179. “He just turned 50 and we have no savings. I’m panicking.”
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When I have money, I wanted do something with that right away. It's very uncomfortable for .

IT to just sit there, take a step back because I know that number and IT would really hurt .

me inside today. Meet kate, Andrew. Kate is a forty three year old mother of two and a home school teacher. Her husband, drew, is a fifty .

year old college professor. And IT feels like we're .

taking one step forward and two steps back.

Kate is a warrior terrified they haven't saved enough for retirement. Drew is a completely .

hands off with money for reasons.

To protect something inside myself.

Together they overspend, and after twenty five years of marriage, they have a masked, a crushing .

amount of death. I don't know how to. Having a plan is not .

existent when I look so many. Do you can they ever .

pay off this mountain of debt? Or will the vicious cycle of overspending continue? Well, let's find out.

I was sitting right here in this this chair and I uh I think I was looking at my finances and he was out with our side um at a soccer game before we left. I was like, I I just get one thing at the concession thing, you're good. And then he takes to me while he was there.

The picture of our son was like, a sad this thing. Can we get another think surprise? Oh, no. That I think that for us, things always are going fine until like those moments where there's a trigger in that sense, where I realize I think we're on the same page, but or not.

I curious see, how did you reply to the text message?

How did I reply?

I think you just said flat out no. And that was that was the answer all I needed to see.

And then I didn't like either because I fAiling this current child dynamic but just I don't want that with him. I'm like a geek ever and it's like a child being like me, can I and it's like he is not know what's going on on our financial picture. I felt like he shouldn't have even ask knowing what .

our numbers are you i'm curious what was gone on for you when you sent that text message?

I guess, trying to take advantage of that small situation and, uh, try to get some extra fries out of that uh knowing that uh, our budget is tight um just to be able to disaster game with my son. Um was was a lot and I was nice and I just wanted that a little extra treat sometimes that i'd try to be funny. Uh maybe not the best way, but the comedy, my way of how I kind of handle things, things I I dress IT up in hiding as a committed act.

And true, what do you make of k bringing up this parent child dynamic?

I don't really like the dynami C2Be lik e tha t. Uh I feel like I should be free to uh do uh or get whatever I want with our money ah because this is ours as well as king. He can do what he wants with the money as well.

I think I think with the disconnect is we have an issue with our finance that's not good. Uh, we have dead a lot of debt. We have some issues we have to deal with. And I can use free with the money. As i'd like here.

you mention that you haven't seen either eye on money for a while. How long would you say you haven't been on the same page, financially speaking?

I started dating him when I was eighteen, almost nineteen. Our spending habits were very different. He's a saver and so he's more conservative with money. And I am a spender.

When I started making money, we actually had a joint credit card, even though we were, I think, just still dating, right? We live together and so we will tally up our expenses individually and paid them. And every credit card bill.

I remember being like, oh my god, like I wasn't. I wasn't keeping track of things and the created card will be so long, and he just kept to spending just very minimal companion off very easily. Not an issue. So we were very different in how we saw money then. And then IT evolved .

when you got married, how do you decide how much to save for the wedding?

I went in thinking, my thousand.

how much was IT in the end? How much .

of fifty? Fifty five thousand?

Yeah, but that's about exactly what happens. Point five to three x of whatever people come up with. First IT happened. I mean, that happened to me. That happens everybody.

Even if you know the principle, you still you can know at all and you're still, it's gonna happen to you for the most part. There are some people who are very discipline. Okay, great. So where did you come up with the extra duty thousand bugs for that wedding?

My parents are very generous, very generous and multitude vely. So my mom was up front that he was going to help me pay.

Your parents are still help you with .

finances from time. time? yes.

How does that work? Like they write you a checked call him up .

as a work this but i'm like i'm forty three, I should not be doing that. So um it's embarrass ways. What's the most .

recent way that they're helped you?

They pay for an entire vacation for my family to go to um universal studios. I was very, very, very, very declared to my kids we would not be on this vacation if IT wasn't for not .

and I noticed that when you talk about your parents giving you money, there's seems to be uh a little bit of guilt or show .

i'm having a full bad reaction right now because I want, again, i'm so grateful for her. At the same time, I should be be able to manage my own finances. I should be able to take my own kids on vacation. I should be more financially independent.

Thank you for sharing that. I have to tell you that I have recently started asking people, uh, about how they get financial help from their parents. And there is a lot of shame, a lot of guilt, a lot of complex emotions because so many people want to help their own children.

I actually just said to drew, I I want to be able to do this for our kids.

What what? So you want to put them in the same position you are.

I want to be financially abundant that I can give give. The generous with them in our on vices is interesting.

though, isn't IT, that so many of the things that make us feel bad are the exact same things that we want to recreate for either ourselves or our children. Do any surprises, as you heard kate explain that dynamic .

with her parents. Her parents are are very generous to us and especially our kids um and they've always been there to help us out whenever we .

needed what sound like for you as the .

sun in law and very gracious that they can help us out um because again, I don't like that feeling of being behind the April, being in a lot of debt like if they can help about them, maybe give our kids a trip. I I appreciate that when I know not in that position to do that and someone else can ah something that's more important me than money is time and my kids aren't getting Younger. So if they can go to disney world or universal and someone can help out, I want them to take that that I want .

to interrupt here to share an early clue on picking up on kate. Andrew have admitted they have fAllen into a parent child dynamic. Kate is policing the money, and drew is constantly asking her for permission for small purchases.

And you can tell when drew is asking for french fries, it's not really about the fries. What drew is doing is absolving himself of responsibility when IT comes to their debt problem, leaving kate to shoulder the burden alone. The chAllenger is to get drew to stop merely being a passenger so that he and kate can work together as a team. But first, let's get into the specifics of their numbers.

How long have you've .

been in debt? I would .

probably .

say close to.

Me close to .

ten years, I think I felt the debt more once moved, uh, we were in a condominium and then we bought before closure property, we fixed IT up. And that's where I really felt the real hit of the debt becoming what felt instrumental.

I D curious ly, what you move?

We were in a thousand but two bedroom home, our second child with eighteen months. So I started to kill crowded because the our children are four and a half years apart. And they were sharing a room.

And I had my parents in my ear also saying, you need to get another house. That house is too small. My, my husband did not want to get a new house. And I, I really pushed for IT.

What did you say? Do remember, the exact words .

is like that we can stay here forever.

