153. “We’re married. Why do I have to ask him for money?”
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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.

what do i have to do for us to join accounts that's a hard question for me to answer and the reason being is because i feel like that all of the financial burden falls on me within the relationship she spends all of the money available to her and then she wants more i'm trying to be a team player i don't even know what we're spending on groceries but you keep wanting money from me like it went back to the feeling like a like a child or something or like a

Maybe just like a boss versus like the employee. Any comparison like that is how I felt. I felt lower than Dan. I just feel like alone in it. I feel like it's just, that's, yeah, I just feel alone when it comes to money. We're going to go to bed and I'm going to feel like it's all my fault again.

Meet Allison and Dan. They're in their mid-30s. They've been married for about four years, and they have a two-and-a-half-year-old and a one-year-old. They live in a very expensive city, Bozeman, Montana. And Allison first approaches me because she's concerned that they don't combine their finances. But as I start to ask more questions, it turns out that the real issues here are way more complicated. Let's listen to Allison and Dan.

Sitting in our living room, kids were asleep. We were kind of going through, I don't even know, our third, fifth, tenth fight about the fact that our finances are separate. How much that bothers me. Dan makes double the money. So in my mind, I think that he should have the money to take care of whatever it is.

And so I get frustrated in those moments because I wish I could see the money. I wish it was all just our money instead of my money and his money. But I do remember worrying about resentment, feeling like it was going to cause some problems in our relationship moving forward. What was the first thing you said? We started it because I wanted to talk about money in couples counseling. So we did that. And the conversation often went down

a way that made me feel kind of child, like a child and he's the father type thing, which is not great in a romantic relationship. And our last couples therapy session where we talked about this, it got pretty heated. And I think that Dan left that session feeling blamed essentially. What would cause you, Allison, to bring up money in the evening with Dan? Did something happen where you need more money? What was that?

Yeah. So I need $300 or whatever it is. I'm not going to be able to afford this. So then I have to ask Dan for money. So that's always a challenge. Honestly, that's actually probably when we're in the shower. That way I don't have to make eye contact. Got it. One of the most recent things that I'm thinking of that happened where I was in the shower asking about this class I wanted to take. It was like a $400 class and...

I didn't have the money for it. In my mind, I kind of felt like, well, I don't have the money for it, but we have the money for it. I should be able to take this class that I really want to take because I know we have the money. And it's like a sadness, I guess. I don't know exactly how to put my finger on that feeling. Sadness? Yeah. Yeah.

I know I cried. I know that just thinking about that, not being able to have this thing made me cry. All right. So when you have these evening conversations about money, they've happened several times. Do you know they're coming? She likes to start with statements like, so I was going to buy this.

I realized that, I don't know, like the dental bill, you know, was more than I thought it was. So I can't afford it. And I'm like, this is, we just got on the road. Like we're about to, we're about to start going down the road. And so, you know, and then I just kind of, just kind of like, okay, we're going to have this conversation again. What's the feeling you have when you hear the kickoff phrase? My initial reaction is like,

We're going to go to bed and I'm going to feel like it's all my fault again. All right. How long have you been married? Four years. Four years. How long have you known each other before that? A year and a half before that. Oh, okay. All right. So basically, you've known each other about five, five and a half years. And I understand you have two kids, one years old and two and a half years old. All right. Congratulations. That's a full house. Yes. Walk me through...

First of all, what do your account set up? What does it look like? And then just out of curiosity, how come your accounts are separate? The way they're set up, so I pay 70% of the household bills. So I pay the bills, right? Like the mortgage, all the subscriptions, electric bill, etc. That comes out of my checking account. And then I also have a savings account attached to that that I just throw $250 in a month. And then...

The joint checking account is what Allison... Because Allison pays for groceries. That's kind of like her thing that she pays for. And so that's where that money comes from. And then she has her own checking account for whatever, I guess. Whatever she wants to spend it on bills or... I don't know what she uses it for. Who pays for the baby stuff? Me. Okay. I pay for anything medical with them. Okay.

Obviously, my own gas, stuff that I buy. I feel like so far I'm making myself sound like I spend lots of money, but I like to buy treats, unnecessary... Dan always calls me out because our pantry has a whole corner of just junk food.

Like what's an example? What's your favorite? My favorite is just chocolate. Anytime something's seasonal, like Christmas time, there's always chocolate mint stuff. So I got to buy the chocolate mint stuff. I fall for that thing. All right. How did you come up with this system that you have?

I don't think we came up with it. I think it just kind of happened, to be honest with you. Nobody sat down and mapped this out? Because if I were to map this out, this thing is really confusing. Yeah, I mean, honestly, it's more so just, you know, we moved in together

and made a large, a far move together six months into our relationship. Um, and at that point, you know, I've just always been, I make the majority of the money in our relationship and that's just kind of how it's always been. And you know, everything's auto pay, you know what I mean? It's just kind of set it and forget it and got it. You move on with life kind of a thing. Yeah. What happens when you have to ask for money? Like, what does that feel like to you, Allison?

It definitely feels like I'm a child asking for some help from a parent. It doesn't feel good. Like I messed up. It brings a lot of shame, those types of feelings. Like I should have done better. I could have not spent this money. What did I even buy? Did I really need that thing? You feel shame around money a lot? I think... I don't know. I've talked to my therapist about this.

