45. “She tells me that it’s my fault we can’t live the life we want to live”
01:11:39 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.

Um, what the hell is going on on this podcast that like 80% of the people who come on here go through massive screening, fill out applications, they never actually read my book. Is anyone else puzzled by this? Look, a lot of the questions that you ask me about money are answered directly in I Will Teach You To Be Rich. How do you pay off your student loans? How do you automate your finances? Where do you start investing and how do you handle big purchases?

I wrote this book as a six-week program so you can follow along on your own or with a partner. If you want to improve your finances, I recommend you get the I Will Teach You To Be Rich book. It has over 18,000 reviews on Amazon. Get it at iwt.com slash book. When I sit there and I look at it all by myself, you know, it makes sense in my head. Mm-hmm.

But then whenever it comes up in conversation, my mind starts to start spinning. I get like choked up or I get like, I don't know if it's like a nervous or like an anxious feeling that I start to feel. In the back of my head, I kind of feel like, I feel like my dad's standing right here. What is he saying to you?

All the stuff that you told me when I was a kid, like money doesn't grow on trees and you need to be able to take care of your family. You can't take care of your family if you're working at McDonald's. You need to be successful. I just want to, you know, like I want to live my life to where I don't have to worry about any of that. Today I'd like you to meet Andrew and Sarah.

Sarah's in her late 20s. She makes $85,000 per year and has very little debt, basically just about $10,000 left to pay off on her student loans. Andrew is in his early 30s. He makes $75,000 a year, but he has over $65,000 in debt. They live together, but they aren't married yet. Now, here's the problem.

Sarah wants to spend her money on travel and things together. But every time she brings it up, Andrew says no. After all, he has over $65,000 in debt. And Sarah is getting increasingly irritated that they can't seem to do anything because Andrew always says no. And she's becoming judgmental about how he spends his money.

As you listen to today's episode, I think you will see that the real story goes a lot deeper than what you initially think. All the way back to Andrew's childhood. Welcome to I Will Teach You To Be Rich. Andrew, I understand that recently you and Sarah discussed going to Hawaii. Can you talk me through that conversation that you had with her?

Yeah, so pretty much we were actually, we were just in a gas station about to fill up my tank. And so there was a long line of cars and she had brought up going to Hawaii because she had seen these ticket prices that were, they were lower than usual. She was, you know, she checks the travel sites a lot to see where we can get good deals on travel.

I already started kind of being like, oh man, here we go talking about Hawaii again. Because we had talked about this like six months before and then like a year before. And it's every time we've talked about it, I felt like the bad guy because I pretty much said like, it's probably not a good idea to go to Hawaii because I'm not ready for it financially. And

Whenever I say that, I can already see in Sarah just from her facial expression and then her demeanor. It kind of turns to this sour look to where almost like, well, what's the point of even bringing this up if we're never going to be able to go? And so I feel like I always end up being a burden because it's like, well, we can't go because I can't afford it. So did you go to Hawaii? Yeah.

We did not. Sarah, walk me through that experience when you're in the gas station and you brought up these ticket deals you found to Hawaii. What was going through your head right before you brought up the ticket prices? Well, I mean, the deal was, I thought it was really, really good. It was round trip for $800 for two people.

And then in my head, it's like, well, our last major trip was over a year ago. Surely he must have saved at least a grand or two since then. You know, he was essentially stepping on eggshells. Yeah. And how was he doing that?

He was like saying, oh, I need to check my accounts. I need to make sure that I have enough money. I need to check my schedule. All that jazz. It's almost as if he was trying to delay the question because these deals are only for at most 48 hours. And after that, it's gone. Okay. So did you know that he was...

delaying the real answer? Oh, yeah. I had a feeling. Okay. And then how did you respond when he said all these things? I mean, I was very disappointed. I mean, I see all my friends, you know, just going out and having fun. And it's like, you know, I want to go out and have fun too. I want to go out and have fun with Andrew. And let's go to someplace that's, I guess...

that's in the States. You know, I'm not asking for us to go internationally. Do you think that he can afford it? Honestly, I think he can afford it if he was a little bit more strict with his finances. But then again, that's just me, though. Andrew, do you think you could afford it? I feel like I don't just because I know how much debt I have. And I feel like having...

Having that over my head, it almost makes me not want to spend even the money that I have even budgeted for a trip. The way my savings and all my deductions work, it's based off of the rules you have in your book, funny thing.

So I have like, I mean, it's been working. Yeah. It's like a slow progression that's piling on, on those little accounts. I feel like that was, that's a good start for me. It's just, you know, it's just like, I feel it gets overwhelming whenever we talk about it. Cause it's kind of like, I feel like I need to keep the money that I have so I can pay this debt off.

This question of can I afford it is a really interesting one. You might be shocked to know that two different people with exactly the same amount of money will look at a trip that costs $5,000 and one will say, oh yeah, I can afford that. And the other will say they cannot. I've talked to people who are about to buy something like a $1,400 handbag and they ask what I think. I'm looking at their finances and I say, you can't afford it.

And they get mad because they believe they can. So why can't we agree if we can afford something? Well, here's why. Let me give you a couple of examples. Let's say you're thinking of taking a weekend trip to visit your old college friends. Can you afford the weekend away if you have debt? What if that debt is credit card debt? What if it's a student loan? What if it's a mortgage? You can see why the affordability question is tricky.

