71. "We finally talked about money. I can't believe how little he's saved"
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Before we start today's show, I have a really exciting announcement that I've been wanting to share for a long time. On January 1st, 2025, I'm releasing a new book called Money for Couples. For the last three years, you've heard me on this podcast speaking to different couples every single Tuesday. I've spoken to over 170 couples on this show about their money psychology, the money messages they heard from their family, the peculiar dynamics that they have around money and where they get stuck.

and how they can get on the same page. Well, behind the scenes, I've been working on the definitive book to help couples get on the same page with money, and that's what I wrote for you. It's coming out January 1st, and in the book, I'm going to share how to talk about money, including the exact words to use, when to talk about it, how to teach your kids about money, even the exact agenda and account setup that my wife and I use in our finances.

I'm going to show the tactics to make instant improvements, like how to set up your accounts to automatically work together and how to assess your financial health.

And finally, you're going to get a deeper understanding of money psychology in your relationship. And you're going to discover why you and your partner see money differently and how to get on the same page. Now, it's one thing to listen to couples or watch couples every single week. I love doing that for you. But it's a whole different thing to be able to have the book and to be able to work through it with your partner. Okay?

I'm so excited to get this book in your hands. You can pre-order it using the link IWT.com slash money for couples and stay tuned for a lot more on this book this year. Again, go to IWT.com slash money for couples to pre-order my new book about getting on the same financial page as your partner. You know, money doesn't have to be boring. I get a lot of questions of people who have set up their accounts who have money being saved and they're like,

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

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

I recommend you pick up a copy of this journal. You can do it solo or with a partner, and it will help you design your rich life. Get it at any bookstore now. I could tell that she was disappointed in what I brought to the table. She's often said, these are things you should know. These are things you should have already known. And she's right. I was really disappointed because...

At our ages, I think that he should have been further along or should have been more careful about money and saving. I don't think Emily trusts me with money. That scares me. And he told me I'm a spender, but I'm not a debtor. And so that scared me too. And the conversations we've had, they've not been productive at all. They've actually felt destructive and unproductive.

We're just going nowhere with these same conversations over and over. And I said, we need to be productive in what we're talking about. We can't keep going like this. Yeah, I definitely kind of plan for the worst with money because I've been through the worst and I don't ever want to go through that again. He was a spender for 17 years. He didn't save for 17 years. I don't think that's just going to drastically go away overnight. Emily and Alex are in their mid-30s and have been dating for two years.

They recently had a conversation about their finances where they shared how much they have, how much they make, how much debt they have. And Emily was disappointed to learn what Alex had saved. On today's call, you're going to hear from both partners, but I'm going to spend more time with Emily because I think that's where the real insights unfold. So I'd like to ask you a question.

Imagine you and your partner finally got the courage to sit down and share your income and your debt and your savings. And one of you just felt bad. You felt disappointed. You wondered, that's all they have? What were they doing all this time? What kind of lifestyle can we build together? What do you think that would be like? What do you think it would be like for your partner?

Well, this happens more than you can imagine. And today you get to listen in to Emily and Alex talk about their money realizations on the I Will Teach You To Be Rich podcast. We had kind of a financial disclosure counseling session. And right before we went with the counselor, we went over all of our finances together. And before that, I had had some clues as to his financial situation, but I didn't know the black and white hard numbers. What were the clues that you had had?

The industry he's in is not a high-paying industry. And some of the things he told me about living abroad for so many years and that he wasn't really able to save as much as he'd wanted living abroad. Alex, so walk me through that moment. Were you excited? Were you nervous? What were you feeling? Yeah, I was excited. I was a little nervous also because I knew that she was further ahead and I knew that I was obviously further behind her.

How'd you know that? Just the way that she talked about money. Like what? She sounds very savvy and she knows what she's doing. Is that because she recommended a book called I Will Teach You To Be Rich? I actually saw I Will Teach You To Be Rich when I was helping Emily Pack one day. And I quickly went on an app and I purchased the book. And I listened.

But over a break while we were in different locations. Why did you do that? Because I knew I needed to out my game. Wow. And out of curiosity, was that before or after this kitchen table conversation? It was before. Wow. Okay. That's impressive. So you saw this book, you realized you needed to get up to speed and you went out independently and bought it and listened to it. That's really cool. Have you ever listened to this podcast before? No.

Yes. You have? Actually, this might be the first time that someone who came on this podcast has actually read my book. I feel like we need to give a round of applause to everyone on this conversation. You're the only people who have ever read my book who have come on this godforsaken podcast. We need gold stars here, Rameet. I mean, I'm impressed. All right. So here you are at the kitchen table. You pull out your phone. You proceed to share your numbers.

I remember looking at what I'd had in my account, what I had invested, what I had saved, also a recent land purchase. And I thought it was going to be an opportunity where Emily and I could meet, put everything on the table or put at least our finances on the table and talk about how we could move forward from where we're currently at. What do you remember happened?

