51. “We went bankrupt, but I still have no boundaries with 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 now. He felt like I didn't trust him to do that, that I would even have to say anything. Seemed like it was a problem. And then it blew up into like this huge thing. So did you trust him? Not really, but I wouldn't trust myself either. Cal, what do you hear when she says that? I hear an attack. Like I've,

feel judged and like this burden, this burden thrust upon me. When it comes to big financial decisions we get, I think now we get cold feet like really fast and really easily and we're very nervous and anxious when it comes to having, to making large big decisions. That leads us into the exact cycle that we're in already. We're not equipped to make the decision so we refer back to my mom and then she makes the decision for us.

Katie, have you ever told your mom no? I've tried and it doesn't work out very well. I'm trying to have better boundaries. Today I'm speaking with Cal and Katie. They're in their mid-20s and they make over $100,000 a year. After a few years of moving around, they now live in Alaska. And their situation, as many, started with a target run.

They wrote me because they'd had a big fight over a trip to Target. But as I speak to them, I learn that there's a lack of trust, that Katie is the one who manages money on a day-to-day basis and Cal ignores it. Until recently, he has traveled for several weeks a month and he comes back, hands over his paycheck, spends a little time with the family, and then goes back to work. As you can imagine,

This doesn't produce a really healthy way of dealing with money. And then it gets even more complicated. Katie feels alone. She wishes she had some support. And so she turns to her mom. Her mom gives, shall we say, not very good financial advice and in fact has saddled them with tens of thousands of dollars of debt. Today's conversation was very challenging.

At times, I had to ask them to focus on my question. And other times, they seem to be spinning over the same stories, unsure of how to get out of it. But that's what I'm here for. And so as you listen today, please stick with it. I think there are some really valuable insights that hopefully you will hear with Cal and Katie. Cal and Katie don't know how to talk to each other about money.

If you are in that situation, if you have struggled to know how to get on the same page with your partner about money, I put together some conversation starters for you. Some word-for-word scripts that you can use to have a really positive conversation about money. You can get those by going to iwt.com slash episode 51. That's iwt.com slash episode 51.

So let's get into Cal and Katie's story. And remember to stay until the end to hear their follow-up from this conversation. I'm Ramit Sethi, and this is I Will Teach You To Be Rich. Katie, I understand that recently Cal came home from work and he wanted to go to Target. Can you tell me what happened there?

Um, I was doing my hair in the bathroom, which is at the opposite end from where he was in the living room. And he was with the kids and he had come home and he had like a list of things that he had kept track of when he was away that he wanted to pick up at Target. And I instantly got really anxious and asked if he could go and do something.

the like app where you can just shop from your phone, put everything in your cart and then just check out and drive there and pick it up. Um, because I feel like whenever one of us goes to the store, we end up picking up way more than what was on our list, especially if the kids are involved. And so he was going to bring the kids for me. I think I had plans that day.

And so he was going to bring the kids and I just it sounded like a recipe for disaster And I was like, can you do that? But then he got upset because he wanted to go in person and actually pick out his items And he felt like I didn't trust him to do that and be concise and that I would even have to say anything Seemed like it was a problem and then it blew up into like this huge thing So did you trust him?

Not really, but not because like, it's only him. It's like, I wouldn't trust myself either. Like I primarily use the app because it's a way of having self-control, which I feel like is something that we both have a really hard time with. And so I feel like if he told me that I wouldn't get upset because I'm like, yeah, like you're right. I would probably make an impulsive decision and buy something we don't really need. Um,

But I felt like he wasn't being understanding of my perspective in that situation. But I guess I also feel really guilty because he had just gotten home and these are things that he wanted to get. So it's just a hard scenario there. Okay. So Cal, paint a picture from your perspective. You came home after being away for two weeks. And was this the next day that you wanted to go to Target?

I can't recall if it was necessarily the... It was the same day. Immediately next day or the same day. But regardless, circumstances mean I'm just away for two weeks. I don't necessarily want to be home or shop online. I haven't been a big proponent of order online, go pick up. Katie definitely is more so into that. Not that I don't like it. Definitely can be convenient. But I was like, well, hey, it's a nice day. I want to go with the kids.

get out of the house, take them, have fun. They're excited to see me. I want to go and just go in person. What did she say to you? What do you remember when you brought it up? How did you bring it up? I probably was a little brash in my delivery, I'd imagine. Most likely something along the lines of, hey, we're going to go to Target and make a Target run. We're going to go get XYZ. And that devolved into, well, it

You're probably going to get ABC as well. I was like, well, no. I said, I'm going to get XYZ. Wait, wait. What items are we talking about here? What is XYZ that you had on your list? You know, it's already been. I remember. Tell me. I can't remember. He wanted, which is very reasonable. Like XYZ is reasonable. XYZ is new body wash, a t-shirt, and I think a belt. Like something very reasonable. Okay. And Katie, what were you afraid that he was also going to get?

ABC would be like stuff for the kids, toys that they saw. We just have a really hard time saying no. Snacks that we don't need. What kind of snacks?

Like junk food and stuff like that. I don't even know. Why are you guys being so cagey with your food? Just tell me. I want to know the details. Well, I'm trying to think because our... Our son's a very good negotiator and he will convince us to get everything under the moon. Your son, the four-year-old? Whoa. Big, big clue right there. The four-year-old who seems to run things around the house...

which causes them to fight about Target and probably many other things. I meet a lot of couples like this. They would probably spend their entire lives fighting about Target, but that's just a symptom. The root cause is so much deeper. And I'm already starting to guess that it is a lack of boundaries. Let's see how else this manifests itself with Cal and Katie. So you have a problem saying no

to your children. Do you think it's a problem? Okay. Katie's saying yes with her head. Cal, do you think it's a problem? It can be. Okay. Well, it's a yes or no question. Yes. Okay. All right. Fine. So you were concerned that he was going to buy a bunch of candy and toys and stuff for the kids. Well, I definitely felt unheard. Like I said, you know, Hey, I'm going to only get what I need. I didn't say I was going to splurge and buy the kids candy.

whatever they wanted. So definitely made me a little upset. I think the problem with the exchange was that it got really heated really quickly, but I felt like it wasn't me necessarily giving out the rules. It was more of like, hey, be mindful of this. I feel like I'm just trying to... Because I know that I need that reminder sometimes. So I feel like I was trying to be reminding, but he took it as more of authoritative, I guess. Mm-hmm.

