46. “The ghost of FIRE still haunts our money mindset—we can’t enjoy 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. You know, money doesn't have to be boring. I get a lot of questions of people who have set up their accounts who have money being saved and they're like,

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

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

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

now. There wasn't as much joy in money, in savings, in finance that there should be. Basically, I tried to get everyone around me involved in the fire community. That's my special help. I've always just thought of it as a mechanical thing. You make money, you save money, you invest money.

than you spend it on groceries or a trip or whatever. It's always been extremely mechanical for me. The idea of putting all this emotion into it, even when you spend it on something fun, is just very foreign to me. I don't think of money maybe as being a joyful conversation. I mean, obviously, I don't. So he comes in annoyed with me already that I'm not interested. When he said we have a meeting, I rolled my eyes.

So he already comes in with all this information and he pulls it right up. There was never any like warm feelings that it was going to be good. Yeah, I mean, it's spot on. I'm definitely condescending. You are? Yeah, I think so. And I can be a bit of an asshole. So, you know, I'm okay with that. I mean, I'm not okay with it, but I'm okay admitting to it.

Today, I'm speaking with Carolyn and Gavin, who've been married for 10 years and have three small children. They bring in about $130,000 in annual income, and they have about half a million dollars in investments. So what's the problem? Well, Carolyn is totally disengaged from the family's finances. She doesn't want to take part in any of it. And this has isolated Gavin. It's created a vacuum in how they make decisions.

Even when Gavin tried to set up a money meeting to talk about their finances, Carolyn was completely uninterested. She wanted to get out of there as quickly as she could. So how do you work as a team if your partner just doesn't want to talk about money? And what if they use all kinds of different techniques to avoid it whenever you try to bring it up? Gavin and Carolyn reached out to me because they want a way to talk about money together.

But I spent a lot of time in today's episode gathering clues. I want you to pay attention to a couple of ones in particular. The first is that they used to be part of the FIRE community. That's Financial Independence Retire Early. And the second clue is that they are obsessed with the mechanics of money. They're actually obsessed with the mechanics of everything, how it works rather than what it means.

I'm Ramit Sethi and this is I Will Teach You To Be Rich and let's get started. Gavin, can you tell me about the last time that you tried to have a monthly money meeting with Carolyn? The first time was horrid. It's like I was talking to a brick wall. So what happened? You sat down and- Sat down. What happened? We had some cocktails. I opened up the spreadsheet, which was the first mistake.

I started talking about the numbers in the spreadsheet. I said, well, you know, here's our net worth and here's what we have invested in our investment accounts. And, you know, it just, that didn't work at all. I mean, it's like she was not interested in having that conversation at all. She pulled out her phone. She was looking at something on her phone, looking off into the middle distance, not at me. You know, it wasn't a conversation, so...

And did she ask you any questions? No, I don't think so. I don't recall any questions. What did it feel like to you to be in this meeting? It felt like I was kind of wasting my time. It felt like, you know, I had a sense that I didn't have her attention and that I hadn't started it off correctly.

I almost had a sense that we should try again. And I think that's ultimately what we... I mean, it was a short meeting. How short? Five, 10 minutes. Five, 10 minutes. Okay. First money meeting, five minutes. That's not usually a good sign. Well, I mean, at least we're having the meeting, right? Yeah. I like a lot of what you did. You put it on the agenda, right? You put it on the calendar. That's great. You had cocktails, making it more fun. I like that.

The rest of it, you know, we could tweak some of that, but I like the idea in concept. So when this meeting wrapped up approximately five minutes after starting and you both parted ways, when you reflected on this meeting, what did you think? If we're going to have another meeting, they can't go like that. Did you know why it didn't work?

Yeah, I think so. I mean, my sense was that, you know, I hadn't talked to her about things that were of interest to her or worked at it from an angle that, you know, that was going to be appealing to her. I kind of immediately started it off with my spreadsheet. And that's kind of like the spreadsheets, my baby. And, you know, it's not that interesting to her. You're proud of your spreadsheet.