I could tell that she was disappointed in what I brought to the table. What did that feel like to you? I understood why. I completely understood why. I just didn't expect the rest of the conversation to go the way that it went. Later in the afternoon, we were further talking about it and she did end up crying and explaining to me how she felt.

and how that really affected her trust in me. I felt shameful for not being in a place that, one, a guy my age could and should be, and two, that she didn't feel safe. Safe. Was that a word that you used or she used?

It's the word that she later used, but I was internalizing that feeling based on how she reacted. I was really disappointed because at our ages, I think that he should have been further along or should have been more careful about money and saving. And coming back to the US and working in the US, I was surprised that he hadn't been able to make up some of that time and save a little more. And it was just kind of a realization of...

this nagging thought and I had in the back of my head, it was a confirmation of that. That scares me. And he told me when he was sitting there, I'm a spender, but I'm not a debtor. And so that scared me too. I think I would be the one who always would have to keep track of the finances and kind of be the finance police reining in spending behavior if we combine our finances.

And being the one to hold us accountable to the budget or to what savings goals we have. I don't expect Alex to change 17 years of behavior in five months. How would you feel if you finally sat down with your partner to share your finances and you realized they didn't actually have that much? I think we can all sit here and judge. But if you've been responsible with money, if money has been a value to you, something that's important to you,

and it hasn't been to your partner, I can see how that would be disappointing. Now, one thing that's really hard for people is accepting that they may not have the kind of life that they envisioned. Think about it. If you grew up envisioning a certain type of house in a certain city, doing certain things like brunch or effortlessly eating out or traveling, and you suddenly realize that's not in the cards for me, that is extremely difficult to accept.

especially now when you see other people doing it every single day. And I don't have any wisdom on what to do about it. It's one of the hardest things that I can imagine. I will say during the great financial crisis, I remember an LA Times article about wealthy families who had lost their houses and they couldn't afford to go to the same restaurants, country clubs, that kind of thing. And of course, all the comments were jeering at them saying, oh, boo-hoo, rich people can't go to the country club anymore.

And I remember thinking, okay, I can understand not feeling sympathy when other people are having it so much worse. But I also realized that losing your social life and status is incredibly painful. It's easy to mock people. Oh, you can't eat out at that fancy restaurant. But for every single one of us, losing our social status would be one of the most painful things you would ever have to go through.

Something to think about as we hear Emily's reaction to Alex's finances. Okay. So how did that conversation end with Alex? I was really upset with him. And we went and met the counselor afterwards. I think I ended up crying in that counseling session. I don't remember exactly. It didn't end well. That was five months ago. She wants to feel emotionally secure, financially secure, physically secure. And a big aspect of that

is finances. Yeah, I definitely want to feel financially secure and trust my partner with finances. And what does it mean to you when you say financially secure? I think it means that we both earn a good income and we're able to save. It means that we have the same goals financially and that we're on the same page together. We're saving together. We

We want a similar lifestyle that I don't think he's going to go out and spend money that we haven't discussed on things that we haven't previously talked about. What's good? Over six figures to me. Okay. Over six means what? $101,000 or $700,000? Right now, I earn more than Alex. And I would like him to earn as much as me. Because what? Because then I think we could save more. And...

try to fill in the gaps of some of those missed years of retirement savings. Do you believe that? Absolutely, I believe that. I don't believe this. I think Emily's using a very logical reason to substitute for a feeling and not being honest about it. I'm sure I could spend 15 minutes on this with Emily and maybe she might realize it, but what's the point? Let's just keep moving.

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.

Thankfully, this episode's sponsor, Rocket Money, can help you easily find and cancel those unwanted subscriptions. Rocket Money monitors your spending and helps you lower your bills so you can grow your savings. Rocket Money will even try to negotiate lower bills for you by up to 20%. Just submit a picture of your bill

and Rocket Money takes care of the rest. They'll even deal with customer service for you. Rocket Money has over 5 million users and has saved a total of $500 million in canceled subscriptions, saving members up to $740 a year when using all of the app's features. Stop wasting money on things you don't use. Cancel your unwanted subscriptions by going to rocketmoney.com slash Ramit. Give it a shot at rocketmoney.com slash Ramit. That's rocketmoney.com slash Ramit.

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So it's strictly about the retirement goals and the savings amount. That's why you want him to earn as much as you. And I think too, we've talked about if we get married and have a family, me being able to have a little flexibility of not having to go back to work three months after I have a child. Okay. Makes a lot of sense. Alex, what do you think? Can you earn as much as Emily does?