And if you were pouring a glass of water, Katie, every morning and every morning, Cal said, be careful. You might splash that water on the floor. How would you feel after the first day, the first month, the first year of hearing that? I'm shaded. But what's the real issue here? I don't really think it's Target. I don't think it's the jelly beans that you were going to buy for your son. So give me another example. A more recent example is like

I will be checking the bank accounts and checking the budgets and stuff. And I'll make a comment like, wow, we spent all of our month's budget in two weeks. It's not even been halfway through the month. And he'll just get frustrated that I brought it up. He's like, why do we do this? And it's like,

It's not helpful. And he gets upset that I brought it up. And he feels like I'm blaming him by just mentioning it. It's saying it's his fault. Cal, what do you hear when she says that? I hear an attack. I feel judged. And this burden has been thrust upon me. Hey, here it is. Figure it out. Deal with it. Here's all the weight of that problem.

I see. And what does that feel like to you? Immense pressure. It feels frustrating. I'm trying to find the words. It's just hard. Too much to handle all at once. I just got home. I want to decompress. I want to spend time with my wife, spend time with my kids without feeling the burdens of life. Not necessarily to shelve it and to not think about it, but just

Just have a moment of rest. I just got off of working every day, 12 hours a day for two weeks. I wanted a moment of rest with my wife and with my kids. This example actually sheds a lot of light on what is probably going on with Cal and Katie as it relates to their money. Cal totally disconnected from money. In fact, he physically leaves to go to work for several weeks a month

Comes back, doesn't want to talk about anything, just wants to spend time with his family. Katie is managing things on a day-to-day basis, highly involved, checking apps all the time, emotionally invested to the point of feeling anxious, feeling alone because Cal is not engaging with the money.

And so she starts to try to control things. As soon as she sees him, she's saying, what about this? What about that? Don't go to Target. You're going to spend too much. Our four-year-old is going to make you buy toys and I don't trust you to say no. Frustrating to listen to, but I feel a lot of compassion for the two of them. There are a lot of couples where one person is the one in charge of money. And oftentimes they find themselves chasing the other person.

just wishing that they would actually care about money a little. And they don't usually come out and say that. They don't usually come out and say, I feel alone. I need a partner in this. They will usually say things like, why'd you spend so much money on that? How could you do that? We're running out of money. And you can understand that. They're frustrated. They're anxious. They're nervous. It's hard to know how to have these types of conversations. So let's give them a little bit of grace.

This is why, by the way, I created that conversation guy, iwt.com slash episode 51. There are very specific word-for-word scripts you can use with your partner to change the way that the two of you talk about money. Instead of attacking or running away

you can have these constructive conversations and start to shift the way that you both feel and act around money. So check those scripts out, iwt.com slash episode 51.

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.

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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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.

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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. So you got married at 20 and you mentioned that the two of you incurred a lot of debt.

Walk me through that. The first thing that happened was right before we got married, Cal and I decided to take the savings that his parents had saved for him his whole life and buy a car with it instead of investing it, instead of saving it for a house. And then we got almost $8,000, $10,000 from our wedding a couple months later. And we spent all of that.

We didn't think to save it. We didn't think to do anything with it. What did you spend it on? I don't even remember. That's the problem even till today. It just goes. It's eating out. It's buying things. Just living. Just living. So you bought the car. You took the $8,000 to $10,000 from your wedding and just kind of spent it. What else happened? Then we moved to Minneapolis and we got a credit card and furnished our place with it. And then...

I still had my car that my parents had paid off and given to me from high school and got talked into trading it in to get a lease on a newer car.

Your buddy Chet at the car lot told you, oh, this is a good day. He was a nice salesman. I'm sure. He was nice. They're all very nice in their ill-fitting suits. What did he tell you? Listen, folks, people, what do you want to pay? What kind of payments are you looking for? $299? Oh, $279? We could make that work for you. Don't you worry about it. Something like that. It was only like $185, but that's because we were leasing it and not actually financing it. And we didn't really understand that. And

So we were like, "Sure, yeah, 185, that's really cheap." And so we traded in my car that was paid for. Yeah, that was a car. You're going to come to find in our story that cars and trucks are literally our kryptonite. It's literally the worst. Oh, really? Wow, that's shocking. What a surprise. What a surprise. It starts here. It starts at the first one. Let's walk through the litany of these automobiles. No, you're going to be shocked with how many different automobiles we've owned in our very short amount of time together.

It was a 2007 Honda CR-V. It was a 2016 Honda HR-V. Something Volkswagen Touring. 2013 Dodge Durango. Then we traded that one in. 2017 Chevy Colorado. Then we sold the HR-V. 2010 Mazda.

Guys, all right, enough, enough. I cannot spend the rest of my life talking about your cars. So now I'm going to create some rules for you. I don't know what your love of cars is, but the two places that people in financial trouble like you get in is number one, they spend too much on housing and number two, cars. And the two of you are really, really exemplifying it with the cars. There's something very odd going on in this conversation right now.

When I started asking them some basic questions, they spent 25 minutes talking about cars. Well, we had this car, but then we leased that car, and then we bought this car, and then we moved here. That's why you finally heard me say, enough. I had to edit out all that car stuff because it would have made this podcast 10 hours.

I don't yet understand what is going on here, but there's something very unusual about this level of detail, about spinning over every minute detail. And when I told them enough, they both almost looked visibly shocked. I don't think they realized how deeply they were going into these irrelevant details. So I don't know what's going on here, but I know there's something going on.

So you buy a bunch of cars, you move to Minneapolis and you move back in seven months, which must have been very expensive in terms of furniture, shipping, just getting rid of stuff. And you finally end up back in Alaska. At this point, how much debt do you have? When we get back in Alaska, I think we only had like two grand in credit card debt at that point. How did you get to $60,000 in debt?

So when we get back to Alaska, we buy a condo. Why'd you do that? Because you don't want to throw money away on rent, right? Pretty much. That's what our mindset was. Who told you that? Everywhere. All the people in the church didn't rent. And in our area, everything here is really ugly. And I feel like

Cal thinks I'm shallow, but I'm like, I want to live somewhere nice and I want to fix it up and make it pretty. And all the places for rent at the time were horrible. And it was the middle of winter. And so when we got home, and so we decided, let's just buy a condo. So we find a condo that is fairly reasonable. How do you know it's reasonable? How did you make the calculation?

