114. “Why did we spend $40K on trips we can't afford?”
01:11:52 Share

Before we start today's show, I have a really exciting announcement that I've been wanting to share for a long time. On January 1st, 2025, I'm releasing a new book called Money for Couples. For the last three years, you've heard me on this podcast speaking to different couples every single Tuesday. I've spoken to over 170 couples on this show about their money psychology, the money messages they heard from their family, the peculiar dynamics that they have around money and where they get stuck.

and how they can get on the same page. Well, behind the scenes, I've been working on the definitive book to help couples get on the same page with money, and that's what I wrote for you. It's coming out January 1st, and in the book, I'm going to share how to talk about money, including the exact words to use, when to talk about it, how to teach your kids about money, even the exact agenda and account setup that my wife and I use in our finances.

I'm going to show the tactics to make instant improvements, like how to set up your accounts to automatically work together and how to assess your financial health.

And finally, you're going to get a deeper understanding of money psychology in your relationship. And you're going to discover why you and your partner see money differently and how to get on the same page. Now, it's one thing to listen to couples or watch couples every single week. I love doing that for you. But it's a whole different thing to be able to have the book and to be able to work through it with your partner. Okay?

I'm so excited to get this book in your hands. You can pre-order it using the link IWT.com slash money for couples and stay tuned for a lot more on this book this year. Again, go to IWT.com slash money for couples to pre-order my new book about getting on the same financial page as your partner. You know, money doesn't have to be boring. I get a lot of questions of people who have set up their accounts who have money being saved and they're like,

What now? What's next? How am I supposed to design my rich life? That is why I created the journal. The journal is something you can do either on your own or with a partner. Imagine yourself 15 minutes in the morning. You have a

cup of steaming tea, and you're sitting down following the prompts that help you envision what your rich life is. What's your perfect week? What's your perfect month, year? This journal is designed as a no numbers journal. It's not technical, but it's going to help you understand what you truly value and also what you don't care about.

I recommend you pick up a copy of this journal. You can do it solo or with a partner and it will help you design your rich life. Get it at any bookstore now.

Where we're from, it was a sailing almost, was you got a house, you got a good job and a car, and maybe you take your kid to Disney or go to Cape Cod. There wasn't too much more than that. I never really thought bigger than that. Our parents are going to work until they're dead. Her mom's retired, but she doesn't have any money. Getting older faster than I expected. Yeah. It's definitely going quick. I just put it off for so long, and now it's like, I got to do it now or I'll never do it. We are one generation.

life-altering financial event from happening, from being ruined. And like, again, I think my motivation is like this panic.

and you have a two-year-old son. That's why it's more real. I'm scared I'm not going to understand it well enough in time to get my act together and be there for our son. I don't want him to grow up being so naive and unaware of all of this. Will I be able to get there and, you know, well enough? We've put ourselves in a position where we now just got to focus on ourselves and we won't be able to help him. And that's a very real possibility and that's

That's really devastating to me. Do you think you're spending more every month than you actually make? The answer is yeah. Does that scare you? Yeah, I don't know if it does. Is it too late for me when it comes to money? This is a question I get a lot. And that's what we're going to talk about on today's episode. I'd like to introduce you to Emily and John. Emily's 35. She works as a nurse practitioner. John is 36. He works in the entertainment industry.

And one of the reasons that Emily and John have started to wonder if maybe it's too late is that they've been together for a long time and they've been spending a lot of money. But they have a two-year-old son. And usually when couples have kids, they start to think about money in a totally different way.

You know, I also want to point out that this is the only podcast where people come on, they share every number of their financials, they talk openly about their childhood, and they let all of us listen in on the most intimate conversations that we've ever heard. I just want to give a huge thank you to every single guest who's ever appeared on this podcast, including today's couple, Emily and John. Let's get into it. We have both come from

a place of not knowing how to manage our money. We don't know what we don't know. And I don't think that that was realized, honestly, and embarrassingly admittedly was until recently, until I kind of found you. It's terribly embarrassing to admit that. Why is that embarrassing? I don't know. I feel like...

like seriously, I was like on Apple podcasts and you were podcast popped up. I usually don't even listen to anything like this. I'm like a true crime podcast person. I just, but I know. And I was like, what is this? Like, I will teach you. I don't know. And so I clicked on it and it like, it blew me away. You realize you kind of acknowledging that

you know, listening to the couple and I don't even remember which one at the time, but looking at their finances and then being like, well, the reason you don't have anything in your account is basically because your psychology and what you grew up with. And I, all of a sudden it was like, boom. I was like, oh my God. Yeah. Like, and I try, I started to like thinking in be trying to be like insightful and like being like self-aware of like, well, yeah, that makes sense. Like maybe that's why. And like really thinking about it. And then honestly really taking a hard look at our finances and realizing that

Wow. Yeah. Like we have, we are not on path to retire at any rate ever. If we continue the way that we are, like we are one like life altering, you know, financial event from happening from being ruined. And like now saying it out loud, I was like, you're an idiot. Like you're like,

what are you talking about? You have to have a plan. Like that makes so much sense. I relate to so many of your couples and it's almost like, gosh, why don't I know this by now? I, you know, I'm 35, I'm going to be 36. I feel silly because I, I feel like I pride myself on a lot of other accomplishments that I've had in my life. And then all of a sudden I listened to all this and it's like eye opening. Really? I was like, wait, what? Like what is,

I didn't know that. I didn't even ever think to think about. And so we both have really lots to learn. When she started bringing this podcast up, I won't lie, I was kind of aggravated. I was like, oh, this is the last thing I want to deal with. I don't know. I feel like I'm going to principal's office or something. Like I didn't even know about... I've had a pension. I didn't even know a thing about it. Even up to today, we're like trying to find out my username and password on there. Okay. And it's like...

It is embarrassing. I should know more than that. Who is it embarrassing to? I'm embarrassed. Honestly. Yeah. Both are. Just because they're so naive to it. It seems like a lot. But now looking into it, it's something I do want to know. And I would like to. We have a young son now. And it's more important than ever. Just being a father and I guess getting older and wanting to

grow our family maybe someday. When I was younger, I didn't really see the importance to it, I guess. I'm so glad that I get the chance to talk to both of you because what you just said is so advanced.

Do you know how many people I talk to that make hundreds of thousands of dollars or even more on this podcast? Many of them agonizing over the price of a pack of gum or blueberries and never realizing like there's actually ways to make a plan and to stop worrying about little things and to elevate. Right. And so I'm with you. Ninety five percent of what you just said, Emily, except for the last part where you called yourself an idiot. Right.

I didn't mean to ignore it. It was that I truly wasn't even aware of it. And I feel so silly. I feel so, I feel so stupid. I, I'm truly embarrassed. All right. How old is your son? He's two. Ah, cool. Congratulations. Thank you. All right. So do you think that your perspective on money is different? I would say it is. I'm, I don't work like she definitely worries more. Oh yeah. And what about you?