I am. Who isn't proud of their spreadsheet? Hey, listen, you're preaching to the choir, man. I spent years trying to convince my wife how cool my spreadsheet was and that didn't work. But I told her, but do you understand how it all flows? And she still was not interested.

look at this graph it increases from the left to the right yeah it means that we're on trend yeah that's okay so maybe you and i should just have a money meeting where we talk about our charts i i can tell we'd be excited okay carolyn tell me what happened the first time gavin proposed having a money meeting

I thought, oh, God, here we go again. Because he does like to talk about money. He does try. I mean, it was not the first time he's ever tried to or we've ever tried to talk about money. And I knew he was listening to your podcast. I think the problem with that meeting was that there was not a clear goal for me at all. I had no idea what we were going to do. And I don't think he knew what we were going to do either beyond, okay, we're going to talk about money.

So he comes in hot, right? He comes in maybe a little condescending with a whole bunch of numbers. I don't think his spreadsheet is particularly easy to read. So it doesn't make a lot of sense to me. Not just because I-

He does love it. How dare you? Listen, I can help a lot, but I can't work miracles. If somebody insults a spreadsheet, that's out of my hands. All right? I also like spreadsheets. I'm pro-spreadsheet. I have my own, but his is hard to read. I couldn't follow easily. Okay, so there's usability issues. Okay, let me file this away. All right, so he comes in hot. He starts talking about numbers, and then? And I just...

Shut down. I mean, I think we already knew how this meeting was going to go. I mean, I think we both came to it with preconceived ideas about it. So even though there were cocktails, even though it was on the schedule, I knew I wasn't going to want to do it. And he knew I wasn't going to want to do it. This is an extremely insightful comment by Carolyn. She just said, we already knew how this meeting was going to go.

Well, if you believe the meeting is going to go badly, then guess what? It's going to be bad. I think in a relationship, every partner learns which topics to avoid, which topics to walk on eggshells around. But for some topics, like money, they're so important, you have to find a way to build a bridge, even if it's uncomfortable. Well, I guess you don't have to. You can end up like most Americans who only talk about money when they fight,

who think it's weird to create an agenda to talk about money, who constantly complain they can't get ahead, but they've never read a single book on money. Maybe I'm digressing here. Back to Carolyn. Right. So he comes in annoyed with me already that I'm not interested. When he said we have a meeting, I rolled my eyes. So that was already existing before the meeting started. And he does have...

He has all the information, right? I mean, I have access to the spreadsheet, you know, I do, but I don't look at it and I can't read it very clearly. So he already comes in with all this information and he pulls it right up and here it is. And, you know, so it's just like there was never any like.

warm feelings that it was going to be good. That's interesting. Yeah. It makes a lot of sense. I appreciate you saying that. So it was, we have a meeting. That's like, you say that at work. It's not particularly warm. I get that. I will say him asking for the meeting, I bet you shows caring from his perspective that

Right. But I don't think you perceive it like it seems like it's an obligation to you, a chore. Yes. I think that he did a nice touch with the cocktails. It's a very nice touch. I think his intention was probably good, you know, showing the numbers. I think he probably wanted to celebrate a bit because I've seen your numbers are very impressive. But it seems like he jumped right into it without a warm up.

Would you agree with that? Yes. Okay. Okay. Gavin, hearing this, what strikes you? Yeah. I mean, it's spot on. I'm definitely condescending. You are? Yeah, I think so. And I can be a bit of an asshole. So, you know, I'm okay with that. I mean, I'm not okay with it, but I'm okay admitting to it. Okay. I like hearing both of you admit these things.

Hey, yeah, I'm a little condescending. Okay, put it out on the table. I need to know this stuff. And Carolyn, I like hearing you admit, I wanted this meeting to end. Okay, fine. Now we can work with that. What I can't work with is self-talk that just spins around and around and doesn't really get to the truth.

Okay. Deep down, most people know the truth about themselves. They might need a little nudging. They might need to unpeel a few layers, but deep down, we know the hard part is having the courage to be honest about it. But in a rich life, a rich life means you are honest, honest with yourself and honest with the people around you. We've been married 10 years and, you know, I feel perfectly comfortable rolling my eyes at him and looking at my phone and being, you know, I don't want to talk about this, but, but

the discomfort manifests itself differently in different situations. The root is not you rolling your eyes at Gavin, which I also think is probably not the best strategy for your partner. But it's that, as you said, it manifests itself differently. Until you become comfortable with money, it's just going to manifest in very peculiar ways in different scenarios. And to get comfortable with

You have to get confident. To get confident, you have to get competent. Gavin did have good intentions, but the money meeting did not go well. I will say, I think it means a lot that he tried to have a money conversation. Maybe he didn't approach it in the right way. And we know that Carolyn certainly didn't take it seriously. But that doesn't mean they're going to be stuck like this forever. To help them, I need to understand what's really behind their disconnect with money.