Yeah, I certainly think I can even in my industry. I'm finding ways to to earn more We actually looked at the dream job course together and that really inspired me to look at take a different angle on on how to approach people in my industry and even that ideal job that I would one day have and even though I've I've not Got that just yet. I've made steps to do that. I've started

my own consulting company where I'm working with individuals and organizations. That just started in, I think, the last few months and well over five figures right now. Really? Yeah. Wow. How do you feel about that? I'm amazed.

It feels like the start of something amazing. And that's something that I feel has always been inside me, something that I've tried doing in the past when I was living overseas. But now it feels like it's an opportune time to start this up. And so when I think of my full-time job and also my part-time consulting, I think it's a real opportunity for me to

to really not just get to a level playing field with what Emily earns, but also to top that up and to help her feel more secure and safe for us so our family could one day feel more safe and she could spend that flexible time with our kids if we were to have them. Has anything changed since then?

We definitely talk more about finances and about strategy. I know he's changed some of his behaviors and he's told me about them. I mean, I don't ask to see his financial plan or anything because we haven't commingled our finances. Our finances are separate. So I'm not looking over his shoulder, monitoring his finances. He's an adult. And just so I understand,

You two are dating, you live together, but are not married. Is that correct? We're dating. We don't live together. We live separately. Okay. And do you think that the next step of your relationship would be living together or combining finances or getting married? Yeah. I think the next step, in my opinion, would be...

getting married, I would not commingle my finances unless I was legally married to somebody. And even then, I don't know how much I would commingle those finances. I like anyone with a point of view on money. Sometimes I agree. Other times I might disagree. But I still like to see when someone has a strong point of view. I actually think the rarest thing in the world is a point of view. So when Emily says she wouldn't commingle her finances before getting married,

I respect that. And I also happen to agree with her. All right. So you have this conversation. You both realize that you have some mismatches in what your expectations were. What happened between the end of that conversation at the kitchen table until now? We went to England and Portugal and Italy and Sweden. And so we planned this trip together and we

Kind of set a truce and decided not to talk about the finances on the trip and enjoy our time together. You said a truce as if talking about money is war, but we're going to set a truce just for Europe. Maybe I set the truce in my own head. I don't think we actually verbally said that. I think that was my mental thought.

Okay. So first of all, you're the only couple I've ever heard. Actually you, Emily, because I don't hear Alex saying a word right now. Emily's the only person I've ever heard use the word truce with money. I like it. It's very grand. All right. We have a Italian truce. Go ahead. So we go on this trip and I had to mentally discipline myself not to watch what he spent and watch how he spent money on our trip.

I just had to put it out of my mind and enjoy our time together and not worry about what he spent. Because after he told me he was a spender, of course, I'm watching how he's spending money. And give me an example. Because I know that you put it out of your mind, but I bet you didn't forget how he spent in Europe. Can you remember a specific example? Look at that smile. She's like, do you have three hours? No.

There was one, we were on the beach and we were going to rent these cabanas and he had gone up and there was so many cabanas on the beach, but we just plopped down into these ones. And I said, can you go and see, you know, and then he paid for them and he came back and he said, those were so expensive. And I was surprised. I said, well, you could, you know, you should have come back and told me and we could have walked down to the beach and gone to a cheaper cabana because we weren't going to be there all day. So something like that.

And how much was that cabana? It was 100 euro for the two. I didn't expect it to be 100 euro, that's for sure, but it was. And so I just thought, you know what? We're here. We're not going to be back here. Let's just enjoy rest. Let's not go up and down the beach to find a place to sit. How long have you two been dating? Almost two years. Okay.

It doesn't sound that unusual to me. You've been dating for two years, you don't live together, that you might not have a shared mental framework on how to deal with a surprisingly expensive cabana in Europe. Like it's kind of an esoteric situation. I'm not surprised that you haven't encountered it before.

I am not surprised by this example. This is what's been on her mind for months, a hundred euro cabana. What this really tells me is that the issue between them is much, much deeper than a hundred bucks here or there. It's about how they see money and maybe even something we haven't even gotten into yet. Listen in. All right. Okay. So you went on vacation. Was there any other thing that happened between the kitchen table conversation and now?

Why is everybody smiling but not talking? I don't know why he's smiling. I want to know why he's smiling. You're making me smile. I don't have any debt. I'm not in debt by any means. But in terms of planning for that vacation, we've talked about, even recently, I didn't plan out how much. We set a limit for what we're going to spend, but I didn't budget for it. And then I think that not having a budget and not having a...

a goal of that I actually saved for that trip had really concerned Emily. What was the number? I think it was 2000. Each. Yeah. So it was about 4,500 total.

Okay. So that includes everything, flights, accommodations. I thought he had saved and maybe that was an assumption, but I thought he had already saved for it. And that's kind of how he knew what his limit was. And then he got a bonus this summer. And when we were looking over the extra income that he's made in the last five months and talking about it, and he said, well, you know, where, like, where did you do with that bonus money? What did you do with this? What did you do with that? And he said, well, I paid for Europe with that.