I do in these moments, but not when I'm on Amazon looking at stuff. I don't know. That tracks. All right. Dan, what does it feel like to you when Allison comes to ask for money? I mean, I think it's kind of a poor way to put it, to be honest with you. Because she hasn't directly been like, hey, I need to borrow. Well, one time, I will say, she's like, I need money. It's not like...

that cut and dry like hey dan i overspent i'm gonna need 300 bucks she's upset because the accounts like she mentioned before like we know she knows the money's there like she knows there's a few thousand dollars in my checking account she wants access to that because it's upsetting to her that she doesn't have any money and so she knows that money's sitting there so that's kind of where it goes it never really is as a outright asking for money gotcha

Even with all that being true, how does it feel when she comes and asks? How does it feel to you? To me, it's kind of like, how did we get here? Tell me. I'm the type of person to a fault sometimes where I ask a lot of clarifying questions. Not to be an a-hole or anything like that, but just more so because I like to have an understanding of what are we talking about here? It's more so like when I ask those clarifying questions and then she typically gets frustrated with me.

What's an example of one of those questions? Why? When we're having not necessarily an argument, maybe just a discussion about how she feels like a child when she has to ask for money. My thought, that's where my head goes is, so you're mad at me for asking why you're purchasing this, but then you feel like a child when you overspend money

It just doesn't add up. It doesn't make sense to me. I get frustrated from that stuff, seeing that stuff. New items in the house every single day. It's kind of like, why does this keep happening? There's a recurring pattern among a lot of couples I speak to where one partner has to ask the other for money. It never feels good. And it creates a really weird, awkward dynamic when it comes to money. But the real answer here is often a lot simpler. Did you catch it?

The real answer is that Allison and Dan don't have a cohesive financial philosophy. He pays for certain things. She pays for other things. They never really recalibrate when their income goes up or their expenses go up. It's just arbitrary, episodic decisions about what he pays for and what she pays for. We'll be right back.

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Now, there are lots of other clues, but I wanted to dive into why they haven't combined their income. That's a Dan question. So my original vision was we make a joint account and then we put whatever we want into that joint account. I actually put 50% of my paycheck into the joint account and 50% into my personal account and kind of was waiting for Dan to get on board. Okay. Dan, what do you say?

It freaks me out because like with the conversation we had before where she happens to overspend, it makes me really reluctant to put all of our money in one account. Because if we're just going to overspend and not think about it, what could that potentially have happened in the future? Because like on the flip side, I don't spend money.

I would love to, but I don't really, I can't because I'm the one who pays for any big thing that happens. Like the tires, for example, she never asked me for money. I just noticed she had tires that were bald and one was flat. So I was like, okay, this is going to be $1,500.

i have to cover that expense um we had a dumb stupid little legal thing that popped up that was twenty five hundred dollars i had to cover that expense the hvac broke twice each time it was 500 but you know what i mean so like it's that type of stuff that i'm trying to plan for you know because i'm want to be warm in my house i would love it'd be an easy system

Right. To have everything in one pot and then maybe have like our own little allowances. It'd be a super easy system. I just don't feel comfortable with it because I haven't been shown there's any discipline with money. It scares me to put ourselves at financial risk, potentially, if we're spending an additional $300 per month.

Which that's more than that's almost two mortgage payments at the end of the year. Right. That's when she feels like I'm assuming that's when she tells me at least that she's starting to feel like I'm talking to her like a child or, you know, she feels like she needs to prove something to me in order to to do these accounts. Doesn't she? Isn't that what you want?

Yeah. And I've expressed that to her. And she doesn't really feel good about that. Yeah. We kind of had this whole thing where he wanted me to tell him what all the spending on my credit cards were. And I very spitefully or reluctantly did go through my credit card statements and did, okay, Amazon, Walmart, Costco, whatever, and gave him the numbers. It went back to the feeling like a child or something or like a

Maybe just like a boss versus the employee. Anything like a comparison like that is how I felt. I felt lower than Dan. Okay. And then what happened as a result of that? You showed him where the spending was going. Then what happened? Well, I think it's a little more complex than that. Tell me. Well, because she didn't want to put the list together. And she told me that. Why do you think she didn't want to do it?

I'm assuming probably because it would make her feel small. Maybe that, I guess like speaking, like talking it out, maybe that would make her feel like I'm a parent or like a father figure. Do you resonate with that? Do you understand that perspective that she has? Absolutely. Okay. But I think the purpose of that wasn't to do that. And what I expressed to her was, is we don't even know what we're spending. Let's get to a square one and let's figure it out from there. And

She didn't want to do it. And she told me no. And then she, like she said, she spitefully made a list that I didn't even know about. And then I had asked her and she just did not want to do it. And I'm like, wow, you know, it just kind of hurt me a little bit because it's like, I'm trying to be a team player here. Like, I don't even know what we're spending on groceries, but you keep wanting money from me.

Dan is worried that Allison is overspending. Notice he uses words like freaks out, which is not the sign of someone who has a healthy, cool, calm, and methodical relationship with money. To tell you the truth, if I were in Allison's shoes and my partner said, okay, show me where you're spending your money, I would feel insulted. I would feel resentful. I would wonder why I had to justify my expenses to my partner.

and I would feel small. Now, let me put myself in Dan's shoes for a second. Maybe I would be concerned because I don't know where my partner's money is going or what their priorities are. I would reframe the whole thing. I would say, you know what? I want for us to be able to have better relationships about money. I don't want for you to have to come to me and ask for money. That can't feel good to you. And I don't want to set up that dynamic.

At the same time, I want to make sure that we are spending our money sensibly towards the goals we have. So what do you think is a good way for us to do that? The key reframe here is from you're not doing it right to how do we do this together and feel good about it? I looked over the list. I thought it was great that she put it together. And I was like, cool. I really do think $1,500 seems like a lot for groceries. Is there something we can do to...

reduce spending. Is this just groceries? Am I reading this wrong? Is this also inclusive of gifts or whatever? And then it just turned into the same old fight. We know that this is a hot topic. The words being thrown around are quite evocative. They're hot emotions, spiteful and father figure small. Let's just acknowledge this is a hot topic.

Regardless of how you got here, you got to the point where you were talking about real numbers. You were looking at real numbers. Regardless of how difficult it was to get there, it was there. Was there any compliments, any acknowledgement from either side in that conversation? I thanked her for putting it together and giving it, showing me.

