter to me. I look at it as we're a team. More or less, put them together, it's one whole thing.

9:05Ramit Sethi: Is this working? Probably not. This is a dynamic as old as time. We've seen it many times on this very podcast. We have a husband. not particularly engaged with money. Whatever, she's handling it. She's better at math than I am. Then we go over to the wife. Wife is the one furiously keeping spreadsheets and doing random ways of tracking things. Does she know what it all means? Not really, but she manages the day-to-day. And when I ask them, is it working? They both go, no, but nothing changes. They have their roles and they are seemingly intractable. How long of the two have you been together?

9:46Seven years.

9:47Ramit Sethi: Seven years. Married six months ago, right? Yeah. Congrats. Thank you. Okay. I understand in your application, there's been a discussion about starting a family. We're kind of on the same page about starting the family. It really is just my, in the back of my mind, I'm like, okay, we're on the same page of what we want to do, what we have in mind, what our family will look like. How many kids? Two. Two kids. Yeah. Cool. And is there a timeline? um soon yeah within the next year cool soon okay everybody's on the same page great so right we're on the same page with these conversations we have wonderful conversations the you know the idea is great but then in the back of my mind i'm like okay now where is any of the money going to come from to pay for that child's food and daycare daycare oh my god um things like that so that's where the disconnect gets kind of started.

10:38I think that like we're very much on the same page. We want the same things with like starting a family. The biggest thing with us is we just don't bring in like enough money for what we want. That's it?

10:52Ramit Sethi: That's the problem? Well, it's some of it, I would say. What's the rest of it? Just like lack of motivation. And on my side of things, she's a doer I get very comfortable in my situations and I don't like change I think that's like the big thing that she gets frustrated with me about that you're not motivated that I just get complacent and I just get kind of stagnant in my day to day routine how do you get connected about that how do you reconcile that if I could change one thing about myself that would be it. I hate not being comfortable but nothing's comfortable. Like going out doing job interviews is uncomfortable.

11:43This is uncomfortable. Talking to random people is uncomfortable but those are just things that move you along and even make you a better person. You talked to Grace about this? Have you told her this? No. No?

11:57Ramit Sethi: Grace wants to say I've been telling you this for f***ing years. Go ahead Grace. Have your moment. No, I have known that that is in there and I've known that that is the thing, right? I've known that that is his thing is that he is so capable, but he just hates being uncomfortable. I just think that I need to stop thinking about myself and I need to think more about our future. You would think that that would be enough to light the fire and to figure something out. But? I'm just kind of stagnant sometimes. is this a thing where it's like, hmm, this isn't working. Let's have kids. That'll fix it.

12:40No?

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14:51Ramit Sethi: The retirement catch-up where Gelt models your prior year retirement contribution opportunities to maximize what's on the table before October 15th. This offer is included for all new clients this quarter. A great CPA is a year-round partner who stays in touch with you, and Gelt is taking on new clients now. Now is the time for business owners to get ahead, not in January. So find out if you qualify at joingelt.com slash Ramit. That's join g-e-l-t.com slash Ramit. I believe in him so deeply and I know he's so capable of like moving on to the next thing, but he just gets in his own way of his own initiative.

15:31And I think that's what holds him back is more of himself because it's not that he's not capable. It's not that he cannot move on to the next job or the next thing.

15:39Ramit Sethi: Do you find yourself encouraging him, giving him advice, you know if you just did this or if you say this at work that kind of thing we're navigating that I think um and that's something that we actively work on outside of here in our own therapy um because yes because I am a helper I want to be a helper and so I I will admit full stop you watch me do it I love to fill in his gaps because I know what I think he's trying to get at but not and I need I know I need to control that better in myself um but I hate I don't like to see people struggle or have people be uncomfortable. And so when someone I love is struggling and uncomfortable, then I want to step in.

16:17Ramit Sethi: What if I told you that I love that? It's good to struggle and be uncomfortable. And that's where growth happens. And I know that, but it's easy for me to do that in my career because I do that all the time. Which is? I'm a therapist. So. Okay. Amazing. And, and then you are in therapy as well. Couples therapy. Yeah. Okay. And individual. Yeah. Amazing. All the things. Okay. And Chris, what's your career? I'm a warehouse manager for an industrial sales company. Great. Okay. Is there a recent conversation where you can recall where you clashed or disagreed about money? 100%. Go ahead. It was just recently.

16:54We were at that baseball game, and everybody knows you want a beer at a baseball game, you're running about$25 a beer. And we had a conversation prior to going into the weekend of like, hey, I need this amount and this amount for the taxes and the monthly bills from your paycheck. you've got a hundred left to spend for the weekend. Like just know that. And we had that conversation and then we get to the baseball game and I'm watching, and I want him to have fun. I want him to have fun. But then I'm watching him get beer after beer, buying other people drinks. And I'm like, okay, a hundred dollars is long gone.

17:25So what, now we're supposed to go to dinner and do other things with this family all weekend. Where is that coming from?

17:30Ramit Sethi: Where was the actual conversation? Where did that happen? Miller Park. Oh, there. Oh, yes. At the game. Uh-huh, yeah. Okay, so can we go through that? Can we actually recreate it? I was like, hey. Talk to him. Hey, that's your fourth beer. Where's the money coming from for that? You know we had$100. And how are we going to pay for dinner tomorrow with your family? I don't know. My family's in town and we're just having fun. So we'll figure it out later. And then I got up and walked away. Because I was like, I'm not going to. This isn't going to go the way I want. We're not going to have a productive conversation.

18:03I'm just going to go sit by my in-laws. So I moved seats.

18:06Ramit Sethi: What happened later as you went to dinner and paid for more things? That's where I pulled from our annual funds. You didn't talk to each other at dinner about, are we paying and how are we going to pay? Nope. I had just moved some money and was like, well, I'll figure it out later. Okay. So that's interesting. So Chris, you said, we'll figure it out, right? Yeah. And then who's we is going to figure it out? You're gesturing at her. Grace. Grace is going to figure it out. So really it's you're going to figure it out later. Yeah. Grace, where did you pull money from? So we own our home. So the money that we pay, we don't pay a mortgage, but we have like the taxes at the end of the year.

18:46And so I have, we have like a short money market account. And so what I do is I collect that money each month and then I put it in there to grow. So this is a terrible way to think about it. And I know that this is a pattern, but I pull from that money because I'm like, well, I can just hope that the short money market grows enough to make up for the one I had to borrow from it.

19:07Ramit Sethi: Oh. Yeah. Does it work? I don't know. Haven't checked. Haven't checked. Hoped it worked. I actually love the answer. I love that you didn't even say no. You go, I don't know. I have no idea. We just pray it. It's working. I don't know. Why not just tell Chris, all right, hey, listen, I understand you bought the beers. I wouldn't have done it. You did it. You got to figure out where the money's going to come from. I don't know that would get done. I get anxious that it won't be fixed and then it'll be a problem I have to fix later What if he has to fix it? That would be lovely if I would not have like a full Anxiety freak out about it.

19:42I'm a very like like I said anxious kind of type a I don't know that I trust him to fix it because I don't know that he understands He's not sat down with me to look at any of the numbers or anything of what i'm doing So I guess my thought is like how could he fix a problem that he doesn't even know exists because he doesn't know the foundation of the problem

19:58Ramit Sethi: Maybe if you just keep figuring it out yourself, then one day he'll magically get it. No. No? No. No. Chris? Yeah, no. No. And this is the pattern, right? I know the pattern, but I cannot seem to change it. Can you tell me how money flows in your relationship? Where does the money go? You both work. What happens to the money then? Grace? Yeah. So I get paid once a month. He gets paid weekly. Like my paycheck immediately goes towards our monthly expenses. and that's pretty much it. So mine, I don't really have any of after. Like mine is put in and immediately distributed. And then his each week is distributed differently depending.

20:38And then also out of his paycheck is our gas and grocery money.

