67. “We spend $3,000/month on groceries for our 5 kids, and it’s ruining us”
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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.

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

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So basically he asks me on a date to go to dinner and I'm like, great. We get the kids to bed. We leave a little later than we had planned. So the place that he wanted to take me was closed. So we leave the house. Doesn't even mention the fact that he invited me to dinner, just drives to the store. I'm like, I thought we were going to dinner. Well, the place I was going to take you closed. And the reason that he wanted to go to that place was because we had to buy one, get one free. And he had a gift card so he could take me to dinner and spend $0. Once that option was off the table,

Dinner, not a word. We didn't, he didn't even mention it. He pretended like it wasn't even said. And it's been almost, what, 18 years since you've been married? What's your advice for everyone listening who wants to have a long marriage? What would you tell them? Not to ask us. We're doing it all wrong. I don't know. Do you believe that?

Yes. Really? Why? I feel like it's been 18 years of just hanging on. Really? Yeah. So we're here. We did it. We're doing it. But gosh, that's tough to hear. If we continue on this path in a few short months, we will get to the point where the money will be gone and we won't have enough. Wow. I've been married for four years and I never want to just be hanging on.

Jim and Casey are 45 and 41 years old. They have five kids, and for the last 18 years of their marriage, they've mostly avoided talking about money. But now, they are dipping into their savings every single month to cover their expenses, and they are running out of money. Listen in as I talk to them to try to find out what's going on. I'm Ramit Sethi, and this is the I Will Teach You To Be Rich podcast.

Casey, can you remember a time in the last month where you were not on the same page with Jim when it comes to money?

Today is an example. I went to Costco and I bought snacks for our kids' school lunches. We have lots of kids that take school lunches. They needed things to fill their lunch boxes. So to me, I didn't buy extras. I didn't spend more than needed. I just got the things. And they might go through them quickly, which he thinks is unnecessary. So I went and the whole time I'm thinking as I'm unloading, he's helping me unload the groceries. I'm thinking, he is thinking,

We don't need this. These kids don't need this. And did he say that to you? Jim never really says anything. He just quietly suffers. It's stressing him out greatly. And he doesn't really ever share that. We don't talk well about money. So I think he's scared to bring it to the table. So he'll be checking finances daily and he'll be freaking out. And I have no idea. He just quietly...

is annoyed until it boils over and it's this huge fight. I said, fine. And this is on repeat, this conversation. I say, fine, I won't spend the money anymore. You spend the money. You do the grocery shopping because I don't think he understands how expensive things are or how much it costs to feed a family or just places that our finances go. What was the last time that it all boiled over? What happened?

But the explosion came where he says, I come home with groceries. And he says, just so you know, there's no money in the account. And like, there's no money in the account.

And, and to me, I've gotten to the point where I think he exaggerates. So in my mind, I'm like, that's not true. So then, and then it just turns into a fight. I say, fine, you do the grocery shopping, you do the spending. And he says, I don't want to do that. I want to do this with you. And then I say, fine, just give me a, give me a budget. Tell me what I need to stay within. And I will. And that was the beginning of September. And I've stuck to that. And so did that solve it? Uh,

I don't know. He would have to tell me if there's more money in the account. I don't know. Okay. How much money do you think is in the account? I have no idea. Like, is it a thousand or a hundred thousand? Definitely not a hundred thousand. If I had to guess in my mind, I'm thinking there's like 8,000 spread across some different accounts. I don't know. Do you want to know? I don't know. Yes, sometimes and sometimes no. Jim makes enough money that we...

We can live off and we do. And this has been working for 18 years. And he's been crying the same wolf since year one. There's no money. We have no money. And we have gotten by for 18 years, paying our mortgage every month, paying our cars, whatever, fill in the blank. Already I hear red flags from Casey. She accuses her husband of crying wolf.

which is really a devastating accusation in a relationship. Because if you can't trust your partner, you're going to have a very difficult time doing anything constructive. I hear that she doesn't know how much money is in the account. And when I ask if she wants to know, her answer is she doesn't know. Let's hear from Jim. Jim, would you say that it's been working for the last 18 years?

I think you'd have to define what working is. Like she said, he makes enough money to pay for whatever we want to do, but I don't think it's ever really considered what that means. So about a year ago, we had over $25,000 in savings. And today she's spot on. We have 8,000 left. So month over month, I have to pull from savings just to pay our monthly bills.