I actually felt good seeing it because I'm like, cool. I know where we're at. I know what we're spending on groceries. Did you tell her that? I did. And actually, after she showed me that, so we split daycare just because of our messed up, split up account situation. And after that, I started taking on, I just pay all daycare now. I get where she's coming from. Like, of course, she doesn't have any money left.

I like that. I appreciate that. I think that's the right thing to do. That's the beauty of talking about real numbers is you can start to get out of the clouds and down on the street. The street is reality. That's where we live. The clouds is where our worst imaginations run free. Oh my God, it's not fair. Oh my God, I'm being judged. All that. That's in the clouds. I always tell my team, we got to go from the clouds to the street. We got to get real. Bring it down. Get specific with real numbers, real examples.

And then we actually talked about it in therapy. I remember sitting in his truck afterwards and having a conversation about it. And it felt okay. It didn't feel bad. I actually felt some relief because I also could see the numbers then too, like you're saying. It's nice to see it. And his reaction wasn't like, you suck or anything. He was like, okay, great. Now we know. And it was...

actually quite relieving. And it wasn't negative once we had like an actual conversation about it. I think a big piece of that is the fact that there's a lot of like the underlying stuff still happening. Tell me about that. Well, separation of accounts, right? She's still upset about that for the reason she gave. Me still feeling the exact same way about the spending and still seeing like

you know, just not like Allison just said it like the there's still not doesn't seem to be, I should say from my perspective, conscious decision of I'm not going to buy this because but I think there's just a lot of like, you know, she mentioned, I know in the application to you, she mentioned like resentment towards me, you know, and that flares up anger in me just because it's like, what do you mean you resent me? You know, doing the CSP

I got really, really upset. Hold on. We're going to talk about the CSP. We're going to get to that. Let me echo some of what I saw in the application. I resent my husband when it comes to money. He wants to save and I want to spend. Is it that simple? It feels like it sometimes. Can I just ask a question? Is it possible to do both? Can you save and spend? Yeah.

If there was money left over at the end of the month, yeah. I guess that's a valid question. I guess we do, but I'm this one saving. She's the one spending. She spends all of the money available to her and then she wants more. Is that accurate, Allison? No. I mean, I would never say it that way. What would you say? Do you spend everything you make?

No, but sometimes. So some months I do. I can think of at least two times that he's had to save me from my own self, but...

I don't think I spend all my money every month. No. Ever since Dan took over paying full daycare, I'm finally feeling like I'm able to catch up. I'm hoping that in the next month or two, I can actually be ahead of my credit card as opposed to... I will spend on my credit card for the month of February and then pay it off in March and be broke. That's what's been happening for me. No. No. No. We're going to stop talking like this. First of all, you two make too much money.

to be using the word broke. Number two, how can one partner in a marriage with two kids be broke? That doesn't make sense to me. Allison, does it make sense to you? No. She's like, no, but I am broke. So can you explain that to me? Well, part of it too, I think is because I'm commissioned sales. Okay. So she has stable income. I don't. It fluctuates month to month. Shouldn't you be the one saying you're broke then?

you'd think, just as an example, we're in the slow season for me right now. So my paycheck is going to be double what it is this month, next month, just because we're coming into the busy season and I sell more. So I have to plan for those months ahead of time, along with any accidentals such as lawyer fees, tires, etc. Can I ask you something, Dan? Yeah. What would it feel like if Allison...

also planned in the same way that you have to plan? I think she would understand the weight of it. She wouldn't spend the way she does. And what would it be like for your relationship? That's a hard question for me to answer. And the reason being is because I feel like all of the financial burden falls on me within the relationship. If she thought the way I did, I would feel really safe. You'd feel safe? And what would it feel like for your relationship? Look at my hands. Two people.

What would it feel like if she understood how you have to plan ahead with finances? What would that feel like for your relationship? I mean, it'd feel really good. I mean... Maybe connective? Yeah. Maybe unified? Maybe together? Mm-hmm. Doesn't feel like that right now, right? When it comes to money? No. Use your hands. Show me what it feels like to you. As far as where we're currently at? Yeah. Like...

With money? I mean, I don't know if my screen's big enough. Hold on. Oh, wow. Okay, so just to describe, Dan, he has his hands far apart. Yeah. Like there's a huge gap between the two of you. And that gap, describe that gap to me, Dan. It's just me. I feel like this kind of falls back into like therapy stuff that we've worked on, where I come from and things like that. I just feel like alone in it. I just feel alone when it comes to money. That's really...

apt than to describe feeling a sense of togetherness with money. When you described that, it made me feel warm inside, just to kind of put it. When you were like, if she thought, not even that she did the exact same thing I do, but even if she had an understanding and things like that of why I do what I do, it really made me feel good. I love that. So we know that it's possible to feel good about money. We know that. Allison,

I want to get your reaction to what you just heard Dan say. It makes me feel kind of bad, but also good. So it makes me feel bad that he doesn't feel safe with money when it comes to finances in our relationship and that there is a little bit of a trust issue there when it comes to money. That makes me feel like I feel sorry. I feel at fault for that. But also, it's really nice to hear that how good it makes him feel just to even think about the togetherness.

You can see how Dan's mood just changed. When I speak to couples, they've often rerun the same story over and over for years and years that they become entrenched in these stories. They forget why they originally got together and how good money actually should feel.

So it's a dance. Sometimes I ask one partner to put their foot forward first. Sometimes I ask another partner. That doesn't mean Allison needs to change everything and take on this burden herself. But you can see from the results of this simple exercise that Dan is suddenly way more receptive. Let's take a quick pause for a message from our sponsors. When my wife and I got married, we decided to sign a prenup.