20:42Ramit Sethi: You mentioned as income's variable, right? What if he didn't make enough to cover groceries? What would you do? I try to prioritize making sure those annual and monthly bills are paid. And then I lower the amount of money we have for groceries. So you're just eating ramen out of the pantry. Has that happened? Yeah. It starts to taste boring after a little bit. Which kind of ramen do you get? The chicken one. Top ramen? Yes. The orange one? Yeah. I love that. It's good. It's good. It's good. And I've mastered it in a microwave, so. Oh, okay. Wow. But no, it's not ideal. Is your money joint or is it separate?

21:19So it comes in separate, obviously, but then he just transfers over to me and I disperse it between our accounts.

21:24Ramit Sethi: Okay. Do you have any joint accounts? Yes. It's been on a hiatus for a little bit. So we have not been able to put anything in it for a while. But that's usually like, hey, I'm, you know, let's put this much in and he'll send it. We both have access to it so we can like send the money into it. Okay. I noticed that when I'm asking about the account flows, Grace, you're talking. Chris has been silent for quite a while. Chris, what's going on with you? I think just because she's just more knowledgeable and that I just, I don't really know what I'm doing. So for the most part. Okay. What do you notice about these roles that each of you are playing?

21:59Ramit Sethi: It sounds very individual to me. There's like no teamwork. It's like, oh, hey, I'm going to do this. Oh, okay. They're very passive. Yep. There's not much actual interaction. Why? I don't know. Avoidance. Yeah. Avoiding argument, avoiding disagreement. Yeah. What realizations are you having right now? I thought I had a handle on it more than I even did. And now talking through this, I realize I'm much more passive than I thought I was. I try to be the planner. I try to be the executor and engage others. But the follow through isn't great. It's kind of just in the clouds. Hoping that it works out.

22:39Chris? Well, I have no idea what I'm doing.

22:43Ramit Sethi: Okay. All right. So there's work to be done. Let's put it that way. Okay. I'm going to put the conscious spending plan up on screen. before we look at the numbers, what was it like to do the CSP together? I kind of took a backseat a little bit and she kind of... She filled out the numbers? As usual, you know. She, did you pull out the computer, Grace, and start putting the numbers in? Yes. Uh-huh. And did you ask him for input? No. Let me tell you what I think you interpreted the assignment to be, even though it's spelled out. Grace, you interpreted the assignment to be, we got to fill out these numbers.

23:21Ramit Sethi: I know the numbers so I'm going to fill it out. Hey, Chris, come sit down and watch but I'm going to fill it out. And Chris, you interpret it as oh, there's some money thing that has to be done and so like, yeah, like, yeah, she's got it. She'll figure it out and yeah, I'm here. Okay. We misunderstood the assignment. What is the actual assignment? To sit down and do this together and really look at these numbers. Ask each other questions about things you don't understand or something that might not make sense. To connect. Yeah. Yeah. Communicate. I don't care if one of the numbers is 50 % wrong.

23:51Ramit Sethi: We could fix the math. But you did not talk about it at all. No. And I think this is true of different parts of your financial life. So this is something that we have to work towards. Okay? And the CSP is just easy black and white math, but it provides a very powerful instruction on how couples complete it. Okay, let's take a look at the numbers. Grace, can you read off the words in bold and then the numbers next to it for this entire box, please? Assets,$390 ,000. Investments,$119 ,500. Savings,$7 ,350. Debt,$22 ,483. Total net worth,$494 ,367. Okay, what do you think about the numbers? Fine.

24:41I think, so the assets, a lot of that is our home.

24:43Ramit Sethi: Do you feel anything looking at these numbers? I'm disappointed that my debt is that high. Okay. Chris, what do you think about these numbers? I like the investment number. Savings is just low because we don't bring in enough monthly to save. But the debt, the debt's kind of a big one there. Okay. Let's go down to the income. This time, Chris, can you read off your combined gross monthly income? $9 ,377. Okay, cool. So that means the two of you combined make about$112 ,000 per year. What does a couple who makes$112 ,000 do with their money living in the area that you live? The median income? We are on the low side even with that$112 ,000 for the area that we live in.

25:34Ramit Sethi: Can I ask you to guess what the median income in your neighborhood is? I feel like it's around 175 to 180. Okay. Like per household, right? Are you talking per individual? Per household. Yeah. 175, 180. Okay. I think about like 150. 150. You know the real number? I'm going to be really embarrassed probably. 113 ,000. You're lying. Nope. Oh, wow. Wow. What does that tell you, Chris? I'm stunned. It sounds like we're not good with our money choices. How? Connect the dots for me. How did you come to that? The, what did you call it? The average? the median is kind of right on par with what ours is.

26:17And so? But yet we're struggling this much.

26:21Ramit Sethi: Yes. No kids. Yeah. And we're going to go into some of your other numbers as well. Grace, what is occurring to you? I'm just shocked. Why? Because it feels impossible to live where we live and make ends meet with our income. But clearly everyone else can seem to do it. So there must be patterns and behaviors and choices that we're making that are not helping that. Let's keep going down the list. Fixed, whoa, what's that number, Grace? Wait, do I? What is it? 108. 108%, what does that tell you? That we spend more a month than we make. On just fixed costs? Yeah, it's not great. You spend more than you make every single month.

27:02Ramit Sethi: It is simply a matter of time until you are broke. beyond broke until you lose it all. When you walked in here, what did you think the severity of the situation was? Chris, did you know? I knew it was bad. Did you know what that meant? Enough. I knew enough what it meant. Oh. I think. So then did you then accordingly say to Grace, we have to change everything. We have to light a fire. We have to come red alert. We have to stop everything we're doing. No, I guess I didn't fully understand that then. I feel like that's kind of a pattern here. Mm-hmm. And Grace, did you understand what 108 % meant?

27:40Yes. Hmm. I understood it in the way of, I know what it meant, but did not know how to take action. I don't know how to fix that.

27:48Ramit Sethi: But you didn't say to Chris, red alert, we're not doing this anymore. We're not going to spend this. Here's what's going to happen. This is what's going to happen. I am becoming coach of this team now. I think I try, but maybe not hard enough or not as intense because I avoid conflict or disagreement. You two are skating on very thin ice. you're close to losing a lot. You have one month's worth of savings here. But that still has not made you have honest conversations about money. You are still tiptoeing around each other. And you're married and talking about starting a family. Yeah. You might notice that I am pushing them.

28:28Ramit Sethi: I'm doing this for a very specific reason. They are oblivious to the severity of the situation. and they are used to dealing in comfort. People will fill out applications. They will go through months of screening. They will fly here to meet me. And then suddenly, when presented with the reality of the situation, they will often revert back to the way they were. They will start to minimize. Oh, it's actually not that bad. We're actually fine. We just need a budget. I don't let that happen because if you went out of your way, you applied, it takes a lot of courage. I'm not gonna let you go home just so that you feel comfortable.

29:02Ramit Sethi: My invisible script is not comfort is awesome all the time. My invisible script is sometimes uncomfortable conversations are amazing. That is why I am pushing them to see what's really going on here. And I'm warning you right now, I'm going to keep pushing. In fact, I'm going to push harder and it's going to happen for this entire episode. How do you own a home at this young of an age? I'm very fortunate. My grandma and I buy property together. And so she and I own our home together. So we bought it in cash. Oh, you bought the house that you live in now in cash. Correct. All right. So your property taxes are$1 ,067 a month.

29:42Ramit Sethi: Wow, that's low. Which means your housing costs are 11.3 % of your gross income. That's amazing. Super low. Yeah. Which then raises the question. Why is this happening? Let's take a look at the rest. Utilities are$4 ,200. insurance is$9.22 that's pretty high yeah so what what had happened was he had a subsidy that was given to him and we being naive and understanding how marriage works didn't realize that as soon as we got married we would have to back pay any of the subsidy and then the the premium was skyrocketed so but now we're locked into a premium that we didn't realize would skyrocket if that makes sense until the end of the year and then what's going to happen yeah I'm just kind of hoping to find a new land a new job that has insurance okay Okay.