Based on what we could pay for rent, I think it was about half. Rent would have been $1,400 a month for a two-bedroom in a decent area. And the condo was $750 before dues. Wow. And what about once you factor in...

All the dues and interest and taxes. It starts to eat it up. Yeah, it starts to be... It literally gets to the same point where it's like about $1,400 a month after all the utilities and stuff. So the condo was a bad choice because the HOA was defunct. And so we ended up being one of the only two...

units paying the dues and the dues kept going up, up, up, up. And they only took care of water and they were supposed to take care of ground maintenance and insurance and they weren't taking care of that. Okay. When did you realize that you were in financial trouble? We didn't really realize until we had bought in the truck and then realized it was a $40,000 truck and a $600 a month car payment. We started to realize that

it was becoming really unmanageable. And that's when my mom got involved and basically was like, add up all your debt. What is it? And it was like $60,000 with the truck and all the credit card debt. What was that moment like when you sat down and added up all your debt together? It was really embarrassing, mostly because my mom was involved, I think. It was defoiting. Did you two look at each other? Did you say anything?

I really don't remember him being involved in that at all. It was more like my mom and then she just kind of like took over. Count the red flags. I count two. Number one, why is mom taking over? And why is Cal not involved at all? Two big red flags that I suspect are going to play a very large role in the rest of our conversation. Where were you, Cal? It was something that I decided would just be easier to let go

Katie's mom was going to offer to assist us. That seemed like a nice, easy way out of our situation. Instead of having to worry about paying a bank, we just pay her mom. Katie, tell me about the offer that your mom made. So she asked us to add it all up because I never had talked to her about our finances once we got married until we bought the condo. And I started to get really stressed out. And after the whole truck fiasco, I...

was really, really stressed out. And so I finally reached out to her to ask for her advice. And she told us to add it all up. And we realized it was $60,000 between all of the different, you know, negative equity and all that crap. And, um, we, she said, I'll take half of it. Um, I'll take 25 grand of it and you guys can deal with the rest and I'll, you can pay me back. Um,

but I'll get a better interest rate and it'll be cheaper for me to take it on for you. So what'd you do? We sold the truck. We sold the condo, got out from some of the debt, used what little equity we had accrued from the condo to help pay down the portion of our debt that her mom was not paying. Okay. And at this point, did you decide to declare bankruptcy?

Nope. Not yet. It wasn't until the pandemic and then Cal lost his job and we were totally screwed. This is a pattern that I frequently hear from people who are not particularly savvy with money. And that is they make a lot of changes all at once. Look at Cal and Katie. House, car, job, all of these things at once.

Now, sometimes you can't help it. If you get laid off, it's not like you could plan for that. But in many cases, when I talk to people who are in financial trouble, they do not sit down and make a plan for even one year. They often will simply focus on the next month and they will buy whatever is in front of them. Oh, we need a place to live. We should buy a house.

That would be a not very savvy way to do it. A much savvier way would be to sit down and say, okay, we're probably going to need to get a new house when our lease expires in three months. What are our options? Do we think that this housing is going to be less than 28% of gross? Do we think that we're going to fit the 2836 rule? Do we have enough for an emergency fund? What about moving expenses? What if one of us loses our job? How will we handle it?

This is the whole point of living a rich life. One characteristic that distinguishes the very rich from almost everybody else is that they plan ahead before they need to. Again, some things cannot be planned for. I understand that. But often, if you're talking about a house and a car in the same year, that is a massive increase in expenses. It's also a massive increase in complexity.

I want to be very careful about doing all of that at once. Okay, so you declared bankruptcy. You discharged how much of that debt? Technically, it's all discharged, but I would...

not have a relationship with my mom if we never paid her back. So how much do you owe her? We still owe her $24,000. So pretty much all of it because of interest and stuff. We weren't paying it for a while. It was just sitting because of the forgiveness during the pandemic. What is the interest rate that your mom is charging you? I think it's really low, 3%.

Is that a question? I'm not sure. I'm honestly not sure. I've asked, but I think it's a variable interest rate, not a fixed interest rate. And I don't feel like... What do you mean you've asked? You've asked your mom? And what does she tell you? Sometimes she answers, sometimes she doesn't. She's a very hard lady to communicate with. Wait a minute. What? Explain that to me, please. Like I asked this afternoon in preparation for this and didn't get a response yet. Uh...

What are we about to discover when it comes to Katie's mom and their finances? So your mom, Katie, your mom currently holds around $25,000 of your debt. That was very nice of her to offer to take that on and give you a lower interest rate. What is your mom's involvement in your finances?

super involved. So it started with that first loan. And then when we had to do bankruptcy, she didn't ask us and just bought a car for us, but with the intention of us paying her back. What? Yeah, that's another... It was a gift. It was a surprise gift. That's not a gift. That's not a gift. So she just bought this car and said, here you go. And then was it free?

No, you had to, they're shaking their heads. You had to pay for a $14,000 gift. Yeah. We're still paying her for it. I mean, it was, it's, we've paid it down too. So it's like, it started out. I'm not asking what you paid down. Hold on. How come, how come it's always, how come it's always the details with you, Katie? I'm curious. Cause I'm finding it very difficult to get to the heart of the matter here. And just, do you find yourself constantly spinning over details?

This is really frustrating. Did you catch what just happened? We learned that Katie's mom gifted them a car and then told them that they were expected to pay for it. And I said to them, wait a second, you had to pay for a $14,000 gift? And Katie's response was, I mean, we've paid it down in part two. This is why I'm getting frustrated.

Katie can't seem to give me a straight answer. And if she can't give me a straight answer, I bet she's not honest with herself about her financial choices either. This has been happening for our entire conversation. Remember, we spent over 25 minutes just going into the extreme details about every car they bought.

At this point in the conversation, we have been talking for two hours. And I finally had to stop her to ask, what was really going on here? Number one, because we're going to spend the next 22 hours on this call. But number two, I'm guessing there's something really important here because very few people do what Katie is doing. If I ask a question, they usually give me a pretty straight answer. Katie is not. And I want to find out why.

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. How come it's always the details with you, Katie? I'm curious. Because I'm finding it very difficult to get to the heart of the matter here. And just, do you find yourself constantly spinning over details? Yeah. Why is that? I don't know. Does it give you comfort?