And that's not sustainable. Like if we continue on this path in a few short months, we will get to the point where the money will be gone and we won't have enough. Okay. Casey, what do you think hearing about the savings account being depleted? In my mind, I'm like, it works out. I don't know how it works out, but it does. So we have been here before. It works out how? I don't know. We get it. We get it.

tax return or we get whatever it, and somehow it, it works out. So would you be comfortable at this point keeping things the way they are? No. Okay. I mean, I would like a large sum saved up to fall back on. I mean, okay. How much? I don't, I don't know. Are we shooting big? Are we shooting realistically? You tell me.

Um, I would like at least $50,000 just to begin that nest egg, just to fall back on. I have to cut in here to highlight what's going on. I often hear people saying, I want $25,000 in my checking account. Now where they got that number is a mystery, not just to me, but to themselves. When I ask them, why'd you pick that number? They have no idea.

People think that having some certain arbitrary number will make them feel less safe, less worried, but it won't. And you can hear it in Casey's voice. $50,000 and what would happen if you had $50,000 in a bank account? I don't know. I guess Jim would feel comfortable and I would feel comfortable. We would still keep doing what we're doing. I don't think you reach a certain level.

number and then you just stop doing what you're doing. How do you feel about money today, Casey? I just feel like it's something necessary to live and to use. I don't feel like I need more money. I don't feel like Jim needs to make more money. I don't feel like I need a bigger house or a better car. I feel like we live responsibly. We don't live beyond our means. Well, you are depleting your savings every month. Yeah.

Okay. Sometimes I think people really love to fool themselves. They just say things that aren't true and they really convince themselves that it's true. Listen here. Just two minutes ago, Jim said they're spending more than they make. In fact, they went from $25,000 in savings to $8,000 and that they are spending money unsustainably.

Minutes later, Casey says, we live responsibly. Like we don't live beyond our means. I'm sharing this because part of living a rich life is being honest. Honest with yourself and honest with the people around you. If Casey can't be honest and Casey and Jim can't listen to each other, they're not going to be able to make a change. I feel like Jim, his number one priority would be the money.

And I feel like if we could tackle that and get that under our belt, I feel like he kind of holds a lot of other things in the relationship hostage until we get that figured out. I think that's probably an oversimplification, but sure, I can see how that would come across that way. I would love to be in a situation where...

our money was working for us. Because right now I spend a lot of time working for money. At some point, I'd like to retire. Okay. So you want to invest more, have your money grow so that one day you can retire. But I don't want that to be our only focus. We've got younger kids. It'd be awesome to be able to make a yearly trip with them a priority and something that just it's on the books and it happens. We just make it happen.

How many children and what are the ages? We have five. Our oldest is 15, then 13, then nine, seven, and five. Okay. All right. Five children, one income. Yes. We agreed before we got married that we would like to stay home while our kids were just in the young stage. And I think we both would agree we want to continue to do that. And right now it sounds like money creates a rift in the relationship for everything.

Costco, kids shoes. For sure. Is that fair? For sure. I think though that that is somewhat one-sided because I, if she felt that way coming in today with that stuff, that thought never crossed my mind. Not one time. I have no problem with it at all. So I don't, I have gone to the grocery store with him. It's not pleasant. He is like, are you sure? And it's just like the looks. And if, if,

And if he goes to the grocery store, if you send somebody to the grocery store and you tell them just to buy a gallon of milk, how often does that person come back with just a gallon of milk? Not very likely. I do. This guy does. This guy does. He is one focus. It's all about work. It's all about... There's not much play involved in there. And I feel like throwing the candy bar in the cart is the joy in life. It's the unexpected. It's the thrill of just...

I don't know. You know, throwing the chocolate in there and there is no chocolate with him. It is all just the milk. Got it. Okay. And it's been almost what, 18 years since you've been married. Congratulations. What's your advice for everyone listening who wants to have a long marriage? What would you tell them? Not to ask. We're doing it all wrong. I don't know. Do you believe that? Yes. Really? Why?