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At tim.blog. That's tim.blog. A few years ago, I went to Orlando to attend a class at the Disney Institute. Now those classes have been on my big bucket list for a long time. I love Disney. I love their strategy. I always wanted to study with the best. And when I saw that, I knew I had to do it. Well, not all of us can fly to Orlando and spend thousands of dollars on a class just out of pure curiosity. But I do think that we have a chance to learn from the best.

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Plus, every new membership comes with a 30-day money-back guarantee. And right now, our listeners will get an additional 15% off an annual membership at masterclass.com slash Ramit. Get 15% off right now at masterclass.com slash Ramit, masterclass.com slash Ramit. Now, let's hear from Allison. If I were Allison and I were bringing this topic up a lot, I guess I would be wondering when...

will we combine our accounts? What needs to happen in order for us to combine our accounts? Allison, am I reading that correctly? Yes. Who decides that? I mean, I would say Dan because he's the breadwinner. Dan, would you agree? Yeah. I just found out about her putting money in the savings account. So this is going to sound somewhat contradictory. But mine was, I like to see some type of

I use the word contribution, which she got really mad at me for using. But just some type of like... It doesn't have to be like savings. Just some type of like, what are we doing to better manage our money? Well, okay. How much did you put in the savings account, Allison? It was only $100. All right, great. $100. She put $100 in a savings account. Is that enough? Again, I just found out about this. So I'm still like... Well, let's talk about it right now. We're here. Yeah. Is that enough? I mean, I guess...

For me, it's like, it's deeper than that, right? It's like, well, did you do it because, you know, you want to, is it because of our past conversations? Like, did they resonate with you? Like within couples therapy and like, now you see where I'm coming from. So you want, you're like, wow, Dan feels this huge burden on himself. Maybe I can help alleviate that and it'll make him feel like we're a team.

If that's kind of where it's coming from, then that's the motivation I need to be like, okay, cool. We're starting to get on the same page here with money. One of the things we didn't mention was that fight that we had about me not... The reason why you don't trust me with money was that you wanted me to save. You remember me telling you I was going to save. I don't remember committing to it. And then I never saved.

So a lot of the reason why... That was most of it. The other half of it was when I found out... I forget what happened, but I was like, it's okay because you've been saving. So we have that money. And you're like, no, I stopped saving. And I was like, well, why? And you said, because that's my money.

Yeah, this is the conversation where it goes two different... That's what broke the trust thing that you speak of. That's coming from. So you and I have talked about this conversation, this fight or this instance multiple times. And one of your things was that you wanted me to save money. That was the thing. So I started saving money because I knew you wanted me to. And I was trying to rebuild the trust from when you said that I was broken. Yeah.

And you're right, I didn't tell you because I was just going to see if I could do it before I told you. That's fair. I get that. I guess like for me, it'd be a cool, that to me would be a cool discussion.

between us. I'd be excited if you said... Oh, telling you that I saved money. Okay. Yeah. I'd be jacked up about it. Just even thinking about it now just makes me happy because it's like, cool. It's important to you to want to rebuild the trust. Because I know very much so because you've expressed to me that you don't feel that you did from your perspective. And that's fair. But hearing you say that

I recognize that regardless of what I think, I broke Dan's trust in this way. I want to rebuild that trust and it's important to me. That means a lot to me. Yeah, that's accurate. That's exactly how I feel. Okay. I like all of that. I love hearing the two of you connect about that and also reflect that, yeah, talking about money can make you feel good, especially when you're being proactive with it. I think that's awesome. Where do you go from here?

This is all a little messy. First, Dan says that he wants Allison to save money. Then Allison does save money, but Dan says it's not enough, which really reveals that this isn't about saving money at all. It's all too confusing. There's no real shared rich life vision. It's just one punitive action after another, and it's reliving the same stories over and over. That's why I stopped here and I asked him, where do you want to go? What do I have to do for us to join accounts?

I just need to build my comfortability level with your spending and maybe understand you a little more on... Because you talked about this with your personal therapy. Maybe I just need to understand where this is coming from from you. Maybe that'll make me feel a little bit better about the spending because I want to be able to spend too and I don't get to. And I think that I would feel comfortable combining accounts when...

we can kind of come to an agreement on this is how we're going to pay bills. This is how much money we're going to allocate to each other. And then whatever, you know, savings or whatever you decide to do. But I just, I think, I don't know if that answers the question, but I just feel really uncomfortable about it. And I'm working on regaining that comfort. I was just going to say, do you know like what you need to feel comfortable?

I think, no, not right this second. No. It really bothers me because the words in Rabit said this, they're big words that you use when you describe money and me. And it feels like looking, I know you said we're going to talk about the CSP later, but just looking at those numbers and I was just like, I don't understand how you could feel this way about me when all of my fun money I'd never get to have fun with ever.

It's really hurtful. Like I said to you that night after completing it, I feel very hurt. And I think you feel justified in my hurt.

Notice that they are living in the past. They have these old stories that they are reliving. Their emotions are vivid, salient, really hot. And I'm glad that they are seeing a therapist. But in this conversation about money, I need to focus on the future. So I decided to look at their conscious spending plan. You can follow along. Get my free template for the conscious spending plan at iwt.com slash CSP. Take a look at their numbers.

Assets, just over a million dollars. Investments, just about $35,000. Savings, $7,500. Net worth, $601,000. But there's a very important twist that's about to have a big effect on their numbers. It doesn't feel real. Okay. What does that mean to you? It doesn't feel real.

When we were doing it, like some of it's our cars and like, well, those depreciate. That doesn't really matter too much. The houses, like, so we have our house and a condo and we're planning on selling the condo. So it's going to change. Mm-hmm.