30:29Ramit Sethi: Car payments 502. Yep. That includes gas? No. Ah, where's the gas? The gas is in our grocery and gas amount, and it's 600. And we do not have an exact amount of what we pay for gas versus groceries. I just put 600 in that account. That's just, I guess, something I've never calculated, how much I spend in gas and how often I fill. Okay. I think it's probably higher than that. I always estimate higher because I want to be conservative in my planning. I never want to get to the end of a month or a year and owe money. Never. If anything, I want to have extra money. So I always am conservative in my estimates.

31:07So if this says 600, what do you think it realistically is? 800? Yeah. Yeah, maybe 800 plus gas right now where we live is insane.

31:17Ramit Sethi: I think it's 900 at least. I think it's probably higher, but I'm going to go there. You spend it on a credit card? No, a debit card. We don't use, we don't, the debt we have is from credit card debt. So we have ceased all credit card use. So we are not. People in credit card debt use debit cards. Okay. All right. We were going to get there. Debt payments at$1 ,218 a month. How much credit card debt do you have? It's all credit card debt. All of the debt is credit card debt. Correct. What'd you spend it on? Our house, getting married, fixes to the house. Like when we moved in, we had a pipe burst.

31:50Then we had an HVAC issue. then we had a bathroom flood so we spent that on having to remodel the bathroom. That debt's kind of old debt. I mean, it's been there a while so what I've done is I've moved it to cards that have like a 0 % for X amount of months and I'm trying, that debt number payoff plan is to try and get that debt paid off within that increment so I'm not being charged the interest.

32:12Ramit Sethi: Is it going to happen? If we can stick with that one, yes. Okay, that's a good answer. How much is left on the car? Um, his car is paid off. The 502 is my car. Um, it's a newer car. We got it within the last six months. What'd you get? Ford Bronco Sport. Ford Bronco Sport. Like an SUV? Yeah, like a little. How much did that cost? Love that car. 30 ,000? 32 ,000? What's the real number? The way you say it made me question that it's 30. I'm not really sure. I know, I know that that's my monthly payment and I'm on like a 72 month or something or other. Why'd you do that? Lack of knowledge. Sounded good to me at the time.

32:57I note that the car payment is not included in your debt. Oh, that would just be a misstep on not realizing that I would do that.

33:05Ramit Sethi: Let's fix it right now. So if it's 22 plus roughly$30 ,000. Yeah, roughly 30. Let's make it 52. Okay. Pets, what is this number? it's a lot of different things um i can parse it all out for you but it's a lot seven hundred thirty five dollars a month on pets yes we have the cutest little dachshunds in the world but um one of them has how many two okay chronic pancreatitis and so he has a very special diet and probiotic and medicine that he has to take in order to be okay all right subscriptions are at 167 which include i like that you listed these off spotify streaming fitness icloud coopers What's Cooper's?

33:46Cooper's Hawk. Huh? It's a winery. It's$20 a month.

33:51Ramit Sethi: Okay. But it's, yeah. All right. You are in for quite a bit of changes under my guidance. Hey, buddy. What's that? That's our, like if your dog gets lost, it's their little tracker. Okay. Ring camera, Amazon Prime. Fine. Grace Wellness, which includes a GLP-1 and hair extensions. Yeah. Okay. And that's$662 per month. Yeah. Cleaning service and therapy is$280 a month. And then miscellaneous, which CSP automatically adds 15%, is 903. I actually think that is completely accurate and potentially even under because of all the things you mentioned that you are not currently counting. All right, so you all are at$7 ,868 per month.

34:31Ramit Sethi: And just to reflect, you have less than one month's worth of savings as a couple with no kids, very low housing costs, who make$112 ,000 gross per year. Chris, what are you hearing right now? That we both might have a little bit of lack of knowledge. Yes. Because you've said multiple times today, well, she's really smart at this stuff. She knows these numbers. Does it sound like that? No. This is blind leading the blind here. I think that's a really apt way. Yeah. Not to be insulting. No, I feel that way. Yeah. Avoiders do this. They use a series of conscious and unconscious techniques to avoid engaging with money.

35:08Ramit Sethi: And one of them is they say, well, my partner's just good at this. they're smart. I'm not so good with numbers. You are using that phrase to perpetuate this dynamic. Yeah. Now, at the same time, Grace, the fact that you've been unable to say, I don't know what I'm doing, to actually even acknowledge that. Like what I'm doing, I'm moving money around, 0 % transfers, 72 months for a car loan. But even acknowledging that activity is not the same as results, but you've got to be able to acknowledge it and then ask for help. I've tried and it's usually met with, I know I just need to get a different job.

35:48And then the conversation goes nowhere. So that's why I'm here. I'm like, I don't know. I don't know what else to do anymore. I don't know how to ask for help. I don't.

35:55Ramit Sethi: I'm glad you're here. I'm going to try to help unravel some of this, but I just want to point out the language you're even using. I've tried to have the conversation for something as important as we are going broke i don't try any yeah i make it happen chris you hearing this what's going through your head right now that i need to stop shoving it all on her and start and i need to start taking responsibility how would you do it by instead of just sitting behind her maybe saying oh i let me at least try and handle this myself or let me do it with you instead of just sitting there and watching. What about actually doing it?

36:38Ramit Sethi: Yeah. Give it a try. See how it goes. You all mentioned you want to have kids, right? Yeah. When your kid tries to, you know, read, are they going to be good at reading? No, they're going to be horrible. They can't read a single letter. They don't know anything. So are you going to say, ah, mommy's better at reading. so let her do it. No. No, that'd be absurd. Yeah. Yeah, we do it all the time as adults with money. We are bad at money when we start doing it. Of course we are like anything else, playing basketball, cooking, any of it. Now cooking, you might be able to get away with it because you're just like, ah, we don't care, ramen, whatever.

37:18Ramit Sethi: Okay, fine. But money is unlike that. Money isn't like we're going to have to eat ramen noodles. Money is we can't afford to have children or we might become homeless even though we own our house. That's why I think it's different. What's your assessment? Need to make some changes. Yeah, this is pretty dire. When I started I Will Teach You To Be Rich over 20 years ago, business organization platforms were not really a thing, especially for small businesses. Massive companies had big bespoke CRM software, but I was just a college kid trying to get to Taco Tuesday. Now, if you already have a business, you don't need to cobble together random tools like I did way back then.

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40:10Ramit Sethi: That's joindeleteme.com slash Ramit. Code Ramit for 20 % off. Investments are at zero. Mm-hmm. Well, zero added to the ones that are there. Sorry. Yeah, you do contribute$136 a month to a 401k. Yes, and then we have maxed out his Roth IRAs for this year. So we put in$7 ,500 for that. Where'd the money come from? The passing of my grandmother. I inherited some things. And so that's what a lot of our investments are, is money. Oh, I was wondering. Okay, so how much did you inherit? I think it was like 80. And you put some of it into investments? Mm-hmm. Okay. And then started a retirement because he doesn't have any through his career.

40:55Ramit Sethi: I see. And the house? We own joint tenancy, so it's… So it falls to you? Yeah, falls to me. Okay, so you had 80. Where did the rest of this investments of 119 come from? That's including my retirement that I already have and then his retirement that we put in. So a lot of the investments, well, it's real money and it's your money. it came from an inheritance. What does that tell you? You're not properly investing. No. Not for your income at$112 ,000. And we can see that because you're contributing zero per month post-tax. Going on to savings at zero as well. And then finally guilt-free spending at negative 13%, which we know is not true.

41:37Ramit Sethi: Because y 'all are spending guilt-free spending, including ball games. What else do you spend money on? Dinners. Yeah, his family's very social. So we go to a lot of events. Like we just spend a lot of time with his family and they like to do things. So we usually are - Ball game, eat out, what else? Wine walks. What's that? What's a wine walk? It's like - They're really fun. They don't have them here? No. Oh my God, they're so cool. You literally get a lanyard with like a wine glass around your neck and you get to go between shops and they give you a little taste of wine. It's the coolest thing.