Maybe. I think so. Does it give you a sense of control? Yeah, that's true. I think you're going to have to gently give up a little bit of control in this conversation because I can't push against you. It's just not working. Do you trust that I'm going to take us to a place that will help the two of you? Yeah. Okay. She's been looking forward to this for a long time. I know she's really nervous. I understand you're nervous. I get it. It's an unusual situation.

But Katie, I really need you to trust that I'm here to help you. And the way that you can show that trust is answer my questions and know that deeply I want to get to the root of what's going on. But I can't get there if we're getting distracted by all these details that are going through your head. Okay? Put your hands in mine. Let's go there together. We'll all go there together. I find this pretty interesting.

I think Katie's probably being honest. I think her way of answering questions does give her a sense of control. I often find that people feel they need to give me all the context to their answers because they really feel that I need to understand every little detail. That's very common.

I also suspect there's probably some element of the way she was raised. Maybe it was her belonging to that church and living with all the people from the church. Maybe it was the way she was raised as a kid. But you'll often find in certain backgrounds that people are expected to paint a pretty picture on everything.

And that's really what Katie did with that last question. I said, wait a second, your mom is making you pay $14,000 back? And she found it extremely difficult to simply say yes, because that's obviously bad. So her natural response was to point out the silver lining. Well, I mean, we've paid off some of it. Whatever the reason, I hope that Katie takes this little dialogue we had and thinks about it.

Because it's impossible to get ahead if you are focused on spinning over tiny little details. Now that we have established a little bit of trust, I want to understand more about what is going on with her mom. This third party who seems to be in the middle of Cal and Katie's relationship. Does anybody think that that's unusual for somebody to essentially force them to buy a car? Yeah, very. She's admitted to it too. She was like,

I know I kind of saddled you with this. How do you feel about it? And now I'm like, well, because of the bankruptcy, we don't have any other options. So it is what it is. It's unfortunate that we didn't have a part to play in it. But that's not the answer. That's not really an answer, is it? How do you feel about me saddling you with a car you didn't even ask for? What is your real answer to that? Embarrassed and childlike.

Like a child. I haven't even told my parents the real circumstance of us having that vehicle. Yeah. That's how embarrassed we are of the situation. It's like so embarrassing. This whole thing. Look at that. There's so much to unpack here. But I hope you notice that once I took away their details that they are both so comfortable living in, we got right into visceral emotions. That's real.

They've been made to feel like children. Embarrassed. Ashamed. Honestly, I think anyone would based on the situation that they're in. Let's keep going. It's not in his forefront of mind because it's my family, my mom, my dad. I'm the one dealing with it. It's on this side of the relationship and he's very not involved. Out of sight, out of mind, I guess, in a sense. I'm not even really...

I have a basic understanding of how much we owe her, but I don't know any of the numbers truly. And what are the consequences of you not owing? Not being able to effectively plan and coordinate and talk with my wife about it. And how does she feel right now? Abandoned, you know, alone. And so where does she go to get help from?

She can't get it from me. She goes to her mom, goes to her family. The cycle just keeps on going. Can you walk me through these conversations you have with your mom? So at a certain point, what is an example where the two of you couldn't make a decision? So Katie, you went to your mom. Just today because Kyle was driving back and forth to work, broke down. She knew it broke down because she had to come pick us up from the tow truck. And

I couldn't hide it or anything like that. So she knows about the situation and she knows we need to get another vehicle. So she's providing her thoughts on what we should do. And how does she say that to you? I think you should do this. I think you should wait. I don't think you can afford X. I think this. And how do you react to that? What words do you use? Okay. How old are you again? 27. And when you...

hear her getting into the, you should do this, you should do that. How would you characterize the way you react to her? Now, because I feel so shameful and like I can't make a good decision. I'm very submissive. Yeah. Like a child. Yeah. And we literally were having this conversation on the way here because it's not just my mom, it's my dad. Like my dad's texting here. I found this car. You need to trade your truck and give...

XYZ amount of money that we don't have. And here, and then you can have this truck and it's never a conversation. It's always, we're being told like children, what we should do. And in the end, do you do what they say?

I'm really proud of Cal because he actually became involved today. Just this week with this particular situation with the car, said no to buying a new car at 19% interest, which was really awesome. 19% interest? Yeah. He was like, absolutely not. Oh my God. I cannot do another car story. However, I do love the example that Cal and Katie just gave me.

of Cal saying, no, we're not going to do that. I am curious how her parents even had the guts or the space to have this kind of influence. And I want to get Cal involved here. I really want to understand how he thinks things ended up here because he doesn't see it yet. It seems easier for him to blame Katie's mom

than to really think about what led to the situation with Cal and Katie together having their finances run by Katie's mom. I think one of the decisions, if not the top, was initially accepting the help from Katie's mom. We just had this conversation where Katie told me that she had the realization when she accepted it that there was no going back.

from as far as like the enmeshment goes of our finances with her. I'd say that would be the biggest one. What about you avoiding conversations about money? Oh, yeah. Seems like maybe number one. I'd spot that in, yeah, up higher. Yeah, I think so. I mean, look, I... Well, I feel like it's like he doesn't want to be involved and he's so hands-off that I feel like I need to take control and then I don't feel equipped so I involve my family.

That's pretty straightforward. And does it work? No. It doesn't work because of the strings attached to it and the obligation. Like what? When Cal spoke of the moment when I realized there was no going back, before then, our money stuff was private. And now if I buy a new rug, it's an issue. Really? A rug? Yeah. I've been told explicitly, every extra cent you have

needs to go towards this debt. You cannot be buying new rugs. And so then I, you know, feel shameful and try and hide things. You two have a ghost in your relationship. It's the two of you. And who's the ghost? My mom. Yeah. But you invited the ghost in, didn't you? I did. In fact, you leave the door open and every afternoon you say, come on in, haunt us. That ghost is a welcome guest in your relationship. So

You grew up, Katie, never saying no, having things taken care of, it sounds like for you, getting married at 20. And if you look back at all those things, how do you think they all affected the way that you treat money today? I never say no. I've never heard no. No is like a foreign concept to me, I think. Hmm.

Okay. Fair enough. When it comes to money, it's hard to say no. And it's also hard to hear no. And yeah. Cal, what about you? When you think of money, what word comes to mind for you? I have a hard time rationalizing our spending. What's a good purchase? Not a good purchase in terms of where we are at financially within our budget.