And I said, well, I thought you already saved for your, and kind of put that in your savings plan. Did you do that, Alex? Did you save for it ahead of time or no? I didn't. I had the money, but I didn't know. Okay. And did you have 2000 bucks in a checking or a savings account? I had it in a checking account. Okay. So what's the problem? You had the money, you decided on a number. Sounds good to me. What's the problem?

I think when I think about saving for something and budgeting for something, I think about planning and contributing X amount to get there rather than taking it out from a general checking account. Okay. How much is in your checking account right now? 18,000. Okay. That's a lot. And then savings is about 20, 25.

Okay. All right. Your ratios are a little off, but I want to understand more about how you both think about money because it seems like this was an issue for you. Emily, seems like from what I'm hearing, he had the money, but it unsettled you that he had not, what, planned for it ahead of time? Well, I guess...

Because he had told me he was trying to save more and trying to contribute more to his retirement, I was surprised that he didn't plan this trip expenses in his total expenses and savings. Okay, got it. All right. So he didn't manage money the way you thought he would, which surprised you. And combine that with the fact that he doesn't have as much as you thought he should at his age and the fact that the two of you are talking about potentially getting married,

you start to add these things together and it starts kind of prickling your antenna. Is that right? Yeah, that's right. Are you hearing the clues? The real issue here is not the cabana. It's not about the amount in his checking account. And for that matter, why does Emily really care? He has the money. It's just not in the accounts the way she would do it. What's a real issue here? Something to think about. I also hear some positive clues.

They both talk about money. They've both gone to therapy, which is a great sign. And they are here talking to me, which is another positive sign. I want to pause here to ask if you have ever judged your partner for not managing money the exact way you would. And now that you're hearing Emily and Alex, what does it make you think about the way you approached those conversations in the past?

Now, back to Emily and Alex. I'm going to shift the questions to them, and I'm going to ask them what they think the problem is. All right. So if you had to sum it up in one or two sentences, what do you think the problem here is? I don't think Emily trusts me with money. Emily? I think based on what Alex has told me and shown me, I feel like I would bear the burden of our finances, me. And I already have a lot of

pressure on myself because I'm also trying to make up from some things that happened to me. So I feel like I would have that extra, that burden and responsibility because of, like he said, he's still got a lot to learn and catch up. And I'm not, I'm not saying I'm some financial expert here by any means, but between the two of us, the burden would be on me. And would that be acceptable to you? Well, no, I want us to be partners in this. Where are you not on the same page?

I think Emily understands finances much better than I do. And I understand that she's often said, these are things you should know. These are things you should have already known. And she's right. And I know, and I'm sorry. I'm just learning these things. I'm not buying this yet. Notice that Emily says the burden of the finances would fall on her.

Well, yes, for the majority of people in America, the burden of finances falls on the higher earner. She also says he has a lot to catch up on. Yes, I'm sure he does. But the fact that he has bought my audio book and listened to it and he's started this side business, those are very promising. We're not there yet. So I'm going to start gently pressing them, especially Emily, to try to get to the root problem. All right. So-

You mentioned that your spending is misaligned on vacation, but then we talked about it's not really misaligned. Where else are you not on the same page with spending? Is this a pin drop silence in here? Excuse me, is my audio just go out? We're being respectful of each other. I'm letting him go first. Oh, okay. That's what I'm trying to work out and understand. My concern is, like I said,

He was a spender for 17 years. He didn't save for 17 years. I don't think that's just going to drastically go away overnight. Okay. I agree. Is it possible you're creating a problem where one doesn't really exist? Emily, hold on. This is a question for Emily. I hope not. I don't think so. You don't think so. Okay. Well, let's find out. What do you remember feeling about money from teenage years into your 20s? What word would you use to describe your feelings about money? I think ambivalence. Mm-hmm.

My brother was very focused on money, my older brother, and he actually gave me your book when I was in my 20s. And he was just very gung-ho about having seven figures by the time he was 30. Tell him to send me an email. I'd love to hear if he used my book. That's great. I love hearing this stuff. Okay. I will tell him. And he... My parents didn't chase money. They worked... Their jobs were more of their passion. Okay.

So to see my brother, his main driving force was money was different. All right. So what happened in your 20s, 30s? What were the major developments for you? Well, I got married and I was married to a spouse who had quite a bit of money. And his perspective was, don't worry about money.

we this is our money this is for our family we will be fine and i will take care of the money and i will be the planner about money okay so what happened we didn't stay married and he didn't really mean all of that about it was our money and that we were okay and i ended up spending almost

Well, all of my savings on legal fees to get out of that marriage. Well, I'm sorry to hear that. When you say that you spent all of your savings, how much was that? Over six figures. Wow. Okay. And are you fully separated, divorced now? Yeah. Okay. What was the role of money in that marriage? It was really horrible because even though we had a lot of money, he would get on to me about money all the time.

that I was spending too much if I went to the grocery store, that towards the end it was really unpleasant. I was in grad school at the time, so I wasn't working full time, and just that I was basically a parasite. Did you say that? Mm-hmm. That actual word? Yeah, that actual word. And is the implication that he was making the money, you were not, you're just basically mooching off of him? Yeah.