I'm all laid back and I definitely procrastinate. That does not help with finances, I'm learning. So, yes, in general, I am the more warrior type A person from all aspects. I admit, like a control freak. I like things done the way that I like or whatever, which is, again, laughable to say because...

If you look at our financial situation, it's like, well, really, that's not reflective of that personality. So yes, I worry more and I'm more like, okay, this needs to get done on top of it. And I'm the one kind of being on top of it all. I'm a control freak. I like strive for perfection, I guess. So what you're telling me is that your concept of your identity of being perfect might not actually be true. Yeah. I mean, I know I'm not perfect. Of course not. Would you two ever call each other an idiot?

No. So let's just not do it to ourselves. How about that? I like it. All right. New rule. We're going to say nice things. And sometimes, hey, we go, wow, I wish I had learned that starting at age 18, but I didn't. And so the next best thing I can do is to get really good at money now. Same thing, just a different frame. Much more empowering. Yeah. How's that feel, Emily?

That's good. Yeah. All right. So let's, let's agree on that. That's one of the rules we've come up with today. Love it. So you heard the podcast, Emily, and you were like, oh my God, I don't know any of this stuff. And what'd you do after that?

listened to a ton more I bought your book I told John all about you I was like listen to these things like listen like we could have this or like what were we doing like we're in no planned path I kind of like divulged all my anxiety on him um convince him that we need to like change try to have him see my perspective and then try to start setting things in motion I guess John how did you receive that when she started telling you about this stuff

So honestly, I thought it was a scam. You thought a site called I Will Teach You To Be Rich was a scam? And then once I started looking into the book and then I was listening to some of the podcasts, I liked the way you just spoke about it very bluntly. And it didn't seem like you were selling anything. You were just trying to educate, which I liked that. Wait, the hilarious part is that I actually am selling things. Like I have many products. Did you guys know that? Yeah. That's actually really funny.

So I don't even know if he knows that you have like, you know, the money coaching program, like all of those things. I know them because I listen. You didn't tell him that because you're like, he'd really think it's a scam. And now he's learning it right now. Yeah. Am I being scared? Yeah. No, no. I love hearing this stuff. I know the site sounds like a scam. I will teach you to be rich. It's like, come on. I kind of love hearing these dynamics. Emily stumbles across it because it's on Apple podcast.

She's like, and then she comes home. She tells John, oh my God, we got to do this. He's like, what kind of bullshit is this? But John, to your credit, you were like, okay, I'll listen. I'll watch a little bit. And then you were like, wow, there's something here. And here you both are. That's a pretty interesting path that brought them here. It's kind of humbling to think that more people may have heard about me in the last two months than maybe the last 20 years combined of my career.

There are also so many things to note about the way that they make snap judgments. Emily says that she's a control freak in her own words, but her finances don't really reflect that. It's like, if you're going to be a control freak and your finances aren't even dialed in, what's the point? Then John is like, that sounds like a scam, but he also ignores his money. Now, I'm not blaming them. All of us have these funny quirks of identity or even gaping blind spots.

The important part is that Emily and John realized they need help and they are here now. You know how many people's conscious spending plans I see every week? What's fascinating is the categories of spending, especially the ones where people spend way more than they think they do. For example, subscriptions. Let's take a look at some recent numbers on how much people spend on subscriptions. $100 a month on subscriptions. $205 a month. That's from someone spending 76% of their take home each month on fixed costs.

$211 a month, $147 a month, and $487 a month. This is literally thousands of dollars a year, and most of us have forgotten about all the subscriptions we are actually paying for.

Thankfully, this episode's sponsor, Rocket Money, can help you easily find and cancel those unwanted subscriptions. Rocket Money monitors your spending and helps you lower your bills so you can grow your savings. Rocket Money will even try to negotiate lower bills for you by up to 20%. Just submit a picture of your bill

and Rocket Money takes care of the rest. They'll even deal with customer service for you. Rocket Money has over 5 million users and has saved a total of $500 million in canceled subscriptions, saving members up to $740 a year when using all of the app's features. Stop wasting money on things you don't use. Cancel your unwanted subscriptions by going to rocketmoney.com slash Ramit. Give it a shot at rocketmoney.com slash Ramit. That's rocketmoney.com slash Ramit.

My team and I create tons of material every single day. Scripts, voiceovers, emails, all kinds of material that we need to be good and we need it to happen fast. And one of the things we use is Grammarly, especially their new AI tool. For example, every Saturday, we send out my podcast newsletter. I break down an anonymous person's conscious spending plan. And I like going really deep to break down the numbers and show you things you might have missed in your own finances.

Well, guess what? That is a lot of copy. Before, it would take my team a ton of time to work through everything I had written and edit it and make it right for email. Now, Grammarly does it for us in seconds. Grammarly Premium actually gives us suggestions on how to make our writing more impactful for you. It identifies gaps in the writing and shows personalized suggestions to improve the whole thing. And it can even add images like that.

Save time with one click and go from editing drafts in hours to seconds. Get AI writing support that works where you work. Sign up and download for free at grammarly.com slash podcast. That's G-R-A-M-M-A-R-L-Y dot com slash podcast. Easier said done. How'd you grow up with money? I'm guessing nobody was sitting there doing compound interest charts for you as kids.

No. Seeing a lot of shaking heads right now. All right. Tell me, John, how'd you grow up with money? I was raised by my grandparents. My mother had me when she was 18 years old. It was not planned. So she didn't know anything about money. She was a kid. And my grandparents pretty much, I think, just spoiled me because they felt bad. Even if I wasn't doing right, I would get not anything I wanted. We were a pretty blue collar family, but

I didn't want for anything and it didn't matter. Like if I was getting bad grades, I still probably got what I wanted anyways. Got it. Okay. So it kind of just felt like, I don't know. I never took money serious, I would say, because I guess I didn't, no one around me took it serious. You grew up with your grandparents, both? Yes. All right. He was a mechanic. Okay. Okay. Emily, tell me about money growing up for you.

My mother and father divorced when I was really young, when I was like four. It left my mother to care for me and my two older brothers alone. That included financially as well. There was no financial support from my father's end. I remember feeling like we didn't have money. She had to work incredibly hard to support just the three of us. It's really conflicting because

she had to like, I remember her working like three jobs. I actually was just sharing this with John the other night is that I have like this memory of being little and her coming home from like her nine to five. And I would want to play with her when she got home, but she would just be like, can I just need to like rest my eyes for like five minutes on the couch so she could get ready to go to her other job to work till one in the morning. And I would be sad because I would want to like play with my mom. And thinking about it now, it makes me

really sad that she even had to kind of do those things like to work so incredibly hard. But I also realized now that she didn't also didn't know, even though she was working so hard, she didn't manage her money well either. I don't think she ever knew how to manage her money because this is a perfect example. Every Christmas she, and actually it's funny, John had this similar thing. So it's really weird, but

I would get like that department bookstore, like that JCPenney bookstore. I don't know if that rings a bell, right? And it'd be like, circle the toys you want. And she would give that to me and my two brothers. And sure as shit, like Christmas morning would come and our living room would be filled to the brim with every toy we wanted, every toy we asked for. She would work so hard and it made her so happy to give us that.