My home life growing up was not the best situation. No one ever talked about money. Money was not something that we ever really communicated about. No one ever... I didn't even know my parents, my family's financial situation until I was an adult. I don't want to delve into my parents' relationship, but I definitely would

It was a very troublesome time growing up at points just from them fighting about it. I heard a lot of fighting over money. Really? Are they still together? No. They haven't been for eight years now. Just before, right before we got married. Roughly a year before we got married. What do you remember about those fights about money?

Not terribly a whole lot, only because I remember I would just isolate myself out of the situation, out of the, you know, in my room. I would just, you know, being a teenager, play video games, put your headset on, tune it out with my wife, you know, not really understanding what was going on with them. I knew it wasn't okay, you know, I knew everything was...

was divulging into what it would become. I could see it three years before it ever happened, them getting divorced. If you look back, you hear your parents arguing over money. You go into your room, turn on the video games. How would you characterize your response to your parents fighting over money? Tuned it out. Zoned out. Didn't care. Didn't want to know. And if we can fast forward about a decade later, when you have money problems

at home with your wife, how would you characterize grown-up Cal? Very similar. Tune it out. Zone it out. Don't care. Don't want to have a part of it. Katie's nodding her head a lot. And Cal is grinning ear to ear. Cal, is it a realization for you? I guess that's... Yes. I'm kind of just now, in this moment, making the connections between that. I don't think I've ever really taken the time to...

really sit down and stop and think about that before. It makes a lot of sense. Yeah. You think your kids haven't picked up on mommy and daddy fighting over money? Our son definitely. He knows. He knows. Yeah. Four years old, almost five. Cal, think about what you did when your parents fought about money. Yeah. Ignored it. And then what did that little boy do as he grew up and took it into his relationship? Ignores it.

did the same thing. This is how we pass these things on. Right. Yep. Lots of breakthroughs here. One for Cal, realizing the connection between how he behaved as a young child and how he's behaving now. And then predictably, how their children are reacting to the way they treat money. Again, this is very common. Virtually every time I talk to parents,

When I bring up how their children are going to react when they observe their parents treating money with disrespect or ignoring it or fighting, it clicks. They instantly get it. And that's exactly what we see here.

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How come the two of you haven't thought about this? I mean, you've lost your jobs multiple times. You've moved. Things have happened. How come you're not factoring this in to your planning? I think like, well, Kyle doesn't know. He's not involved at all. So it's all up to me. And I just feel overwhelmed. So I just, I don't know. I feel like my expectations that we're going to fail from the start. So I don't plan anything.

to win. Like I just planned that, Oh, we're, there's no way we're going to be able to save that $500 by the end of the month. Like I'm not even going to budget for it. Like I, I know my expectation is to fail. Okay. Now that's honest. You're not even playing to win. You already have accepted that you're going to lose. Right. What a terrible way to live. Yeah. What do you think, hearing that from your wife? No, I mean, that makes sense. And I haven't thought about that way, but that's,

Those are the words that I didn't know I needed to hear, but those are like, that makes perfect sense. Like we're just playing to survive, playing to just push it onto another day. So you have options. What do you think your options are?

It's like those, remember those Scantron tests we used to take and you don't know the answer. There's multiple choice, but at least you can eliminate a few things. Is there anyone around you who you know you don't want to take advice from? I'd say your dad. We decided today that we're going to completely cut my dad out of the loop after the house was very good and assertive today with him. No, we're not going to be buying that car. No, we don't. We're not doing that.

we're going to sell the car as is that broke down and keep the money. And we will make the decision on when, when, and if we want to use that money on a new car or a different car. So your dad is marked off. Who else? I want to, this is the thing is like, I want to be self-sufficient and I've had this conversation with my mom that I do not want to be in debt to her forever. I don't know how to get there. Like when I get to this point, it's a block. Like, it's like, I don't know how to uninvolve her.

Now that we've got the bankruptcy, it's not that I can take out another loan so that I owe a bank and not her. Okay. Do you remember what my question was? Who to cut out? I would like to cut out my family. All of my family. In a lot of ways, you can see what Katie's constant spinning and focusing on irrelevant details gets her. It lets her avoid very uncomfortable answers.

I pressed her on it just now. And you can see the answer she said. She said, I would like to cut out my family, all of my family. Now that's real. And that is something she never would get to if she focuses on spinning on irrelevant details, on everything but what actually matters. You know, one of the reasons I do this podcast is that

I want you to hear real couples telling me their story. Because when they tell me their story, you can hear that much of it is totally irrelevant. It's interesting and sure, we like to know what type of car they drive or where they eat. But when it comes to their money, there's usually two or three things that actually matter and you can discard all the rest. This is a key skill you got to learn.

When it comes to your money, there are about three to five things that actually matter for you. What's your income? What's your savings rate? What's your debt? There's a few big wins. And if you get those five to 10 big wins in life right, you never have to worry about the price of coffee or can you order an extra dessert or even can you stay an extra day on your vacation.

Part of living a rich life is being able to hone in on those key factors, the things that really matter. And that's why I love this podcast because every time I come on one of these conversations, I don't know what they're going to tell me. I do know that they're going to give me a lot of stories and a lot of information. And it's my job to try to figure out what actually matters along with their help. Now we are really getting into it with Cal and Katie. Katie, have you ever told your mom no?

I've tried and it doesn't work out very well. Okay. I'm going to ask that question again. And I want you to listen to your answer. Katie, have you ever told your mom? No, you have. Okay. Give me an example. She asked us to watch her dog a couple of years ago, right after she bought the car and I felt indebted. So I originally agreed.

And cause she was going out of town and then Kyle's mom decided to come up and I said, Hey, change your plans. My mother-in-law is going to be staying with us. It's really not convenient. Can we work together to find another solution? And all of a sudden I'm like this horrible person. I'm so ungrateful, all those things. Um, maybe I missed it, but where was the word no in that dialogue? Oh, I can no longer watch the dog. It's not going to happen. Um,

So then I don't really have a no. Okay. Thank you. Okay. So can we rewrite your story? Because you never told your mom no in your entire life. Come on. I love that the example you gave me in that example, your first answer to your mom was yes. And then when it became inconvenient, you want to change your mind. You go, hey, mom, can we come up with a solution together? That's not a no.