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.

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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. We moved back from Germany in 2015. We lived overseas for my work.

And about that time, I got into the FIRE community and started going through, you know, actually adding some rigor to our finances, which were always pretty good, but that added some rigor. And then, you know, I started questioning small things and, you know, kind of

Laying it on a little bit thick in terms of, all right, is this a good idea? Do we need to spend this much money? Let's go through the grocery receipt and look at what we're actually purchasing. That's my special hell. Gavin, how did you get from the FIRE community to me? Because the FIRE community loves their receipts. Yeah. Basically, I tried to get everyone around me involved in the FIRE community. Oh, wow. That must have gone well. Yeah.

I got good reception in some places and not such good reception in other places. But, you know, really it was my brother. He, you know, is like, you're ridiculous. You're out of control. You know, he didn't say you're cheap, but, you know. Oh, no, he did. He definitely said that. And, you know, he kept suggesting that I read your book. And I just, you know, I just wasn't into it. And, you know.

Uh, finally when the podcast started coming out, he said, you should listen to this podcast. And I did. And, you know, I'd already started to, you know, change my perspective a little bit, but I think the, the podcast and reading the book kind of like made it, uh, solidified it for me. Um, and what did it solidify for you?

uh that there wasn't as much joy in in money in savings and finance that that there should be um and that you know you can be too absolutist yeah and did you know that i totally see that in fact of all the things i asked you what do you both speak about money there wasn't one thing that was joyful that's interesting i mean that's a that's a it's a very interesting thing to notice because that's true i mean

I can't think of a joyful conversation about money. I mean, it's things like, well, you know, I've bought tickets to California and we're going to go. Isn't that exciting? So the trip is fun. But like... For everybody listening, Carolyn has an absolutely dumbfounded look on her face right now. I think that's accurate description, right, Carolyn? Yeah, I just never... Again, I don't think of money maybe as being a joyful conversation. I mean, obviously, I don't.

You just heard massive clues on what is really going on here. First, with Gavin telling you that he used to participate in the FIRE community. In fact, he was almost evangelical about it. How do you think that affects him? And Carolyn, who got very quiet when she admitted, I can't think of a joyful conversation about money. If your entire perspective of money is a negative thing, then it's no surprise you want to avoid talking about it.

If your entire perspective on money is that you should accumulate as much as possible and squelch all joys and save and hoard and track your spreadsheet every day so we can escape this job that we hate. How do you think that affects your view on money? Some people think of money as a chore, an obligation. They prefer to avoid talking about money or even thinking about it. Others think that money is evil. If you earn more, you'll become an asshole.

You'll get too big for your britches, like all those evil rich people out there. Some people think that focusing on money or admitting they would like to make more makes them vain. In almost every case, there's a complete lack of joy around money and often a hyper focus on the mechanics of it. But if you only focus on the mechanics of it, like certain communities, then you never develop joy.

the connection between money and joy. And that explains Carolyn's dumbfounded look when I asked her that question. It would be like me asking somebody, how can you use concrete to create joy in your life? What? Concrete? What are you talking about? Many people literally cannot see the connection between how money can lead to joy. And that's my job here. Why now? You could wait years,

Your life is fine. You have a nice family. You have a lot of money. Why? Why change? Why wait to start living bigger and better? We're at a crossroads. My job is changing. Carolyn's looking at going back to work. We're looking at a major move. So when we talk about these big life decisions and there's major things happening,

in our lives, you know, I think it helps to be in alignment. I mean, it makes it more present that, you know, the lack of alignment, you become more aware of the lack of alignment with these kind of big changes. Carolyn, what do you think? Yeah, I mean, I think the same thing. I think it's definitely, you know, this idea that we're going to move and essentially start a new life in California. Yeah.

All their answers are so generic. They're using intellectual words like lack of alignment and vague phrases like start a new life. But part of my job is to not take people's answers at their face value. I don't have to believe everything people tell me. Half the time, they're lying to themselves and they don't even know it. Most people crave someone who they trust, who will gently ask them questions like, really? Are you sure about that?