42:10Ramit Sethi: And does it cost to get in or do you pay - Yeah, it's like 50 bucks. All right. Y 'all are 29 and 30. I wouldn't blame you for going on and having fun. We enjoy them. All right. I have fun. Okay. What else do you spend money on? I will be transparent. I spend a lot of money on clothes lately. My body has changed a lot. I've lost a lot of weight recently. So I've had to buy a lot of clothes lately. What are some of the shops that you shop at or places online? I love Amazon. Uh-huh. Uh-huh. And how many clothes are we talking about? Probably more than I could ever imagine because I don't really keep track of it.

42:42Ramit Sethi: Chris, you mentioned Amazon boxes earlier. Yeah. How many of those boxes are coming in the house? Like multiple weekly. When we left to come here, I opened the door and there was like three things on the front step. Okay. What I want to know is eating out. Yeah. I just want a quick number off the top of your head. No calculation needed. Eating out, including coffee, lunch, dinner, breakfast, any of it. How many times a week do you think that the two of you eat out? Twice. Twice. Okay, Chris, quick number. Like three. Three times. Okay, great. Welcome to another episode of Ramit Sethi's Law of Eating Out, where people tell me that they think they only ate out three times a week, and the answer turns out to be at least three times higher than whatever they told me.

43:31Ramit Sethi: You've heard me do this on the podcast before, and I love this. I ran Grace and Chris through my little audit. What do you all eat for Sunday breakfast? What about for dinner? What about for coffee? And the number we landed on was not two like Grace guessed. It was not three like Chris suggested. It wasn't five, 10, or 12. It was 15. What the hell is wrong with you, America? I don't mind if you eat out a lot. Fine, if you can afford it and you love it, God bless. But can we stop lying to ourselves? Can we stop saying, oh, I only eat out three times a week. And then by Tuesday, you've already eaten out six times a week.

44:06Ramit Sethi: Come on, let's get realistic. I want you to try this exercise yourself. Leave me a comment today on how many times you thought you ate out every week, including coffee, lunch, dinner, breakfast, a snack, brunch, any of it. And then tell me what the total tally is for the week. I bet you're going to be surprised. 15 times per week. What do you make of that? Too much. Yeah, it's ridiculous. Because we're drowning and we should be making food at home and going to the grocery store. Anybody surprised by the fact that you thought it was twice a week and it's actually 15? Not surprised, no. I had a feeling that I was not a good estimate.

44:49Ramit Sethi: What do you make of this? It's probably more than that too because I get lunch. You all have concocted a reality that is not real. We are trying to get to the root of what's going on here. You eat out 20 times if we factor in the days you eat out and probably the stuff we didn't even count. You said two, it's 20. So you all are spending thousands per month on stuff that we would technically call guilt-free, but it's just discretionary. I think we can make some big changes. Please. Would you be open to it? Very. Both. Yes, please. I like that. Yeah. I like that energy. Okay, I need to understand how you got here.

45:39Ramit Sethi: Chris, what do you remember your family saying about money when you were younger? There wasn't like a whole lot of talk about it. I was pretty fortunate growing up. My dad had a good job. My mom had a good job. We lived in a pretty decent-sized home. How big? 3 ,000-ish square feet. It was my sister, me, and my brother. um you know i i was able to you know play sports play on the travel teams where you know you had to spend a little bit more money to be you know to play and i always got the glove and the baseball bat and the nice basketball shoes and it was very steady for us and i really had no no problems growing up.

46:30Ramit Sethi: What money messages do you think you grew up with that you are now bringing to this relationship? I didn't have to worry about it. So I, I guess growing up now, I am kind of chill about it and chill. Yeah. I just didn't have to worry about that growing up. And I feel like that's a bad trait that I've taken as a kid. And it's, But it's interesting because the way you describe it is, you said it in the first two sentences. You said, I grew up very fortunate. Yes. My parents never talked about money to us. And here you are today, 25 years later, not talking about money. In fact, highly avoidant with money.

47:15Ramit Sethi: You're still not paying attention, just as you didn't pay attention to money when you were a kid. What's the problem? Well, when we say like that, it sounds like there is no problem. There's no problem for you. Yeah. Who has the problem? My wife. Yes. And if your wife has a problem, then who else has a problem? Us together. Yes. So then I have the problem. Yes. As well. Yes. If I were you, I might reinterpret the way I was raised, which is, look, my parents were awesome. They did the best they could. They gave us a great childhood. However, they never talked about money. And that has actually really cost me a lot.

47:56Ramit Sethi: I never had to pay attention. I never even knew it was a thing. And now as an adult, I'm struggling to actually care about money, to talk about money. My wife is telling me she feels like she's on a sinking ship. And I think back, I wish my parents had talked about it. And I wish I had taken a little bit more interest in it. Do you see how reinterpreting your narrative, whether it's your childhood or adult life, can dramatically change the way that you look at today? Yeah. Yeah. I thought it was really interesting when Chris said, I was really fortunate growing up. My parents never talked about money.

48:32Ramit Sethi: As if the two go hand in hand, as if talking about money is a bad thing because the only way to talk about money is if you are worried about it. Look at my face. Do I look like I'm worried about money? No, I get the opportunity to talk about it. Money means, ooh, I can buy a new phone. Money means I can take a trip or buy some Doritos. Money is not simply a source of stress and overwhelm and guilt, but that is the invisible script going on here. Now, not surprisingly, Chris did not talk about money, fortunately, and guess what? He doesn't talk about money today because just like his childhood, somebody else manages it.

49:13Ramit Sethi: Both of them have been subsidized in one way or another. There's inheritance, there's a home, there's somebody taking care of the money, and when you are subsidized, it becomes very difficult for you to live in reality and to understand what it would be like to have to do things on your very own. That's why this conversation is proving so challenging right now. Grace, what do you remember your family saying about money when you were young? There wasn't much talk of it when I was young. We didn't have a lot of it. I grew up with a single mom. There were times in my life where we were feeding or paying our babysitter with food out of our fridge.

49:54Like it was pretty dire in different ways. I was a student that was provided free lunch at school because, you know, we didn't have the money. My mom worked her tail off three jobs, single mom. So money was not prevalent. What did she say? She really didn't talk about it much. I think she really tried to be a protector of keeping adult problems an adult problem and not talking about it with a little kid.

50:19Ramit Sethi: You grew up in the Midwest? Yeah. How many siblings? I have, well, so growing up at that time, so my mom got remarried and then that kind of shifted also my financial experience too. But when I was little, I just have one full sibling. One sibling. And then you mentioned your mom got remarried. Yes. What age were you when she got remarried? I was 10. And my wonderful stepfather, he has a great job and he moved us, you know, to a nice home, a nice area. And then - Take me through that moment. So you were financially struggling until the age of 10. And then suddenly your stepdad has a stable job, etc.

51:02Ramit Sethi: What was that experience like for you? Like total 180. It was like, oh, I can play sports. I can afford to be a cheerleader and take these gymnastics classes. And I can buy clothes and I don't have to take hand-me-downs from people. What did it feel like? exciting um like secure what does that mean um just that i wasn't stressed or worried about that my needs would be met were you before i knew she was gone a lot i you could you know you can kind of read between the lines you're intuitive and i think i knew that you know you're like why does my mom have so many jobs and why is she gone all the time why does someone have to watch me so you know you kind of make your own narrative of maybe what's going on what was the narrative?

51:46Just that life was hard. My mom needed to work a lot to make ends meet.

51:51Ramit Sethi: So age 10, your mom remarries, you feel more secure. You're able to participate in school activities. What happens in your teenage years with money? You know, my parents are divorced. And so I never lived with my dad. So I'm not sure. Like I know their financial aspect is a little different. But in the household I grew up, I never really wanted for anything. I never felt deprived of something that I needed. Is your mom and stepdad still together or are they separated? They are. Okay. How are they doing with money? I don't know. We don't talk about it. At all? Not really. Okay. Okay. Got it. Did you go to college?

52:26Yes.

52:27Ramit Sethi: How'd you pay for that? I was very fortunate. My grandfather and my grandmother had inheritance for, or like a college fund for each of the cousins. Oh. Yeah. We were very fortunate. What did they you to have all this inheritance. Quite impressive. My grandfather was a fantastic architect. Wow. Yeah. And he and your grandmother seems like they saved and invested a whole bunch to be able to pass that. They created trusts. Yes. Wow. Yeah. So they paid for your college. Do you know how much approximately that cost? Well, my undergrad and my grad school in total was probably about$230 ,000. Whoa. Yeah.