Actually, I'm curious, Katie, have you ever told anyone aside from your kids or husband? No, no, no. What does that feel like to say? I know it's codependent. Like I know that it's bad. I know it's bad. I'm trying to be better, but I don't know if it's about being better. It's a skill. Yeah. I'm trying to have better boundaries, but I don't feel like I've ever been taught boundaries. So I don't know.

I just do it because I'd rather do it than hear about it or yeah. You seeing a therapist? Yeah, I'm currently seeing one. Good. Yeah. And it's, it helps a lot for sure. Good. I'm glad. Did you tell your therapist about the conversation we were going to have? Not yet. Okay. All right. Well, I definitely want to be sensitive to the work that you're doing with your therapist. I'm so glad you were seeing one. It sounds like it's much deeper than,

your mom and a dog and a Jeep. Right. I think the reason it's hard to get to the root of things is because everything feels so enmeshed. And it's like some of the same themes that you're recognizing are some of the same themes that my therapist recognizes because it's hard to sift through. Well, look at where your kids are right now. Look at the Jeep that you're driving.

I mean, it's every single place. I am really happy to hear that Katie is working with a therapist. I always encourage my readers, my listeners, if appropriate, seek out a therapist. And I talk about my experience in seeing a therapist. When Cass and I were discussing a prenup, it got really hard. And we went to see a therapist and it was immensely useful. Now, while I wish everyone

would go and see a therapist when appropriate in their life. The fact of the matter is, the vast majority of people will not. It's expensive. It's hard. It's unfortunately stigmatized in our culture. And I don't want any of that. That's why I encourage people to see a therapist. And I talk about my own story. But with this podcast...

I also wanted to set the context of where this podcast fits in. It is not therapy. And I don't try to pretend it is. I have a lot of respect for therapists who are highly trained and work with people for many years. That is phenomenal. This podcast, I get to speak to a couple once, maybe a little bit of email follow-up. But

Imagine, because most people will never see a therapist, what do they do? They often will go on TikTok and get financial advice. They will try to read a book, but their partner won't read it too. And so they're stuck. And that's why on this podcast, I wanted to go behind closed doors and show you how couples actually talk about money.

For some, this alone is super helpful. It gives you the ability to have a conversation with your partner like you've never had one before. Others might say, wow, we should do this and we should actually go see a therapist. I think it would be really helpful. Whatever you choose, I want you to know there are lots of options out there. I don't want anyone to ever stigmatize seeing a therapist. And this podcast fits in but does not replace therapy.

Cal, if you're honest and you look forward two years, where do you think you will be financially speaking? One of the stipulations with us being able to buy a house, her mom has made it very clear and continues to make it very clear. We need to pay her off first. So before we can even remotely think about saving for a house, we need to save to be able to pay her off. Well, you owe her $25,000, correct? Which is, I mean, it's a very fair thing. And me and Katie both

agree to that. And we understand that. And this is something now that we've been working towards and we're trying to find out a solution on how to... We would like to find a solution to expedite that process. What happens after you pay off your debt? I didn't get a clear answer to that. Have you two ever thought about life after debt? I have. I can't say that I necessarily have. Katie, what have you thought about?

I want to go on trips. I want to be able to make a purchase and not feel guilty about it later on. And I want to be able to...

take the kids to Disneyland and not have to have, you know, like one of our family members come because they offered to pay for it. I want to be self-sufficient. I want to be able to do things for our kids and our family and start our own traditions and vacations and memories. That's a powerful vision. Yeah. Have you two talked about that vision before together?

Now that she's mentioned that, yes, we've communicated that with one another. Okay. That's cool. I'm pleasantly surprised because oftentimes people who are in a lot of debt, it's like they're driving in the fog. They can only see 50 feet ahead of them. And if you ask them what's past 50 feet, they go, man, I'm just trying to make it the next 50 feet.

And so it's cool to hear you have a vision. I love that. Being able to buy something without guilt, being able to go to Disneyland without a family member having to pay for it. I think that's beautiful. Well, let's figure out if we can get you there. What do you think would prevent you from paying off your debt?

We're stressed out about having to make a big decision and it's literally crippling. So I feel like not making a bad decisions where it comes to big purchases like cars or houses in the future or taking a trip when we shouldn't, stuff like that, that we can't afford would keep us from being able to get there. Okay. Cal, what's going to stop you from paying off that debt? I think Katie kind of said it in a really good way. I mean, when it comes to big

financial decisions we get, I think now we get cold feet really fast and really easily and we're very nervous and anxious when it comes to making large big decisions like that. And I think that could limit us and keep us from

pushing ourselves out of our comfort zone to try to... Well, I think that leads us into the exact cycle that we're in already. It's like we feel like we're not equipped to make the decision. So we refer back to my mom and then she makes a decision for us, which is the very thing that we're trying. The vision is being self-sufficient and being confident and making our own decisions. You know, it's funny.

One principle of psychology that I have observed with human nature is that most people would rather do the same thing for years and years, even if they are failing, than try something new. Most people are more comfortable sticking with something and failing than trying something new and potentially failing. See how ridiculous that sounds? But that's the way we do it.

Think about it. People who have been frustrated about finding a job, they go about it the same way they've been doing it for years and years. They send a resume on a website and they wonder why they don't get a response. I had a young woman on Instagram DMing me the other day. She's tried this. She got eight applications and nobody responded to her. I said, why don't you join the dream job program? We show you a better way of doing this. And she wrote back with a litany of all these reasons that might not work for her.

That indecision will probably cost her $250,000. But most people would rather do the same thing for years, even if they are failing, than to try something new. So when Katie and Cal tell me that they do this, I feel a lot of compassion. I also know that there are a lot of other people out there who do the exact same thing. Let's do this. You've got your family dynamic. Everyone has their own. I have my own too.

Let's get out of your situation and you transport over to mine. So I'm married too. And we have our financial discussions together. Okay. What role do you think my parents play in those financial discussions that I have with my wife? Zero. Of course. Of course. Are there certain times I would say no? Yeah. I share that because I want you to know that it is possible. Right. What do you think?

exists in my dynamic that's different than in yours? Well, you don't go to them with every single decision that you're going to make. Correct. What else? You don't feel obligated to do that. I don't know if your family gives you unsolicited advice, but when they do, you take it with a grain of salt. Look at my skin color. What is my background?