Because most of the time, we have not thought deeply about these issues. So when I question people,

I don't usually say, hey, I think you're lying to me. Sometimes I will, but usually I don't. What I'm really trying to do here is to interrogate them gently, to ask them to interrogate themselves. Really? Do you believe that? Where'd you get that from? Is that the truth or is that just a story you're telling yourself? And when they can do this themselves, suddenly they can start to uncover their own invisible scripts.

Suddenly they can realize, boy, I've believed this thing for 15 years and I never actually checked if it was true or not. And that can hopefully lead them to designing their rich life. When you think about your overall financial picture, your net worth, income, all that stuff, is it an easy to access place? No. So we tried one of those wallet apps. Yeah. Forget, forget all that. Forget all that. Listen, yeah.

a piece of paper and a crayon and write it in that way if you need to i i looked at several couples financial documents for each other it was so complicated they had every single thing split out i go god i'm getting overwhelmed and i do this for a living they're splitting out all kinds of subcategories i go you guys are optimizing for precision you should optimize for simplicity

Just get 85% of the way there. Who really cares about the other 15% at this stage of the game? You should be able to put all your stuff on one page. You already sent me a one pager. Use that. Take it, make a copy. And what I would suggest, Carolyn, is for you, you have to take the lead on this one to ask Gavin what you need in a document that would make you feel comfortable. Starting with our income and savings and investments.

And then specifically where those investments are is interesting to me and how much. And what if he just wrote Vanguard or Fidelity? Would that answer your question? Yeah, that'd be fine. You don't care about the logins there? Well, I have them. Well, you told me like 10 times in this conversation that logins are a problem. Yeah, I hate them. I mean, I could access them. I don't have them in my head. Well, do you have a password manager?

Not really. Okay, so you don't have them. Do you use Safari or something that can save your passwords? Chrome. Okay, so what's the problem? Chrome saves them? I feel like financial passwords shouldn't be just on your computer. Oh, okay, so they should be locked up somewhere where you can't use them at all. Oh my God. They were so stuck in the mechanics, she couldn't even get beyond passwords.

They're so stuck in these weeds, they can't even see what's important. And truly, she's lying to herself by believing that passwords are really what's stopping her from engaging with her money. Try to ask yourself, what do you think they are getting out of this? What do you think that this hyper focus on mechanics is doing for each of them? That's the question that I'm thinking of right now. Carolyn, work with me here.

You want to, you asked him that in that document, he should tell you where the investments are. I said, is it enough to just write Fidelity or Vanguard? And you said, no, I want to be able to log into them. Okay. So what do you need in order to be able to log into them? Just like a Subway sandwich will have all of its ingredients right in front of the sandwich maker. I mean, the passwords. Okay. And where do you want the passwords to live?

I'd love for them to live in my brain, but I don't think that's possible. I'm going to ask you again. Where do you want the passwords to live? I'd like to write them down on a piece of paper. Okay, fine. Fine. Do what you want. For everyone listening, get a password manager, one password, last pass, whatever. But

Honestly, just figure out a way to get the passwords somewhere where you can access them. Now, I will tell you something, Carolyn. I suspect that if you put these pieces of paper with the password somewhere in some box or some drawer somewhere, you're not actually going to go and get them. Yeah, no, I think you're right. So can we just be honest? You're not going to go and pick out those hidden pieces of paper from under a drawer. You're not. You know the truth. Yeah. Yeah.

What if he gets hit by a bus and I'm going to need the passwords? You need the passwords. They cannot live in his head, but you need them in a way that's easier. Gavin, you want to jump in here? Yeah. I mean, I'd be willing to look at some of those like password minders. It comes down to, you know, providing that security and providing that access and, you know, taking away any, you know,

perception of inequality in the finances. And, you know, you know, maybe the, the risk is worth the return on that. I agree. You guys want to do it, right? Get a password manager, pay for it. And then the two of you have access to your shared passwords and it is secure. Do it. This is a solved problem.

The fact that we're spending 10 minutes talking about passwords is fucking crazy to me. Do you not realize that? Why are you spending my time talking about passwords when we could be talking about millions of dollars that you have to spend? So you are both causing yourself to play small by letting these little logistical details get in the way because it's what you've been doing for years. What a tragedy. You're going to end up by the time you're 65 with $9 million. Right.