53:04Ramit Sethi: That's quite a gift. I don't even have words to explain the gift. Yeah. Okay. Like remark, I am beyond lucky to have had that privilege. Yeah. Do you take anything away from the example that your grandparents set by being able to give this money multiple generations later? I would love to do that. I have no idea how they managed it. Yeah. They seem to have had it really well figured out. My grandfather and my grandmother were very smart. With their finances. And I wish prior to their passings, I had taken more time to understand that. Are you having those conversations in this relationship? No, I would like to be.

53:44But I don't know how to start them.

53:47Ramit Sethi: Grace, what messages do you bring from childhood to this relationship? I think it was, it'll all work itself out. So it'll all be fine. You know, it - It is fine when mom and dad are the ones doing it. Yeah. And you mentioned your mom was the protector when it comes to money. Yeah, I think she just, she put her head down and worked her tail off and was like, I don't want my kids to see me struggle and I'm going to make happen what I need to make happen for them. Who's the protector in this relationship when it comes to money? Me. Maybe. I don't know. Yes. I think I'm shielding him from having to know the struggle of it.

54:23Ramit Sethi: Yes. God, you're good at that. Yeah, no, that makes sense. And when your mom protected you from money, what was she doing in the moment? I think the intention was good. Which was? To not feel the stress or the pain of, you know, struggling. Because she doesn't like to see people she loves struggle. Or be uncomfortable, which is what I don't like. And I don't want him to struggle or be uncomfortable. Maybe I can do this with your kids. Huh? Not see them struggle, not see them be uncomfortable, and then when they grow up, they can do it to their partners. And then for five generations, we can just carry this on.

55:04No, no, no.

55:05Ramit Sethi: Huh? No? No. No. Wow, Chris, what was that? That was like a real gangster attitude right there. No thanks, mother f***er. Where did that come out of? We just got to, we got to break the cycle. Yeah? Got to break the cycle. What cycle though? The talking about money, talking about uncomfortable things, being okay with being uncomfortable. I hate being uncomfortable. So you're willing to do it. Yeah. Well, you are being uncomfortable by being here right now. I could tell. Yeah, 100%. And I appreciate that. This is not easy for anybody. So you are ready to change the cycle. Like that really, that power you had when you said no, that spoke to me for the first time.

55:49Ramit Sethi: It's amazing, Chris, that you are willing to kind of let this dynamic persist. The one where you don't talk about money, et cetera, but when it comes to a future child that's not even born yet, you are fierce about it not continuing. That is a conversation that we've had. Yeah? Yes. You have had it with him? Yes, because that's my thing. This is the only other thing we dispute about is like, why are you ready to make the changes when a child is here? But why can we not make them ahead of time to set ourselves up for that? Okay. And have you said, this is what I need before we have kids? I don't know what I need.

56:28I don't know. And I think that's part of it too, as why we're here. I need to figure out what I need for that to feel okay and ready.

56:37Ramit Sethi: You want to do it right now? Sure. Yeah. Anytime like the present. Yeah. I don't like homework anyway. Might as well just do it now. What do you think? That's why I'm a school counselor. By the way, correction for America. I don't like homework for me as a 43 year old man who dominated homework. For the kids, you get the homework and you better do it. We're going to find out what you both want and need? Have you ever talked about what your rich life is? No. Okay. Well, people who have talked about their rich life, they answer like that. What's a rich life? You tell me. Because my rich life, I don't want to be, I don't need to be a millionaire.

57:18I don't need to be a trillionaire. I just need to be able to be stable enough to have a family. Okay. Do, you know, do things when we get asked to or if we want to on the weekends with family and friends. Be specific. I want to make enough money to just be comfortable where we are. I want to have a family.

57:38Ramit Sethi: You want to eat out 15 times a week? That's fine if that's what you want. Tell me. Sure. Okay, great. That would be great. Great. I would love to have for my kids, if they say, hey, dad, I want to play this sport. Great. You want to give them the same childhood you had? Yeah. Okay. That would be awesome. That's it. That's the rich life. That would be awesome. It feels very surface level. It's literally just a recitation of how you grew up. like if you don't like travel, I'm not forcing you to travel. That's your life, not mine. Yeah, not a big traveler. Food, leisure, convenience. For me to be able to treat my family because they live close by and they like going to a ball game and gosh, once a year, I sure would like to get box seats.

58:18Ramit Sethi: That would be a rich life. But what I'm hearing is I want to be able to live a comfortable life. Yeah. That's boring. But that's, I'm a simple man. What I'm trying to get at is, is there something deeper here? And I think if you just wanted to learn how to save a little bit of money, there's plenty of places you could have gone. Why did you come here? We came here because my wife, she knew who you were and knew what you were about. And her therapist wanted us to check you out. You came here because your wife wanted to come here? Sure. I think that might be the crux of what's going on here. Maybe a little.

59:04The avoidance seeps into every part of your life.

59:09Ramit Sethi: You're even avoiding talking about your own rich life. I didn't care if you came to me and said, I want to buy$150 ,000 worth of shoes. I would be like, God bless. Let's figure out how to do it. But if you can't even do that, your rich life, not even hers, yours, it's going to be very difficult for you two to make progress together i want you to think about that grace i want to ask you about your rich life actually before i get to that what did you notice as i was speaking to chris about his rich life i think he wants more than he's saying oh i think he has more rich life ideas that he's just not saying like like we want to add on to our house and we talk about that and growing you know and how he wants like just in more detail i think he could say in more detail what he wants.

59:54I know he says he's simple, but I think in his head, there's more detail than he's saying. Yeah. Sometimes I'm, I, I don't articulate the best.

1:00:05Ramit Sethi: Yeah. I mean, it is nerve wracking here. We got a bunch of lights and all that stuff. Fair enough. No, he's just a man of few words. He has such great ideas and things that he wants. And I just don't think maybe you'd describe them in the way that you want. Grace, are you okay being with a man of few words? Um, sometimes. Because I'm struggling to find out what your rich life is. And I know how to do this. What I want is change. And sometimes, Grace, the way to do that is to set an expectation and hold the partner accountable. But because you don't like to see people uncomfortable, you are currently unable to do that.

1:00:39Ramit Sethi: And so you fill the void. All these are just stories you tell yourself. What if you just change that? What if you flipped it? Oh, as of yesterday, I was not good at letting people that I love be uncomfortable. But starting today, I am extremely good. In fact, I love it. Because I know that every second of their discomfort makes them stronger. Hmm. I wonder if we could just change our narrative. Grace, what's your bridge life? I love coffee shops and going and trying unique coffee shops. And I would love to go and try as many coffee shops as I want and not worry about how expensive the latte is.

1:01:16We want a fence in our yard so our dogs can run around. And we want to put a play gym or whatever we want to put back there and have an all-seasons room. And we want to add on to our primary bedroom. So I would love to add on because we do plan to stay in that house. We love our house. What about for the two of you? I would love for us to be able to still have date nights after having children.

1:01:40Ramit Sethi: Nice. I would love to like really be intentional about time for like connection with each other. I would love to be able to afford child care if needed or figure out how to navigate that like with our families. Because we do have families that really want to be involved, which is wonderful. But also if they're not available, you know, I want to figure that out about how you financially work all those things out. I would love to travel. I don't we don't travel a lot but if we had the means to travel I think we would more what about for yourself there are some things that are also on our conscious spending plan that I do like better self-care and that are important to me so like some of the medications I take or what I do with my hair like that is really important for my like overall well-being and mental health and so those I'd like to keep intact great Chris what do you hear when she describes her rich life I feel like hers was more like kind of like home oriented.

1:02:36Like we, we do want to put on a three seasons room. We do want to fence the yard. Yep.