You're Indian. Do you think Indian parents give unsolicited advice? Have you ever heard any jokes about Asian people or Indian people? Yeah. Yeah, I'm a master at getting unsolicited advice. What else? You have to be competent with money so that you know whether or not

the decisions right for you and right for the situation. That's right. Because if you don't, then you're just this reactionary teenager who goes, mom, leave me alone. But you actually don't know what's good for you. Mom, leave me alone. I'm going to go run in traffic. Not a good move. So you have to be good. And you also simultaneously have to build those communication skills. It sounds like getting rid of this ghost in their relationship is something that Cal and Katie both want to do.

I'm glad that they are on board. It's going to take a while, but I'm glad that they both have the same intention. Now I want to get into some numbers. That's going to help us understand what their next moves might be. So at $8,800 a month in gross income, let's talk about your debt. So your debt is $39,000. Can you break that down for me?

That's the $24,000, $25,000 to my mom. And then the Jeep, also owned by my mom, the balance is $15,000. One thing that's weighing heavy on our minds, come October, the primitive fund dividend gets paid out to all residents of Alaska. And everyone that's of one year old to how it doesn't matter, as long as you live in Alaska, if you're at least one, you get a PFD.

And this year's total is going to be... Almost $13,000. Yeah, almost $13,000 that we're going to get direct deposited into our bank account on whatever day in the morning. Boom, check our bank account. It's there. And we've already been told what we're going to do with it.

Aha. You've been told by the ghost. By the ghost has already informed us what we should do with it, but we're not too sure if that's necessarily our best path. We don't even know if that's a good thing. We don't even know. What did this ghost tell you that you are going to do with your $13,000? Pay the Jeep off. The ghost wants us to pay the Jeep off. And we're not too sure if that's the correct path for us. Okay. Well, I can answer that for you. But can I just point out that

The last 10 years of your relationship have essentially been one tactical financial decision after another. And you're still thinking like that. I said, what are your options to fix this entire situation? And here we are talking about a one-time $13,000 transaction. Yeah, it's always that. It's always like PFDs, tax returns, this, that, this, you know? This is so common. And it's also so destructive.

This is the idea that most people treat their money completely episodically and transactionally. To them, money is simply a series of random arbitrary decisions. Do I go to Target? Do I get the gummy bears on my frozen yogurt? Should we spend extra, pay down our mortgage? Should we get this shirt or that shirt? It's just one transaction after another. There's no vision.

And if you treat money this way, you will treat it that way until you die. Yogurt, gummy bear, shirt, death. What kind of life is that? They are living lost in the transactions. There's no vision. And they are led there and kept there by her mom. What I really wish for them is to zoom out and come up with a vision. That vision should incorporate

what they love, what do they want to spend more on, their money dials. What's a priority to them? Do they really want to pay this debt off? How fast? What are they willing to do in order to accomplish that? A set of money rules. They can be simple things like, we're going to have a date night once a month, or we are only going to eat at this place once a quarter. Whatever, it's their money rules.

That is how you come up with a vision. But if you don't do that, you will spend the rest of your life just focusing episodically on random transactions and random money decisions over and over and over again. Okay. And your savings is $2,500. Your investments is $5,200. How do you feel about these numbers? It's painful for me because the way we do spend big chunks of money, like our tax return, gone. Like it's...

We had $10,000 in that savings account and now it's dwindled down to 2,500. So it's painful. Dwindled where? What do you spend on beyond your means? Eating out. Yeah. Where do you eat out? Coffee shops. Where do you guys get delivery? So up here, there's like these drive-up coffee shops that are really good. And going there every single day. Did you go there when he was at work?

Oh yeah, I would go there. I've been going every single day since I was about 16 years old. Really? Yeah, genuinely, since I got my driver's license. It's about $7 to $8 a day. And then if I take the kids, I'll sometimes get them something. Not all the time, but then it can get upwards of like $15 with tip. Usually I'm not operating at the coffee level. I don't know if you've heard any of my other material. I can tell you two things. First off,

How important do you think your coffee habit is in light of your entire financial situation? I know that it's something that I'm willing to give up. I just, it's hard for me to find the willpower again, back to the mindset of like, well, I might as well get this $5 cup of coffee. Okay. So you totally ignored my question. All right. This is like number 10 on what you should be thinking about. Let me put it just bluntly.

You two have 500 things that you're thinking about. What rug should we buy? We have this car. We have the PFD. He just got a reduced income. Oh my gosh, our bonus comes, but it's variable. I don't know about these rugs. And you're treating them all like they're at the same level. Right. And it's driving you both nuts. It's true. You two cannot get where you want to go by considering rugs at the same level as your debt.

Right. They are not the same. They're not even the same animal. They're not even the same universe. A coffee problem. Okay. We could talk about your coffee thing is not the same as owing $40,000 to your mom for cars. Yeah. They're not in the same universe. It's, but then she says, if you just didn't get your coffee, you could pay off the stat. Why are you listening to your debtor? I just, I, you're totally right. Yeah.

It's just like, it's bad hearing it out loud. The worst nightmare would be that the two of you are just stuck in this pattern for the next 10 years. It's my biggest fear. Yeah. But in order to change, you have to change your behavior. Let's see if you're really serious. How much is that coffee? Coffee is almost as much as eating out. Okay. So what do you want to do about that? The same thing. Pick.

you know, a day that I, or a couple of days that I go out for coffee. So right now it's seven days a week. How many days do you want it to be? Realistically, I think I could do four. Okay. Once you cut it down, start at five, do that for a couple of weeks, get used to it and then cut it down to four.

Take your time. Do it right. Right. But each week, I want you to be noticing. This is a great opportunity for you to write it in a journal. You know, oh my gosh, it's my first day since I was 16 not going. This is how I feel. Just get comfortable with it. We're building new habits here. It doesn't matter to me if it takes you an extra week or two to get to your target. You both want a fresh start. This is your chance. Normally, I do not get to the coffee level when I work with people.

I prefer to focus on things like asset allocation and money dials and investments and savings rates. But in this case, I actually think the coffee is really important. For Katie, the coffee matters because it is a symbol of old patterns, old routines. It is a symbol of letting old habits guide what you are doing today.

And it displays a lack of vision of where she and Cal want to go. That's why I'm pushing them on the coffee. And this is why I think that the opportunity for a fresh start is a deeply human need, something that we all love the idea of. And for Cal and Katie, they really get the chance to create a new vision of how they want to use money.