And it can get even more complicated. For example, some people create their own internal rules of what they can afford. Let's take me. I have a money rule that I want a year of expenses in a savings account. If I don't have that, then to me, I cannot afford a vacation. Some people just look at the price of a restaurant or a theme park and say, hey, we can't afford that.

A lot of times it's based on what they think it should cost, often what it cost 25 years ago. Sometimes it's based on how much they have in their checking account. That is a very simplistic way that a lot of people make their financial decisions. My point is the can I afford it question is not as simple as you think. It is as much about your feelings as your actual numbers. You want to see what I mean?

In Andrew's case, he has about $65,000 of debt, but he also has six figures of money in investments. You know, what's interesting is you have $112,000 in your investments. That's a lot at your age, 32. So how do you feel about those numbers? Well, I mean, I know whenever I, I don't check my investments, maybe only like

twice a year, maybe every six months. Following the IWT system. That's what I like. And so whenever I see it, actually, when I looked at it to fill in the sheet that was sent to us, that was the only other time I looked at it. I was like, oh, I didn't realize I was at six digits already. That's right. Hold on. For everybody listening, make sure you just heard what Andrew said.

Oh, I just followed the, I will teach you be rich system. I didn't even realize my investments were at six figures. That's how it works. Yeah.

All these Looney Tunes people writing me online, writing, oh, should I buy this book? I don't know. I'm a left-handed Eskimo. Does it work for me because I live south of the equator? It's an $8 book. Don't ever write me asking if you should buy I Will Teach You To Be Rich, the book. It's $8 or get it at a library. Andrew just told you he woke up, turned on his investment account, probably at Vanguard, and it was six figures. Andrew, where's your investment account, by the way?

Uh, well, it's, it's through my work. It's through fidelity. Okay. I'll take it. I have no, I have no hate for fidelity. They're fine. All right. Good job. Congratulations. But how do you feel about the rest of the numbers, your income and your debt? The debt, that part I'm not so happy about because like,

I could have paid it off when I was still living at home with my parents. But because of things that I had to do at home, like for them, I was paying for a lot of things for them, family stuff. If I didn't have to worry about paying those things off for them or whatever I was helping them pay for,

I feel like I wouldn't be in this situation. So can we talk about what happened? Why did you have to pay for your family? What happened? Well, the main thing is that my dad ended up filing for bankruptcy. After he stopped working, it was just my stepmom that was pretty much pulling in the

I guess being the breadwinner at that point because she's a nurse and she was helping trying to help out as much as she could to pay for the mortgage and their vehicles. And then I have two younger brothers who also started college, have their vehicles. And so

there wasn't enough to pay for all those things with just my stepmom's income alone. And so then whenever I got back home or whenever I graduated college and started working, I almost pretty much like picked up right there and like, okay, where, you know, where, where, where do I need to help? How much were you sending to them?

Oh man, like almost my full paycheck. And I was, and I was getting paid or at that time I was getting paid about like 19, $1,800 every two weeks. Um, at that point I would say like almost 75% of that would go to whatever they needed help paying for, whether it was like internet cell phone, uh,

car payment, the mower, the lawn guy. Why did your dad declare bankruptcy? Because he also ran into some trouble with debt. Like what? From what I know, because I don't feel like I know the whole story actually, but from what I know, there was a lot of credit card debt and I think some stuff from his past that he owed some debt collectors. I'm not 100% sure on the details.

But I know there was like, he couldn't afford making his payments. What kind of lifestyle did your, is your dad still alive? He is. Okay. Are you still in touch with him? No, actually. And is that because of this?

It, I don't know. It's not actually that it's different. It's a different reason. Okay. Did he live obviously above his income? I would say, yeah, I would say yes. What do you have? The cars, the house, that kind of stuff. Or what else was it? That. And then just like, I think he spent a lot on just like,

acquiring things, whether it's for himself or for us, because my dad's from the Philippines and he grew up dirt poor. He told me all the stories. And so he always told me that whenever he finally moved here to the States, his dream was to make sure that his family wouldn't go through what he went through

I could see like, I mean, he bought, he bought me all the things that I ever, you know, toys, um, you know, game consoles, what have you, when I was a kid, you know, all the nice clothes, the best shoes. Um, and he did that. How do you think his lessons rubbed off on you? What did you take away from your dad's relationship with money? Well, I, I, I think I mirrored his, uh, his spending habits, if I'm being honest, uh,

Because I know, I mean, I like nice stuff too. And when I get an opportunity, I'll get it for myself because it's like, oh, I have a job now and I can afford it. But of course, there's limits to that. And then now I'm in this problem that I'm in. When you buy nice stuff, what are we talking about? Clothes? What else?

Yeah, clothes. And then I'm also really big into like health and like supplements and stuff like that. Oh no, what are you getting? What supplements are you taking? Just tell me.

Well, I take all sorts of things. I take athletic greens. Of course. Would you hear some podcast ad somewhere? Come on. Yeah. Come on. I know that's where you heard about it. Okay. What else? For sure. I take that. Let me guess. Let me just guess. You got fish oil, glutamine, protein.

some carnitine or whatever, I don't know how to pronounce it. Am I getting these right? What else? - Yeah. - Vitamin D and zinc. Tell me. - You're pretty close, yeah. - I love it. How much you spend on this shit? Come on. - Oh man, at least like $250 like a month. - Are you serious? - Yeah.

Look at Sarah's face right now. Sarah, what's going through your mind as you hear this right now, please? Can I say profanity? Yes, we love profanity on this show. Okay, first of all, Andrew, what the fuck? Did you know that? I mean, I knew that it was expensive, but holy fuck. Yeah, and $2.50 per month times 12 is...