And you're going to be sitting here talking about a freezer and debating over ordering a CSA? No, we can't let that happen. I won't let it happen. The idea makes sense to me, but your points about the mechanics are difficult. I've always just thought of it as a mechanical thing. I mean, you make money, you save money, you invest money, then you spend it on groceries or a trip or whatever. It's always been extremely mechanical for me. The idea of putting all this...

emotion into it, even when you spend it on something fun, it's just very foreign to me. Ding, ding, ding. This is a huge clue. If you see money as mechanical, why would you want to engage with it? You don't. You want to minimize it and get on with your life and try to think, where did they come up with this concept of money as mechanical?

Who was the one who was really into it? Who was evangelical about spreading the word? And how do you think that affected this relationship? 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,

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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.

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Elevate your style using Next Level Wardrobe at nextlevelwardrobe.com slash Ramit. That's nextlevelwardrobe.com slash Ramit. Yeah. Yeah, it is. That's why my readers are so successful because they quickly learn by using all the other free stuff out there that mechanics only get you so far, right? And

you run into trouble with yourself and with your loved ones when you just try to beat people over the head with a spreadsheet or all these investment logins. You also minimize yourself to thinking that life is just a series of mechanics. I mean, if we were going to do the same thing for your kids, isn't it just mechanical? You wake your kids up in the morning, you feed them some food, and then you make sure they don't drown, and then you put them back to sleep. Hey, that's mechanics. But is it missing anything?

Yeah, it's missing everything important. Love, caring, intentionality, all of it. Even yelling at him.

Listen up, people. I don't want to talk about fucking password managers. I don't want to talk about your stupid money apps or your cool productivity app. They're all worthless anyway. The best people in the world do not obsess over tools. Losers on social media do. They're the ones posting their 49-minute videos on how they use Roam Research and Inbox Zero and their simple morning routine of 39 cosmetics.

Pick something simple and move on. The point is not to optimize your password manager. The point is not even to live inbox zero. Who cares? The point is to live a rich life. If you and your partner hit a sticking point like this, then zoom out and ask them, hey, what's really important to us here? We want to have easy access to our passwords. So if one of us gets hit by a bus, the other one isn't left in the lurch.

Fine. Do you have an idea for a password manager? Oh, you do? Oh, I don't agree with 100% of the features. Fine. Let's do that. It's 85% of what we both want. And I want to move on so we can focus on the bigger picture here. That's how you do it. I can already think of 10 other things that the two of you could be talking about more joyfully. Carolyn, what were your rich life items? Um,

I mean, a house that's big enough. We have three young children. So a house of good size with, I'd really like it to be somewhere where I can see the stars with a telescope. So if not a lot of light, a dog, we've got a dog right now.

being able to kind of allow my children to pursue whatever it is that interests them and not be worried about if they want to play a different sport or if I need to buy them a trombone, like whatever it is, just being able to pursue that, no problem. Sounds like a beautiful vision. And how old are your children? They are seven, almost five and two. And Gavin, what about your rich life?

Yeah, I mean, it largely mirrors Carolyn's. We would definitely like to take our kids to experience things, different cultures, not necessarily at the, you know, the peak of luxury, but, you know, getting there, I can definitely see upgrading from coach.

Europe would be fantastic. There's these fantastic little huts in the Swiss Alps, and I'd love to go on a hiking trip. Yeah, established productive children is a big one, and just a lot of opportunity for them to play and be outside.

Add a large environmentally conscious property with animals and food growing there, I think is important to both of us. Love it. Okay, great. So I get excited listening to your rich life items. Did you two have a good time talking about these? Love it. I love talking about this.

Let's step back and think of how much we've covered in the last 10 minutes. It's been quite a journey so far. We went from critiquing the security capabilities of different password managers to building a full Rich Life vision that takes Carolyn, Gavin, and their three kids to this beautiful Swiss Alps travel Rich Life vision. Do you see now how powerful a change in perspective can be?

And do you see how much work it takes to get out from those mechanics, from those weeds and really elevate yourself to creating a vision? In talking to a lot of couples, I have learned that many people have lost the ability to dream. We all have it as kids, but when you think about money, a lot of people sort of put on this sour face.

Okay, time to talk about money. It's like when people talk about marriage. Time to get hitched. Time to go ball and chain. What a terrible way to look at marriage. If you've lost the ability to dream, might I encourage you to quickly get it back? Because it's one of the most important things I think anybody, certainly any couple can have. Now, back to the one sheet. We've honed in on Carolyn and Gavin's why. So this makes it a lot easier to

Let's talk about joy in the next part of our conversation, which is building a conscious spending plan. On the one sheet, I think, Carolyn, that you should have a conscious spending plan with an amount that you, I was going to say you get to spend every month, but I actually think you have to spend it every month on something joyful. I bet that's going to really stretch you.