Uh, I feel like it's been 18 years of just hanging on. Really? Yeah. So we're here. We did it. We're doing it. But gosh, that's tough to hear. I've been married four years and thank you. And I don't want to just hang on. So if I can help today, then I would consider it a gift because 18 years, five children,

I don't want you to just hang on. I would like for you to thrive and have some fun. And I do think money is an important part of it. It's clearly causing some issues. So I'd like to be able to help a little bit. Damn. Five kids, and that's how she describes their relationship. You know, we've all heard these jokes about the old ball and chain. I hate those jokes. But this is beyond joking.

It really shows that there's a lack of trust in the relationship and a lack of security. I want to hear from Jim now.

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.

Thank you.

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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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In my definition of that, no. Well, extreme frugalistas never admit it. They always say stuff like this. I'm just selective with how I spend. I don't really need to waste a lot of money. I'm content with just a little bit. And then meanwhile, their partners over here are like, we've been married 18 years. That was a good impression of Casey, by the way. Thank you. Are you an extreme frugalista?

Probably. Can I give an example that might help you see? Oh, suddenly, suddenly we got the examples coming up. Go ahead, Casey. He asked me to go get something to eat. So basically he asked me on a date to go to dinner, right? And I'm like, great.

Then we get the kids to bed. We leave a little later than we had planned. So the place that he wanted to take me was closed. So we leave the house. We are going to run an errand. Doesn't even mention the fact that he invited me to dinner, just drives to the store. I'm like, I thought we were going to dinner. Well, the place I was going to take you closed. And the reason that he wanted to go to that place was because we had to buy one, get one free. And he had a gift card so he could take me to dinner and spend $0. Once that option was off the table,

Dinner, not a word. He didn't even mention it. He pretended like it wasn't even said. Jim? Guilty. What? That's actually what happened? Well, sure. I can't justify any of it. Okay. Are you extremely frugal?

No, I just don't spend any money. That creates guilt on me because when you say like we're in financial ruin and Jim spends no money, then obviously the ruiner and the problem here is me, right? Because you have somebody that spends absolutely no money. So when we're in financial ruin, it's all my fault because I do do all the spending, but it's because he doesn't buy birthday gifts, nothing. I buy all of his family's birthday gifts, parents. I do all of the spending. You know,

One thing that I noticed with couples who are not on the same financial page is they almost never have a joint vision, a joint vision of where they want their money to go. And because they lack that, they inevitably point fingers at each other. Or in this case, Casey, you're actually pointing fingers at yourself. I really am trying to do my best. I feel like I'm not being crazy. And I like...

Yeah, I see so many people that are out there just like spending and spending. And I go with friends and we go on out to dinner and I'm trying to be conscious and I am trying. I believe you. But I do know I can do better. You can hear the frustration in Casey's voice, but you can also hear the assumption that it's her grocery spending that's gotten them to this place. I doubt that.

And of course it doesn't help that Jim has these odd behaviors with money. We haven't always been here because we managed to accrue a pretty significant amount of savings just by contributing every month to putting the money in these bank accounts. So that was pretty cool and I don't know what's happened. Gas started costing $5, eggs started costing $7 for 18.

And I just feel like he's not accounting for some of that. Have you all talked about that?

I try. And that's why I say maybe you should do the grocery shopping. That's not really talking about it. That's just shifting the burden to someone else. Why don't we just talk about it right now? We don't need to talk about it because I'm aware enough to know that everything's more expensive. But you say, I don't know what happened. You're like, I don't know what happened. And I'm trying to tell you, our kids got older. Their sports got more expensive or whatever. Yeah.

Gas got more expensive. I do a lot of running around, a lot of running around, driving our kids to and from school, from activities. So we spend a lot on gas. And that's just a small, obviously, area of where maybe some of that's going. So I guess the disconnect is if I have to transfer $4,000 out of our savings account to pay the credit card bill this month, is that all because of the increasing gas prices in groceries?

So I don't have a view into that. So I literally don't know. Gosh, I feel like you two are so close, but you're also on repeat. Each of you just repeating your own lines. If you only knew, like I've said those exact words, like we're so close. Like there's just one thing that we just can't like, we can't get past that thing. And if we could like. I'm going to go out on a limb here.

Because I know you both sent over a conscious spending plan before we got on the call. Casey, I'm going to guess you had nothing to do with preparing that document. No. Do you see the problem? Yes. But I also see the problem that we literally cannot work together. Well, why do you think I'm here?