That's a lot of money. Sarah, what do you think that money could have been used for? No, for your debt. No, buying me nice things. Okay. But yeah, mostly your debt. Andrew, what do you think? I mean, 250, okay. Yeah.

I agree. We all have nice things we like. I'm never here to break people about that, except, I mean, come on. Most of those things have no efficacy that's been proven whatsoever. And supplements is basically one of the most bullshit industries on the planet. But okay, besides that, you like it. It seems you spend your money on it.

I get a lot of comments from people who accuse me of being hypocritical on my rich life philosophy. For example, when I point out that some dude can't afford a $75,000 truck, their clever reply is, Ramit, maybe that's part of their rich life. Let's get one thing straight. You can't just point at something you want and twirl around three times and chant rich life, rich life, rich life, and then suddenly buy it with my blessing.

That's not how it works. Your rich life has to be something you can afford. That's table stakes. It's like breathing oxygen. You all intuitively get this. If your high school buddy said, my rich life is buying a private jet, you'd roll your eyes because you know he can't afford it. But how come we don't apply that level of rigor to someone buying cars or clothes or trips or even the type of place they choose to live in?

I want you to start critically evaluating the purchases you make. Not just using my rich life lens, but also using the affordability lens. This takes more than just your feelings. It means knowing your numbers. How much are you saving each month? What's your investment rate? What's your debt payoff date? A few minutes ago, we talked about how complex this question can be of knowing how much you can afford.

Well, knowing what you know now, do you think Andrew can afford a trip with Sarah? Can he afford $250 a month on supplements? What do you think? Listen in.

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. Where did the credit card debt come from?

The credit card debt, different things. It comes from anything that I have that's automatically being deducted from my credit card, like internet. Internet doesn't get you to $17,000 in credit card debt. No, it doesn't. And then for sure, the supplements, for sure. Okay. And then everyday stuff, gas, and also if...

Like if we go out to eat or something and I offer to pay, then I'll also put that on the card. Yeah, that's pretty much it. What else? This doesn't add up yet. I want to understand it. $250 a month on supplements. Okay. While I might not spend that much, fine. But that would take you years and years to accumulate $17,000 of credit card debt. What else?

It's just stuff that I would buy for myself. Like whether it's like stuff for working out, like equipment gear for working out. My, I also do, so I also practice jujitsu. And so I, I, I pay for a year's worth like a fee to go to the, it's like $2,000. No, that's not it either. Okay. It's kind of interesting. Uh, it was, yeah, it was like $6,000. Holy fuck.

And did you take out a loan for that? Well, originally I did. Okay. Keep going. Yeah. Originally I did. And then whenever I spoke to Sarah about it, that's when we kind of got into an argument about that. And then that's when she offered to loan me the $6,000. And so then I could pay the loan off and then I would owe her the $6,000. And what does this course get you?

Um, well, I'm trying to, um, I'm trying to get out of the, uh, the hospital environment. Um, I'm trying to, I, I'm trying to find a new avenue of, of work. So will this course get you that? Potentially? Yes. Currently right now I'm saving close to like 40% of my income just to put a down payment on like a house. At one point I was paying most of the rent, you know, and, um,

And to be fair here, there are days where I don't see Andrew as my equal because I'm the breadwinner. I'm the provider. I make more money. At some point, it's like, hey, you're kind of dragging me down. Andrew, what do you think hearing that? That's the part that I...

get triggered on and it hurts whenever we have these conversations because that's usually what gets said in these conversations that it's like, you know, it's because of me that we can't, you know, we can't live the life that we want to live. So this isn't the first time you've heard that? No. Okay. And when you hear that, what is your reaction? I mean, I'm like crying on the inside. Like it just...

Because it's like, for me, it's like, I just feel like so unfair about the whole, how it happened, you know, before I decided to move out of the house and like after graduating college, like all those, the last decade of my life, I feel like, you know, it wasn't my fault. And so like, it really, like, it makes me really sad and upset at the same time because I know like, if I could have just,

you know, maybe I should have just left the house sooner or something and just not have worried about anything. And then I could have just taken care of myself. Then maybe I wouldn't be in this situation, you know? So how long did you live with your family? I mean, it was probably till I was like 27. Wow. Okay. So four or five years after you graduated college and then, and you had between the time you left and now,

It's been what about five years? Yeah, because I pretty much I moved out of the house when I got with Sarah because I mean, they didn't really take to her. I don't know. I don't think they really liked us being together. Why is that? Well, the biggest thing is she's not Filipino. Yeah. So is your family very traditional?

I would, yeah, like a hundred thousand percent. But I know a lot of Filipino, I have some really close Filipino friends and their family doesn't care if they're with Filipinos or not. I'm so surprised by this. Oh, trust me. I am too. Like I'm the same way. I got friends that are Filipino and they're with Vietnamese women. And, you know, and so like, just like Sarah and I, that's what, that's how we are. And, um,

And so like, I mean, that's just one reason. I don't know what else, but I know for sure that's it. Because ever since I started seeing her, it's never been the same. I'm sorry to hear that. That's awful. I'm sorry to hear that. That's not your fault, Sarah. It's obviously not your fault. And yeah, I wish that it weren't like that. What I'm more curious about is,

the last five years in which you've accrued all that debt. What has been going on there? I don't like Sarah feeling like I'm the burden. And so I always do what I can to... If I can buy something that we need or if I can pay for dinner sometime or if I can pay for an experience, I don't know, a concert or something just so that we can...

spend time together and experience life together, then I'm going to do that, whether or not I have enough money in my checking account. What does the man in the relationship mean? Well, the way I was raised, at least, and I don't know if I believe this now, but when I was... My dad would always tell me, it's like, you need to...