So let's pick a number. I don't know the exact number. Gavin, what's a ballpark number of a discretionary amount that each of you would get each month and you have to spend it on something you love? $1,000. Wow. Okay. That's more than I thought. Carolyn, what do you think about that number? That's way more than I thought. That's kind of a lot for $150,000 income. Yeah. What's going on?

$2,000 a month, that's $24,000 a year off $150,000 gross.

Yeah, but meet me halfway. I almost never do this. Usually I have a bunch of millionaires who are sitting here and they go, oh, $50. I go, fuck $50. I don't want to ever talk about $50 with you. So you're the opposite. You actually picked bigger than I would have, which I love. I'm going to rein you back just a little. It's tough to go from zero to $1,000 a month. I want to set you up for success. Forget $1,000. Forget $1,000. Pick a number lower than that.

Let's go with 500. Okay. Which is still a huge... I mean, massages comes to mind. How much does a massage cost where you live? About 110 bucks. 110 bucks. You tip, right? Yeah. How much do you tip? Well, yeah, on top of that, 20%. Okay, good. Nothing worse than a cheap tipper. Okay, fine. So...

500. Do you feel that Gavin, are you pointing at yourself? Cause you're a cheap tipper. I'm going to kill you right now. Yeah. I'm working on it. I'm working on it. Yeah. Here's how you work on it. Add a zero to your fucking tip. What's the problem. God, if I really fucked you up, what, why, why can you be a cheap tipper when you have millions of dollars? I don't understand. How much do you tip? Tell me the truth. I mean, it's gotten, it's gotten a lot better.

Ah, shit. When you ask cheap people if they're cheap, they never answer the question directly. This is what they do. They always go, well, it's not that I'm cheap. I just like to be selective about what I buy. Gavin's doing the thing here where he talks about how much he's improved instead of answering my actual question.

Listen, people, this isn't your fourth grade soccer team where you get the most improved player award at your pizza party, which is really the nice way of saying you were the worst kid on the team. This is real life. Answer my question, Gavin. No one ever tells me the truth. Every time the answer is really bad, they always say it's getting better. I go, just tell me the fucking number so we can get into this. How much do you tip? I'll tip 15%. It depends on the service.

Okay, that's a lie. When he says it depends on the service, what he really means is I always tip less than 15% and once a year I'll tip 15% and therefore I will say it depends on the service so I don't sound cheap.

I once interviewed a waiter who'd collected thousands of tips, and he explained tipping psychology to me. He told me people like to imagine they are highly responsive to service by the amount they tip. In reality, you're either a cheap tipper or a generous one. Most people tip the same amount all the time, and it's not about the service you receive. It's about you.

I fucking hate cheap tippers. So Gavin, you love spreadsheets. You love tracking everything. And every so often you'll say like, I don't know, should we get this? Should we do it? Let's go to Costco. We can save a lot more over there. And like, if we do this weird thing where we drive all over town, we can save an extra $6. And then you bring that home and you mentioned certain cost saving strategies to Carolyn. Did I get that right or wrong?

I've gotten a lot better in the last year. That's not what I asked you. Carolyn, tell me the truth. I also will drive around for a good price. Why is no one giving me a straight answer here? Does Gavin do that? Yes, definitely. Everybody's distracting themselves from answering me. What is going on here? The two of you are wealthy. What is your minimum percentage you are going to tip from now on?

I mean, I've always tipped 20%. I'm happy going above to 25. Okay, 25. All right, Gavin. By the way, this number has to be the same because you two are married. You're a team. Gavin's really quiet all of a sudden. I can roll with 25%. 25% it is. Fantastic.

This is money that you can afford to spend and is quite meaningful to the person you tip. So let me just draw a line here. 25% minimum, you can tip higher if you want. 25% minimum if you are eating at a restaurant. 25% if you are buying a cup of coffee. 25% if massage, anything. And if you're not sure, tip. Can't go wrong.

Okay. So how about that little tip jar on the counter at the bakery? You know, I mean, do you, do you tip for that? I mean, yes. Yes. Wait, keep asking. What else? What else are you not sure about? Hotels. He does not believe me that you should tip the hotel cleaning lady. Oh yeah. You tip $20 a night.