But, you know, at the same time, I have very vivid memories of being like called into the principal's office, being pulled out of class to be told that, hey, we've been trying to get ahold of your mother. Your tuition's not paid. So you, you know, you can't go back to class. Wow.

She knew how to work hard for our money. She was generous with her money, right? Because she really wanted to make us happy. And I think in her eyes, it was, you know, giving us all that. And that's how she tried to portray that by, you know,

Yeah, like she would take me to the mall like once a week and we'd go on a shopping spree. But like... Once a week? Like sometimes we would. That's a lot. No, yes. She's in a situation where she's retired, but her retirement is purely... She's living off of Social Security and a disability check. And it makes me feel sad to think, well, she's already a lost cause. Now I'm going to get upset. Yeah.

Yeah. So like, for example, like we've been saying, oh, we're going to meet with this financial advisor. Like I'm referring to you, but not going to tell her I'm going to be on a podcast. Tell her I'm not a financial advisor. Yeah, I know. I know. I just don't know how to explain you. That's okay. I get it. But I can already, I can tell that she's like, hmm, like that's weird because that's something that's before and to her. Right. It's out of her day to day, even year to year. I get it. Look, our parents grew up with different

situations, different tools, certainly a different income than the two of you have. It's not necessarily fair for us to expect for them to have the same advantages that they gave us. I get that. I certainly can hear a lot with what you're saying, and I understand what you're talking about.

Both of our families and all of the relationships in our families and clearly the finances too, but the relationships and things in mental health problems and things like that are... Generational. Yeah. I don't know. Issues and not treated. And we pride ourselves that we're breaking the cycle together. And we laugh and say all the time, who did we think we are? Us?

to getting together because now we're just like meshing too bad things. Gene pools. Gene pools that like when we were going to have a kid, we're like, is this the right decision? Like, should we do that to a kid? Like a therapist that said to me, all it takes is one to break the cycle and you're already doing it. And it was really...

amazing and really nice to hear. I noticed that Emily's mom works really hard, probably feeling guilty about not being able to buy her kids lots of things. And then when the holidays came around, she gave him a JCPenney catalog and said, get whatever you want. I noticed that her mom had a lot of anxiety around money and not necessarily the best financial skills. Now, when it comes to money behavior, do you see any similarities between Emily and her mom? I never.

Flew anywhere until we started dating. When was that? What age? Oh, 18 years old. Okay. You guys have been dating since you were 18 years old? I was 17, yes. Wow. And you're from the same town or something? Yes. Wow, this is a real small town love story here. I love it. Okay. Where'd you meet? Where? The YMCA? Where was it?

In like a field. What the fuck? We met in a field? No, like kids getting around at parks and stuff like that. Wait, that's a field! No, I get it!

I guess, but that sounds more terrible. Let's go. We met in a field and it was love at first sight. Oh, it was a beautiful day. Hey, look, that's like neighborhood love. I kind of love it. That's beautiful. And have you two been together since then? Yeah. Wow, so you've been together 17, 18 years. Yeah, go 19 this year. Yeah. Congratulations. That's amazing.

That's amazing. I don't hear that story too much these days, so it's kind of cool. Sorry to interrupt. We didn't have a money conversation before we got together. We were little too, right? Yeah, that doesn't surprise me. Yeah, we were kids. We both got our careers, I guess, pretty young. I remember we were going on trips to islands when we were probably 19 years old. What islands? I think we went to Jamaica, I think.

Oh yeah, hold on. I have to ask you guys this.

So in the pre-screen, my colleague made a comment. She goes, you guys love Aruba, don't you? And you were like, yes, we do. And I was like, what is this? And she goes, everybody from Boston goes to Aruba. And I'm like, what the hell is this that I had no idea about? Can you please explain it for all of us? I know we can't, actually. For some reason... It's just where everyone goes for some reason. Everyone from Boston goes to Aruba? Yeah. Yeah.

A lot. They go there a lot. Because it's a quick flight and it's great there. The weather's always great. So it's just like the go-to, I think. So it's just easy. I love it. I did not know this little micro trend of people from Boston always going to Aruba. That is amazing. Thank you for opening my eyes to that. Let me tell you why I love this so much. There are micro trends in cultures that will never, ever show up in a written book, but they are nonetheless real.

Like if you go to any Indian person's house, like my mom's house, every single one of them has this Le Persil serving pot with orange flowers on the side. I don't know how every Indian mom has the same pot, but they do. It will never show up in a book, but it's real.

I don't know why I love collecting these tiny, specific cultural examples. But now that I've got this podcast, Mike, I want to ask you, if you have one, send me a DM on Instagram and tell me what it is. It can be a little quirk of culture or religion or gender, geography, whatever. But I just love collecting these and I want to hear from you. And you were taking trips? We would just take trips and we never thought of it. We just...

We'd get paid and we thought we were getting paid well and we'd just go on vacations or out to restaurants and it's like, oh, we can afford it. Surely you grew up hearing people around you say like, save, save, save. Everybody in America hears save, save, save. Doesn't mean you do it, but surely you heard that. Is that fair to say? Yeah. Okay. Did you save?

No. Well, no. I mean, we saved to buy our house. Yes. Okay. Did you buy it? Yeah. Yeah. Not the right way. No. What does that mean? We didn't run the numbers. What's your mortgage? So our mortgage is $3,300. Okay. But we own a multifamily. Okay, great. So we rent it out. All right, fine. So we're renting one of the units. So we're getting, you know, that's what's included in there.

And then what I did, because you're going to be really excited what we did, is we got a HELOC. Why'd you do that? Everyone told you to. It's free money. Yeah. Yeah. I'm on. Yeah. Hold on. Don't even tell me. Let me guess. Let's take out the home equity line of credit.

And let's renovate it because renovation is free money. It will add to the price of the property and we'll get the money back. Did I get that? Yeah, we did a little rent. Yep. We did, did spend some of it on renovations. Yep. Shocking. Okay. Wow. And what else did you do with the money? If you say Aruba, we're in real trouble. No, actually it was, it was a much better trip. It was a much better trip. We spent three weeks, um, in Italy and Croatia. He locked it. Yeah. Vacation. No, that's,

So that's the thing. We didn't take it out for that. But then once it was there, we were like, I mean, listen, I'm all with you. Like you got the childhood, you got the blue collar family. I'm like, okay, I can roll with that. But this is crazy. I know. Yeah, I know. Do you know why? Why is it crazy? Well, now I,

No, that's going to cost us like 10 times what we paid for in the long run. You're telling me that your loan officer didn't clarify all of these details. You're telling me your loan officer didn't have your best financial interests at heart.