You're responsible for the house. You have to take care of the house. You have to take care of your wife, your kids. You have to pay for everything. You have to be responsible. It's like all these hard things that were drilled into me when I was a kid. When was the first time you remember hearing this?

probably like when I was like six, like five, like first grade, second grade. Like what do you remember your dad saying to you about money when you were young? Oh man, he'd always tell me, number one thing he'd always say, money doesn't grow on trees. That was what he would always tell me. And then he would always tell me, don't go out there and like

be flipping hamburgers and, you know, at a minimum wage job, you know, you need to, you need to be successful or else you're not going to, you're not going to be able to pay for your, what you want in life. That always was ingrained in me. When you think back to those two things that your dad said a lot, how do you feel? Well, like now, now I feel like I almost feel like it, it wasn't exactly true because I

I mean, yeah, I mean, maybe money doesn't grow on trees, but then like, for me, I feel like if, if you just, if you put in the effort and, you know, you work hard enough, you'll be able to, you'll be able to reach your goal, you know? And I, and so that like, I, I,

I mean, it just kind of hurts inside whenever, you know, like when I talk about it now, it's like, what am I supposed to, how am I supposed to understand that at five, six years old? Yeah. You seemed angry when you said those two things, like, like it almost seemed like an insult coming out of your mouth. Did you notice that? No, actually. That's why I asked. It can't be easy to think about your dad giving you money lessons and

and then him going bankrupt and causing you to sacrifice your early 20s for his behavior. Do you ever talk to him about that? I have, actually. What happened? It wasn't a pretty conversation. Actually, that's another reason why him and I don't really talk to each other anymore. He was too proud?

If I'm being honest, I think so. Yeah. I mean, he told me like, how dare I say that to him? You know, like who, you know, you wouldn't be here. You wouldn't be where you are if it wasn't for me. The classic Asian parent guilt. We all know it well. Yeah. And like just talking about it now, like it really, it makes me, it really hurts inside because it's like,

it's it's not it's it's wrong like all that the stuff he said like it's wrong it really is and like and then i feel like i i realized that too late or something and and then like you said i i mean that's why i feel like i i feel like now i have to catch up and then like with sarah like i i don't want her to feel like oh because of him i can't

You know, I can't move forward either. These childhood events create deep grooves. They're not something you can simply shrug off. One of the reasons I started this podcast was to show you how deeply our upbringing can affect us, even 30 years later. It's hard to grapple with that when you hear someone spending $250 a month on supplements when he's in debt.

But as you start to hear about how Andrew grew up and what he faced, even as a young adult, my hope is that you start to empathize with what he went through. That doesn't mean you have to agree with how he spends his money today. But my hope is at least we can start to understand that we all come to our financial lives with different experiences. We all come to our lives with different cultural views and invisible scripts.

And if we start to internalize that and understand it, it can help us understand why people think and behave the way they do around their money. It can even help you understand yourself. 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 eight 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 Ramit.

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 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. How do you feel about being now an even higher earner in the relationship? How do I feel about being the higher earner? I mean, it's just nice to have extra money, but I just felt that with the extra income, you kind of have to...

delegates part of the money to help the other partner out in their situation. Okay. So great. So you're earning more money. The way you think of it is, hey, I can use this to help Andrew out with certain things that he might want.

And it doesn't seem, even though you, you believe that the man should earn more, even though you earn more, it doesn't seem like there is a gender issue for you. Am I reading that correctly? No, there's not really a gender issue for me, but, but in my head, it's like, hypothetically, if we do have kids, you know, um, I'm, I'm probably not going to be working as much. Um, and so then at that point, I'm like, Hey, like,

I need you to bring home the bacon just so I could focus on taking care of this human being. Well, bring home the bacon. So currently Andrew makes 75 K and you Sarah make 85 K. Is that correct? Yes. So if, and when you have children would, what's your expectation? Actually, have you two talked about this expectation? If you have kids?

No. Whoa, this is interesting. You just said no. And Andrew's nodding. Yes. Well, I love this. It was more so the fact about like having kids. Not so much. Yeah. So am I correct in assuming that you have discussed one day potentially having kids? Yes. Okay, fine. So let's say you have kids. And Sarah, you have...

the child? I would probably be working a reduced workload. Okay. So sometimes they'll just cut my paycheck. Got it. Okay. So best case, you would take some time off and then go back to a reduced workload, whether that be remote or in the office or whatever, but your pay would be cut. Okay. And so since you're the higher earner, a larger proportion of the household income would be cut. Would you be able to make it?

You know, if you dropped like 40K or 50K from your paycheck? I mean, assuming that we don't have any really big debts and whatnot, we could. Especially since I've aggressively saved. Like, I think that like I have like over a year's worth of savings. Mm-hmm.

Notice that we've gone on this long in the conversation without talking about specific numbers. That is on purpose. Too many people jump right into the numbers. I'm talking about financial advisors and I'm talking about you. You sit down to have your first conversation about money and you nerds open up your 34 sheet financial model with a P&L. Nobody wants to see that shit.