Look at that face. Everybody couldn't see that face. He did a face like he just stubbed his toe and he knows the pain is about to come in about two seconds. Yeah, you're going to tip $20 a night from now on. And you're never even going to probably see the person's face, but it's going to be incredibly meaningful to them. You can afford it.

He's writing it down. This is awesome. Gavin, I appreciate you. You're fully engaged with this. You're writing it down. I can tell. And that means a lot. This is getting you out of your comfort zone because this isn't just the Carolyn show. It's really the two of you here. And I love seeing this. I kind of love like Carolyn. It's amazing. You really came to life when we just started talking about tipping and you're like, oh yeah, I tip all the time. I tip 20%. I have no problem going higher. You were just boom. So confident.

That tells me that money is not just this dark place for you, that there are certain aspects of money that you feel really comfortable and good about. And I just saw it. That's exciting. I do like giving money away. I mean, it feels great to call up NPR. Bingo. It took me hours to get to this point. But finally, I can see how money is not just this mechanical thing to Carolyn.

In fact, although Gavin is usually the leader when it comes to money, Carolyn is way more comfortable when it comes to tipping. And once I discovered this, I got excited because by making this explicit, I can help them see that money is something they can both engage in. Sometimes Gavin knows more. Other times Carolyn knows more. Now together, they can start to design their rich life vision.

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I would definitely engage them in asking what they want to donate to. Because my, I mean, especially our eldest, she's an outdoor maniac and she loves the wolves and she, you know, loves the spiders and all that stuff. Yes. Okay. Hold on, Gavin. One second, one second. Beautiful. Do that. That rolled off your tongue. One thing I want to suggest. I want you to think about who presents this message to

Gavin, I'm sure you talk about money more than Carolyn with the kids. You know, they come to you and the Tooth Fairy and all that. This would be an amazing opportunity, Carolyn, for you to demonstrate leadership. Imagine sitting down with the kids and Gavin. You say, you know, dad and I were talking and we have decided that we are going to donate every year because it's important for us to give back. Notice I'm telling them why I'm teaching them. I'm connecting money with joy and we want to get you involved.

Dad and I have decided on one charity we want to donate to, but we want the three of you to come up with another. And they are seeing you, Carolyn, leading this conversation. What do you think the kids are taking away from this? I mean, that it's fun to give away money and that it's, you know, it's an important part of their responsibility. It's something that grownups do. Yes. And specifically, who is leading this one? Mom. That's right. That's right. That is a beautiful moment.

Gavin, what were you going to say? Oh, yeah, absolutely. You know, you pretty much filled it in for me. You know, sitting around the table, like talking, having a conversation together as a family and, you know, hey, what are some of the things that we love? And, you know, who wants to

We do this thing at dinner every night, rose and thorn, where we go around the table and say one thorn and one rose from the day. I love that. We could do the same thing with charitable donations, I think. I love that. Who do we each love for a cause? Paint the picture for me, Carolyn. What do you want your daughter to see in you? I mean physically see you.

What do you want her to see as it relates to her mom and money? Being competent, not freaking out because I can't find my logins. You know, just being calm and confident about money. Just, oh, we got to check this real quick. Okay, so let me translate that for you because I want to bring it to, again, what can someone visibly see? You want her to see you logging into some of your financial accounts and reviewing certain numbers. Is that right? Just not being, not avoiding it. Not...

fretting about it, just having it be part of everyday, regular life. You know, you buy milk and you go to school and you brush your teeth and you check, you know, and you take care of your money if you need to. If you have kids, I want you to sit down with your partner and ask each other, what do we want our kids to notice about how we treat money?

You'll notice that Carolyn made a common mistake. She started using descriptive terms like being competent and not freaking out. And so I gently redirected her to this question. What do you want your kids to visibly see you doing? Like visibly with their own eyes.

They should probably see you logging into your accounts so they realize it's normal to track money. They should see you planning a vacation so they understand that money gives you the opportunity to do these amazing things. They should see you deciding what type of bread to buy and even audibly weighing out the pros and cons of certain purchases so they understand that money involves trade-offs.