Yes, exactly. But that had to come beforehand. All of that planning had to come beforehand. And it's just, it's insurmountable. It fills between the two of us. Okay. Jim, the conscious spending plan is made to be done by both partners. Question for you. Did you go to Casey and ask her to help you put it together? Directly? No. I alluded to it and said, Hey, we got to do this stuff.

But I never asked her to do it with me. Why? Because I don't want to deal with the fight. Yeah. You both don't want to talk about the price of eggs because there'll be a fight. You don't want to talk about how much you spend at Costco because the kids are older because it'll cause a fight. You don't want to do a conscious spending plan before you talk to me. This is a big deal.

millions of people listen to this and you have a chance to have somebody come and help you. 18 years of, as you put it, holding on. And you don't want to have that conversation either. It's not that I don't want to have the conversation, but to your point already, like we're on repeat. It's the same conversation over and over again. And I actually think that you both do yourselves a disservice by retreating into your corners and playing this who-who game. You guys are going bankrupt pretty soon.

What does it get you? Casey, what does it get you to go and repeat? Must get you something. I don't know. When you asked that question, I was like, seriously, it gets me nothing. But maybe if I'm digging, things stay the same. And if they stay the same, what does that mean? That means I don't have to do a budget. I don't have to, I don't know, cut out the kid's piano. I don't know. Yeah. And did you catch what you said earlier that things always work out?

So maybe I don't need to change because they always seem to work out. Yeah. Yeah. I can, I can see where you're coming from. Yeah. Think about, think about even when you were 20 years old and you were about, you had gone to college and then you were getting a house or an apartment and a car and things kind of worked out. Didn't they? How did they work out? I don't know. Who paid for your wedding? My parents. Who paid, who helped pay for the car?

My parents. I wasn't entitled. I wasn't spoiled. I don't think you were entitled. I just want to say that. I did have help. You did have help. A lot of people have help. Fair enough. Doesn't mean you're a bad person. When was the last time you engaged with the numbers when it came to money? Like the beginning of the month when Jim gave me the paper that had all of the numbers on it. Well...

I don't know if I would call that engaging. That is reading a piece of paper somebody gave to you. How about before that? I mean, we've tried to do this other times where it was the same situation. It's just him giving me a printout or a graph. He likes to give me graphs. And do the graphs mean anything to you? The graphs are colored and they show me like...

This is where we spend at Walmart. Does it change you emotionally? Does it change anything? Does it make you feel anything? No. Okay. So why don't we just stop doing that? For everybody listening, if you give your partner a 300-page document full of charts and they use it to light the fireplace that night, that might be a clue that a financial document like that is not working in your relationship. Hell, even I wouldn't want to get that.

So maybe there's a different way. But Casey, I hope you're also hearing that you have not engaged with the numbers. Would you agree? Totally. I think I'm scared to engage in the numbers because I feel like we fall short. We have this life where our kids are in these things. And I feel like if I'm involved in the numbers, then I see some or all of this has to go.

And I just, I don't, I don't feel like I'm ready to face that, I guess. Thank you for being honest. This is a moment of honesty. I hear this all the time from men and women that they just do not engage with money. They don't know how, they're afraid for some reason, whatever it is. Now, Jim and Casey both shared with me that they grew up middle class, that their families were modest spenders, but they didn't really talk about money around the house.

So let's take a look at those numbers. Before coming on this call, I had Jim and Casey fill out a conscious spending plan. This is a simple document that breaks your spending into four major categories, fixed costs, saving, investing, and guilt-free spending. You can find a link in the show notes and get your own copy of the CSP. 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.

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Elevate your style using Next Level Wardrobe at nextlevelwardrobe.com slash Ramit. That's nextlevelwardrobe.com slash Ramit. Okay, why don't we look at the numbers? How about that?

Great. There's only one problem. Casey has no idea what these numbers are. Casey, you got to open the doc. I gave it to her. Oh, oh, oh my God. She's literally holding up a clipboard. Yeah. She's holding up a clipboard with the printed out conscious spending plan. This was all sitting here waiting for me on the couch. Okay. I have to say, I do admire the logistics of printing out a spreadsheet. I have to say that is a little weird, but I admire it.