I know, I know. Cell C45 never talked back to you. It's so logical. The formula is exquisite. The problem is nobody cares. If you want to get on the same financial page, you have to start where people do care. That's why I always ask people about a specific money situation they remember and about their rich lives and how they grew up. And then maybe we'll talk about the numbers. Now, when you get to the numbers...

it helps to have a way to talk about them. And the way to do that is to use a conscious spending plan. This can give you structure on where your money is currently going and where you want it to go. You can download your own copy of my conscious spending plan at iwt.com slash episode 45. That's iwt.com slash episode 45. How can you have read my book and you haven't like run...

created your conscious spending plan. I'm curious. I'm not judging. I'm just curious. Because in some ways, you're pretty savvy. I'm looking at how much you have in investments. Six figures by age 32. That's great. But at the same time, you're sitting here saying, I just don't know how to sort these numbers out. I feel like when I sit there and I look at it all by myself, it makes sense in my head. Mm-hmm.

But then I think it's just whenever it comes up in conversation, I tend to like, that's when my mind starts to start spinning. And it's kind of like, I don't know. It's almost like, okay, well, I had this plan, but then now my plan is not there anymore. Because I feel like I get choked up or I get like, I don't know if it's like a nervous or like an anxious feeling that I start to feel whenever it's like, for example, if it's Sarah and she's,

we're talking about finances. Like I just, I almost like in the back of my head, I kind of feel like, I feel like my dad's standing right here. What is he saying to you? Like all these, all the stuff that he told me when I was a kid, all the, all those things about like money doesn't grow on trees. And like, you know, like you need, you need to be able to take care of your family. You can't take care of your family. If you're working at McDonald's, like,

Oh, like, it's like, I just feel like there's like a presence of him looming over as, as like, we're having this conversation, like Sarah and I will be talking. Do you want to keep him here? Or do you want to get rid of him? 100% get rid of them. Okay, let's do it. I can help you do it. You want to? Yes, please. Absolutely. Do you believe that it's possible?

I, yeah. Okay, good. You said, yeah, with a question mark at the end, but I'll take it. Okay, let's do it. Let's, let's start with this because I am confident you can get to the numbers part of it. And candidly, I'm looking at your numbers and, you know, there's a way out. I could tell you right now, I looked at your numbers. It took me five seconds. I said, there's a light at the end of the tunnel here, but you don't yet see it. Do you know why? No. Because your vision is clouded by your dad.

Because you're looking at these same numbers I'm looking at, but you have a set of lenses on that are smudged and blurry with your dad's fingerprints all over them. So what do you say we take those lenses off, put on a new clear pair of lenses? Okay. All right, let's do it together. On one shoulder, you have your dad. He's whispering in your ear. He's saying money doesn't grow on trees, Andrew. Don't work at McDonald's.

Even though you make $75,000 a year, you are not working at McDonald's. What he says still gets you, doesn't it? Yeah. Okay. Well, you know your dad's name. Usually I name these characters. We don't have to put your dad's name out here, but just think of that character chattering on your shoulder, in your ear. That's your dad. Now I want you to replace on the other shoulder, a new character. Who is somebody you look up to

It could be a real life person. It could be a family member, college friend, even a character from TV, whatever. Can you think of somebody who you really admire when it comes to money? Yeah. Okay. This is somebody who makes you feel good about yourself. Somebody who shows you it's possible to be even better than you are today. And they know that sometimes you're going to fall. That's okay. But they just gently guide you.

pick you back up, point you in the right direction. Who gives you good advice about money? Actually, Sarah does. Okay, Sarah. Wait, this is interesting. Is Sarah... Well, we can't have Sarah on your shoulder. That's too weird. You know, you're dating Sarah. Sarah can also be whispering in your ear. It's too much. Too much Sarah. But just for the sake of curiosity, what would Sarah tell you about money? I mean, she would definitely...

Tell me if I don't need it, I shouldn't buy it. Okay. That's good advice. What else? She would also tell me not to get her anything. Don't get her anything extravagant because it's... Or else she'll kill me. I don't think she wants me spending a lot of money. I love a good homicide threat on this podcast. It's good. Okay. And have you bought her anything expensive?

Other than like a trip, a trip to a trip to Vegas, like earlier when we were, when we started dating, that's probably like the most expensive thing, but. Okay. So if Sarah's giving you good financial advice, how come you're not taking it? I feel like, I think I still, I feel again, I think I feel like it's my dad talking to me. Yeah. I'm going to, I'm going to do something I don't usually do.

I'm going to do two things I don't usually do. The first is to be more directive. Okay, I'm going to, usually I like you to come to the answer, but it feels like you're struggling with this person on your shoulder. And that's why I'm going to do the second thing I usually don't do, which is I'm going to be the person on your other shoulder. I almost never get this directive on the podcast. Certainly not with naming the person on your shoulder. That's because it's actually an important part of my process that people put skin in the game.

But Andrew is really struggling here. And I don't think he's doing the regular old innocent dough routine. I suspect part of the reason why he's stuck here is that his confidence is just totally shattered. So I'm going to lend him a helping hand for now.

I have this hilarious slash sad thing that happens to me almost every single week in my Instagram DMs. Somebody will write me, they go, hey, I'm paying 1.25% AUM to my financial advisor. I know you've talked about not paying a percentage to a financial advisor. I just want to know if it's worth it or not. Where can I ask you a question? I go, just join my money coaching program. It's like 69 bucks a month. I do live Q&A every single month. And they go,

Oh, well, I'm not really sure that I can afford that. Listen, the person writing me this exact question will probably spend over $100,000 in lifetime fees

but they are afraid to spend $69 for one month of money coaching. Now listen, I don't mind if they join my program or not. That's not the point. The point is, isn't it fascinating that people would rather pay a percentage and not even know how much they're paying than to write a small check? That is how so many financial advisors charge by percentage and it costs you way more than you realize. I want to introduce you to our partners at Facet.