It's a good one that that that resonates. IT rings true. We can stay here forever. Therefore, what's the end of that sentence?

Therefore, we need to start looking for a new house now, even though we didn't have money saved up. That's where my parents helped out again. They gave us another chunk of money to put IT down him on this house, so we can Carry two mortgage while we renovated the house.

How much did they give you for .

the downpayment hundred grand?

So they give you hundred grand, put in the new house some renovations eeta. And that is when the serious debt started. Is that right?

Yeah, I was thinking we got a deal.

You know.

this is been a real estate investment. We're going to put money into IT and you know will put more equity. I hypothetic ticals. He was like, I will just do the kitchen in the bathroom and IT all costs about fifty ground. Yeah, we had to add another zero.

Is that an exaggeration?

I wish I was.

Just tell me the full number you spent on renovations.

We did two. So was about hundred and twenty five thousand dollars.

five hundred and twenty five thousand dollars. Let's hear more. After a short break from our sponsors, my coworker has been testing cookware from our place, which is this episode sponsor.

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five hundred and twenty five thousand dollars on renovations and what we thought was a deal.

How was this possible? Like as a guy who's used to exceeding the numbers, I get IT. I get fifty into two hundred.

I get but five hundred. How did that happen with me? First.

this house, drew was up in the bathroom, deming IT by himself while I had an eighteen month and a half year old. You would come home. Ince, I barely made a dent and i'm like, oh my gosh, how are we going to do this? So we started looking for contractors now um in my native ty, I did not do my due diligence around appearing a general contract or who wanted to try me hourly in my mom. Like what are you doing IT was a really bad mistake before you knew IT it's snowball so bad that the entire place with a shell IT became a brand new house. Basically IT was so much going on the time of the renovation that I wasn't on top of our finances and wondering why our credit card bills get high and I didn't have the funds to pay here.

Two clues that I notice. First of, kate is the money person in this relationship, but it's becoming clear that he is not especially skilled at managing money. And the second thing is that kate has admitted to being impulsive earlier in their relationship.

Keep overspent on credit cards. Then SHE overspent on their wedding by thirty thousand dollars. Finally, it's a house where they overspent by five hundred thousand dollars.

And of course, you'll notice that the rational conveniently changes now is for the kids. Meanwhile, drew is checked out. You can see that this dynamic will become a bigger and bigger problem.

How much of this is something that happened to you versus how much of this is something that you yourself chose?

We created this one hundred percent. O K. I mean, the first life happens. But I think we set up a very precarious situation. I can see how expulsive i've been with money, and i'll just follow a good feeling. And I i've been very lucky up until this point, like I was able to do those risky things and right in mind and always got away with IT til .

that's usually how to goes. I applied that you take responsibility. I think that that's incredible. I always say we've got to be honest with ourselves, honest with the people around us, if, especially if we want to make a change and we want to live a rich life. I'm curious between the two of you, how do you a portion responsibility?

I think for the first one, I felt a lot. I felt very responsible because I pushed him into getting this house right.

how much the house .

the costing IT was like three hundred and .

fifty five thousand. So just so the audience knows, can you just explain the concept equity row? quick. Is this how works? Three, fifty five plus five hundred means your houses worth eight hundred, fifty five thousand dollars.

Is that the way that works well in this in this market? We're lucky that, that kind of does.

It's talking to my example, but it's not the point if we take this irrational housing market historically high out of place. That's not how you do the best people. But in this case, IT actually was alright.

Can we talk finances? Because i've heard some big numbers thrown around. I would like to know in your own words, starting with drew, what is the state of your finances today?

IT feels like, um we're taking one step four and two steps back.

Kay, how are you at?

The first word that came to me was dire.

dire. Wow, that's quite different. Isn't IT dire versus one step of two?

When he turned fifty, I had close to a ana where I realize something is GTA change, so all last year and new that we need to be more a mindful of our spending. So I restricted a lot all year. And towards the end of the year, he said he was gonna get a big check in january because he was gonna. He worked even during a the winter break, I got a little excited and one up going a little crazy for Christmas. Did you spend .

on Christmas just bottomed for me?

A grand OK that freaked me out. So I I felt out of control with money at that point, and was having panels. What did I do? Like we have all this dead. That huge check could have kind of dead.

What did I do? 对， this is not unique. This is like tens of millions of americans do exactly the same thing. And the funny thing is, they do in every single year, what we you would think we would learn? No, no, because it's all episodes.

So seems to me that I actually find IT comforting when I discovered that I am basically copying what other people like to do, like I find that really come free. Because if millions of other people do the same thing i'm doing, then there's probably hope. If we know that, then we can begin to make a change. All right, what you say, we take a look at the numbers. Drew, can you read off the word in bold and then the full number next to assets.

uh, seven hundred and forty three thousand three hundred investments five hundred thirty two thousand two hundred and ten savings fifteen thousand debt four hundred and eighty thousand five hundred and forty eight worth .

that worth eight .

hundred and nine thousand, nine hundred and sixty two.

What do you all think about .

those numbers? The lack of savings is concerning and the amount of death is concerning. agree. I also feel like our investment should be higher given our ages.

Let's clarify some of the details here. So you have a seven hundred fifteen thousand dollar house and then investments are at five hundred thirty two thousand savings of fifteen k by the way, I note that you rope, it's not emergency savings. This is for future monthly expenses.

So you essentially have zero emergency savings. K and debt is three hundred and fifty case of mortgage, a hundred and thirty k is the home equity line of credit and then two thousand dollars for a business credit card. Kay, can you read the growth monthly income to me .

combined sixteen thousand six hundred and sixty seven dollars?

yeah. So two other can a year correct? Um did you all know that that how much you make?

Yes, I track all of this page cks because this income .

is very able did you know you make two hundred thousand?

Yes.

wow. Alright, you know what? I gotto start giving a lot of apples for people who even know their own income. Okay, it's.

So rare, i'll when can I .

ask you guys a question? So you sent in A C, S, P, which had everything done on an annual basis. You know, the csp is designed on a monthly basis. what? And you told my producer that you were not gonna the monthly.

Why was like, how do I do this monthly with the way that I like manager money IT fell confusing and frustrating .

for my job. Um my pay varies uh gravely um as I teach fall in spring, I get a consistent paycheck um when IT comes summer time depending on how many places I teach, I made a huge chunk K R money uh by weekly so I kind of throws off uh I guess the calculation of you know um .

saving consistently .

month by month because sometimes demand is lower but in the summer the mount so .

much higher. The old question, what do I do if my income is variable? Honestly, i'm kind of sick of this question.