And coffee fits into that because it is a routine that she goes to and spends money on every single day. Continuing and looking on at your numbers here, your rent is fine. It's roughly 17%. Don't move. Okay. Your daycare is $1,000. I know. That's so good.

You were about to move, huh? She was thinking about it. She wanted to move. I was looking at places, but then I was like, no, I should do the opposite of what I want to do, think I should do. And I was also thinking like, what would Ramit say? Stay there. Okay. You know what? Okay. Usually I don't advise people, whatever you're going to do, just do the opposite. But maybe for the next six months, I do like to joke around with you, but I don't want to joke around with you about you trusting yourself. Okay.

Here's what I would like instead. I don't want you to leave this call saying whatever I'm going to do, I do the opposite because that just further disempowers you. The direction you're going, the two of you both need to actually become competent and confident with money. So I'll give you a lifeline. I'll give you like a bumper bowling. For the next six months, you think to yourself, what would Ramit do? How would he handle it?

You know, I made a mistake here. We were having a lot of fun, but I had to catch myself just now because I do not want them to do the opposite of everything they think. It sounds funny, but it's actually not funny at all. It's a trap because I need them to develop confidence and competence.

And you can't do that if you're joking with your partner, like whatever we're going to do, let's do the opposite. That actually just demeans you and it makes you feel stupid. You can't take yourself seriously. If you can't take yourself seriously, how can your partner take you seriously? So I caught myself there. I wish I hadn't even gone down that route.

I don't want them to do the opposite of everything they think. I want them to build the skills so that they can think about money correctly. So do we want to change this? Absolutely. How can you, Cal, help change this? Step in and try to take a more active role. I mean, she's not wrong. I definitely have taken a backseat in our financial situation. But hopping in the passenger seat, instead of sitting in the backseat,

Would be a better, or the co-pilot seat best would be a better analogy. Instead of just being a passenger, be your co-pilot. I think that's a great metaphor. Co-pilots. Right now, it almost feels like no one's flying the plane. If anything, it's mom. Yeah. When the two of you are co-pilots, guess who can't be in that cockpit anymore? Mom. How's she going to feel about that?

Not happy. Yeah. What kind of techniques? She literally told me, for example, when we buy a house, she's like, you have to consult me. You guys cannot make this decision on your own. It's like that repeated about every single decision. Just I have no confidence that I can do it. Yeah. There's a lot of techniques that people like your mom use a lot. And I'm sure that the work you're doing with your therapist will help you uncover those. I'm really glad that you're speaking to them. That's a lifelong thing.

But for me, speaking on the finances, I just can't tell you how outrageous it is from an outside perspective to hear someone say, my mom bought me a car and then made me pay for it. And that saddled you. It will saddle you for years, the two of you. This is almost an opportunity for you to each develop skills as co-pilots. You get to tell your mom

Next week, once the two of you solidify this, mom, we really appreciate that you have helped us with the car loan. We actually want to pay it off more aggressively. That's going to shorten the time period from X to Y years. And that's it. It's not up for discussion. Well, what about this PMD data?

We're going to handle that on our own, but this is what we're prepared to do with this. Simple as that. I'm not asking, I'm telling. And if you need to send an email, your therapist can help you with it. That 13,000 should not go towards your car loan. That money is for savings and investments. Put it aside. This is a rare opportunity. And honestly, that debt is low enough and you do make enough that you could pay it off. It will just take you time. So-

Just thinking because I know her. What if she says, you don't pay it off, then I'm selling it. And you won't have a car. Would she do that? I wouldn't put it past her.

But she knows that would leave us in a bind without a vehicle. Yeah, but I, yeah. Would she do it or not? But I wouldn't put it past her. Cut it off at the pass. I would say, you know, we're taking a new approach with our money. We're prioritizing money. We're being more responsible with money. And part of that is that I'm focusing on my discussions with Cal and we are going to make decisions as a unit. End of story. Well, what about me? We are making decisions as a unit.

I love that because it's so politically correct. It's not saying we're not talking to you anymore because your decisions are horrible for us. It's we are making decisions together as a union. And you just keep repeating that. Yeah, I like that. You will not be pushed around anymore with your finances because if it doesn't stop here, it will go on for the rest of your lives. You start to see why it's so important to decide at a high level what kind of life do we want.

And it trickles all the way down to Katie, you sitting there and saying, should I go break my rule of only going to eat, have coffee four times a week? No, because I have a bigger vision than coffee. Right. I have a vision of being free, of being independent of my mom. The two of you are not bad people because you can't will up this stuff to go right. But you have all the information you need and you're actually talking to the author of the book. Yeah. Trust me, neither of you are magically changing after this call.

The minute you start to accept that, the minute you can actually build a system that works. Right. There's no trumpets playing at the end of this call. There's no general saluting in the background with a tear running down his cheek. Nope, none of that's happening. The two of you came to this call and you are leaving the call basically the same people. That's reality. Yeah. You can say, okay, I'm ready to make some changes and I need some help. I spoke to Katie and Cal for hours and hours. It was one of the longest podcast recordings that I've ever done.

And when I get off these calls, I always wish the couples the best, but I never know if they will actually change or not. A few days after speaking with them, I received follow-up letters from both of them. You can read the full letters at iwt.com slash follow-ups, but let me give you an excerpt from each of their notes to me. Katie said,

In order to see change, we will need to systematically rewire the way we think and how we feel about money. That starts with being competent, reading your book and understanding the fundamentals. Then tackling the shame both on my own and with a mental health professional. New rules. We don't speak with others slash family about our finances. We set up boundaries.

Cal and I will wait to have conversations about money when we're in the same room and able to concentrate and fully connect. Friday nights are for our family. We order pizza and do an outdoor activity together. Memories don't need to be expensive. And Cal wrote, I know it has only been a week, but I feel a fire under my ass to get this debt paid off so we can live our rich lives.

Katie and I worked together to restructure our finances to be, for the most part, fully automated. Sitting down together, we did the math again for the pace we were going and said, F that. We don't want to be paying Katie's mom off for another 20 years.

Their letters go into much more detail about exactly what they did, including their new money rules. I would highly encourage you to check them out at iwt.com slash follow-ups. And all of this was possible because Cal and Katie were able to start having productive conversations about money.

If you want to start talking to your partner about money, go to iwt.com slash episode 51. That's episode 51 to give you everything you need to get started, including word for word scripts. 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.