This is really weird. And you just know that Jim printed it out for Casey. She's never looked at these numbers. I can guarantee you that. And I can also guarantee you that they mean nothing to her. But I want to work through it with both of them. I'll take even the smallest win right now. Casey, I see you looking at these numbers. Have you ever looked at these numbers before? Yes. Like I said, he's given me these papers before. Yeah.

And to me, like it just, it doesn't add up. So then I'm like, I go into panic mode. So then now both of us are freaking out. Let's not panic. And there's no way to bring the panic in. Does that make sense? Yeah, but that's why I'm here. Today, I'm your anti-panic guy. Okay. All the panic comes up in the room and I'm going to absorb it for you. And I'm going to help redirect us somewhere constructive. That sounds great. So without looking at that, Casey, just look at me, please. How much money do you have?

How much money do we have? Yeah. In the bank? I don't know. Total. I have no idea. Okay. Start with what you know. 8,000. That would be like in our savings account. I don't know that we have any money in our checking account. And your assets are indicated as 655,000. Jim, what is that from besides the house at 550,000? Just the vehicles that we have. Okay. Got it.

Your investments total are $7,000 and your savings is about $8,000, Casey. Looking at this, do you have enough to retire? No. How do you know? Because it's all accounted for. So there's no extra to build a retirement that we could live off of. Okay. And how much would you need to retire? I have no idea. Exactly. All right. So to me, this is a red alert right here.

The fact that you only have $7,000 of investments means that you will not have enough in retirement. It's a problem. And we can even extrapolate the numbers. Did you say you're 45? Yeah. Okay. How much are you putting away every year now in your investments? I think it's set at $200 a month, so not very much, $1,200. So let's take a look.

So if you went on that current path, just so you know, by the time you're 65, Jim, you would have $132,000 in that investment account. Now, again, what does that mean? People go, I don't know. Is that a lot? Is that a little? I don't know. What's your first reaction to that? We're short by a couple million. Yeah. For the life I would like to live. Okay. It means that essentially, if we use something called the 4% rule, that the two of you would have $5,000 per year to live on.

Can you live on $5,000 per year? I don't want to find out. No, the answer is no, you can't. Casey, you look, you're not blinking. What's going on? It's scary. It doesn't have context. Right now, we need to have a common language of finance. Just the way that the two of you are good co-parents and you have a certain language and communication, we're going to apply that same thing to money.

Okay. Now, Jim, I want to hear your perspective on these numbers because I heard a lot about Casey's perspective. What do the numbers tell you? Our fixed costs are too high. Okay. And so that eats into, you know, that I forgot what your word is. Guilt-free spending. Guilt-free spending. So that eats into that area a lot. And that includes things like going to dinner, going on a trip to Hawaii. Yeah. Because we don't have a real plan to...

direct the money that we have to those things. That's right. That is right. But you may know that, but Casey doesn't know that. Right. I love this phrase you used before, co-parenting. Co, co. If one of you just said, here, take the baby and do something. Here's an instruction manual. Go ahead. It's just not how parenting is done, right? You have to talk. It's critical.

But with money, there's a lack of that in your relationship. Even this document, while it only took you a few minutes, the real purpose of the conscious spending plan was for the two of you to sit down and talk about it together. I actually don't care if you got these numbers right or wrong by 5% or 10%. That's not the point. The point is for the two of you to sit down and do it together. So we missed an opportunity then? Yes. But luckily, we have the opportunity to talk about it together right now.

and talk about it in a way that connects both of you. No judgment. Nobody's wrong for spending too much or too little. None of that. Just let's take a perspective. Let's take a scientific view on where the money's going today, and then let's decide where we want it to go tomorrow. How about that? Jim, would you be down to do that? Yeah. Okay. Casey, would you be down to do that? Yeah. Okay. Let's do it.

This reminds me of interviewing for jobs in college. They'd ask these case questions like, how many gas stations are in the United States? And they don't really care about your answer, but they want to see how you think. Can you take a big problem and break it down? Can you use logic? Can you make assumptions and use basic arithmetic? I don't mind if people get their conscious spending plan numbers wrong. What I really want to see is how they think about their numbers.

Your gross income is $12,500 per month. It's $150,000 a year income. Is that right? That's pretty good. That just happened like a month ago. Oh, really? Congratulations. What was it before? I got a $15,000 raise per year. Very good. Question. Where is the $15,000 going?