I get IT every single week. And i've talked about IT five hundred times in my book in prior videos. S online everywhere.

How do you deal with irregular income if you're an uber driver or a free answer? What's really happening here is that the answer is available. You could literally search for, meet at irregular income and find the answer.

But what's really happening here is that people are using this question as an excuse to not take action. Allow me to be direct. You are not a special snowflake.

Just because you have one seemingly unique situation does not make you different than everybody else. Don't use any scenario as an excuse not to take action with your money. My wish for you is to become aggressive, to become bold, to say, i'm not gonna anything, get in my way.

I'm gonna a knock IT down and get to my rich life. Now, if you want help, if you want to learn how to deal with your money, specifically, join my money coaching program. I'll put the link right here, but it's time to stop using the same old question over over as an excuse to not move for.

We're past that and I don't want to hear this question anymore. One last thing kate says he wants to be precise. Yeah, me too.

But if you're being precise, how are you overspending by eight thousand dollars? Remember that the point of a csp is not precision. The point is to actually see the big picture. So I need them to zoom out and recognize the need for change.

But I ask you an honest question is the way that you have been managing your .

money working now I I in the same that he feels stressful um and I I the only vision we have is to pay off debt, which is not really forty four and fifty .

years old in four hundred and eighty thousand dollars of debt, which includes one hundred and thirty thousand dollars he lock what I see, kate, is you've done .

in your way for .

a long time. But what you have done, even though you may have positive intentions, has not gotten you the positive outcome you want. And even when you have the chance to speak to me, you struggle to adapt the way you think to a different approach to money.

I ve spoken to lots of couples. I don't think i've ever seen a couple put IT in the annual format. What does that tell you?

I couldn't see IT any other way. I am stuck in my own.

I .

created.

And more importantly, your relationship dynamic around money is stuck in that. Just think of that. What kind of dynamics can we already identify? You said one already.

K pair child dynamic. That's the one where we have the or please can I have some money for a treat and the other partners? No, you can.

And IT is toxic to a sexual intimate relationship and also disappointed one partner, both partners. IT doesn't set you as financial equals. O there's so many dynamics at play here, but IT all shows up in the csp.

The csp is gone to tell us the four key numbers and help us see the big picture right now. I don't think the two of you know the big picture fact. I'd be willing to bet that you are lost on the big picture fair OK.

And yet the over need for precision, which you actually genuinely believe we need to, is actually what's causing part of these problems. And if you're really honest as IT even work, like you try to be precisely about how much your renovation was going to cost you. Blue passed up by hundreds of thousands.

Try to be precise about the wedding cost. Blue, has that try to be precise about these numbers start working anyway. So my philosophe is, if you're gone to choose between different ways.

one we just do in my way. So I agree with you that we need something no, and it's scary.

It's scary to give up control. I'm example number one, because I run a business and every entrepreneur is a control freak and they have to systematically learn or have control stripped from them or they will go out of business in your finances. You have a lot of um one office like this quarter we do this, but in summer for two months we do that. And do you see why having all these one office makes IT very, very complicated to create a basic flowing system?

yes. And IT makes IT hard for me to see what we actually can afford and what we .

can sometimes correct. So that is what the csp is designed to help you do, is to standardize everything. It's almost like, look, when you drive to honor grandma's house, okay, at some points you're going twenty miles an hour.

Some pots you're going sixty five miles an hour. But we can say it's gonna take roughly sixty five minutes per sixty miles. Ballpark fair.

That's what we're looking to do here. Even the four or five, five percent. Okay, all right. What's the lesson we ve learned so far? A K and Andrew.

The that we should be Operating a monthly.

I didn't intentionally jump to making changes, actually wanted to slow down. I wanted to help them understand that first, their system is way too complicated. And second, they're not working as a team in a relationship with money and with each other.

You can just have one person pulling everything and the other person just being the passenger. It's got to be both people. And when both people are committed to a rich life is actually amazing. How fast you can make changes will be right back after a quick break to support .

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and savings habits.

When I have money, I wanted do something with that right away. It's very uncomfortable for you to just sit there.

Uh, are you impulsive in other parts of life?

Um yeah I think so. I mean, even even when I when we bought our first condo, I bought IT, he did in um we didn't plan that either. I just got tired of renting and said i'm looking for a house he didn't want to buy that he's how either I got .

out of myself seems like a recurring pattern. I this is like blowing my mind like to me, IT is inconceivable. IT is in consumable, like to trip and fall and buy a house and you would be so shark.

How many couples the to say we were after brunch on a saturday, we decided to walk past a couple open houses and then things move so fast, and then suddenly we had a house. I'm like, do IT takes me a month to see if I should sign up for like brit box on, you know, which is like seven dollars a month isn't just happen once that happens multiple times. Tell me if you correctly, you to struggle saying, note your kids, right?

I feel like I say no a lot. That's why when they really do want something I like, i'll figure out how I can make that happen. I think i've saying no a lot of times. And then sometimes I think my old childhood wounds come in every now and then they take a little peak and I say.

I want them to have everything I didn't have. I don't want them to miss out and on and on and on.

And the times i'm like, I know they're going to be OK.

They're more than blessed you, right? right? And then drew, you know, we should also acknowledge two you not on the same page.

If drew is not only saying yes most of the time, but then even like testing with the sad face with the kid, it's in a way undermining the financial values that the two you are trying to set, which says you don't have aligned financial values. OK, yes. Okay, let's look at the numbers. Your fix costs read number to me.

please. 一。

okay, it's pretty investments. What does that say? Five percent.

You got, you got to protect investments. Uh, I have a four, three meat work. How much you put in?

I put in five percent in my employer matches IT .

with ten percent. Your employer matches IT to the one. What of you know how good that is, right? So they put, you put in ten k they put in twenty k so you're investing thirty K A year pretax. Your savings are at nine percent. And you have like what you have like ten sub savings accounts well are not .

only seen in the account. This is where in the summer when you get this chance of money, I put these things aside and something .

it's good to say for things you know are coming. Okay, great. And and then a your girl free spending is all messed up.