It's terrible. Especially because from what you told me, he had told you earlier, our money is ours. Yeah. Where did that come from that he would say, I mean, the parasite word, it's quite extreme. It's extreme, but I think it fit in with the person he ended up being. Looking back, what are your takeaways from that marriage? Looking back, I wish I had not been

so trusting about he was going to take care of the finances and been more involved. And after that marriage ended, I worked really hard to save again. And there's just this almost like self-defense mechanism of

you know i have to be able to provide for myself i will not rely on somebody else for money ever again or trust that they've got it figured out or that they're going to take care of me because it was so hard to get back to a place of being able to save and be financially okay after that i'm really sorry you had to go through that all of it the the marriage the marriage is dissolving obviously

words like a parasite and whatever else may have happened. I hate hearing that because it stays with you for a long time. You know, it's not easy to get over. So anyway, I'm sorry you had to go through that and I appreciate you sharing it. Thanks. Do you think you've brought any of those lessons into this relationship? I think there's certain expectation that he should have these things figured out financially. Because finish the sentence for me.

Well, because I think at our ages, we should, we shouldn't be relying on anybody else. Right. I learned that the hard way. Okay. Any other reasons? I, I think because who I was married to before I had it all figured out. And that's what you want me to say. And no, no, no, hold on. Hold on. I don't want you to say anything. I want you to say that. Well, I think that's what you're getting at. And I, the irony of that is sure. He had it figured out supposedly, but,

He came from generational wealth. So how much of that was his own is debatable. But he was so ungenerous with his money, with the money. What? Like what? You know I love examples of cheap fucks. Okay. Just let's do it. Tell me. Let's vent. We could not have people over for dinner because he didn't want to pay to feed them. Oh my God. I'm in heaven right now.

He didn't want to pay for what pizza? What are we talking about? Just whatever. If we grill out or make a salad or whatever. What did he say? He said, I don't want to pay to feed people, other people. And, and was your response like, don't you come from three generations of wealth? Do you ever say that? I said, well, we can afford it. Uh-huh. And his response? No, we can't. Really? He said, no, we can't afford it. Mm-hmm.

Okay. See, the things going through my mind are things that I would use to verbally eviscerate someone on Twitter, but I forget that you were married to this person. So usually you don't try to impale your intimate partner. Okay. Fair enough. Fair enough. Don't take my advice on verbal destruction, at least in a relationship you want to continue. All right. What else was he cheap about? Anything to do with the house. If we needed to buy anything for the house, we couldn't afford it. And

When I paid for grad school, he didn't help with any of that. And in a way, I'm glad because during the divorce, he couldn't claim that he financially supported me with those payments. I became scared to use money and spend money. How long ago did the marriage end? Everything was legally finalized around two and a half years ago. Okay, great. So you get some time to get some perspective and kind of think about what lessons you took away. Some of the lessons that I heard you say were...

He micromanaged money, was constantly on you about your spending. And he said, we can't afford it. He called you a parasite, which cannot have felt good. He lied, presenting himself as very wealthy. But then when it came down to ordering a salad for friends, he wouldn't do it. Are all those fair to say? Yeah, all that's fair. Okay. And he made you feel like you were insecure with money.

Like you didn't, you wouldn't know if you were going to have enough. It's possible you brought some of those lessons to this relationship, right? It's possible. Yeah. Should we just put them all out on the table? Cause I think it would help us move forward. Yeah, let's do it. Let me just break in here to talk about a few things.

If you're a cheap tipper, you're going to want to turn this podcast off right now because I fucking hate you and I'm about to blast you. Oh, and if you're not sure if you're a cheap tipper, but you use phrases like, why should I have to pay for companies underpaying their employees? Or we don't do this in Europe. Or, oh, Ramit, so you're saying I have to tip 25% even if the service is terrible? Just know that you are a cheap fuck who's going to die alone.

All right, you know what? I don't want to spend another 20 minutes ranting about tipping right now. Just Google Ramit tipping and watch my videos. But I do want to talk about the obvious clues that Emily is giving us. She went through a traumatic marriage specifically related to money. And she has obviously brought a lot of those lessons into this relationship.

To you and me, this seems obvious. But if you rewind and listen back, it's also evident that Emily hasn't connected her past marriage to her financial expectations of Alex today. And without understanding that connection, she will forever be feeling resentful about tiny issues like a cabana. But the real root cause is so much deeper. One of the worst feelings in life is feeling stuck.