She did not. I'm shocked that anyone in the mortgage industry would possibly not put you and your interest first, that they would only be trying to make a commission. That's right. That's so shocking. Anyone in the mortgage industry, I'll see you in hell. All right. So I just want to point out that you're spending like 17%, 17 and a half percent of your gross income on your housing. Is that good or bad?

I don't know. Okay. That's a fair answer. Emily? I think it's good because you said it should be about 20. Less than 28%. Am I wrong? Less than 28. How much did you take on the home equity line of credit? I think it's approved up to $130,000. It's at $94,000. You have $94,000 taken out. Okay. That's a lot. Oh, yeah.

We also have this land that, oh, if it's opened, that could be, we could dip into that for a down payment on another house. And then don't do all this. Yeah, please stop. I know. I'm not even going to get into how some of you actually trust your loan officer to look out for you. I want you to think of anyone in the mortgage industry as one of those little merry-go-rounds you used to see outside of Kmart and Target. You know, you put the little two-year-old, they ride on the horse. It costs a quarter.

The mortgage industry is like that. They're coin operated. That's what they do. They get you financing so you can buy a house. That is it. You wouldn't expect your merry-go-round to do your taxes, would you? That merry-go-round is not going to kiss your boo-boo. It's not going to rotate your tires. So why the hell would you expect your loan officer or your realtor to look out for your financial interests? They are not there for that. They are there to make a commission. Okay.

Let's look at their numbers. Their assets are $900,000. Their investments are $57,000 and they're currently investing 9% of gross. Their savings are $2,000 and their debt $557,000. One of the worst feelings in life is feeling stuck.

You hear it sometimes with podcast couples here. They feel stuck around their money. I felt stuck in my business. I had made a bunch of decisions years ago and I woke up feeling trapped. So after thinking about it, feeling stuck, not sure what to do, I went to a CEO council that I'm a part of and I just laid it out. And after listening to me, they were like, oh, it's so obvious. You need to change this, move this person over here, change this resource allocation. Boom.

I wish I had done it years earlier. If you feel stuck in your career and you also wish you had a group of peers who could help you get unstuck,

help you accelerate your career, then I'd like to invite you to check out this episode's sponsor, Sidebar. Sidebar is an exclusive, highly curated leadership program where you can tap into a group of supportive peers, including Fortune 500 executives and innovative startup CEOs. You can get expert advice, new perspectives, and most importantly, raw feedback, which is so rare on how you can get unstuck.

When you become a member, you get matched with a group of 8 to 10 peers. Then you meet with your group twice a month for 90-minute facilitated sessions and have real-time messaging access to the entire community. Learn more at sidebar.com slash ramith.

and join thousands of top senior leaders from companies like Microsoft, Amazon, and Meta who have taken the first step towards accelerating their careers. That's sidebar.com, S-I-D-E-B-A-R.com slash R-A-M-I-T. When I was in my early 20s, I was not into clothes. I wore free t-shirts from tech companies, and I really did not want to seem like I tried too hard.

But I started to realize that clothing is the first thing people see about you. They don't see how nice I am or how much I know about personal finance. They see what I'm wearing. And like it or not, that shapes a lot of how people perceive you.

Now, I take a lot of pride in the clothes I wear. And I love knowing that when I buy something, I'm going to keep it for years and I know that the people who made it were paid well. I actually hired my wife, who runs Next Level Wardrobe, a luxury personal styling company, to style me for my Netflix show and all of my events, including what I wear day to day for more casual outfits. If

If you're a professional who wants to dress better, maybe you recently got a promotion, maybe you've gone through body changes, or maybe you're just tired of wearing the same clothes you wore in your 20s, I recommend you check them out. When you hire them to work with you virtually or in person in New York, they'll help you clean your closet, buy the right items with the perfect fit, and they'll help you put together polished outfits you can wear to work.

You'll be able to open your closet every single day and know exactly what to wear for every single event. They'll help you look like an elevated version of you. And they work with professionals of all ages and sizes. I love the convenience. Next Level Wardrobe has over 125 star reviews from happy clients and they've been featured in the Wall Street Journal. Take their free styling quiz at nextlevelwardrobe.com slash Ramit.

Elevate your style using Next Level Wardrobe at nextlevelwardrobe.com slash Ramit. That's nextlevelwardrobe.com slash Ramit. Okay. Total net worth? $401,000-ish. Okay. What do you think about that? I hate it. Okay. John, what do you think about it? I hate it. How come both of you hate that number? It should be more for what we've made.

Okay. We blew a lot of it. Mm-hmm. Frivolously. Mm-hmm. Okay. I thought I was just having fun, but now I'm looking back and... I mean, we did have fun, but it was... We did. It was at the expense of... Yeah. Our future, it seems. Okay. What scares you about money the most? Emily, I know you're scared of it. Right now, I feel like...

We've gotten ourselves in a position financially that it's just going to take so long to recover from that. It's going to now like again, another drain of time before we're getting back on the right path. Okay. John, how do you, what scares you about money? Before this, not too much, to be honest. We always, where from it was the ceiling almost was you got a house, you got a good job and a car and

Maybe you take your kid to Disney or go to Cape Cod. There wasn't too much more than that. So I never really thought bigger than that, honestly. But then I start listening to the podcast and we're talking and it's like, our parents are going to work until they're dead or her mom's retired, but she doesn't have any money. So they're not going to retire with a pension. I don't even...

No one I know in my family had a pension other than my grandparents. Getting older faster than I expected. It's definitely going quick. And I'm like, I just put it off for so long. And now it's like, if I got to do it now or I'll never do it. Okay. I'm scared I'm not going to understand it well enough in time to get my act together and be there for our son or in future children too. Now hearing this, I...

I don't want him to grow up being so naive and unaware of all of this. I want to start talking to him about money when it's age appropriate and doing all the things that, you know, everyone clearly know, or not everyone, but people do and recommend this whole life that I never even knew existed. These dynamics in someone's family. I never even knew about. I, I want to be those parents. And I'm like, will I get there? Like, will I be able to get there? And,

you know, well enough. And, and then also I want to be able to financially, you know, get him on a right path to like also provide for him. And now I'm afraid that I've put myself in it. We've put ourselves in a position where we now just got to focus on ourselves and we won't be able to help him. And that's very, very real possibility. And that's really devastating to me. So it sounds like this is Emily, you,

coming to terms with this idea of breaking the cycle that you talked about specifically relating to money. Is that right? Um, yeah, I think you just said something that just made me sorry. Um, yeah, like I just said, like, we're really proud that we've like broken the cycle in other areas. And now I'm realizing that because we didn't break this one, I won't

my son will benefit from it. Like I didn't break it for him. Can we reframe that slightly using that rule that we all agreed on? What was the rule? I'm not an idiot. Yeah. Basically we're not going to beat ourselves up. What are we going to do instead? Get better. Yeah. Get better. Exactly. So try that same thing. Cause you're giving me the honest truth, Emily. And I could hear that.