IT says negative fourteen percent. I know that's not true because you all went to a soccer game recently. We're trying to get extra pretzel. So how much you think you're spending on guilt free spending per man? You losing money.

eight, two thousand, eight hundred.

twenty thousand. So far from looking at the C S, P, my guess is that you are probably spending more than you make every single month. That's my guess.

And the reason I say that is that you don't have anything under fixed cost for missile ious. So typically we had fifteen percent, which in your case would be a lot. I'll be like, uh, fifty hundred box yeah you'd be at ninety one percent fix costs that means your broke.

Now what's interesting about this is you are still investing thirty thousand dollars a year, but you are effectively losing money every single month. I also want to acknowledge dge of no emergency fund. You're simply saving for expenses that are gonna up the words you are in trouble in several ways. I'm sharing all this not to bring you down, but rather just to level set expectations here can use the word dire. Through what do you think about that word in light .

of what we've just seen? It's a pretty strong word, certainly grabbed my attention. I never really get burying nervous about money because said earlier, um you know exact are more conservative. I won you know, go beyond what I think in my head of a certain number would be that kind. Like my limit point.

you're in one hundred and thirty thousand dol. He lock. You have three and fifty thousand dollar mortgage and not enough money for retirement. So this thing about is in my head and you i'm not sure that's effective. And also you mentioned I never really get stressed up by money is that is IT possibly you don't get stressed out because your .

wife is the one handling the money day to day when he tells me we were at and I know IT IT bothers her like how much were in debt, uh, for instance, or how much we oh or some other costs has come up and I can see the panic in her. And for me, I kind of take a step back because, uh, if I know that panic and if I know that number, um IT IT would really IT would really hurt me inside uh.

that hurt is being filled is just that kate is taking that .

on instead of you taking care of our money um and having to decide what to do with IT on my own. Uh feels lonely ah that's something i'd rather us great together because even though it's really hard right now um of doing IT together with make this hard time feel a lot Better.

And when you say I take a step back, she's trying to take a step forward and talk about IT. That's why he wrote in here and you are taking a step back.

I don't know how to get out of that hole. It's something i've never experience before. So having a plan to get a bit is not existent to me.

Do I need to make more money? Do I need to get another job? K, to get a job, I mean, is another option.

Why is that? That every couple who is in debt, specifically debt that they themselves put themselves into, why is IT that one hundred percent of the time? Their first solution is we got to earn more money.

Then you want to change. You want to change your behavior. It's easier to go castle, making more than IT. Is the fed back of like having to say no to things, having to say no to your kids.

erect and to each other and to yourself? The fact is, you make two hundred k you make three hundred k you think your life would considerably change.

I don't think anything will change because we're going to the same behavior, the same patterns with money. I'm gonna be compulsive and have the same spending, feeling guilty about a restricting spending and then um when uh Andrews gonna the same, you know not wanting to say no to me or the kids.

your money psychology is not tight. It's not dialed even from the fact that you can simplify your numbers down to a monthly number that shows its real slippery and loose. And there's all these like mental accounting tricks that are being played oh, sometimes I use this card and that this thing comes in december. So we put money is sloppy and it's actually more complicated than mine. You should .

be simple.

So that is what we're going to start developing a set of principles for you with money. At the curiosity how often you talk about your money values with your kids, we're very .

cleared the kids about that and how how we make mistakes that we don't want them to repeat IT. Before that, I realized I wasn't talking at all. I wanted them to think that there was no problems because I grew up with a lot of stress around money.

And my, I vivid, I vivid memories of my mom sanction of the money. I do want my kids to feel that. And I now realized that I hurt them more than help them by repeating them too.

What do you teach him about money saving?

I mean, I guess that would be my thing. I also have to teach them, you know, with some money that you do make, you know, it's okay to spend IT. I don't want them to, you know, be worried that you they can buy something you feel like that I think restrict themselves will buy something you canford, which I know sales hype.

tics and kids love hypocritical parents. They never example of, say a thing, right?

My son throws IT on our face all the time. We could have this and disappear after to go buy this house.

This kid is the best. Wow, he's like you ever SAT down and seriously considered all your front m cost. I'm talking about all of the opportunity costs.

What did you factor that in? Man, I never heard a ten year old just rip their parents to shreds over a thirty year compound interest chart for now on this isn't the remote C. T.

Podcast anymore. I'm going to have a co host. Little does everybody know. My co host is ten years old, but that coast is gonna a rip all your future guest threads. You thought I was mean, no, no, no.

I'm the nice one now because the ten year old is coming on to just let loose. Okay um alright. So when I ask what money principles do you have in your family?

We don't have strong values in place that we are teaching the kids. It's more like I don't want to make the mistake that I did energy and my husband is not really involved in IT. I don't feel like we're doing IT together as this is our family values.

In order to change that energy, we got to come up with some core values, some principles that will help us cut through the million decisions we make on an annual basis. Anybody want to come up with a few core values with money? I'll give you one of mind. Just kick things off 啊。 In our family, we fight for simplicity.

I largely love that because I tend to be more. And for mini moist in general.

I want to feel proud of the money I make and be .

able .

to spend IT in in ways that I can enjoy IT. We spend .

money on high quality food because I value health.

nice. That's a value. What I like about that is that fits your family. awesome. Hey, drew, about a the involvement in terms of both partners with money.

I wanna work .

together .

on an equal partnership uh, with building our financial goals together um so that were no longer on office site pages going in different directions for us to work together. Uh you would have to be equally responsible and trusting each other with .

we're not good .

make any decisions that would hurt the other.

That means you have to shoulder some of the financial load. okay. And I think I don't know if kate has explicit ask for your help. Kate, have you asked you to participate the money?

I really like that time because I said, this is so stressful for me. He's such a great listener, but he will continue the same pattern.

You know, I given speeches to google. I've had a show on netflix. But the one thing I am too afraid to do is to speak to a group of kids.

Because during coffee, I got an invitation to speak to kids, and I pulled out the best of the meat city, my best stories, my best jokes. These kids just sattle just blinking at me, no response, and looked like their face was covered out a stone. I tried everything, zero response.

And that's when I learned teenagers are ruthless, and I am afraid of them. Isn't IT hunting that kate drew w sun is essentially rosing them for how they treat their finances? And isn't IT also interesting that their response is to simply ignore IT and keep doing what they've been doing? That's how so many of us are, me included.