It's just, I don't know. It's a lot of money. I would have never thought that that was our net worth. I agree with her on the car thing. The house thing, I've read a lot of your Instagram posts about leasing and owning. But I think with our homes, with the market that we're in, we're making a lot of money when we're selling the condo for that very reason. We're able to sell it and allocate a lot of funds to good things. So I feel good about it. I think

It's more than I thought it was going to be. Before we go on to the rest, I want to make sure I understand the condo situation. So from what I understand, Allison, you owned a condo before you got married. Yes. It's actually making you money every single month with tenants? Yes. Okay. Can I ask a couple questions about that? So how much are you making every month from the condo?

So we were charging $1,900 a month. It's currently empty because we're selling it. Ah, okay. Got it. What's the total cost, mortgage and all that stuff per month? So it's on my bills as like $1,100 something. Oh, okay. All right. So let's just say $1,100 for easy math. And you were making $1,900. Ballpark. Right. Fine. Let's go to income.

This time, Allison, walk us through your gross combined monthly income. $15,683. Did you say you live in Montana? Yes. You make $188,000 in Montana? Well, in Bozeman, Montana, which is pretty expensive here. That was the one place I was like, wait, not Bozeman. Is Bozeman considered high cost of living? Yes. Oh, yeah. Okay. All right. Fine.

So it's a good income. Would you agree? That's a high income? Absolutely. So you bought the condo before you got married, Allison. How did you discuss what was going to happen with the condo now that you're married? Did you do a prenup? No. Okay. We didn't do a prenup. We... Yeah, we didn't. I mentioned a prenup. I did very briefly. But no, we didn't do a prenup. Um...

Wait, how do you mention a prenup and not do a prenup? Quick aside on prenups. Prenups are appropriate if one or both partners is bringing a significant amount of premarital assets into the marriage, like an investment portfolio, a business, or real estate. I covered my own prenup journey

on the Tim Ferriss podcast, where I discussed how my wife and I went through the prenup process. If you're curious, you can search Tim Ferriss, Ramit Sethi prenup and listen to that episode. In Allison's case, I would have advised that she sign a prenup before they got married, but that ship has sailed. There is another option, by the way, called a post-up if anyone is interested. We'll be right back.

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Now back to Allison and Dan. So how did you decide what was going to happen with this condo once you were married? Well, we actually moved away from this area and weren't married. So we rented it. All right, because I rented it. And we kind of like had it as like a...

We didn't really have a plan for it. And then we ended up moving back here and we actually moved into it. So it was nice to have in that sense. And then we were considering selling it to buy this place that we currently live in. But we wanted to try to get rental income if we could keep both and use that as an investment. Because we do live in a really expensive area. And the amount I paid for it and the interest that I had on it was...

It's worth hanging on to see what happened. And why did you decide now to sell it?

We don't want to be landlords. Wait, hold on. Why is that? It's passive income, right? Free, no work. Just wake up and the money comes in. That's what they told me. Yeah, right. Exactly. No late night calls or anything. We don't want to be landlords. Honestly, from your stuff helped me realize that we do not have any retirement savings. We're way behind on that. So my plan was always to put a good six figures towards retirement.

Gotcha. How much do you think you're going to sell the condo for and how much will you make from it? We're hoping to sell it for $410,000. And we should make, after all expenses, assuming capital gains tax is something like 20%, we should make $206,000. Nice. Okay. And you feel that's pretty realistic with the market and interest rates and all that stuff? Yeah. Wow. Okay, good.

Nice job. That's great. I like that you got it. You tried out being a landlord. And you also were like, hey, we're making a profit, but this isn't for me. There are lots of ways to make money. Lots. I think it's great. If you had told me like, oh, we're profiting and we're making 700 bucks a month, I would have said also fantastic.

That's great. I don't mind somebody having rental property. That's fine. I just want them to run the numbers. Okay, great. So you potentially are going to make $200,000. And when is that going to happen? It has been on the market for less than a week now. We haven't had any offers yet, but we're hoping March or April, we'll get that money. Okay. All right. Are you fine if you make like $150,000 instead of $206,000?

No, not really. You wouldn't sell it? Probably not. Oh, what would you need to make in order to sell it? Well, I'd want to sell it for $400,000. So we're talking that would be like $50,000 less than I'd sell it for or than I want. Yeah. Yeah, I want to sell it for $400,000. That will double what I paid for it. Who makes the decision on whether to sell it or not?

I would say it's a team, but I think because it's mine, Dan would agree that it's ultimately my decision. But whatever's best for the family would probably be the answer. We talked about that. And I 100%, it's totally up to her. It's not my condo. It's, I mean, plain and simple. So even when she was having a little bit of cold feet and stuff,

I was like, it's your call. I mean, because we share the landlord stuff, right? So we can just keep doing that. I don't want to, but it's totally her call. And the income that came in before, so the roughly $700, $800 a month, what'd you do with that money?

That just sat in an account and then we use it here and there. So I think... For what? Well, nothing to do with the condo. We did have to use it to buy a new oven, but we bought... We took about... Do you remember how much we took out to buy my car? $5,000. It's five. Yeah. And I think... We took five out of the savings account. Yeah. So we took money out of it when we needed to spend on something big usually. Otherwise, it just sat there.

Yeah, it just sat there. I just have to jump in here. Do you notice how the same patterns from their personal finances are also present with the condo? Notice Allison's passivity around signing a prenup. Notice the convoluted account structures. Notice the clear lack of ownership. Who owns the decision? It's not just their personal finances. It's the condo and I suspect a lot of other parts of their life.

Deep down, the way that they treat money goes way deeper than any individual expense or investment. It's really the set of lenses through which they see the entire world of money. Well, and you've been paying your car payment with it. Right. So then... What? Yeah. What the hell? Why'd you do that?

So I had... We in Montana don't have any paternal... Wow. Maternity leave pay or anything. So when I went on leave with our last kid, I moved it over to there since I had no income. And it started just coming out of that account. And then it just stayed there. Still. Sloppy. This is too sloppy for me. It's driving me crazy. Allison.