I'm going to cue you up with the first part of the sentence you said. You said, we're so proud of how we broke the cycle in so many other ways, but now with money. We're going to break it. We're going to be the ones to break it. I know that, I guess. Will it be all that I thought I could be, I could provide or could give him? I feel like, all right, I'm going to stop being so negative about myself. Yeah, we're going to break the cycle. We're going to be better. We're going to be

We're already amazing parents. And, you know, I know that. I would like to chime in a little. We're both, both of us, me and Emily, like our parents were very worried about like, where do they go when they get older? They don't really have anything set up. So that's a very real fear of hers that like, she doesn't want our son to feel that way, the way she feels. Yes. Yes. Which is like,

Is that burden going to be put on her or us? Right now, the way that my parents and even my sibling have been, you know, their financial situation is set up is that I'm like the stable one of the family, right? And so I'll be the one that will have to step forward. And so I do not want that for my son. I refuse to put that

to have him feel the way that I'm feeling right now and to feel that burden. And I'm feeling like that situation with them, if it does burden me, it will just trickle down and burden him. Yeah. Would you like to change it? Yes, desperately. Just want to reflect for a second on how many couples come on this show

And acknowledge that they want to break the cycle of how they grew up with money. And I find that to be very, very powerful. Especially when a couple decides they want to do it together. They have a very good chance of being able to do it. Now they may not necessarily have the role models. They may not even have the skills. But the desire alone is a very, very promising ingredient in wanting to change the way that you treat money.

By the way, if you want to do this, you can download your own conscious spending plan at IWT.com slash CSP. Talk to me about your combined gross monthly income per month. 16,200. Do you guys know what your income is combined per year? You do? What is it? 200,000. John, what do you think? We live in an expensive city.

Weird. I didn't ask where you live. I just asked what your income is. I mean, I think it sounds a lot better than we're making out to be, I guess. What's the number? $200,000. Yeah, correct. About $200,000. I mean, that's a lot of money. I know you all live in an expensive area. That's fine. But I just want to point out, you two grew up

blue collar. You grew up with nobody teaching you about money and you're making $200,000 a year in your thirties. What do you think? You say it like that. It sounds good, but I don't feel good about it. Of course you don't feel good about it. Let me ask you this, John. If you had to break down the percentage, how often did you feel bad about money? And how often did you feel good about money? Growing up? Um, mostly bad. Yeah. Like what percent?

80-20. Yeah, 80% bad, 20% good. And the 20% you felt good, what was happening when you felt good about money? Someone was buying something for me or spending it. Wow, that's so shocking. Do you see any connection to your adult self right now? No, definitely. When do you feel good as an adult with money? Spending it. Yeah, specifically where? Vacation. Bingo. Do you ever make that connection before? Recently, but...

Not before that, no. So it's no surprise to me that you don't feel good about money. It's no surprise to me that the two of you are sitting here all depressed sounding about, oh, boo-hoo, we only have $400,000 in net worth. I'm looking at something completely, I'm looking at the same exact spreadsheet you're looking at, the conscious spending plan, and I'm seeing something totally different.

I'm seeing a young couple in their mid thirties with a young son who grew up. Nobody teaching you about money. You met 18 years ago and you said, we're going to break the cycle and you now make $200,000 a year. That to me is incredibly impressive. What do y'all think? I just think the same. I said earlier, it does sound good. It's just, we're not doing the right things with the money.

Yeah, it sounds great in theory. And I'm like proud of what we made. I'm just not proud of the way we've managed it. And so it's hard for me to feel proud about it, I guess. All right. Let's make some changes so you feel proud. How about that? Yeah. All right, fine. Now, can you just how much are you spending as a percentage, Emily? What's this number up here under fixed costs? 71. What's it supposed to be ideally? 50 to 60. Yeah. So what do you think about that?

It's too high. It's a little high. What's interesting is your rent and mortgage is actually quite good. Usually these numbers, especially in expensive cities, are like 28, 30, 32, even 34. You've kept this number really low. So there's some other stuff that's really high. We can talk about that. And we're going to have to find a way, ideally, to bring this down. We're going to have to get rid of the parking.

Yeah. We're going to have to drastically change. She pays for a private spot at work. There is like shuttles and free shuttle. Okay. Done. Can you do that, Emily? Are you committing to that? Yes. All right. How much is that? $400 a month. Whoa. All right. If we put my Ubers and parking down as well. Yeah. Yeah. How much? I mean. Probably like $200. You want to take $200 off this number? Mm-hmm. Okay. Yeah.

John, are you okay with that? Yeah, and I'll just have to only take them if it's nighttime and the trains are closed. Okay, fine. We're at 65%. We're getting closer. We could definitely get rid of some of the subscriptions, but like you said, there's... Listen, keep YouTube because my show is on there. Get rid of YouTube TV. I don't know. Pick one. Let's just play with it. Let's at least get down to 60%. I know.

that this if i feel so silly like this i listen to your people do this and i'm always like why can't they figure it out and now here i am well 854 i'm taking youtube away okay 64 all right iphones yeah anything on that i don't know i feel like we're scraping the bottom here you two tell me holy shit what is all this stuff so i yeah

pretty litter you guys yes so wait you have a cat so where's the cat food in here so yeah you're right i didn't well i include that in the groceries oh okay fine peloton 44 bucks blah blah blah well look you guys want to tell me how you want to get to 57 yeah isn't this crazy like i it seems silly that i don't i feel like it's impossible

Before we go on, listen very carefully to this life lesson. Okay, it's really important. Be very cautious about what you add to your fixed expenses. Because once it's there, it is extremely difficult to get rid of. Once you get used to two car payments, it's almost impossible to think of only having one car. Once you get used to feeding your dog some organic stuff from Switzerland...

it's almost impossible to imagine getting your dog food from the grocery store. And when it comes to housing, forget about it. Once you get used to a certain lifestyle with housing, whether it's a four bedroom house or a certain neighborhood, it is almost impossible for people to contemplate downsizing. The lesson here is to be extremely cautious about what you allow into your fixed costs. You want to rent a beach house for a week? Be my guest.

But if you want to buy a beach house, keep in mind that it is going to be extremely difficult for you to ever downsize because of financial reasons. In my own situation, I know that one day when I buy a new car, it's going to be a nice car and I'm never going to want to downgrade. Same thing with a house. I'm going to buy one one day and I know once I buy it, I'm never going to want to go down. I'm only going to want to stay or go up.

So my philosophy is that I'm going to set myself up so I never, ever have to put myself at risk for what earns its way onto fixed costs. I recommend you do the same.

All right. And then everything else, your guilt-free spending is $1,600 a month. I don't really believe this number. I think the two of you spend a lot more than this. And this is including all your vacations spread out through the whole year. You didn't include that? No. What are we talking about? Right. Because we're... I'm not going to say the word. Can we just do it? Let's just... Okay. Take your number. Put a pin in that. Your vacations last year, how much did you spend on all of them? I truly don't know.