When we have something that is wrong in our life, we ignore IT. Maybe we know we need to go see the dentist or the physical tera. We take our partner on a because it's been years or certainly money.

We put IT in the back of our head because we don't like to feel bad. And that is human. And my wish for everyone is that we realize sometimes the best thing we can do with our problem is to turn around, face E A head on, and then walk through the fire.

But the answer is not about allowances. It's not about whether or not to buy fries. These are all waco. One of answers, the real chAllenger, is to develop values and a vision around money. Like in our household, we value simplicity.

And once we know that we truly believe IT, then that answers a thousand questions about whether we should buy this or whether we should do that. But you actually have to have that vision and values, and you have to believe, IT, that is what I want for kate and drew. But in order to reach through, I need to understand how we got here and where these patterns started.

True, let's go back to a childhood. What even be your parents saying about money as a kid?

The speeches my parents gave a very simple um you know get a credit card. They always .

told me .

make a purchase, make you have the money to paid off by the end of the cycle so you're not paying interest and giving that money the extra money away. So I discipline myself to do that, and I did a very good job at IT.

Did they talk about money? Did you see them paying the bills?

My father handled the bills. He, he was, I guess, to say, the bread when her, my mom was a stay at home on um for myself, for my sister. I never saw anything. I just knew everything was fun and he was okay. Uh, the financial picture never was brought to my attention.

What do you .

want to share about your dad and money? Is dad used to make a lot of money and hide IT in accounts for the kids?

Why my .

parents went, were divorce the money that they both accumulated. They tried to, you know, uh, my father want to keep IT as you go to the divorce. So he would put IT into counts for us, so that way he hopefully could get that back later. So he was playing tricks during the dior's proceedings, but they did make sure that we were still taking care. But now the other drama.

do you said that you have trouble saying.

note your kids correct. Do you see .

the i'm .

generous, just like my mom is with money, even though we might not have a lot, we will certainly spend IT.

I've heard them i'll say the same phrase um anytime I would like, especially in Christmas when I when I access to my husband about something, about certain gifts, I just want them to be happy. And my mother loves us the same thing. I just as as long as the kids, you're happy.

What I do notice about my mom that has become different for me is my mom will not go to a point where sh'll put herself in a home so I went overboard and um now trying to get out of that uh feels a lot different and it's it's on uncharted territory for me.

I'm looking for you to to make connections, connections between the past and your current behavior and more importantly, connections between each other. What conclusions did you take away from the whole thing we talk about with your parents and you? I took .

away that clearly growing up um I knew .

nothing .

about money and that most likely is translated today and because of my acknowledge of money and seeing how my parents handle the money with the dramatic divorce proceedings I feeling never really took IT upon myself to learn more about that for myself, for my family. I feel like I ve neglected a big part of that in my life to be more responsible with finances.

I think that you had a pretty traumatic experience with money. I think that you see money as basically negative. The only thing that is really positive is when you spend IT on people around you, which is primarily your kids, and that gives you join, that makes them happy, which makes you the hero, and you will spend more than you have.

In fact, that doesn't matter how much you have because the way you see IT, you'll just grind harder and get a second job. If IT comes to money, you won't look at the numbers. You would do anything except that in in general, you have a love hate relationship with money.

I think you're pretty much on point with that, especially with the love hate relationship with money.

Love to earn money, love to spend money, but also hate money, hate money because it's source of stress, which you just ignore. And hate this because you know that you co created this hundred and thirty thousand dollars of dead, and you've been sitting on the dead for a decade. true.

This is the level we gotta get to then that this, I didn't learn about money. Nobody learns about money. This is the real, I love money, I love you, but I also hate IT.

This is, this is real life. This is how you treat money. And IT shows up in your csp. You have to change your relationship with money, or nothing here will change.

And right now we can see that there is a lack of skill because of the situation that you're both in and you've been in this for years and uh, not able to note your kids with money is just a symptom of something much deeper. What do you say? We take a look at these numbers again and start working them feel like we're ready before .

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Now back to the show, just at the stage. Let's remind each other, you are currently losing money each month. At fifty years old, you have five hundred and thirty two thousand dollars, will have roughly two point two million dollars in retirement, which is about ninety one thousand dollars a year in income.

Which would feel like a big dog bread.

but it's less than half of what you make right now.

right?

Through how what kind of lifestyle do you want from now until life ends for you?

I want to have some financial security. I want to have money, a lot of money, to the point where, you know, I can retire and not have to worry about dead. I want to to be able to go on vacations with my wife. I want to be able to go to restaurants.

Is ninety one thousand doors enough for that?

I don't think so OK. I want to be able to share some that money, give back.

give some of my kids do that. What i'm trying to do is help you understand the severity of the situation you are in. Luckily you have a high income.

Luckily you ve been putting aside a very, very good match, which allows you to invest thirty thousand dollars a year and for the next fifteen years. That's powerful. The fact is you're fifty years old.

In order to get where you need to go, you both need to be philosophically alive to can't be rowing in two opposite here. You don't have time anymore. Time is up. You're not twenty five result.

One of the things that I think drew has not gotten involved with the money, there has never been reason for him to you, just as you put, beg him, ask him, come back every few months. what? What does that cost him if he doesn't do IT nothing? He actually just avoided IT kicks IT back to you and he gets to go on his merry way.

What is IT costing him? nothing. There's no real .

boundary .

until there is. There will probably be no change. IT can be one of you changing and the other, not not with this time frame in these numbers.

And drew, you also should recognize that kate needs help. Kate not particularly skilled at managing these numbers either. This is basic stuff. You learnt about food. You can learn about this.

Alright.

let's walk to the numbers. Get seventy nine percent fix costs more like ninety one. But we'll just leave this here for now.

That's too high. We need to bring that number down. You need to bring IT down to a roughly sixty percent.

Your savings were gonna and you're girl t free spending. I just don't believe IT, there is no way. So we're going to start with the fix cost because that is where the problem is. So right now, uh, I always want to ask couples, you want to make no changes, small changes or big changes.

How about big changes?

Oh, wow, kay.

we need big changes on there, but we need .

never heard that before. I every couple .

says .

IT only some couples truly minute. Let's see.

We see this in every episode where a couple says they want to make big changes. And then when IT comes to making those changes, very few do. Here's a clue on what a couple says when they are actually not ready to make those changes.

sure. We should try to cut back on grocery spending. Try we can't cut back on that subscription because we need IT. Sure, we can cut back on netflix, but fifteen or twenty dollars a month isn't going to do anything. Now let me tell you what a couple who is ready to make big changes sounds like.