Show, don't tell. That is a key principle inside my company. I will teach you to be rich. I want you to use it as a parent too when it comes to showing your children about the importance of money. Okay. So she'll see you not fretting about it and also logging into your accounts and making it just a normal matter of what you do in a day or a week or a month. Okay. What else do you want your daughter to see you doing? I'd like her to see me

to our conversation earlier, spending money and doing things that are fun, finding some joy in money. Families talk about the things that they value. And I just love the idea of the two of you as a team starting to talk about money in a way that's meaningful to you and then to your kids. So I would say, here's what you do. You have your one sheet, okay? Which I'm going to give you some homework to do at the end of this call.

Second, you have your monthly call that's already going so much better than it is. Add to it. Each month, I recommend that you go, well, you should do it every week. Go through one chapter of the book. It's a six-week plan. So by the end of your second call, you'll be totally done. You two could probably get through that quite quickly, but don't rush it. Chapter four is your conscious spending plan. I want you two to create it together.

And this will be really fun. This isn't a budget, Carolyn. Budgets are backwards looking. A conscious spending plan is where do you want your money to go looking forward? Now you know that each of you has $250 a month for you only spending. So that gets written down right away. And then you have money for the kids. This is where you get to map it out. How much do we want to spend on the kids?

It was interesting as like a starting off point. Okay. And it had never occurred to me to do anything like that before. And so I did it for a while and I was like, okay, no.

Now I have a concept of it and I have no desire to do it anymore. Okay, cool. So, hey, that's going to come up in chapter four, the conscious spending plan, because you're actually going to have a pie chart and it actually is going to have recommendations. This is how much you should spend on your fixed costs and your investments and all of that. And my favorite one of all, guilt-free spending money. Guilt-free. Isn't that a nice word? Because you already took care of all the other stuff. So this is money. It's totally guilt-free.

And whether it's awesome food or a massage or taking the kids to a coaching thing, guilt-free. In order to get to guilt-free, you have to go through the work of making your plan. The two of you both want this to work. You just may not have the right tools, intentions, and history to make it work correctly.

I later learned that you were in the fire world for a while, which explains some of your aggressive investments. That is very impressive. However, it has costs. And that became immediately apparent when I asked you about your daily spending. And it was just all mechanics.

all mechanics all the time. I go, are we going to smile at all? Is there anything happy going on here? And then we pulled and pulled and then everything came out. I feel very confident with the two of you. Sometimes we start with the simplest thing. Let's do a one sheet. Let's talk about our numbers once a month. Let's create a conscious spending plan. And that moves us at least for the next six months. That's the step I want you to take. Yeah, I'd totally be game for that. Awesome.

This was a really fascinating conversation. With Carolyn and Gavin, the immediate problem seemed to be that Carolyn was totally disengaged with money. But as we talked, it became clear there's a lot more interesting stuff going on beneath the surface. For example, the fact that they used to be part of the FIRE community. FIRE helped them, helped them invest a ton of money and save and change their spending behavior.

But it also had its costs, and it caused them to look at money through the lens of pure mechanics. When you hyper-focus on the mechanics of how much can we save up, what's our savings rate? Oh, I don't know, Trinity. Oh my gosh, when can we retire? That can help you, right? It's a very pure thing to work towards, but it also costs you.

You will often see people on FIRE subreddits and forums talking about the problems that they've developed. They move the goalposts. They've made enough, but they can't bring themselves to retire. They constantly worry about money. And some of them will even describe even more serious problems. Anxiety, mental problems. These are serious things. I want you to be aware of the costs of whichever approach you choose to take.

In this case, fire, as well as other things, contributed to Gavin and Carolyn looking at money as purely mechanical. Now, I received a follow-up from both of them, and you can get the full follow-up at iwt.com slash follow-ups. But let me give you a quick excerpt of what Carolyn wrote. Quote, I thought the price we were paying to live so frugally was dinners out and new clothes, which was easy enough to give up.

I'm not sure if it would have ever occurred to me that the actual price was the joy that I was getting from occasional dinners out with my family or well-fitting pants, or that mindset could rob me of joy in the future. Of course, seeing this doesn't mean I can change it overnight, but I did take my five-year-old out on a mommy-son date and tip the barista 25% this morning. That felt good.

Yes, you can read the full letters from both Gavin and Carolyn at IWT.com slash follow-ups. And I want to emphasize that frugality serves a purpose. I'm still frugal about many things, but there is more to life than frugality. So if spending money to create joy is something you struggle with, go read their follow-up letters at IWT.com slash follow-ups to see how they're doing it.

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.