You hear it sometimes with podcast couples here. They feel stuck around their money. I felt stuck in my business. I had made a bunch of decisions years ago and I woke up feeling trapped. So after thinking about it, feeling stuck, not sure what to do, I went to a CEO council that I'm a part of and I just laid it out. And after listening to me, they were like, oh, it's so obvious. You need to change this. Move this person over here. Change this resource allocation. Boom.

I wish I had done it years earlier. If you feel stuck in your career and you also wish you had a group of peers who could help you get unstuck,

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and join thousands of top senior leaders from companies like Microsoft, Amazon, and Meta who have taken the first step towards accelerating their careers. That's sidebar.com, S-I-D-E-B-A-R.com slash R-A-M-I-T. When I was in my early 20s, I was not into clothes. I wore free t-shirts from tech companies, and I really did not want to seem like I tried too hard.

But I started to realize that clothing is the first thing people see about you. They don't see how nice I am or how much I know about personal finance. They see what I'm wearing. And like it or not, that shapes a lot of how people perceive you.

Now, I take a lot of pride in the clothes I wear. And I love knowing that when I buy something, I'm going to keep it for years and I know that the people who made it were paid well. I actually hired my wife, who runs Next Level Wardrobe, a luxury personal styling company, to style me for my Netflix show and all of my events, including what I wear day to day for more casual outfits.

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Elevate your style using Next Level Wardrobe at nextlevelwardrobe.com slash Ramit. That's nextlevelwardrobe.com slash Ramit. The feeling I'm getting is that some of the examples you've given me today, when I hear them, I go, all right, I mean, I don't know if I would have got a $100 cabana, but okay, fine. But the lens you're viewing them through seems like it's almost assuming the worst, right?

Would you agree? Yeah, I definitely kind of plan for the worst with money because I've been through the worst and I don't ever want to go through that again. I'm with you. I don't want you to ever go through the worst again. I guarantee by the time we finish talking today, you will have some strategies you will not have to worry about worst case scenario. Let's put that on the table right now. Okay. But

When you're in a new relationship and you're talking about potentially coming together physically, financially, all kinds of stuff, it's kind of hard to build a relationship when you're primarily looking at what the worst case scenario is, right? Yeah. Alex? Alex is like, yes. Alex, get in there. Yeah, tell me, Alex. Yeah, it is. And we've had the same conversation for the past five or six months now. And it feels like it's...

It's the same thing that keeps coming up about... What is the conversation? That she won't be able to trust me with money, that she'll be managing the finances, that she'll... Will she be able to afford to be flexible with her job when we have kids? Will I ever reach an income? Is my area of work lucrative enough to be able to...

to allow her and me to have the lifestyle that we'd ideally like to have. Sounds constructive. Well... Why are you giving me the thumbs up? It is constructive. It is? No, actually. So I think I get heightened emotionally and I just start feeling scared and resentful. Do you see the difference in changing the lens the way you look at the world of money?

Yeah, I definitely think that would be a more positive mind frame for us to work off of than worst case scenario. I think for me, I get frustrated and that's a little bit not only at Alex, but at me. It's like I'm almost talking to him the way I feel about my situation sometimes.

Let's talk about money lenses for a second. In America, the primary money lens is cost. That is what 90 plus percent of people use every single day. How much does this cost? Oh no, that's too expensive. But you and I intuitively have other money lenses. And you know that. That's why you buy name brand diapers or protein powder. And there are a lot of different money lenses. They can be safety, luxury, experience, delight, even status.

and you can Google Ramit Money Lenses for more. My goal for you is for you to have a set of money lenses that you can use in different scenarios. Just as an orchestra needs multiple instruments, you too should have multiple money lenses. Let me give you an example. When I buy a commodity like salt or a ladder,

I'm just going to get the cheapest one. That's cost. Also, if you are, you know, I had a guy on this podcast who has a $25,000 toolbox times three. He's, if he still listens to this podcast, he's really pissed that I said a ladder is a commodity. Please don't email me. I don't buy ladders. That's just an example. But when I book a restaurant for a business meeting, I'm not using cost. I'm choosing one where I know I can get parking and I can have a quiet conversation and good enough food. That is security.

When I travel, I'm booking luxury hotels because that's one of my money dials. That money lens is luxury, even delight. Now with Emily, I'm using this concept of money lenses more metaphorically. She looks at the world of money negatively, always asking what can go wrong. But what if she took those lenses off just for a minute and asked herself, what could go right? When we first shared our finances back at the kitchen table,

when I got my phone out, I thought that's what we were going to start working toward and it wasn't and it hasn't been. The conversations we've had, they've not been productive at all. They've actually felt destructive. Like I've mentioned, we're just going nowhere with these same conversations over and over. I said, we need to be productive in what we're talking about. We can't keep going like this.