It's going to be tough for the next twelve months, but we're setting ourselves up to live a rich life for the rest of our lives. Eating out every week. We don't need to do that right now.

Once a month is enough for us right now. On sundays at ten am, we're going to talk about money and we're going to look over our numbers together. Do you see the difference between a couple who's not ready to make big changes and one who actually is .

big changes? Means what in your mind?

The first thing that comes to mind is activities for the kids, which scares me because of their ages. And then we limit them to one sport. So if we take that away of nothing.

So you're saying kids activities, you're gna cut in net troubles. You, fine.

I didn't say what .

can cut IT IT seems like I should cut IT. Alright.

you, what do you got? What's a big change for you?

A big change is, is, is working our harsh to get through the biggest monster, which is the biggest dead, linger over. And that's the heat lock out. If I need to get another job.

Can we can we not do the earning money thing right now? Can we actually just talk about the way you're spending money? K, you want to say something before we look at the numbers?

Yeah because in our fixed expenses, that looks like one of them is fixed, but that's actually like twenty or twenty five hundred a month that were just yeah IT down. Let's look payment let's look at what you mean.

Here's an example. So your debt repayments are twenty seven fifty per months. You're in two thousand seven hundred fifty thousand per month over the minimum.

Let's just subtract that out to see what happens to your fix costs. Uh, okay, well, there we go. We fixed the whole thing at fifty six percent.

What am I? What am I doing on this stupid show? Anyway.

let me explain what just happened here. They are paying two thousand seven hundred fifty dollars over the minimum, which makes their fixed costs appear artificially high. So just to see what would happen, I took that extra payment out and IT drop their fixed costs to fifty six percent.

So the situation is not as dire as I had originally thought. However, they still have a lot of debt and they still have problems over spending. The lesson to be learned here is the cost of over complicating your finances. She's stressed about extra fries at a ball game, but we're actually over here talking about hundreds of thousands of dollars of debt. You know, this csp can be fixed with a simple change, but they're not grasping the point of IT and starting to become really frustrating.

I'm about to have a heart attack on this show. I swear to god, i'm good at this is gonna be. I hope this is in my orbit. Ual remote city finally busted by a couple when IT comes to their C, S, P. And then in the orbital ary, you're gonna be like, remember C, T, final words were, it's not a budget because budgets look backwards and A C, S, P looks forward.

Your C, S, C, S, P was such a gift to me because when I plug in all the numbers I was able really clearly C O when we have up with this um getting this hillock, that's what mess up all our numbers. We need to get rid of this A S A P and our numbers will fall into the fifty to sixty percent range.

Have you read my book?

Um part of that I watched almost every cockey up. So though as I can.

this podcast is like learn learn some cool stuff from couples. The book is the nuts and box, what the the right approach for a variable income is to build up a buffer. So what that means is you want to less to say we want to six months buffer take for a variable income. So we want to eventually have thirty thousand dollars in this buffer. Let's say anytime he makes more than five thousand a month.

you're putting .

the extra in the buffer. In the months where he makes less, you're pulling from the buffer funt. Okay, but eventually he gets to six months and then you basically are simulating a totally stable income. okay?

This is covered in, I think, a chapter four of the book conscious spending plan is how to deal with an irregular income, and that will really help you stabilize what's going on here with this highly variable income. You have kay, like a bucket. You wanted fill IT up if IT drops below the number needs to B I.

You just fill IT up more if you have extra. But IT dinner in general, you look ahead for the major expenses. Those would be things like a holiday trip.

Summer came for kids at seta. But other than that, you don't need to be saving for every little one of thing. You're never going to account for every single thing.

You need to zoom up factory, all the things you've spent in the last year. If you want to go backwards, add an extra fifteen percent on top and then set the money, decide. And if you find yourself spending more than that, guess what the favorite word of this new relationship is? No, no, you'll never said no to this stuff. That's why you're bending over backwards contorting yourself instead of just doing the easy thing in the world, which just to say, no.

we haven't plan for that. How to have bunny sitting in there? When I have debt, I to know .

IT having money in a savings account or an emergency fund is a good thing. Spending money on stuff when you have an eight point five percent interest rate on one hundred and thirty thousand and alone makes zero sense. Me like the problem is not saving money for this of the problem is spending in the first place. That's the difficult thing that the two of you have not really accepted.

I'm having a hard time because um I already feel really guilty about the decisions we made. So then it's like my kids have nothing.

This is the crux. iit. If you feel like cutting expenses in your household means you're a bad parent and you're never going to do IT.

One thing i'm not going to do is just go through this and have you tell me all the reasons you can't change anything. You have no emergency fund. If drew loses a job or becomes injured or something happens, how long can you last? Not very long.

You don't have enough for retirement. You're not setting an example of saving for your kids. You have no trade, ffs. No modeling of what that means to actually say no when IT comes to money. I'm not talking about no to some pressure talking about no because we have a bigger mission. A bigger vision isn't IT important for your family to actually feel the consequences and understand that we actually have to say no to certain things in order first to pay this set off.

I said no to the kids about a lot of things already. That's why this feels hard and very clear. Like i'm saying, no is are paying off that .

think this is where the two of you not having a joint vision comes in. I would never get a message from my wife saying, like, hey, let's a spend one hundred and fifty thousand dollars and go into debt on X, Y, Z. We have a unified vision.

We talk about money all the time. Sometimes we disagree. We talk about that we wait or patient trying to create a culture of healthy relationships with money with each other.

So right now, as IT stands, your hillocks paying the minimum would take you like thirty years to pay off, but you're adding an extra twenty seven, fifty or month so you going to paid off in three years and four months, which is good. It's quite aggressive. I like that. I need money going to an emergency fund.

okay?

And I sure would would like to have money going towards retirement. See, have options. Your options are at your expenses. And redirect that money towards an emergency fund. You can take some of the money you are spending towards being off that twenty seven, but some of that money towards an emergency fund, you can earn more money and put some of that money towards an emergency fun .

like the second with the cutting some of that and have a for the extra money for the health and put that in emergency fund just so we know .

building that is something that I am open to IT, especially due for two point. Um excited to have something that we uh are both united on. Um I was just I guess this is more like a security thing because producing so much and interest.