What's this number right here? Combined fixed costs. 75%. What do you think of that number? It's way too high. It's too high. What should it be? 50 or 60. You have two car payments. Uh-oh. The $445 car payment. What is that, Allison? What kind of car? That's including gas. That's a Ford Explorer. Oh, God. We got to talk about this. Why did you buy a Ford?

I knew you were going to give us crap. We both have Fords too. Why? Dan cares about it. It's not even like... We were going to get a Toyota. They're so expensive.

You were going to buy a Toyota and you bought a Ford instead? In Bozeman, Montana, Toyotas are twice as much as anywhere else in the country. I swear to God. I want a Toyota. I did. I can't afford it. Hold on, everyone. This is going on the front page of Yahoo Finance. A couple who makes $188,000 a year cannot afford a Toyota. A forerunner's 80 grand here.

It's nuts. All right. So fine. This 445 includes gas. Okay, fine. That's a Ford Explorer. And then what do you have, Dan? Ford F-150. Why do you have a truck? What do you do for a living? I sell insurance. Oh, you definitely need a truck for that. I hunt a lot too. And put dead animals in the back of it. Does that include... Where's your insurance? Is that under your insurance number? It is. Yeah. Yeah. What about your... How come there's only insurance for one?

He's the one paying it. So we just put it under. He pays for both. Okay. Yeah. So just so... I just want to show you like, there'll be multiple elements of these. But you... In order to buy your car, Allison, you took $5,000 from the joint account, $5,000 from your condo account, and then he pays the insurance. It's hard to feel good about money when you can't even understand what's going on with your accounts. Yeah.

All right. Well, it's a lot of money you're spending on your car, but let's continue moving on. All right. Debt. What is this debt? $75. That is from when I borrowed against my 401k to buy my condo. What the f***? What? Why did you do that? Because I didn't know any better. I needed an extra 10k. Are you going to pay that back when you get the condo sold? Yes. Okay. Fine. All right. It ended up working out for you?

Probably don't borrow against your 401k ever again. Good? Yeah. Can somebody read this number for groceries? Let's say perhaps the primary grocery buyer. Allison, what's that number? $1,500. All right. So listen, you have two kids who are very young. Let's give you some credit for needing to spend money on food, but not $1,500. How much should that be realistically?

I think it could easily be $1,000. What is it that you are spending there? I don't know. This must be like... What do you mean? You did the report. The treats and stuff. Yeah, but it wasn't like itemized receipts. It was Walmart, this much money. Costco, this much money. Should we look? Like right now? You have the app, right? Like a credit card? Well, what do you have on your phone? First of all, do you have the Walmart, Target, or Costco app on your phone?

I have the... Like the Walmart I do purchases from. I could look at the Walmart app. How did I know? All right. Pull it up. Okay. What do we need to look at here? Yeah, all right. There's... You know, here's something unusual. Love note marshmallows for Valentine's Day.

Hershey's Hugs white chocolate Valentine thing. How much? Lollipops. $2, $4, $1.25. This isn't it. This doesn't get you to $1,500 a month. Truthfully. Honestly, the two of you make $188,000. If you want to buy some Valentine's candy, you shouldn't think twice. That's not the problem. What is it that's getting you to $1,500 a month? Dan?

i think it's like the it's not the candy i i 100 agree with you um it's like the other stuff i'm trying to think like toys for the kids stuffies for the kids um

You know, the like laundry basket things for the dryer that costs $17 a piece, but we buy two of them in a month. Like it's like a lot of cumulative things that if you really break down because I'm with and I know you talked about this in your book and things. I agree. Like you should be able just to buy little things like that doesn't matter. It's not going to make or break you. But when that equates to $100 a month.

That's the difference. And part of that report, like you mentioned, it wasn't in the report. You're exactly right. That's what I wanted to see. I think deep down, you believe that if I just get this magical information, then it will all make sense. And then I'll feel different. Not going to happen. No chart is going to make you feel different. I promise you that. I do think that changing the way the two of you talk about money...

has helped and will help. I also think that, Allison, you need to take ownership of certain expenses here and you need to hit a number. Now, if you want to show a report and you want to report that to Dan, go ahead. That's up to you two. But that's not really what Dan cares about. Dan doesn't really care if you report it or not. Dan cares about that number going down to a number that the two of you need to agree on. Whether or not you get a report is irrelevant. You just need that number to go down. Correct? Correct.

Yeah. Allison, what do you say? Are you willing to do that? Yes. Let's just go on to the investments. Oh, never mind. That's fast. What's the number here under investments, Allison? Zero. Dan, you want to add anything? I guess just a question. Because 401ks, right? We both have one now, but it says post-tax retirement. So we didn't put anything in there. So basically, how much are you contributing per year?

Ballpark would be about like $4,500. So not a ton of money. All right. That's better than nothing. How about for you, Allison? Ballpark, how much you contribute? I'm looking at right now. It's like $173,000. So whatever that math is, like $2,000. $2,000 a year? Yeah. All right. Savings is at 2%. What is this? Why is it low? $2,000.

We just don't have an actual plan. Dan's the only one that regularly puts away the $250,000. And I'm trying to do $100,000. I just wrote $50,000 just to cover my ass. I'm trying to do something. But yeah, I'm not doing anything. Okay. Yeah. Mine's just... I just set it up. It's an automatic poll every month. $250,000. Just something that I know. I just treat it like a bill. That's good. That's actually 80% of it right there. So do we need to drop one of your incomes here?

Yes, we need to drop mine by $1,900. All right. So what I did was I dropped your income by $1,900 gross and net. Everybody on the internet is going to leave 5 million comments about how that's not accurate. I really don't care.