1:02:42Ramit Sethi: Like it actually told me a bit of who she is. You know what I heard in that was like, oh, she loves coffee. Okay. That's interesting. She's a coffee lover. And she'd like to be able to do date night with the two of you. And then there's something about childcare and expanding that. Like, oh, okay. I kind of get who she is. That's what I want to know when I ask people about their rich life. If you asked me, I would talk about hotels and travel and convenience. And you'd be like, this guy is a little weird, but like, I can tell the kind of guy he is. The more that the two of you are specific about it, the more that we can rework some of your numbers.

1:03:15I would also add to love or love to add, um, if we could afford to have a long service to where they could take care of our landscaping. See, I knew he would like that one. I knew that Chris just goes, yeah.

1:03:28Ramit Sethi: Get those lawn guys out here immediately. This is what I'm talking about. He knows it's in his head. He just doesn't think to say it. Chris, kids and lawn care. Is that your thing? Yeah. I mean, I mow the lawn once a week. I got my little push mower. What age are you going to make your own kids mow the lawn? Maybe like 17, 18. That's too late. What are you talking about? 17 years old to mow a lawn? Maybe 16. I thought you were going to say six. I was like, my man. 17 for a push more? Bro, I was out there at like age, what, 10, 11, mowing that shit. This is honestly pretty hard, especially because they have never faced actual consequences for their financial behavior.

1:04:11Ramit Sethi: Sure, they spend more than they make, but they still have Spotify. They still buy all this cool dog food. So how am I gonna get through to them? One thing that I can try to do is show them what is reasonably likely to happen if they make no changes. I don't know if it's going to really land or not. I'm going to try my best. If nothing changes in your finances, if nothing changes in the way that you communicate, what's going to happen? She's going to keep looking away. I'm going to keep looking away. We're not going to be on the same page. And then? And then we're going to be broke. And then? That's it.

1:04:50Ramit Sethi: No, keep going. It's important that you actually understand what's at stake here. And then, I don't know, probably have to sell the house. Yes. And then? Sell everything. Get rid of everything until there's nothing left. And then you have nothing. Yeah. How would that affect your relationship? Terribly. I never, I mean, I'm not going anywhere with her, but I'm sure it would be not ideal. Is it possible that the environment you grew up in was not particularly healthy for money? Even though you all had a pretty nice upbringing for your entire childhood and after the age of 10, is it possible you may have had things, but you did not learn knowledge?

1:05:35100%.

1:05:36Ramit Sethi: 100%. I mean, I always say like, these are the things I wish they taught you in school. You all are adults now. It's on YouTube. The freaking books are at the public library. It's on my dining room table. Did you read it? Not yet. I wanted to read it together. So I haven't started myself because I figured if I started myself, I would do it all myself. And then it's money for couples, not money for one. Did you tell them that? I mean, I told them, yes, I'd like to read it, but it didn't really go past that. Okay. You all walk around eggshells for the rest of your life right into losing the house.

1:06:12Ramit Sethi: And the future family that you mentioned about having a child or multiple children, what will they learn about money if nothing changes not good things not good habits not good patterns um what will they learn how to avoid talking about money how to just hope it all works out chris we're good people i i think our kids are gonna grow up and see that we're we're good people but like if we keep going on this path our kids for sure won't learn anything They'll learn, watching the two of you, if nothing changes. Moms are the ones who should be freaking out about money. Moms are the ones who try to convince dad to participate, but dad doesn't want to because dad wants to buy the things he wants.

1:07:01Ramit Sethi: And then mom is the one who figures it out. Not sure if mom's even good at money though. But we got what we wanted. We were very fortunate. They observed dads are the ones who are carefree, chill, easygoing. How does that strike you? Accurate. Yeah, very. You all want to let your daughter grow up thinking that mom is the one who has to take on all the burden and dad gets to do whatever he wants? Absolutely not. And a son? No. No. So let's change it. We're going to look at your numbers. Chris, I want you to take a leadership role in this. You all are on the path to losing what you've got and potentially having to sell the house in the future.

1:07:42Ramit Sethi: I need you to make changes. and I'm going to give you a little suggestion. Typically people who are spending more than the 60 % I recommend for fixed costs, they chip away by, let's cut Hulu, let's cut this, let's cut that. That's not going to work in your situation. You can't. So I want you to actually start with a blank page and I want you to tell me what do you envision the kind of lifestyle that you want right now is. It can't be the lifestyle you have. Well, I feel like the pets is pretty, can't mess with that one. The phone's pretty stable. maybe take out the cooper's hawk wine subscription that's 20 yeah you want to see what the effect of that is it's nothing i'll just show you so instead of 60 we're going to make this 40 and watch this number up here this 113 it drops to nothing nothing think bigger and move faster the 662 hair in GLP1, that's a kind of a cosmetic thing, but I know it makes her happy.

1:08:42But maybe if we take that off the board, something might happen. Ask her, is she willing to make that change? She's not. Then ask her. How do you know? Are you willing to make that change? No. No. Okay. Yeah. I mean, that's like my mental wellbeing. Like when you have a condition where hair loss is a thing. Taking care of that is something important.

1:09:01Ramit Sethi: I was not aware of that. Thank you for clarifying. Let's keep it. Can I take a sec? Yeah, of course. Want to join her? Sure. I don't mind that my guests sometimes cry. I don't mind that they get uncomfortable. I don't even mind that sometimes we have to take a break and they leave the room because these are very, very overwhelming feelings to encounter. Chris and Grace are actually discussing money in a way that they have never done before. And yeah, I am pushing because I need them to see the seriousness of this situation. I totally respect and appreciate that she's taking a second and I want to keep going with them because discomfort is not necessarily a sign to stop.

1:09:49Ramit Sethi: It might just be a sign that things are starting to sink in. Welcome back. Welcome. Okay. I'm glad we got a chance to take a break. How are you both doing? Good. Yeah? Okay. All right. Thank you for letting me know. I appreciate that. Was not aware. Yeah, because it is a cost. I mean, it is an expense and a cost. And so like. I appreciate that. Thank you. Okay. Let's take a look at the numbers. Tell me what you would like to do next. Maybe take the cleaning therapy out. It's 280. Ask her. Are you cool to take that out? No. Okay. What else? The subscriptions are kind of irrelevant. It's tough, right?

1:10:29Yeah. Okay. What would you do? What would you like to do? I personally would just be like, okay, then we don't have gas. We will just take out all the food money because everything else I don't.

1:10:40Ramit Sethi: You're going to take out food before… I just want to point out what you're saying because I want you to hear it out loud. What you just said is we will take out food before we take out a cleaning service, before we take out fitness, Spotify, pets. We'll take out food. Yeah, I'd lower it. you can lower it by$100 it's not going to change a thing what are you realizing? I just gave you the opportunity to cut from 113 % to 60 % and you got nowhere nowhere what are you realizing? I'm having a hard time being willing to compromise on things yes flip it from now on Chris for the next two minutes you are completely in charge I give you carte blanche do whatever you want and she will support you just for the next two minutes go ahead probably the first easy ones would probably be like Spotify, streaming.

1:11:32Just tell me the number. Oh, maybe like cut it in half. All right. What else? Maybe like cleaning and therapy, just scratch that. Okay. Maybe somehow cut groceries and gas in half. No, that's not really.

1:11:47Ramit Sethi: I'll cut it for a hundred bucks though. Sure. Maybe pets. Uh-huh. Cheaper food. Yeah. What else? That's about it. All right. So we drop it a hundred. Yeah. Yeah. Remember, you are currently, you have a magic wand. You can do anything you want. You have 30 more seconds. That's probably all I could do. All right. So this - Yeah, can't do anything else. That's it. Yeah, I can't. Because why? I just can't. Didn't you tell me at the beginning, like, I want to be the man of the relationship and the man is the one who provides, et cetera. Yeah. In that prototypical way of thinking about life, doesn't the man, especially when somebody like me is like, you have carte blanche.