Well, I can help you figure it out right now. Emily's like looking down. Emily, the ground is not going to open up and someone's not going to grab you and take you straight to hell. You got to stay here with me. This is your hell from now on. How much? I mean, our trip last March was probably, I don't even know. This is what's so silly. It was probably like five, $6,000. Okay. Usually when someone says 6,000, it's like about 10,000.

Because they don't add in taxes, taxis to the airport, flights, tips, drinks, all that stuff. Yeah. Because definitely we don't like think about those things on vacation. Spending money. Definitely not. All right. 10,000 for the big trips. That's two a year, 20,000. And then the small trips. I mean, at least $500 if they even like one to two nights somewhere. Definitely more because. Yeah. That's just the hotel. Yeah. Yeah.

2,000 more, 3,000, 2,000 is the minimum. We don't say one to two, we say two. And how many did we say you do? Um, eight per year, 16,000 plus 20,000. That's $36,000 a year in travel. How weird. We don't see that represented on the conscious spending plan. Emily. I know that. I know that we do. So I, there's no way we spend that much money.

I believe, I mean, yeah, I guess so. See, see, it's called like, don't know. Everybody listen closely and look in my eyes right now. That's phantom costs. That's how it works. They're called phantom for a reason. They're invisible. You forget about them. Your mind does not want to factor in 38% taxes at a hotel or the drink, much less the tip you left for the bartender.

We don't want to think about that. We go, oh, the hotel costs 200 bucks, 250. It's like 2000. That's how it works. So again, I don't know if these numbers are right or wrong. They're actually, they're definitely wrong. We don't even know what direction they're wrong in, but we know that it's a lot of money. Would we agree? Yeah. If you actually knew that you were spending $40,000 a year on travel, would you be going to the same places you go to in the same style and the same stuff? No.

No, when you say it like that, absolutely not. That's the point of a rich life. You got to get it on paper. You got to be honest. And then you have to design your rich life. And I guarantee if you're going, I'm dropping 40K a year on travel. You're not traveling like this. Yeah, you're right. If we correctly calculated this and I just added like 3000 bucks a month to this expense, your guilt-free spending, your number jumps from 15% to 43%. Mm-hmm.

You're going broke every month. That's exactly how people can make a lot of money and actually feel like we're doing okay. We could be doing better, but we're doing okay. And they're actually losing money every single month until they skate so close to the edge that one minor problem can totally destroy them financially. I don't want you to get there. I want to flip it around so you can keep traveling. So you can build some really good habits. You teach your son how this all works. All that. All right.

How are you both feeling right now, Emily? I feel like I'm ready for your suggestions and your help. I'm open. Cool. John? I'm feeling a little better than I was coming in. I was very nervous coming in. It doesn't look as bad. That does not look good as well, but I feel like that's something that could be corrected. That's like a self-inflicted thing. Yeah.

Yeah, totally. If we're not over our heads with that, we could stop it. No, you could totally stop this. And just the fact that you even said that is amazing because you realize that's in your control. I think it just all adds up. Do you think you're spending more every month than you actually make? I do. I think so. Very close. Oh, no. The answer is yes. I mean, we only have $2,000 in our savings, so we must be. Does that scare you? Yeah. Yeah, now it does.

It is so, so easy to spend more than you make. I think a lot of us have this belief that if you spend more than you make, suddenly your credit cards are going to stop working and a big loud alarm is going to start blaring somewhere. Nope.

That's not how it works. In fact, so many people spend more than they make and don't even realize it. You can do it in a lot of ways. Most commonly, you do it slowly with a little bit of debt, thinking it's not so bad. The debt starts to cost you more each month, especially if it's high interest credit card debt, and then suddenly you are trapped. Or you can draw down your savings. You used to have $5,000 in savings. Now you only have $500. What's going on? You're spending more than you make.

It can happen with one-off expenses like medical expenses, which is actually extremely common later in life. With things like vacations, you usually hear people saying, it's not like I'm spending a ton, but oftentimes they're doing it eight times a year. The point is, it's much easier than you think to spend more than you make. And you can actually go years doing this, never even realizing it.

What do you call someone who speaks three languages? Trilingual. What do you call someone who speaks two? Bilingual. And what do you call someone who speaks one language? American.

Listen, imagine you're going to Mexico or Italy or Thailand this year. Wouldn't it be amazing to at least ask where the bathroom is in the local language or to say thank you when you're walking out of a restaurant? This fall, you can start speaking a new language with Babbel. Babbel's quick 10-minute lessons are designed by over 150 language experts to help you start speaking a new language in as little as three weeks. Here's what you need to know.

Rules and restrictions may apply.

I have a friend of mine who's always cold. She told me she and her partner have totally different temperatures when they sleep. She goes to bed in a flannel pajama. She's got extra blankets. Her partner's running hot. So now she recently started testing the Pod Cover from 8sleep, one of our sponsors. Before she goes to sleep, she gets on the app, cranks up the heat, and when she gets into bed at night, it's already warm and waiting for her. The Pod Cover by 8sleep fits on your bed like a fitted sheet.

and it collects information. It has sensors. The pod then uses that information to understand what you need to get better sleep. You can set it to heat up or cool down before you get into bed. It also adjusts while you sleep. And you can set it to change temperatures to gently wake you up in the morning. Best part, there are two zones. So if you run hot and your partner runs cold, you can each set your side of the bed to exactly how you want it.

Improve the way you sleep by using my link at 8sleep.com slash Ramit for $200 off plus free shipping on their high-tech pod 3 cover. That's 8sleep.com slash Ramit. E-I-G-H-T sleep.com slash Ramit. R-A-M-I-T for a better, smarter sleep. How long can you go keeping on spending more than you make? I mean, where one injury or knock on wood, like,

like an accident away from something bad happening and you have a two-year-old son yes i know that's why it's more real we just need to be honest with ourselves and realize like we just can't keep up the lifestyle that we got used to another thing we didn't factor in what like how much we spend just like taking them out and things like that where do you take your two-year-old well i feel like

anytime it's raining or bad weather we spend money we take them to like an indoor park like get out of the house or take them to a museum or like we'll go to target just like buy him a toy because it's raining and not this again whenever we're bored um notice whenever we're bored we go and spend money it'll just be like oh if this is boring let's go to the bar or the restaurant around the corner

Tell that to Emily. Tell that to Emily. Have a discussion about this. Oh, I know it. We know it. Oh, we know. Well, it's good you know it. Did you do anything about it? No. Well, now we're trying to. Now we're trying. I'm realizing that it really is just about getting out and being together. And it doesn't matter about what the things that we do. And we just somehow always...

um, or lean toward and it's spending money. All right. I don't mean to interrupt. Like we'll drive into Boston and spend 50 to park and then go out to eat. Yeah. And it's like, so we were out for two hours and spent 200. Yeah. Yeah. And we didn't even like, we didn't even like, yeah. And listen, I totally get it by the way. I've lived in these big cities. I know how expensive it is to even just go into the city and just have a drink. I totally get it. Okay. But what I am also pointing out to you is that, you know,

You know, it feels good. You get dressed up, you go, you have a nice dinner, whatever. What you don't think about unless somebody shows you is that that hundred bucks that you just spent directly took away from your own vision of a rich life. Yeah. Now, if your vision of a rich life is to go into the city twice a month and have a nice drink, I'm all for it. I'll show you how to do it.