Emily, what do you hear from that? I see his point and I agree. I thought we had a very productive conversation the other day, though, about money. That was the first. Hold on, hold on, hold on. Don't jump in. Don't jump in. Keep going, Emily. I think for me, I get frustrated. And that's a little bit not only at Alex, but at me. It's like I'm almost talking to him the way I feel about my situation sometimes. Yes. Now, I completely understand that.

Can I bring it back to what I just said a second ago? Because I really want to hear you respond to it. So Alex said, I feel that our conversations have been destructive and we can't keep going on like this. Can you respond to that? I agree. I want to make them productive and not stressful and make them nice to have. Great. Awesome. Thank you. Can you see the difference in the two responses that you gave? Yes. What was the first one?

The first one was sort of defensive and an explanation about why I come at things the way I do. And the second one was agree to move forward more positively. Love it. Completely right. And by the way, you did this unconscious thing, which Alex, you were about to play your part. Emily said, you know, that last conversation was blah, blah, blah. And then she paused and then you took the bait, Alex, and you were about to reassure her. So notice even in a short relationship such as yours,

You've developed these conversational grooves. That's okay. Every couple does it. I do it. We all do it. But I love what you said at the end, Emily. Hey, I don't want it to be that way. I want us to have nice, positive conversations. Now that's a place we can work from. Yeah. Alex, what would it look like for you if you and Emily had a positive relationship with money? I think we could strategize together. Obviously she, she,

she has a greater insight into what to do with, let's say retirement funds and things like that. It'd be wonderful for me to work together with her if we're going to get married to do that. There is that greater trust there with our finances so we can just be strategic with which funds are going into or which retirement accounts are going into. I'd love to have those conversations where we could talk together rather than

I should just know it because of my age. Yeah, that does sound nice. What are the conversational habits that you and your partner have developed? Let me try to take a guess. If it comes to money, one person tends to bring it up. One person in your relationship is the worrier and the other walks on eggshells around money. That person proactively reassures the worrier saying things like, okay, we have to talk about some money stuff, but don't worry, it's not that bad.

I kind of love hearing these conversational habits. To me, it's like the wrinkles on someone's face. I don't think there's something to hide. I love seeing wrinkles. I think they show a lifetime of experience. And I don't think of them as a mark on us. I think they are a part of us. But when it comes to conversational habits, they can also be destructive.

If one person is always worrying or defensive or avoidant, it can create real dysfunctional dynamics. So I want to make a suggestion. Try this in your next monthly Rich Life Review. You know, that meeting every month where you talk about money. Flip the roles. The person who usually talks less, now they're going to run that meeting. And this principal question of, what are all the things that are wrong with our finances? Flip that.

Try this. Amazing. What are three things we can celebrate this month? I want you to try to flip the script, to change these conversational grooves because they'll make you realize those grooves do not make up who you are.

Those grooves can be changed and you can choose what type of relationship you want to have around money. Now, if you want my help to do this, you can join my money coaching group where we talk about money every single month live in a positive environment and I answer your money questions. You can join at iwt.com slash money coaching.

I have a friend of mine who's always cold. She told me she and her partner have totally different temperatures when they sleep. She goes to bed in a flannel pajama. She's got extra blankets. Her partner's running hot. So now she recently started testing the pod cover from 8sleep, one of our sponsors. Before she goes to sleep, she gets on the app, cranks up the heat, and when she gets into bed at night, it's already warm and waiting for her. The pod cover by 8sleep fits on your bed like a fitted sheet.

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One of my money dials is generosity. For example, I love tipping big. I love buying gifts and experiences for my family. And recently, I bought my parents a subscription to Delete Me, this episode's sponsor.

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dozens of pieces of personal information. I knew it would be important to protect my parents too, but I also knew that they probably wouldn't sign up themselves. So I just got it for them. So if generosity is one of your money dials, great. If you care about your parents at all, if you have ever given them a hug, just sign them up. You know they aren't going to do it for themselves, but you also know that they probably need it.

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Okay. How old are you? 35. Okay. So it's low because what? It's low based on my age. Oh, which website did you read for your age? I look at the retirement trajectories. And what does it tell you? By my age, I should have at least double my income saved. Okay. What is your income? It's about 160. Okay.

Okay. Okay. So yeah. All right. When did you start making 160? Just recently. I got a new job about a month ago. Wow. What a surprise. And what were you making before then? I was making about 127, 125. 125. Wow. 250. And how much is your net worth again? Could you read that number to me? 239. Is there any relationship between 125,000 and basically 250,000?