Yeah. It's gone. It's gone. So everyone, he just did a, like, like it vanished into thin air. This is very common. People will get a raise substantial like you and they'll go, I don't know where it is. It just vanished. Or they were paying $600 a month towards their debt. They finally finished paying it off and they go, I'm supposed to have $600 more per month. Where is it? So you two have done a great job keeping your housing costs low.

Awesome. Awesome work. Now let's talk about this other thing I see here, car payment slash transportation. Can someone explain how you're spending more on your car payment and transportation than you are on a house that holds seven people? I'm assuming you added the gas to that. I did. So I had put like, I think $400 a month for gas and just maintenance because our

We only have $800 in payments for the cars that we're paying for. Say that you only have $800 a month in payments. So we have $600 for one and $200 for the other. What's the $600 car? It's the family hauler. It's a Yukon. So it's a big family car. I want to get rid of the car. Jim does not because we're probably upside down in it and says we can't afford to get rid of it.

Well, we would have to replace it because it's the only vehicle that we have that our entire family fits in. So, you know, I see it as the lesser of two evils. Why did you all buy this car in the first place? How did you decide how much you could afford? Jim said. Got real quiet in here. Jim? I said, Jim said. Jim researched it. He made a spreadsheet. Jim, what do you say? What happened?

Yeah. I went through. I knew it was a car that she really liked and really wanted. And I just made it work. Jim, how can you say you made it work if you're losing money every single month? Is this a guy thing? Where every decision you make, you say, I did it to make my wife happy? I don't love this. I don't love the idea of tossing the ball from one person to another just to deflect on responsibility.

And again, let's be honest. Jim says, I made it work. But their financial situation is not working. Groceries are $2,000 a month. What do you all think about that? I don't know. Because just the beginning of September is when he gave me this number. And I was like, okay, I'm going to stay within it. I think I've done pretty good. But I would have to go back and count all my numbers. I've tried to keep track. Okay. Do you feel confident that you're...

under that number? I do. Okay, great. Was it hard to stay under 2,000? No, but I feel like some months are harder than others. So we've picked a baseline of 2,000. Fine. Sounds like you're tracking it. That's great. You sound confident that you're under it. Here's my question for you. Casey, if you had to get a little bit more aggressive about how much you spend on that, in other words, if you had to cut back, how much could you take that number down to?

I don't know. Comfortably, I would say 15. Really? But I would have, I would have to be very, very, very careful. Well, I think, could you do that? Sure. You don't sound that confident. I don't because I just, I don't know exactly what I spent this month because I felt like I was careful and I would have to add my numbers up before I said, yes, I'm totally confident I can do 15. Well, can we just do that right now, Casey? Because honestly, this is one of those things that we need to know the answer to. Um,

No. Why? Because there are receipts that I have that I didn't get a chance to put in my phone. So what? I'll wait. I don't care. I'll take all the time I need. I want to help you two. You know what I don't want to do is create more homework for the two of you and let you off on your own and then be stuck for another 18 years.

If it costs me an extra 20 minutes, I will do it. So this is where I get hung up. So there are some places that I have receipts and I come home and I put them in. Other places are just like grocery online that you pick up or like...

Does that make sense? So I feel like they're coming from all different directions and it's been a little harder for me to keep track of. So can I make a couple of suggestions? Yes. Okay. Do you buy everything in terms of groceries on a credit card? Yes. Same credit card? Yes. Great. Well, that's the hard part right there. So just pulling up the credit. Yes. Yeah. Just download that. In fact, you can even look at it on their website and it will show you exactly how much you spent this month.

So can we do it right now, please? Yes. Jim would have to do that for us. Oh, no. Jim's not going to do it. It's going to be Casey doing it. I do not have access to that. You do now. No, I literally can't get into the account. It's all his passwords. It's all his. So I... What a surprise. Okay, so... Hold on before I get totally run over by the bus. No, he has tried to set me up on this before. Yes. Okay, okay, okay. I already know what you're both going to say. So just save it. How about this?

You get a chance to start co-parenting, but this time with money. Casey is going to have access to the credit card and how she's going to use the transactions to download it. So she's not doing all this weird receipt tracking and stuff like that. Casey, I don't want to just make this a fake conversation. I literally want you to do it right now, please.