They realized what's wrong with this AUM or percentage-based model, and they did something about it. They're making financial advice accessible to everybody. With Facet, you get flexible access to a team of financial planners, CFP professionals, and a team of professionals providing guidance across retirement planning, tax strategy, estate planning, and more. And instead of taking a percentage of your portfolio, they charge

an affordable flat membership fee. And Facet does not charge you to invest with them. Facet CFP professionals are fiduciaries, meaning they are required to prioritize what's best for you. That means when you make more and you're not paying a percentage, you keep more. Now, Facet will waive the $250 enrollment fee for new annual members, and they will add $500 into your brokerage account when you invest and maintain $5,000 in the first 90 days of membership.

Check out their new membership options at facet.com slash Ramit. Again, facet.com slash Ramit.

If you are looking for a financial advisor, if you have a large portfolio, a complex tax situation, or you need specific guidance on something like retirement planning, check out facet.com slash Ramit. Sponsored by Facet. Facet Wealth Inc. Facet is an SEC-registered investment advisor headquartered in Baltimore, Maryland. This is not an offer to sell securities or investment, financial, legal, or tax advice. Past performance is not a guarantee of future performance. Terms and conditions apply.

You ever feel like you're making money, but you don't know where it all goes? Well, for a lot of people, the answer is subscriptions. Think about it. Between streaming services, fitness apps, delivery services, parenting apps,

It's endless. And a lot of times we signed up for something months or even years ago and we don't remember. Now you could look them up all yourself and cancel them one by one, or you can just try Rocket Money to help you find out what subscriptions you're actually spending money on, and then they will cancel the ones you don't want anymore.

Rocket Money is a personal finance app that finds and cancels your unwanted subscriptions, monitors your spending, and helps lower your bills. I can see all my subscriptions in one place, and if I see something I don't want, I can cancel it with a tap. I don't have to get on my phone with customer service. They'll even try to get a refund for the last couple months of wasted money and negotiate to lower your bills for you by up to 20%. All you have to do is take a picture of your bill, and Rocket Money takes care of the rest.

Rocket Money has over 5 million users and has helped save its members an average of $720 per year with over $500 million in canceled subscriptions. Stop wasting money on things you don't use. Cancel your unwanted subscriptions by going to rocketmoney.com slash Ramit. That's rocketmoney.com slash Ramit. rocketmoney.com slash Ramit.

Okay. You seem to struggle with getting some good financial advice. Gee, if only there was somebody here who could share a couple of little tidbits to help you with your finances. I wonder who that person could be. Well, here I am. Okay. Fate has brought us together and therefore I must deliver. All right.

Listen, listen to what I'm going to say. Now this, this, what's going to happen. Okay. Your dad's on one shoulder. Now you have this bushy, bushy, browed Indian dude with really hairy arms on the other. Okay. He's wearing a nice cashmere sweater. And anytime you face a financial situation, you have this little gremlin sized Indian guy on your other shoulder. Okay. It's great. Nobody ever walked around with a little doll gremlin like this. Now you do

So what does he slash I tell you about your finances? He tells me that I need to have systems in place. Okay, good. What else? I love this guy. What else? You got to have a plan and know your numbers. Fucking love this guy. Keep going, keep going. This is music to my ears. And then make sure...

No, understand compound interest. Okay. Very good. What does he say about debt, about your debt? I know that like, there's like the debt pay, pay your debts off would be like, follow it. Like, well, the debt snowball. That's probably like the biggest thing. Okay, good. That I can think of. What does he say about spending $6,000 on some course when you have a ton of debt? Pay your debt off first. Yeah. Yeah.

And what about, what does he say about your debt and your relationship? Uh, well, I know that, I know there's a part that you have to communicate with your partner. Do you think, does he think you can do it? Yes. Yeah. Is he confident in you? Yes. Does he think that you can do it today and you can begin and not have to wait 10 years from now?

Yes. Does he think you're strong enough to do this even though your dad is on your other shoulder? Yes. And does he think that Sarah can be a good partner to you? Not an adversary, but a partner? Yes. You're right. I think all those things. What are you thinking hearing this? I mean, it just makes me feel like a little bit emotional, honestly. Why? Well, because I mean, I never got told like, you know, I'm not,

I feel like nobody ever believed in me when I was a kid. And so it's just, I guess it's just nice to hear. I believe in you. I believe in you. Sarah, do you believe in Andrew? 100%. Andrew, I believe in you. I don't think you need to wait for some magical day. I think you already dream big. I think you work hard. You did it. It's quite impressive. You saved $100,000 in your investments.

Even though you were taking care of your family in your early 20s. I can see you're emotional right now. Can you share why? Because all I ever wanted was... I just didn't want to end up like... I didn't want to end up like my parents or like my dad. And so I just want to... I want to live my life to where I don't have to worry about any of that. And it's just...

I guess it just hurts. And I don't really know how else to explain it. But I just felt like nobody... It's like I was doing a mouth to nothing. And it was just nice to hear. Like, okay, I do got this. And it's like my dad was wrong. Yeah. That's when you become a true adult.

When you can see your parents for who they were, trying their very best, and you can, with some perspective, assess, take the best of what they taught you, and then create your own path forward. You have a great relationship with Sarah. The two of you have been together. Financially speaking, when you combine your incomes, you do quite well. But there's just this ghost in the relationship.