That's not the point. You're within a few percentage points. You can fix the details later. We just want to get the overall thrust. What we see is that your fixed costs are now at 89%. But we have to get rid of my mortgage payment. That's right. Let's drop... And my debt payment. Very good. So we're going to drop your mortgage out. So I just want to point out that right now, you're still at 77% fixed costs. That's a problem.

Let's do a little bit more fixing. These groceries, no way. No one's spending $1,500 a month because they just don't even know what they're buying. Give me a number. I mean, $1,000 is definitely enough. $1,000 takes you to 72%. Everyone got really quiet all of a sudden. Daycare, that's the problem. I understand. Daycare is expensive. How long will you have to spend on daycare? Another three years for our oldest. Okay.

All right. So it's a long time. Let's just keep it in. Yeah. Yeah. Okay, fine. Look, sometimes, especially for young parents of young children, your fixed costs are going to be higher than normal. Okay, that's going to happen. We have to accept it. That's reality. So we're going to have to figure out other things to do. Certainly helps to have $100,000 or $200,000 coming in the door in a second. But let's leave that out of it for now.

Are you going to travel, eat out, all this stuff more or less than average? Probably less. I think we do less than average. We just do. It's expensive to go out with kids. It's a pain in the ass to go out with a one-year-old. So we don't really do much. So this is my point. Babysitters aren't cheap. Yes. This is my point. If you have this constraint, right? Young children, embrace it. You're like, oh, shit.

The next 18 months, we're really not going to go out to eat that much. It's a pain. So therefore, we're going to cook at home. So instead of battling against it every single day for the next two years, you go, no, this is the season of life we're in. We're going to be at home right now just for the next couple of years until they get a little bit older, we get more comfortable and we can afford it, etc.

It's like a judo move. You're not fighting against an opponent. You're going, yeah, okay, you want to punch me? Cool, I'll pull you towards me. And then after we hit a couple of our numbers, we fill up our emergency fund, we'll have more money to redirect to our guilt-free spending. And that will be a couple of years from now. That's how it works.

There are specific seasons of life where your numbers might go outside the recommended guidelines of the conscious spending plan. Young parents are a prime example. They have a baby. Suddenly they realize, oh my God, I didn't anticipate all these expenses. One or both parents might take a step back at work. Expenses are up. Income is down. Suddenly they're freaking out about what's happening with their conscious spending plan. If you're in this case, here's my suggestion to you. Keep saving. Keep investing.

But give yourself a little bit of flexibility. For example, if you were saving 10%, maybe take that number down to 6% temporarily. Give yourself a little bit of freedom to be able to spend on all these new expenses. If you were investing 12%, take that number down to 8%, even 6%. Just keep at least something being automatically saved and automatically invested every single month, even if you have to reduce that number.

and try to aim to get back to where you were within three years. The point is to have a plan, but be flexible if life calls for it. Now let's take a look at the condo sale and how this is going to affect them. I mean, the $100K potentially going towards retirement is nice to know. You want to talk about that? Now we can bring that up. Okay, I like it. So you told me that you're going to make... How much selling this place? $100K.

Hopefully $206,000. What are you going to do with the money? So the plan is $100,000 to like target date fund, like Vanguard or something. $10,000 per kit, so $20,000 for college funds. And then we were going to probably pay off Dan's truck since it has interest and buy ourselves something, which would be like a mattress and a water softener. And then the rest is going to go into like high yield savings or maybe more towards investments. We'll just see what we have after that.

Yes. Sorry. No problem. All right. Let's see. Allison, break down your percentages for me. So I did invest 50%, 20% for kids, which might also be an investment. Save 20% and 10% fun. Yeah, I guess I would just do... Honestly, I like what she said. I agree with what she said. Okay. Yeah. Let's talk about that for a second. So invest 50%. Why? Because of our...

lack of retirement savings. So what that tells me is you are sending a signal to yourself and to yourselves as a couple that investing is the most important thing we can do. That's the message. You send yourselves messages about what's important. You do it by what you eat. You do it by what you wear. You do it by where you allocate your money.

And for you to tell me 50% investments is a very strong signal. I approve. I appreciate it. I have the same highest proportion goes to investments. I think that's fantastic. Next, you have kids at 20%. To put 20% of your money aside from kids. Tell me about that. Why? We just want to put some money away for college. If there was extra, it could go towards buying their first car. I don't know. I just want to make sure I can provide for them.

It's important to me to have something to give to my kids. And then finally, fun is at 10%. 10% fun doesn't sound great. But when you look at the actual number, it's not bad. No, it's not bad at all. Keep in mind. Let's keep in mind. This is additional unexpected income. These numbers are always different. These are my numbers for unexpected income. 75% goes to investments.

10% to savings to be spent within 12 months. So it's pretty much a vacation almost always. Next is 10% to lifestyle improvements. And I have a list of lifestyle improvements that I want or we want. And then finally, 5% to long-term savings.

What is a lifestyle improvement? What's your definition of that when you say that? That would be somebody to mow my lawn. Okay. Somebody to do laundry. Or if you have somebody come and clean the house, instead of coming once a month, they come once every two weeks or once every week or whatever the frequency you want. I got you. Okay. Haircut, whatever. What do you take away from my numbers?

Well, we trust you. So I would like want to copy you. No, no, no, no. Don't copy me. These are my numbers. But I think it's useful to kind of talk about them, right? Don't feel pressured that you're doing something wrong. You're not. Your numbers are not wrong. They're just yours. But what else do you notice about my numbers? You're taking care of yourself. How? With the lifestyle changes and the vacation.