I don't think I anna pay them back. I'd rather have some stuff that helps us rather than gives back to them. I'm going to interact for her.

I haven't really heard anyone make any tough decisions today. 那 我。 I feel like it's basically like, okay, we're going to like change this and change that and cut this five, five hundred box and put IT towards in emergency fun. And that's that okay.

that's IT. We could get real .

dassie and just cut all that fun spending right off the grid. That sounds pretty extreme. If we take all that money, lets save, for example, and we use that into the emergence shares.

We cut off all the savings for the kids stuff and what's in that section. But now we have to do with that and the kids and how we going to. They are known to them what second looks like.

And I need a parent. And unlike, do you know how many times I was told no as a kid?

What is IT? There's times when I don't want my kids to feel the same pain that I did. Money was painful when I was Younger for something that they above. You know when like soccer, the only thing they do and that's like they are love that that hard.

but you're not teaching them any great lessons about money by taking on all the pain yourself and costing your family a healthy relationship with money. I know I know another think you guys are forties and fifty. What are you going to do for retirement at times taken?

Your kids don't have any understanding of money because their parents have no understanding of money. You have no emergency fund. You're not even willing to talk about you any of this.

You're not willing to enlist your kids for help. I haven't heard anything about they're built free spending. None of IT listen .

up and listen closely.

One of the biggest mistakes that couples make is thinking that spending money equals love. When I grew up, we couldn't spend a lot of money because we didn't have IT. My dad worked.

My mom stayed home with us. And that was that when I look back, I think about the ways in which we spend quality time together, the ways that my parents showed us love. For example, my mom took us to the public library on saturdays.

why? Because we loved reading, which they taught us to. And IT had air conditioning, so we didn't have to run the air conditioner at home.

Just think about that. I had a happy childhood full of experiences that did not require a lot of money. And i'm not telling you this to tell you how to raise your kids.

That's not my place. What I am encouraging you to do is to think about the lessons that you are teaching when you say yes blindly to everything, you're not teaching resilience. You're not teaching how to handle the word no. And most of all, you don't actually know about money yourself. And if you don't know about money, if you can impart that wisdom through what you say and more importantly, what you do, and how can you ever expect your kids to learn IT?

I'm going to show you something I am going to be. Category is something to make IT easier for us to look at. I took everything from your savings, the kids soccer, kids clothes, and I put IT all into guilt free spending.

So you're spending one thousand eight hundred and sixty five dollars a month, actually reasonable OK for a family of four. That super reasonable, sixteen percent. However, I can tell you that a couple that in one hundred thirty thousand doors of debt typically does not spend sixteen percent gl free spending. They typically would be spending like ten percent.

So that thirty five thousand that I have going towards debt you really talked about before you said you wanted to put some of that toward savings instead.

Yes, how much? Here's the number, twenty seven, fifty a month. Let's do have what's the implication of doing?

F well, that means like our hillock, I going to be paid off or like if it's i'm thinking, like at least six years over.

you can take you six .

years to .

pay IT off. What about acetic ally in two years? When you graduate on the swiming, you'll start we're working in that the extra income that can go to one of bees places.

right, called you, I like that. Now you start to make rules, money, rules about what happens to things like unexpected income. I love that if the two of you, or like, totally united, unified and said, we have a huge debt problem, want to pay this off, when to build our emergency fund and everyone to invest, we're gona need a mix of changes together.

I think you could do IT and you could get the family on board. But the thing is, right now, you don't neither viewer on the same page, neither viewer unified or actually even really willing to make substantial changes. So any one person in the household basically has a veto like that's IT.

They can be like, oh, that makes me uncomfortable. Okay, never mind. And that's why you stay stuck. What are we going to do about this?

So we go the way we're going and we commit to paying off the hillock in three years, four months. We're basically in a very valid tile position for that time because we don't have that is correct.

That's part one. That's the most obvious one. yes. Two, um you are not on track to necessarily have enough for retirement right now, but that would change after the hillock is paid. That's number two.

But three and I think most serious and most subbed is that you too are sending signals to yourselves in this relationship at every given moment right? And for the longest time IT has been kate handles the finances even though he doesn't quite SHE has that the technical knowledge of the jews not interested in the finances and like he's happy that SHE handlers IT. And really the biggest risk is that the two you just Carry on the way you've been Carrying on, you'll get into more debt somehow. You don't build the skills of saying no, of building a vision together.

of being aligned. What we need to do is work together and connect and tackle this financial problem together and not apart anymore. What we're doing right now, you said it's very clear, not working.

It's funny because I watch too many of your punk like I thought we were a good to the ones ending on like this positive.

The point is you came here with a goal or a goal, you told me what you want. You would feel lightness, ther's, tension. You want to feel connected on money. You want to have a joint goal. Do you feel that you achieve that today?

I definitely still, I feel like really tense. This was a big hole that we dug ourselves into. And so in order to to be sustainable, IT really needs to be more baby steps than like you were talking about me wanting to be more black and White and just like try to clean IT a lot really fast because I feel such difficult negative emotion that I wanna try ick, the bad decisions behind me as quick as possible yeah.

there's a lot of positive things that I see you. A high income fix costs, in general, are manageable. Once we took out the extra payment could pay off your debt in roughly three and a half years, you could get lucky and not needed an emergency fund.

You could then take that money and start relocating IT towards investments and emergency fund. And things could work out pretty good, kate, your way in the weeds, and you've created this overly complicated system, which gives you a sense of control. It's not achieving the goals that you want to OK.

More importantly, the impulsivity and the lack of education around money has LED into several huge mistakes with money. And it's not just on you. These were joint decisions.

The two, you may house renovation eeta. And you ve gotten to forty three and fifty years old, and you've gotten lucky in a lot of ways. I don't like people to build their financial lives based on luck.

It's just too risky for me, especially as you get older. That really concerns me. Drew, I think that you've been super avoided with money, and there's been no reason for you to change.

Even on today's call is unclear to me that there's really a reason for you to engage. And I don't think kate has said any clear boundaries you see making any um constraints for your kids, financially speaking, as taking away from them. I see IT as adding to them.

You when you say, i'm sorry, I wish we could do that. But here's here's what we've discovered. Here's the plan we've put together.

We need to all contribute. And what that means is that I won't be able to do this, yeah, I won't be able to do that. And we as a family are not going to do this for the next two years.