But it seems to me that you're telling me you do a lot of these things just because you're bored. Yeah. Yeah. And if you go really deep and you think about your childhood, that 20% where you felt good, John, and for you, Emily, when you think about your mom buying you those toys every single week, there's almost certainly that connection that's coming up for you may not even be aware of it. And guess what?

What's going to happen to your son in just a couple of years? Yeah, he's going to be us. He's going to fall into this trap and think exactly like we do. He already is, I feel. Is he? Oh, yeah. Why? Like, he'll get bored. I mean, it could just be a two-year-old thing, but I feel like he's bored with his toys instantly, and we're already, like, moving on to what else can we get him. Oh. What else can we get him at two? That's an us problem. Yes.

But I'm saying I think he's getting used to it. Yes, I know what we're overspending and all that. And I think one of... I just have to say this. One of the first episodes I listened to of your podcast, I remember it caught my attention because it was the quote that one of the couples said. And it said...

How can we like not change and still live our life that we don't want to change anything. But also, you know, have our retirement and be set for life. And I was like, yes, that's like the best question ever. Right. Like, even though I know it's unrealistic. Yeah. That's like, yeah, I relate to that. I enjoy, we enjoy going on those trips and, you know, doing all those things. And it's that realization of like,

Those have to stop at least temporarily or need to be done the right way. And having to acknowledge that that's really going to happen is not fun. Because there hasn't really been any restriction for the last 18 years. It's mostly been like, hey, in fact, we have more money than we know what to do with since we're 18. So there has not been much restriction. But you know what else there hasn't really been? There hasn't really been a vision of a rich life.

Emily and John's situation is so common. They're not really on top of their numbers. Things seem fine, but upon closer inspection, they're likely spending more than they make each month and they have poor financial habits. And what's most common of all here is that they ignored this until they had a child. And now suddenly they're in a big hurry to fix everything. The solution isn't for me to tell them all the things they're overspending on.

It's to help them develop a rich life vision and let them come to that realization themselves. If they do that, it's going to be so much more powerful and they are going to lock in the changes that they need to make in order to live that rich life. What is your rich life, Emily? So, yeah, I do want to travel. It's obvious that would be really nice, you know, be able to budget for that and not have to worry about that to feel like there's

financial security in the sense of knowing that I can do all those things that I want to do, but know that I'm still set, have myself set up for the future as well. I want to remain part-time because I want to enjoy, you know, my son at this age and maybe if possible, another child. And it's really important for me to like,

prioritize spending time with them. And so I, but I, I want to like retire early so that we're young enough to enjoy retirement. I also want to be young enough to retire, to, you know, enjoy my children's children and, you know, my grandchildren be young enough to maybe be there like their daycare. That would be a rich life to me. All right. Thank you, John. What about you? What's your rich life?

To be able to afford these trips that we want to go on and not be spending money we don't have. I would like to, like if my son was getting married, be able to pay for it. We didn't have that. Not everyone has that, but I would really like that. Or like if he wanted help with a down payment or something, we'd be able to help him out. And then just, I mean, I would love like a vacation home, but like somewhere we could drive.

Okay. Like a lake house or something. All right. How do you both feel hearing each other's rich life visions? Any surprises? No, no surprises. Emily? No, I don't think so. Have you talked about this before? Yeah. That's, I think our problem is that we, it's that we have talked about all these things that we've wanted and for a long time, not realizing that we like aren't putting anything in motion for them to be realistic. Yeah. Are you ready to make a change?

Yeah. Yes. So can we agree that the one thing we will not do on this call is to leave the situation as is? Can we all agree on that? Yes. I agree. Yeah. We would, she would say all the time, like, where is our money going? Even way before we found you and we both would just look at each other and be like, I don't know. John, you have a pension. Is that right? Yes. Is that reflected here, Emily?

No, neither of our pensions are on the conscious spending plan. Oh, how much are those for ballpark per month? Um, so we, we have no idea about John's. It's been so incredibly difficult to try to get information on it. Um, and then I have the pension funded by my, um, employer pension, right? There's like, it's like 7% based on what I make annually. They contribute like a seven and a half percent. Uh, that's a lot. Yeah. Yeah.

It's really, I haven't written down. That's really good. That's like a lot of money. So currently I have 69,000 in there. 69,000 you just found in the couch cushions? No, we didn't find it. Does anybody have any other $60,000 findings somewhere? I don't know how to factor. How do you, that was a question that we were going to ask you. Why don't you just type it in? Who cares? Okay. Watch, watch, watch me do it. Okay. Watch this. Okay.

Emily, I'm putting it in caps. Emily's pension, $812 per month. What I'm going to say here is this is all wrong, but at least directionally, it gets us pointed in the right direction. It's a pension. It's not post-tax, blah, blah, blah, whatever. At least we got it down on paper and we can tweak it later. Mm-hmm.

You have $70,000 sitting in an account that's not reflected anywhere here. That's not okay. We got to find a way, even if it's imperfect, to put it on our conscious spending plan. Do you see what I mean, Emily? Yes. Yes, I do. I want to be able to factor that in and know how to factor that into my retirement as well, in addition to my investments. I don't know how to use that as being like, okay.

Well, here's the thing. It's very complicated. And I don't build that into the CSP because so few people have a pension. Okay. And the pension can depend on all manner of things. You can go to your HR person and ask them like, Hey, help me understand this pension. What number do I call? And they will tell you if you work this many years, this is how much you're going to have every single month by the time you retire. So that's another thing that we didn't even mention, which

John used to make more, significantly more than what he made. And COVID, because he works in the entertainment industry, he was out of work during COVID. He lost his job during COVID. And then when they returned back to work, it was not where it was. Yeah, it's not the same. If it does go back up, what would it go up to? You're currently making $4,600 a month, John.

I was probably making like 70 to 80 grand a year. Oh, that's a lot. All right. So maybe like almost double. All right. What would you do with the extra $4,000 a month? I mean, now I would want to just put it right into investments because we've learned how to live without it.