1:12:25Ramit Sethi: You could do anything you want. Magic wand. Aren't they just like, mother f*** these numbers and they just chop it out? Isn't that what the man does? Yeah, but I can't do that. Why? Because I can't. Okay. The number is you went from 113 to 104%. You all are broke. That's simply unsustainable. Yeah. I think what's happening here is you all want me to do some magic trick for you when you all are not even willing to make the changes yourself. Is that what's happening? I could see how it looked like that. Well, scroll down. Take out... You got to take out the GLP one in the hair. Okay. Zero that out.

1:13:00Maybe only like a streaming thing for like to watch TV or something. Okay, great. I mean, yeah. I don't really know what else to do. We pay for dog walking services. It's like...

1:13:11Ramit Sethi: Oh, yeah. $360 a month. What the f***? $350 a month for a dog walker? Out of 635? Only three days a week. It's crazy. Dog walking is expensive. So? I mean, in theory, yes. That could… That could go. Okay. Goodbye, dog walker. Alright. You're at 89%. It's better. Nice. But not enough. What does the number need to be to not? 60. 60. Okay. I find this very peculiar phenomenon, especially in self-development, where people are obsessed with finding the perfect book, the perfect coach, the perfect program, and they almost never take a look in the mirror and ask themselves, am I coachable? And that is what I am seeing here.

1:13:57Ramit Sethi: Are they ready to change? I don't know, but it's pretty difficult for me to get them to see it. Now, that doesn't mean they are uncoachable forever. We all have parts of our own life right now, today, that we are not coachable in, including me. But there has to be a day where if we want to make a big change, we are coachable. So how do you become coachable? It's hard. It takes practice. And most of us have systematically shut that skill set down as we become adults because it's uncomfortable. It makes us feel bad. I don't want to do it. I'll avoid it. Or if the situation comes, I will just lie.

1:14:38Ramit Sethi: Here's a different way to look at it. One, deep acknowledgement that I have a problem and I need to change. No minimization, no equivocation. Second, we need to make a change. Not the world, not somebody else, not us, me. I need to make a change. And then third, even the simplest specific tactic. From now on, I am going to ask my partner to lead our money conversations because I have been trying to do it my way and it's not working. That's just the basic scratching the surface of how you become more coachable, which is a huge skill to develop. You have to remember, you're at 89 % with effectively no mortgage.

1:15:24Ramit Sethi: This is not acceptable. If you had a mortgage, it's one thing. Even still, it would be unacceptable. You have no mortgage. Correct. So where's the money going? Look, miscellaneous is$809. No way. But no one here said anything because both of you fundamentally don't believe you have control over your money. If I looked at these numbers, I go, give me a machete. I will cut this so aggressively. There's no way on this planet that we allow$809 in miscellaneous to happen. I'm going to fix it. I'll go, okay, wow, cool. You're telling me like that. What are you going to do? We're going to be in control of our numbers.

1:16:00Ramit Sethi: We're going to download it every week. We're going to have a conversation. Oh, wow. We're going to give ourselves only$100 a month so that this number becomes in control. And suddenly we're down to 79%. Oh, that's better, but it's still not enough. Insurance, that needs to be fixed. Chris, I need you to find out about this different job. I need you to find out what's going to happen. We can afford this for a while, but we cannot afford this for more than six months. What are you going to do? What's the plan? Give me a report on it. Chris, I need you to take control because I don't want to be looking over your shoulder.

1:16:32Ramit Sethi: This isn't the way the two of you talk, right? No. What do you say instead? Nothing. Yeah. In a future like the one I was just describing where I'm aggressive, how would that ballgame conversation have gone differently? We probably wouldn't have even gone, to be honest with you. Bingo. My family calls me, hey, we're going to the ballgame. It's a special occasion. What would I have said? No, thanks. Yeah. I wish I could. I love you guys. Right now, finish the sentence for me. Right now, I can't afford it. Right now, we are prioritizing paying off our debt. Right now, we need to focus on saving money for the two of us.

1:17:11Hard to argue with that. Oh, come on. Come on. We love you. It's okay.

1:17:15Ramit Sethi: Yeah. That would have got you, right? Oh, yeah. But until you can prioritize this relationship, specifically the finances and the connection, you will simply continue sinking underwater. And isn't that what you described this financial arrangement right now? You said it's a sinking ship. Finally, where would expenses for a kid go? Great question. Nowhere. There's no money. We're not even... Diapers. Couldn't even afford that much less childcare and all the massive costs that come along with one kid. What's happening right now? What are you both realizing? It's terrifying. Good. Yeah, it's terrifying.

1:18:00Ramit Sethi: Good. Sad. Yes. Notice my reaction. Am I trying to assuage it? Am I trying to make you feel better right now because I don't like discomfort? No. No, what am I doing? Letting me sit in it. Yeah. You earned it. And the only way you change is you realize how close you are to the edge of disaster. I have questions. The debt payments, when are they over? um some are 12 month and some are 15 months so some should be over by december and some should be over by march april of 27 can we look i'm just going to zero this out to see what happens yeah okay fast forwarding you're down to 61 when that debt is paid off wow that's pretty amazing that's a stark difference but i want to paint the picture for you at 15 months if you were to execute this plan flawlessly, which I think is unrealistic, would we all agree?

1:18:53Ramit Sethi: It would mean that the GLP ones would stop today. Hair extensions would stop today. Eating out. There would be no eating out for 15 months. Pet food cut in half. Does this sound realistic? No. Both saying no. No. What's the solution here? At least do something. We've been pretty, the debt payments are something that have been consistently being paid off. So they are on track to be paid. In regards to like my medicine, that I am almost where I will be stopping anyway. So that will be about$450 a month that will be cut out soon. What about earning? Yeah. I mean, I get an annual increase every year.

1:19:38Ramit Sethi: How much? It varies between three to 5%. Okay, fine. Chris, bottom line, I would probably just have to switch my job is mine. I didn't even put this in here and you're probably going to freak out. Um, I have a second job, but it, it doesn't bring in a lot of money. It brings in about eight to 10 grand a year. Oh wait, that's pretty good. What? 10 grand is not a lot. That's a lot of money. Well, I use it to pay off all the miscellaneous things and the inquiries and the stuff you don't count. So it kind of just sits in an account and then I pull from it to like, you know it's so I don't really disperse it anywhere because I try and hold on to it until I grace listen you're not managing money effectively yeah and you are not demanding enough of your partner what are you hearing me say that I'm not managing my money effectively and I'm not demanding enough of my partner how would you do each of those in turn be specific well I would start to be more direct in my conversations and in my approach and my tone and my tenacity about it.

1:20:40Ramit Sethi: Yeah, for example? Like, hey, we don't, even if we have this$100 left over, we're not going to the game. Correct. We're not going to attend that. We can go and hang out at the house when they're done or whenever they get back, but we can't go to that event. Or, yeah, I know the wine walk is for your dad's birthday, but we can't afford it right now. Great. I love that. Chris, how would you receive that? Probably not well, to be honest with you, but seeing this, like there just needs to be a change or else we're just not going to survive. Yes. I appreciate your honesty, actually. That's pretty cool of you to just be like, yeah, I wouldn't take it well.

1:21:19Ramit Sethi: Nobody does the first few times. And let me give you a little suggestion as to how to get to the point where you do receive it well. If the two of you continue individually, then if you try to make a change, you are each going to invisibly tug, like a tug of war. and it will be impossible to change. You will go right back to the way you were. So like, oh, I'll just do this for three more months. It'll be fine. Oh, the dogs are so cute. We can't do that. What if they don't like the food, et cetera. The beers, oh, come on. It's just my dad's birthday. It's once a year. And you will resent each other.

1:21:55It's a horrible place to be.

1:21:57Ramit Sethi: What the two of you need to do is to find a vision together where you are both like, this is what we're doing. The outside world is not relevant to us. We are the most important ones here. because if we don't do this, we're going to be stuck in this forever and then we're going to pass this on to our kids for the one, two, third generation and maybe more. You have to find your why. That's why I talk about a rich life. You can get there in 15 months, maybe sooner. Thoughts? That sounds good to me. Yeah, that sounds great. We just got to stick to it. How are you going to do that? A lot of silence here.