That gets everyone on board, but there's none of that. If you see cutting spending on certain things as losing, that's the ball game. You will never do IT.

I thought, in my opinion, that the key lock was the problem and that would have been the end of bit. But clearly.

it's not a aside from you .

know our connection needing to be strong and to work together towards a vision. But seeing that the emergency fund, there is a lot of no, you'll free spending that, that needs to be looked at and cut and we need to make those the decision and not I see I see the .

floors that .

you are pointing out now and there's a lot of them and you seem very discouraged as I guess, where we go .

actually think the two of you could knock IT out. You could pay the dead off, build up an emergency fun, have fun with the family. You can do all these things. We never got there. I never got there because neither of you, at least as far as I can tell today, want to talk about teamwork.

Let me just cut in right here. This is one of the rare times on this podcast where when speaking to A, I was basically starting to check out because i'd been speaking to them for hours. At this point, we'd been talking about the dire financial circumstances.

They're in the effect on their children and their own retirement, but neither them. We're really willing to talk about making serious changes. And notice how I said we never got there past pets. I was essentially resigned, this conversation going nowhere, and I was basically ready to end IT. But keep listening to see what happened.

I guess my perception of this was .

um being honest .

that you were going to, I guess provide some guidance, some incidents to how to fix the financial mess that we are in.

I'm gonna teach you my book on a four hour call and I think if this were serious to you, you would have read the book before you came here. The fact is, and I think the most important part is that right now, you haven't had any really compelling reason to get involved with the money. IT only changes if both.

If one partner, the one is doing the work, sets a boundary, and then the other one actually lives, lives up to IT. Very rarely do people suddenly just decide to get healthy. Very rarely, especially age fifty, two people just decide i'm gonna involved in the money.

That's why I asked you, true, what's in IT for you, because right now you have a really good, both kate and you, both of you need to get educated. And actually part of that education is doing IT together. You have to educate yourself about money. Nobody is coming to do IT for you. I am double funs up, huge supporter of the two of you doing this together.

Think i'm feeling that energy from you that we could do that if we are doing this together. I think, I think the whole call I was doing IT from the mindset of alone. So and IT felt harder.

You feel about that.

true. I feel like towards the end of this conversation to see like, but was going down, bill and I was getting more depressed. This know you're saying, and i've be honest, I just trying to get angry.

Angry because angry. Why I like that .

honesty oh, because but your things not positive is that I didn't expect and and not in this and I appreciate your analysis, which is why I feel this way. And i'm not nothing personal against you, just I hate hearing what you telling .

me honestly DRAM really happy. And you say that because this dead and screw being stuck and making the same decisions as you've been making for twenty plus years. No, that's I don't want that for you.

Trust me, i'm getting bad. I've got bad looking at this the first time. So i'd like that you're anger. I like I especially like that you're honest about IT you like, yeah, I was getting kind of pesticide. I respect that.

alright.

Now we're getting honest here. How about hell did you take us four hours to get here, ford, to have I .

see both the .

longest four play I ever had in my life. Money cannot only feel bad. Money also has to feel good.

And you can feel good about money even if you have that. Kay, money can feel good even if you have that. Second, the kids can be brought .

on board.

Don't play defense with your kids. In order for money to become part of your rich life, you have to go on office. And I mean that in every possible way you have to go on offence with yourself.

That means you have to start interrogating, why do I feel this way? Why do I talk about money? Why do I avoid money? Or why do I complicate money? You need to interrogate your dynamics together.

Why is IT that we never talk about money except win something, go wrong or we don't have enough? It's that right. You have to start to create a vision together.

Hey, what do we want to feel like? How often should we talk about gotch? I'm really glad. I'm really glad we talked .

in these last few minutes. It's for you, absolutely.

Do IT I like the positive energy? money? Money should be fine. IT should also in your a situation, IT should be hard. There should be tough decisions to be made that shows you you're on the right path if everything feels easier and you didn't have to make any tough decisions, made a mistake way back there.

This is one of my joys and life. I love speaking to couples, and I speak to couples who have applied, and they've gone through a lot to speak to me. That's why IT is so frustrating when they come to me with a real problem, and I see a solution for them to get on top of IT, but they're unable to stop replying the same stories that got them into the situation.

And that's what I was feeling with kate and drew. And I was hard. But I think towards the end, there was a little bit of a breakthrough because we all talked openly about the elephant in the room, how frustrated we felt.

There is power in calling out the elephant in the room. Sometimes the best thing you can do if you're frustrated IT, is just to say, i'm feeling really frustrated. But the question is, can they make a change? I chAllenged kate and drew to read my book together and to hold weekly meetings to discuss their finances.

Now that sounds good right now. Ultimately, what matters is what happens once this conversation ends. So let's take a listen to their followers.

Since we last spoke, we have been meeting weekly to discuss the book and talk about our finances, and we just wrapped up our fourth meeting. We automated on credit cards to be painful every month to no more playing games with the credit cards. My business credit card will be paid off two months earlier than we planned for.

We have a solid plan in place to fund an emergency fund with six thousand dollars by january twenty, twenty five. We know that this is not nearly enough, but we wanted some kind of a cushion in there. And they are aggressively pay pay off the hillock in three years max.

We are also having conversations about skin and soccer for next year. Since this year is already paid off, we have some time to really evaluate all of our expenses through the lens of our money values. We've already been doing that with a little things. In the best part is that we're doing IT together.

Hi, remember, this is drew. I have some good news to report from the statement I made last time that I was not gonna sitting on the sidelines anymore, that I would be actively paying with our financial picture. And I have done that the last four weeks.

Kate nine have not been working apart. But together we've been using your book. We've been having our meetings every sunday night.

We take a chat to a week. We've gone to over credit card issues, and we've even just a couple hours ago, started tweak our conscious spending plan. Seeing the numbers up close has been quite refreshing.

And you can see i'm very happy about doing this versus just sitting on the sidelines. I do regret that i've done that. A lot of time has gone by and was wasted because of that, but now I feel regenerated. This is a new journey. And cake nie doing this together.

wow. I have to say i'm pretty impressed with kate and jews follow up. I love that they went through the book. I love that they did IT together, and I love that they are talking about money.

One of the lessons of this podcast is you will be amazed how quickly you can turn your financial life around when you do IT together. So to kate and drew, thank you. That conversation was tough, no doubt about IT. But I am thankful that we have the .

chance to talk and to do IT together.