That just floats above everything. Who do you think that ghost is, Andrew? My dad. Yeah. And he's not the ghost we want to admire. He went bankrupt. So if we're going to have a ghost in the relationship, why don't we just pick a better ghost? And for whatever reason, this ghost is now me. At least for now, you can change whoever you want. But what I wanted to show you there, Andrew, is that you can choose who you put on your other shoulder. You can choose whose advice you take.

You don't have to only listen to the things that were drilled into you from age six. Okay. So what do you say we actually go ahead and, and talk about a plan? The reason that I spent so much time talking to you about your dad and trying to understand Sarah's perspective here is that mathematically, this is quite simple, you know, it's not that hard, but I knew there's gotta be something else going on here for you both to have applied to come on the show and,

Because with your income, it's kind of like, let's just solve this. Let's knock this out of the park and move on. But a rich life isn't just about math. It's about so much more than that. I think today we're really getting into some of that. Okay. Well, here's what I would do in that situation. Number one, I would take everything I had and focus it on getting that credit card debt paid off. Cannot pay the minimums anymore. Okay. Okay.

I would write it down. You can go to debt payoff calculator, Google that, and you will be able to calculate if I pay an extra $100 a month, how much faster will this thing be paid off? In your case, it will be paid off years sooner, years by just an extra 100 or 200 a month. Because your credit card interest rate is so much higher than your student loans, in my situation, I would also take

whatever money beyond the minimum for my student loans. And I would focus it directly at the credit card. That's me, right? That's up to you how you want to do it, but you will be able to calculate that with the debt payoff calculator. But I can tell you right now, you have a lot of money that is unaccounted for. If you make $75,000 a year, like where's all this money? It's not like supplements 250 a month. Up until recently, I was paying a car payment. What kind of car?

Acura TLX. How much is that car? It was like 37 at the time. And now you're paid off? Yes. From February, like after beginning of February, I paid my last payment. How long are you going to keep that car?

I mean, right now, I actually, I don't plan on getting a new vehicle. Good answer. You better keep that car for the next 10 years. Don't even dream of getting a new car for the next few years. Okay, good. You paid it off. Happy to hear it. Great. What are you doing with the payments you used to make towards the car? Where's that money going? Well, now, so like this, this month, like March and then April was like the first month where I had extra money.

from the car payment. And then the other thing that I also paid off was a consolidated loan that I had from maybe four or five years ago now. I paid that off and that was like another $1,000 a month that was being paid to as well.

So all this payoff of this loan and then my car all happened around January, February. So it's only recently that I'm able to... That I have this extra money now that can go towards something. Yeah, I get that. So how come you don't sound happy at all? I think...

You sound like you listen to a 90s emo song all day long in the rain. And you're just like looking out the window with like an old tattered book in your hand, listening to some Sarah McLachlan or something. And just like one solitary tear rolling down your eye. What are you talking about, dude? You have like thousands of dollars a month. What's going on here? What I feel at least is like, I feel like now that I have this extra...

Yeah, these extra dollars in my checking account, I almost kind of feel like I want to keep it, like, you know, keep it to myself or something like. What does that mean? Keep it to yourself so that it goes to Athletic Greens? Where? Keep it to yourself means what? I mean, really for me, I mean, it makes me feel more secure. Okay, I understand that. So let's keep some of it and let's pay down that debt so you can get out from under this weight. How about that? Yes. How much was your car payment?

It was like $472 a month. And you had a consolidated loan payment of $1,000 a month. Okay. Where's the rest of the money going? You had $1,000 in rent, $1,000 in loans, $472 in car payments. What else? Guys eat out? Ever? Yeah. How much is that? It can be between like $50 to $100. It's pretty typical. That's like, what do you guys eat for that much in an entire month?

How many meals is that? Probably like just a few. Yeah. Okay. Fine. It feels like you're missing like thousands of dollars right now. Maybe about a thousand, 1500 bucks we're missing. I'm guessing some of that's your student loan payment. Basically what I'm telling you is you don't know your numbers. Without being competent, it's impossible to be confident.

Okay. You have a lot of money you can use to redirect towards your debt. You told me it feels hopeless. You feel like you're behind, but you know, I wanted to point this out to both of you. Do you know, I've spoken to couples who have $800,000 of debt and they didn't even sound as down as the two of you. What does that tell you? That's, it's, it's more about like how you, you know, how you feel about the situation. Yes.

Yes. In other words, your feelings about money are highly uncorrelated with the amount you have in the bank. Andrew, what that means is you could pay off your debt tomorrow and you would still feel bad about money. I don't say that to make you worry. I say that to tell you, I want you to get aggressive about paying off this debt. It's not doing anything for you. You don't even know what you spent the $17,000 in credit card. You can't even name anything. Let's just get rid of it.

but also you have to simultaneously work on your money psychology. You can do both, but they are two parallel tracks. And of course, one will help the other. Right now we're working on the plan. So $1,000 in rent, great. Don't change a thing. I love that you two have managed this rent, which is low and it's just great. Awesome. Car payment, done. I wouldn't have advised you to get that car

But you paid it off. It's a car that's going to run for a long time. Fantastic. So you take this extra $1,500 a month. And what do you do with it, Andrew? Take care of the credit card. Yeah. How fast do you think that credit card debt will go away? Maybe less than a year. Correct. Exactly. Now, you can now choose. Hey, you say, Ramit, you know, I like to have a little bit of this money in my savings account. It makes me feel better.