1:22:31Ramit Sethi: What's happening? Remember, I'm here to support you. I'm not here to tell you to do something you don't want to do. grace what's going through your head right now i'm having a hard time with the idea of cutting and thinking about the fixed costs and the thing like i i think that i tried to eliminate things as much as i could thus far without making my life miserable like those things are all to me things that that keep me okay in life i think i'm overwhelmed yeah Yeah, that's pretty self-aware to be able to call that. Chris, how about you? Yeah, it's very eye-opening, I would say, just not really realizing kind of what the situation was at hand.

1:23:17Ramit Sethi: Yeah. So, yeah, I think it's just very eye-opening and actually kind of diagnosing what's actually going on. Yeah. What would you say you see as the diagnosis? What is going on here? we have a lot of high costs at the price that we, you know, can't really afford. Kind of bottom line. I think it's apparent that we just avoid it and we just kind of dance around the bush all the time but never really get close to it, you know? It's like a, yeah, we just are like, well, you know, it'll be fine. As long as you don't touch it, it won't hurt you, you know? And you just kind of hope that it'll all work itself out.

1:23:57Because seemingly it has, quote unquote, right? Like haven't lost our house yet. So, you know, and I have like my second job and that brings in, you know, and then that's, that kind of sits on the side. So I'm like, okay, that subsidizes whatever I can account for. So I'll just, you know, and so I, you mentally convince yourself that you've got it handled and you don't have it handled. Yeah. So I think I just realized that I thought I was more involved and taking care of it than I really am. And this is what I'd hoped to get out of it too, that it shined light on like my patterns and my behaviors that I think I have under control but clearly not and bringing awareness to that.

1:24:37I actually love realizing that I have been doing something wrong.

1:24:44Ramit Sethi: when you're not getting the outcomes you want. And you're like, God, what's wrong? Is it me? Am I, is there something genetic? Da, da, da, da, da. And then somebody comes along and says like, let's break down exactly what you're doing. Oh, you thought you're eating out twice a week. You're eating out 20 times a week. You thought you were spending this much, but you actually did not include X, Y, Z, A, B, C. And you go, oh, it actually all makes sense. Not that it's good, but at least it makes sense. because once something makes sense, then you can start to make changes. You might be wondering why I did not get to how much they're going to have in retirement or even contributing to their investments.

1:25:23Ramit Sethi: That's intentional because we couldn't even get fixed costs below 100%. For me to talk about investments 30 years from now would be absolutely pointless. In fact, it would be an escape valve for them to focus on something else instead of the problem of their house burning right now. That's why I didn't talk about that stuff. Sometimes you got to focus on what is in front of you and nail that before you can go to the next step and the next and the next. Based on what we've talked about today, what do you think you are going to do? I think prioritizing getting that debt paid down. I think figuring out where we can flex costs.

1:26:06For example, maybe we flex how much the dog care is. I look into other options for his food if that's possible. Eventually taking at least the GLP-1 part of my wellness bracket off. Increasing income would be nice. Like in summer, I'm off on summer. So maybe I can take on more hours at the barn. I actually do make a better hourly rate there than I do at my current job. It's just the hours aren't there. So at least in the summer, the hours are available. So maybe I could do that to bring in some more income. I'm really actually trying to sit down and look at, I want to like actually understand how much we spend on gas and what that really is a month and actually do the numbers.

1:26:48I also would like to look more into how much we really are eating out and like what we actually are doing. Because I think like we just do it and it goes into the cloud and you think it never happened. Chris, what about you? I just think trying to cut down where we can. I think a big one will be me with the insurance. That'll kind of cut down costs for us. And I know we can't cut it all back. That's not like totally realistic. But when me and her go home, we're definitely going to start looking at things together and trying to figure out where we can and can't and trying to come up with a plan for that.

1:27:29Is that a more regular time that we talk with each other? What time would that be? Like a Thursday evening or something.

1:27:36Ramit Sethi: Okay. And what are you going to do in this meeting? First, we should read your book. Yeah. Start with reading the book and follow the steps. Maybe that's part of the meeting. Yeah. Yeah. I think we could read a chapter and then kind of reflect on it. So like, what did you learn? What did you learn? Any ideas from this or any ideas from there? I like it. Collaborate. So you're going to come to the meeting both having read chapter one. Yeah. Like a book club. It's a book club. But the two of you are going to be having these meetings, probably for the rest of your life. I hope so. Yeah. Great. I would like to talk about this frequently.

1:28:08Ramit Sethi: I like your reactions. So let's find a way to enjoy it. We might have a little freaking snack at the beginning. We have an agenda in Money for Couples that you can use. We always start with a compliment. It always feels good when we start our money meetings. We start with a compliment. It's cheap, costs nothing. It's amazing. You choose which book you want to start with. It's up to you, but you should read both of them. you may want to create a set of core values and one of them is we make informed decisions quickly that's one so if something needs to be cut out you cut it out immediately next another skill you'll need to work on is creating a united front together against the rest of the world you can't be united together unless each of you knows what you want if each of you knows what you want then you can be united as a team that takes work and then being united despite what the world says to you, that's a skill.

1:29:06Ramit Sethi: So when family calls, both sides, when friends call, you two should practice and rehearse what you're going to say. And if you need help, ask your partner. And the other thing is not avoiding the hard discussions. There are a lot of tough discussions ahead of you. I don't look at them as a bad thing. The most important things are hard. I know that we're willing to do that. And we need to do that. But I know that we're willing to collaborate more instead of me just taking a backseat and me thinking that she's just handling it all. So, yeah, I think that we know what we need to do from here on out, I think.

1:29:51Ramit Sethi: I like that. Earning more is the natural next step. You both are young. You have time. but I would not wait. Increasing your income will dramatically affect affordability for the two of you. Like the summer opportunity you mentioned, to me, that is an absolute no-brainer. It's a yes. There's no discussion about it. I thought about being a Starbucks barista. Why not? Love coffee. Why not? Got great benefits. There you go. Thought about it. Might as well go do it. It's time to start taking the decisions. Again, we make informed decisions quickly because we have a bigger vision then the two of us are going to be comfortable.

1:30:31Ramit Sethi: We talked about what happens if you make no changes. That's not an option. Yeah, not an option. You have to make changes, big changes, and they have to happen fast. Are you on board? Yeah. On board. Okay. I think it's going to be really hard for Chris and Grace to make the changes that we discussed today. But let's remember that before today, they had never had a single substantive conversation about money. Let's also remember that Chris does not like to be uncomfortable, and being on this show was the definition of uncomfortable for him. So they've already taken a big step. Will they do it? Probably not until their backs are against the wall.

1:31:11Ramit Sethi: Most people do not make self-development changes unless they have to. I don't want them to have one or two kids and suddenly realize, next month we can't afford diapers. I don't want that. but there's only so much I can say or even do until they realize it for themselves. So I want to thank Chris and Grace for coming on the show. It was not easy. This is a major opportunity for you to change your entire dynamic. I really hope you do it. And now, let's take a look at the follow-ups. This is our reflection from our time with Ramit. Our biggest surprise from the session, mine was probably related to our different childhoods experiences with money and how our parents talked about money or lack of conversation around money and how that has translated into our adulthood and how we show up for ourselves and in our relationships in relation to money.

1:32:05And my biggest surprise was how close our income is to our to our neighbors and the people locally here in our town. um and our biggest takeaway my biggest takeaway probably ties into my biggest surprise so realizing those patterns and how you know I want to take those patterns and I know my husband wants to take those patterns and change those um for our future children and kind of alter those in a more positive way so having more positive conversations around money um and open conversations and being more proactive um and changing the patterns that we noticed about our childhood and how we got here um and my biggest takeaway um is knowing that we need to have more in-depth conversations around our rich life and how we will get there someday um and our changes that we'd like to make i think we both agree that we are wanting to one you know read the book but two have more weekly set meetings on thursdays at six um about you know about our finances and moving forward in a positive direction thank you

1:33:15Ramit Sethi: If you want to know the exact month and year that you will have$100 ,000 in your investment portfolio, sign up for my new program, Road to 100K. I'll help you hit that number fast. Go to iwt.com slash 100K to sign up.