He's at the computer and he can give me access right now. I think there's confusion. Are you just asking us, you want him to give me access right now? Yes. I literally want you to tell me how much you spent on groceries this month. Right now, Casey. Perfect. You want her to tell you. Yes, I don't want you, Jim. I know you can do it, but that's not the point. Casey is going to own the grocery spending from now on. Therefore, she needs access. Yes. So we could do that through an app on your phone?

Oh, he's coming out here to do it for me. He's taking my phone. No, you handed your phone to him. Hold on. What is this? Jim? Hey, Jim. He wants you to come back. Why don't you go and hand that phone right back to her? Well, I was just going to get the app on her. I'm sure you were. I'm sure she can also do that herself. This is not the first time we've had this conversation. She's telling her Chase is the app. It's probably in the app store right now. I have it on my phone already, actually. He's now giving you the password.

Yes. There was no like at Hotmail or at Yahoo. So I just was wondering. So it's sending request code to Jim's phone. Jim's passwords are all 50 letters, exclamation points. You're adding up each transaction? Yes. Is that what you want me to do? Online, it does show you like categorically. I don't know. Now that I'm adding these all up, I'm worried. Why?

I don't know. I don't know if I can stay under the 15 or the two. How much are you at so far? I'm still writing. Jim is back in the room with Casey pointing out something on the phone. He's showing me how to pull up the graph from the credit card company. Okay. Casey, try that. And we can always do the chart thing later. Okay. I am just adding it up, but I'm not confident that it's going to be under...

2000, like I thought, which I guess is a good eye opener, right? Okay. So I'm about 1300. So the whole month. Yes. You can hear the anxiety in Casey's voice, even as she's going through this, that comes from not knowing the basics of their personal finances. And it's normal to feel nervous because

So what I'm doing is going step by step with her so she can overcome that fear and start to engage with their money. This is really important. That's why I'm spending the time with them to do it.

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

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I like that. Great job. First of all, round of applause. Awesome work. All of you. That took a lot for you to get to that. That's amazing. That was stressful. So I want to point out my observations of what just happened. Before I do, what do you think my observations are going to be? Your observation is going to be that Jim had to step in and show me how to do it. That like...

Yeah, that this is being driven by Jim. That Jim just takes care of it type of situation. One more reason to say I'm out of the loop, that I'm not connected to the money. Okay, Jim? This is definitely not a team thing that we're doing together. There's no co in what we're doing. And you both like it that way. Have you noticed that? I think you get in your comfort zone and you just do your thing. And then, yeah. Yeah.

So it's easier to just keep staying in our lane and to try to make it work different. I would rather be teammates for sure. Love that. Teammates it is. This is not a parental relationship. It's an intimate partnership. But I think that realization of we've been negatively reinforcing these roles that neither one of us want to play became painfully obvious to me

as you forced us to go through that experience. So I can do my part to stop that on my end. Yeah. This is why I say that most people would rather keep doing what they're doing, even if they are failing at it, than try to make a change where they might potentially fail at it. The two of you are slowly depleting all the money you have. You will go under if you don't change a thing.

But you would rather keep doing that than to make a change, which might be harder. Let me reflect on what's happened so far. Casey does the grocery shopping for their family, but has no access to the spending data. She actually has the financial app on her phone, but she doesn't log in. Jim has the password.

When I asked Casey to open up the app, Jim walks into the room and Casey hands him the phone. Then she looks at me and says, he took the phone. And of course, he starts to helpfully give her tips on how to download all the data, etc. And she starts to have her eyes glaze over. She's not engaging with the money. She starts to worry. But what happens in the end? In the end, she does it.

And they can operate as teammates, but they will have to radically reconceptualize their relationship with money and likely their entire relationship dynamic. I wanted them to have an actual conversation about money together with me just observing. Listen to what happens. Casey, do you have a computer in front of you? Yes. Okay, please open it up and get that conscious spending plan on screen.

I would like for both of you to have this document open. There's a lot of laughter going on all of a sudden. Casey, why are you laughing? I never sent it to her. Of course not. But that's about to change. Why don't the two of you have a conversation? And I'd like to see how the two of you make this decision. So we need to take 250 and put to just retirement? Yeah.