Yes. Yeah. But let's start with the big number. What's the big number? Well, the investment. Yeah. And it's huge, right? Huge. So what signal, what message am I sending to myself? That that's the most important thing to you is to make sure that you're investing in yourself and well, you and your wife are investing in yourselves. Exactly.

planning for the future for yourselves too. Bingo. There you go. And by the way, I plugged in your old numbers here. I just want to show you. It's getting a little sloppy, but I don't mind. Oh, we got to take the rent and mortgage out from that one. Zero this out. 67%. Hey, this is good. It's higher than I want, but it's still good. It's still good. Okay. I don't mind it. I'll tell you why. One, we know that daycare is particularly expensive and it's a

It's a thing that at least daycare itself will end at a certain point. Two, look at your investments. That's a nice, nice number. Okay. Again, I'm not even counting the healthy number you're going to put in from the sale of the condo. Three, look at... Oh, savings. This is not good. What needs to happen here again? We had $1,200. Yeah. $1,200. Exactly. So that's at 12%. That is nice. Nice.

Very nice. And then look at this. Everything else at 11%, which is like day to day. It's a little restrictive. But what are you doing anyway? Take it, use it for a date night. Get one toy every few months and you're good. Truthfully, this isn't the time to be spending a huge amount of money with the exception of a nice summer trip. You want to take it? Take it. Because you got the money from the condo.

Yeah, that sounds good. It feels good. I like that there's kind of like a priority to it. Like, I really like how you talked about like, this is a signal to you that making these moves, even though it might be with an un, like a random chunk of money we're getting, I think we could still use that.

with our just income as kind of a foundation to build on. It's relieving to know that we actually can't afford to save and invest some money. It just didn't feel like we could. It's nice to know we can. I do think that the crux of this working is the two of you combining your accounts. So let me explain why. When you are separate, especially being married with two kids, you develop these kind of peculiar habits

ways of handling money. Like I pointed out how the car payments were made and you do this and I do that. It becomes really weird. Like to an outsider, I'm like, it's too confusing. You're not really sending the right signals to each other. So if you were to combine your accounts, dramatically simplify, both of you come up with a few key rules. Rules are not a negative restrictive thing, but rather like

When I sat down and started talking to my wife about money and we developed our vision together, my vision was, I don't want to have to look at the prices when we go out to eat. What I primarily care about is that we are saving and investing a high percentage. If we're hitting that, the rest is irrelevant to me. Can I show you a couple of investment numbers that might help you? Yes, please. So it's going to be $135,000.

Right? That's how much you have. $35,000 and you're about to put $100,000. So it's $135,000. $1,000 a month. And how long do we want to say that grows? 30 years? Yeah. Yeah, let's go 30. I think that's good math. Yeah. All right. What percent should we put here? Seven. Yeah. Nice. How much do you think it's going to be? A million. No, it's going to be more than that. The $100,000 was like $700. I'm just going to say 1.1 is my guess. Okay, wow. I think that's close. All right, let's take a look.

1.1. Wow. You may be the first couple who ever got the number right. That's amazing. That's not easy. Well, your book kind of spells it out, Rami. Does that say annual edition? Wouldn't we be putting more than that annually? Oh, you're right. I totally miscalculated that. That's monthly. So we're way off too. We're all off. Okay, let's fix it. Let's go back. I'm really excited right now. Oh my God, this is huge. Are you ready? It's not 1,000. It's 12,000 a year.

Whoa. Done. We can retire. 2.24 million. Instead of 12,000 a year, let's make it 15. That's not too hard if you wanted to. Now we're at 2.69. What are you all taking away from this? That selling the condo is a great idea. And investing the money is a great idea. It's almost like we have to figure out what makes more sense if we upfront put down more than the 100. Yeah.

And then saved up separately for the kids some other way. That's better to put that big chunk. Or, I mean, to that same point, like I was going to say, maybe put a small chunk in to get it started. So it starts building. Yeah. And just like I do with the pay yourself first with your bill, just monthly contribute for the next 18 years. And then you could do that.

You could totally make it a line item, put $100 a month away or whatever number makes sense under your plan. Yes. It just feels so nice and refreshing to be able to talk about it and feel like we're on the same page. It's just... It makes me feel closer to him as his wife, which I know sounds ridiculous, but it's such a big deal. Money is such a big deal.

Before I share their follow-ups, let me tell you what I noticed about Allison and Dan. First off, not everyone has the chance to have a condo that doubles in value, which will seemingly solve all of their money problems. Well, at least the numbers on the page. So I want to acknowledge that. But if we take the condo and put it aside, what I see are some recurring patterns from many of the guests that I speak to. Strong feelings about money.

not communicating about money or ever getting on the same page. No rich life vision that is shared between the two of them. And in fact, a confusing account structure that's not bringing them together, it's actually setting them apart.

They were reliving the same stories over and over. Resentment, inequality, even feeling like a child having to ask for money. But when we cleared the cobwebs and all these confusing accounts, what we realized was that they will have more money than they ever thought possible. This is what's so similar among other couples.

This focus on small, insignificant $3 questions, never zooming up to look at the big picture and the $30,000 questions and realize that if you focus on just a few big wins, you can live a richer life than you ever thought possible. Now let's see what Allison said in her follow-up.

So I learned that selling the condo was a really good idea. It's gonna set us up for success more so than I really ever thought. I was surprised how Remy kept saying how sloppy our situation was. It's just not the way I looked at it. I don't love it but

Sloppy was just an interesting word to me and I was kind of surprised that that's what he thought of it. I'm going to try to start paying attention to how I spend. I'm going to try to set a goal of $250 per week on groceries and just see how that goes. And I'm also going to try not to spend emotionally, which I think I do. And now, Dan's follow-up.

As far as what I learned from meeting with you and going over everything is really that numbers help create clarity and structure when we're trying to figure out finances and everything. Based on using your CSP, I feel comfortable that we're going to be able to retire and still be able to take care of our kids and their futures with college and things that are important to us.

What surprised me the most is how important transparency and communication can really be between Allison and I, which shouldn't come to us as a surprise, but it did. But especially when planning for long-term goals, I can see how important it is. But with an actual shared vision for that future that we can both buy into and grow together. So again, thanks for me.

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.