That's totally fine. Life isn't just about the mathematically optimized answer. So you might say, instead of paying $1,500 a month, I'm going to take $200 a month and keep it in my savings account. But I'll take the rest of it and I'll put it towards my credit card. I would love that. I love when people develop their own point of view about money. That's up to you. That's like you choosing how much salt you want to put on some dish. Totally love it. That's up to you.

But I think what's important is that you choose your path. You automate it so that the credit card is automatically being sent money and that you and Sarah talk about that plan. When you talk to Sarah about money, I want you to come to her with a proposal. What you just said to her was a bunch of worries.

We got to reshift the way you talk about money. You coming up with a bunch of problems is not the way to talk about money. I need you to come with a proposal. Sarah can accept it or reject it, but it shows that you are taking the initiative when you come with a proposal. So try that again. So what I propose that we do is that I will take the money that I have left over from the

after all of my checking expenses get deducted, I'll take that money and pay it straight to the credit card. And then I will hold off. I will hold off paying you the monthly grocery expenses and things like that until after the credit card is paid off. Is that a plan that sounds manageable to you?

Yeah, that sounds manageable. So far, we've heard Sarah's frustrations. We've also heard that Andrew's spending habits are deeply shaped by his experience growing up, especially with his dad. I think Andrew's learning. Seems like he's having some breakthroughs today. But there's something that's been bothering me. Neither of them are really putting skin in the game. They've signed up to come on this podcast. They send me all their financial details. They've opened up about a lot.

but they're still not actually asking for help. And this is what's driving me crazy. If they're not asking for help, they're not really putting skin in the game. They're just replaying their old arguments again, and they are not putting themselves in the position to receive help. And you know what that does? That puts me in the uncomfortable position of just blabbing on and on to two people who don't really want to hear it.

So what I'm going to do here is I'm going to call out the elephant in the room. I want them to understand what they're actually doing and not doing. I'm going to wait until the two of you ask for help or we're going to all end up dead on this call from silence. I will watch my hair turn white before I volunteer to help you because the two of you are not asking at all. Have you noticed that? What do you think we should do? What do you suggest that we should do?

I love Andrew's example of taking both of your loves of experiences and baking that in. It could be a date night, could be a brunch. It could be you both love going for a road trip or a drive somewhere. It could be you two planning on when you're both going to have a million dollars and you're 0.7% closer to it.

It could be the two of you going through my rich life process and discussing what, you know, when are you going to get married and putting aside $10 or $50 a month. You could go through my wealth triggers program together and talk about money psychology and where you want to spend money. Once the debt is paid off, there are so many things you can do to make money fun. Oh my God. I'm having fun looking at your finances right now, because when I saw your application and I saw your numbers, I go, why are they so down?

Like we could knock this debt out pretty fast. It's not that big. And now that I talk to you, I understand why. It has very little to do with the numbers. These numbers are incredibly manageable. You two don't know how to have fun with money. You don't have a vision of something awesome that's in your rich life. There's no joy. And it makes me sad because I want joy. With the amount of money you earn and the amount of investments you have, it would be a tragedy if you can't find a way

to use money to feel joy, to use money to be generous, to use money to live these amazing experiences. That's why I wanted to talk to you. And that's why I've kept pushing you both on this call. Now that I'm able to distinguish the whole thing with my dad and everything and understanding how that affects me and the relationship as well, I think moving forward, I'll be able to

catch myself in those moments when I'm talking to Sarah and be able to have a better understanding of not just like how I'm, how I'm showing up into this conversation, but then also understanding where she's coming from as well. My intentions are is to knock this dead out and, you know, be able to live those, live the experience. Like I don't want, I don't want to waste the time. So I'm all about making this happen.

as smooth of a process as I can. Sarah, how do you feel about that? Yeah, we are in it together. This problem affects both of us. So it takes two to be a team and just have to support each other. And then like, you know, I'll always be there to support him. Even if he somehow gets off track, I'll always be there to support him. We'll figure out a plan and we'll get back on track. What about when he...

pays off his debt and he has mastered the ability to talk about money. What about then? Once he pays off his debt, he's going to buy me a ring. You know, you know, I hope that, that we will continue to have these healthy financial discussions and then figure out what we could do jointly as a couple, whether it'll be, you know, a wedding or like a house or, or us,

going on a random trip. Would that be fun to talk about? Then why don't you start talking about it today? You don't have to wait. That's my point. A rich life is lived today and tomorrow. That's the way to make your conversations fun. You don't need a cupcake and you don't need a clown car. What you need is to talk about the things that are important to the two of you. Talk about them, discuss them, make a plan, put a little bit of money towards it, even $20.

That's the beginning of a rich life. I received an email from Andrew after we talked. He took my advice. He filled out a conscious spending plan to help him pay off his debt. If you'd like to get a copy of that conscious spending plan, go to iwt.com slash episode 45 and enter your email address. Here's a little excerpt of what Andrew said.

Ramit, what surprised me the most is, quote, I didn't realize how much my dad's influence still stuck with me. I've actually had therapy before because of my toxic relationship with my family. And this isn't the first time my dad has come up in conversations like we had. Andrew has a lot to work on. And Andrew and Sarah have a lot to work on together.

He has put together a plan where he will pay $1,472 towards his debt every single month and still have money left over for guilt-free spending. If you want to put together your own conscious spending plan, go to iwt.com slash episode four or five. Thanks for listening to I Will Teach You To Be Rich.

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. ♪♪♪

you