And then I would really like to focus on... But what does that mean when you say inter-retirement? What does that mean? So right now we have a Roth IRA that I've been contributing to. We have a lot of room to continue to add more to that before we hit the limits. So I think we just put it into that IRA. And I have... Look at her face.

what do you think she's registering right now nothing so why are you saying that so let's connect yeah talk to her what was the question she asked you what does that look like okay what is the what is the investment so we put it into a an investment that i've been making a rock ira

describe what I'm seeing. So at first you asked this question, which was a very valid question, Casey, like what is this investment? Where is it going? And Jim started off on his going way down in the weeds with all these different accounts. And Casey was checked out, just totally checked out. And Jim wasn't even looking at the screen. So this is often what happens. The person who's living in the spreadsheet and particularly people who are like, really, they love numbers.

They just talk, talk, talk, but they're not connecting with their partner. Casey, I'm going to go out on a limb and guess that you're asking, what is this investment? How do we know we're not going to lose it all? Is it going to make us money? How do we know? Are those the kind of questions that you really want to know the answer to? Yeah. What is it? What does that mean? You know what I mean? Yeah. Yes. So

Jim, when you go, it's a Roth IRA, but I haven't maxed it out. And we have a $5,600 max. It's like describing quantum physics. Let's meet her where she is. And once Casey gets interested and engaged, then you could definitely get into the technicalities. And this is like months from now. But right now, it's just addressing her where she is. She's concerned. What is this money? What is an investment? So this investment would be put into...

something called a Roth IRA. It's pretty low risk. And we just hope to build that over time to get to a point where it can be part of our retirement. So you can take from it anytime you want? Like you put it in, you can take it out? No, not easily. There are some penalties with how it works. So we can access the money, but there are some financial penalties that we would incur if we did that. What is the benefit of doing that over something else?

What else would you have in mind? Like another account or another investment. Yeah. So putting, and I think this is what Ramit was saying. If we had $20,000 in a savings account, there's not a real return interest wise on those. So they're not considered investments because it's just money sitting there. So to really invest our money, we have to put it somewhere where there is risk anytime we do that.

But with that risk, there's a greater rate of return. And so our money can start to work for us more than just putting it into an account. But I do like the idea of having that emergency fund where we have cash that's available to us in the case that we need it. I agree. I think with the conscious spending plan that I put together and that I need to go through with you, those things have been accounted for.

Sounds good. I feel better than about doing half instead of all of it into the investment. Yeah. Cool. That was really nice. I love the way that two of you had a back and forth and I love the clarifying questions. Whenever I hear a clarifying question like what you just said, Casey, it was like, well, what's the advantage? Oh, it makes me smile so much because that shows me you're engaging with this material.

And I love, Jim, that you communicated and explained this at a level that met Casey where she was. And that was all that you needed to do. So I'm going to take the win on that. Big win. Let's give each other a high five, please, because that was awesome. You two have just committed to saving thousands of dollars a year and investing thousands of dollars a year. That's amazing. It sounds an awful lot like a plan. And I think...

That's really what I was looking for from today is to be able to get to a place where we can both agree on where we're at and, you know, stare down the barrel like this is the truth of the matter and come up with a plan as a team to change. Just sounds like a meeting point, a place to start to work together.

We continued to go line by line in their spending to look for areas where they could shift money to an aggressive investment strategy. And we realized a few options. They could replace their $600 car payment with one that was half that expensive. They had about $15,000 worth of toys and other things in their garage that they could sell. And instead of buying these motorbikes and owning them, when they decided they wanted to go out and ride an ATV, they could go and rent them.

And finally, they had to accept the reality that they can't save for their kids' weddings or college funds. They just can't. They do not have enough money invested for themselves. After sharing all of this with them, I received a follow-up message from Jim and Casey. Jim wrote,

I was impressed with how simply saying some things out loud made it crystal clear to me that what I've been doing with my money and some of my attitudes towards it have not been good.

Rather destructive, in fact. But with the insights I gained from our time with you, I can start to do things differently. I have a pretty clear picture of what my rich life will look like. I'm setting the goal that within five years, we will have a million dollar portfolio and we will be debt free. Time to get to work. Casey also followed up and said, the thing I learned is that it's never too late to make financial changes just by being aware.

I have a lot to contribute to our financial situation, even though I'm not currently bringing in any money. You can read the full follow-up letters from Jim and Casey at iwt.com slash follow-ups. For all the links mentioned in this episode, check the show notes. 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.