Nice. Do you know how many people come to me? They go, Ramit, it's impossible for me to save $50 a month. Investing $100 a month must be nice. I go, listen, everybody can invest with rare. There are tiny, rare exceptions, but almost everybody can put aside $20 to $50 a month. And here's the trick. When you set it up automatically, you learn to live without it. I'm talking $20, $50. For some people, $500.

a month. They just won't miss it. Look at this amount. You have $70,000 on the couch. You know, it's like there's money to be redirected here. So at 4,000 extra dollars a month, or even 2000, if that happened, the fact is you've learned to live without it. That is an amazingly insightful thing. If I asked you like two, three years ago, could you live with $40,000 a year less? What would you have said? I would have said no chance. No chance. Hmm.

Here you are. So what does that tell you about your current situation? It's not as bad as we think, or it could get better. This is kind of unbelievable. They literally just proved my point that if you automate your investments and savings, you will learn to live without that money. In my experience, over 90% of people who automate their investments do not miss that money after three months. And you are not an exception.

In Emily and John's case, they're investing hundreds every month. In fact, they used to have $4,000 a month more. And when that money went away, they didn't really miss it. Forget about the numbers themselves. Maybe you don't have $4,000 sitting around the couch cushions. It's the principle here that matters. If you set up automatic savings and investments and you don't even see the money coming into your account, you will not miss it.

So automate your money, get chapter five of my book and do it right now. John, where are you right now? How are you feeling about the changes we made? I'm feeling good. I'm, I, I was very discouraged when we were looking at the fixed costs and just like, I feel like our mortgage isn't too bad. We only own one car, but if we do move farther away, now we need a second car.

the parking comes back. So that was very discouraged, but I do feel a lot better. I think we could do a lot better with the everything else money. I know we can, I know we just wasted it. Okay, great. Emily. Yeah, no, I, I, I absolutely agree with what John just said. Um, I also was staring at those fixed costs. Like, I don't know. Like I admittedly was just like, Remy, just tell us, like, I don't, I don't know. Um, it, it seemed a little impossible, but, um,

I feel like still a little like, wait, we're going to like put this money in the investments account. We're going to, you know, do that. Like, I still feel like there's so much to learn. Like we both have bad habits, right? We've established that I've not been insulting myself. I'm just being honest. We both have bad habits with money. And so I want us both to learn.

support each other to break them. I'm nervous because of our habits. We need to, we really need to be, we need to commit to it then. I think we're saying, and it sounds really great. And I really hope that both of us are like, when the time comes down to it, it's not that like, oh, well, let's go. Like, let's. This is the time, right? Yeah, it is. You're right. It is. And I'm, I'm ready to do that. Are we both ready to do that? Like I am. I, are you too? I'm ready as I'll ever be. Okay.

I see thousands and thousands of couples. I see a lot. And the action that you've taken, even though you're in your mid thirties and you're kind of just starting to learn about money, you're moving at such a faster rate than many other people. Remember the rich life vision that you talked about? Yes. What is that? How does this get you that? I mean, if I cut down on those and start investing properly, I could have these things I would like.

Yep. As your income and your net worth increases, you're probably going to add on travel places that you want to go. And this time you get to have a totally different conversation. It's not like, oh, we're just going here because we're bored or like, let's get a weekend away. It's like, what would make this trip magical? And I think that is a totally different conversation when it comes to travel that the two of you get to have. Emily, look at that smile. I'm excited for that already. There's one last thing. Your son's two years old. By the time he's four or five,

What do you want him to notice about his parents when it comes to money? I just want him to feel secure and not have to worry about, I mean, at five, he won't be worrying, but I don't want us, we don't own it now, but I don't want there to be like fighting over money or anything like that. Tell me about this secure comment. I really love it. How would you know that your son felt secure about money at five? Make it seven. Just never worrying about like,

He can't do things that kids in the school are doing. I'm not saying you have to do everything, but I don't know. I'm not sure that's secure. What would you say to him about money so that he felt secure? Maybe try to explain to him like you need to put everything, start saving as young as you can. So I don't know. Never had this conversation when you were a kid, right? No. Neither of you? No, never. Yeah.

I could see the struggle, but I love watching you think about it. Emily, is it tough to hear? No, it just is this realization that like, again, like I want to be that person and I want to do those things. And I just don't even know how to start. Like I wouldn't even know how to. But you're here. You showed up. You got the book. You did your own version of the CSP. You're asking to learn things that weren't taught to you. I love that. This to me is my favorite kind of conversation of everything I get to do. You're giving me a gift.

Some of the things you could say would be, come sit down with mommy or daddy. I need your help. We're going to push this button. This pays the bills so that we can eat the delicious food that we eat in our house. That's a real simple example. Really simple. Push a button. It's fun. Maybe a little older saying something like, we're always going to have a roof over our heads. We're always going to be a family.

We save our money so that we can always be safe together. That's all a young kid needs to hear. How do you think your son would react if he heard that? I don't know why, but it made me emotional imagining that and feeling so happy to be able to say those things. Thank you for those examples. That's exactly the type of parents we want to be. And we just don't know. We didn't know how or we didn't know that.

I would love to say those things to him. I feel 100% confident that you're going to be able to say those to him in just a few years. We actually just heard from them right before this episode was released. Here's what they said. Emily.

What surprised me is how simple finances can be. Since finding Ramit's podcast and starting this new journey on financial literacy, I was overwhelmed with where to begin. I have a tendency to overthink and try to plan 10 steps ahead, which prevents me from taking initial steps. Ramit made me realize I don't need to strive for perfection while I'm learning. There will be mistakes along the way, but as long as I continue this path forward, we will be okay.

Number two, my biggest takeaway is knowing that we are on the right path to support our children with their own financial future. I love what Ramit shared about teaching our son about money, even at a young age, because not only is it possible for us to be those role models, but we already are simply because we plan to be. I'm happy and grateful that we will start this generational custom for our family. And John said, number one,

I was nervous about Ramit's view on our financial situation and was pleasantly surprised to learn that we are not as worse off than I expected. I know we have a lot to learn and unlearn, but I felt encouraged by the end of our session, feeling more motivated than ever. Number two, my biggest takeaway is that financial stability can be achieved by anyone. I used to accept that being financially successful wasn't in the cards for me because this is the mindset I was taught growing up.

Ramit helping me realize that like anything else, you can always learn new things. Thank you for helping to open this door for us. I want to thank Emily and John for having this very candid conversation and for wanting to change the trajectory of the way that they treat money in their family. I wish them the best. And I'd like to remind you.

Number one, I have a podcast newsletter coming out this Saturday. You can only get it by being on the list and I do not send it out again. Go to iwt.com slash podcast newsletter to get this week's brand new email on money psychology. And second, I would love it if you could go over to Apple Podcasts and leave a written review. It really helps and it helps other people discover this podcast. Thanks for listening. I'll see you next week.

Thanks for listening to I Will Teach You To Be Rich. I'm Ramit Sethi. Please follow the show on Apple, Spotify, or wherever you listen to podcasts. If you haven't read I Will Teach You To Be Rich, my book, pick up a copy. You can get it at any bookstore or any library, and it will show you the specific tactics for how to build the I Will Teach You To Be Rich system into your personal finances.