So that is about double. But it feels very behind for me. Wow, really? You're telling me that the way you feel about your money does not correlate to the amount of money in your bank account? I know, shocker. This is so crazy. Who came up with that phrase? Is there somebody who says that every single episode on his podcast? I will teach you to be rich. I just fell right into your trap. I was afraid of this. Yeah, I mean...

That's what I do what I do. It's for these moments. God, that felt good. Just a quick reminder that if you are worried about money with $10,000 in the bank, you're still going to be worried at $100,000 and a million dollars and often $10 million. Your feelings about money are highly uncorrelated with the amount of money in the bank, which is why you have to independently work on improving your money psychology.

Another thing, guys, please stop reading these stupid fucking websites that tell you how much you should have saved up by age 30 or 40 or 50. Do you think these sites factor in your student loan debt or the fact that you live in Toledo versus Manhattan or the fact that some of you want to live a minimalist subsistence farming lifestyle and the others want to stay at Amman hotels? What the

fuck is going on right now? Why is it that people will spend more time learning how to post disappearing texts on their TikTok videos than on calculating four simple numbers that will give you 85% of what you need to know in terms of how much money you'll have for the rest of your life? But you have to understand coming out of losing so much, I think of how much I could have had. I get it. I totally get it. Let me give you a hypothetical example. Okay.

I'm a guy who doesn't read any books about money. Instead, I get my advice from TikTok, where I clicked a couple of different videos, and now I follow many realtors who tell me that I can make passive income from buying houses because houses always go up. So I go and buy a house, and the house, I pay $300,000, and it ends up being worth $700,000.

on Zillow. I go, oh my God, I'm rich. Ramit, that idiot was wrong. Real estate does only go up. I make $400,000, but then the market turns and my Zillow Zestimate goes down to $500,000. How much did I make from that house that I bought for 300? 200,000. Yeah, but it feels like I lost way more, doesn't it? Yeah, because of the potential you had.

that you thought. So what advice would you give somebody who feels like they lost that money and they feel way behind? I would talk to somebody so much more differently than I talk to myself. Tell me. I would say, I think you're doing well. You're able to save. You got a better paying job. You have savings. You have investments. You're just going to continue to save. You'll be fine. Okay. Hold on. Hold on. I need to do something.

Okay. I'm going to hold a reflection up to you. Say that again. Say that to yourself. Say it. Say it nicely. Okay. I would say you're continuing to save and you have been able to save and make up money in a short amount of time and you will be fine. You will be fine. I like that. I like that it feels a lot more compassionate. I like that it meets them where they are. I like that it's not punitive. What do you like about it?

Yeah, I mean, it's hard to beat yourself up financially all the time. You know, some people listening have been in an unfortunate situation where they were beat up a lot by someone verbally. You know, it could be verbal abuse. It could just be just not nice things. And after a while, it doesn't feel good. It feels really bad. And it starts to often make people believe that about themselves.

Now imagine you tell yourself that every day. I'm behind. I'm behind. You look at anyone else's money, like your partner's. We're behind. We're behind. It seeps into everything. Going to the grocery store, going out to eat, going on a European trip. Are you behind? I'm not even convinced that's true. You have hundreds of thousands of dollars in the bank, $1,200 of debt. Looks like you got a pretty good income. $160K, that's outstanding at 35. Seems to me like

You're doing pretty well financially speaking. Have you ever heard anyone tell you that? My mom. Well, that's good. That's good. I'm glad she said that. She's right. It's going to be very hard to make changes unless you can fundamentally change the way that you talk to yourself. I'm curious for those of you listening to this, what do you notice about the way Emily talks to herself?

Can you think of any examples in your own life where you practiced negative self-talk? If you have, go to my Instagram page and leave a comment there on this episode's release. Sometimes I think it helps to share how we talk about ourselves. Now, let's jump ahead.

I want to just give you a couple of quick numbers on Alex. He has $90,000 in assets, including a Subaru. And for some reason, he bought land in Colorado. He's got $55,000 in retirement accounts and $25,000 in savings. Yes, you're thinking exactly what I'm thinking. So how do you feel about your numbers? I feel considering that I started again three years ago.

I'm moving in the right direction. They're certainly not where I want to be at this stage in my life, but I feel I've made some great steps. In a recent money coaching call, you actually used my CSP as an example, and I was wondering, what can I do? What do I do? And you just said, "Let it cook."

Let it cook. I remember. Let me just refresh everyone because in our money coaching sessions, once a month, we all get on and I answer people's questions. And you had sent this question ahead of time. And it was, hey, I've made these changes. I've done this stuff. But it just feels like I don't have enough. And I took a look at your CSP. And I remember your numbers were solid. Your earnings were good. Your percentages were on point. You were investing pretty aggressively.

It's just that it takes time to get it. It's just like getting a train rolling. You know, it takes a little while. You go, how do I get the train to go faster? You go, just keep the engine going and keep moving. And at a certain point, it gets so it's so big and so fast, you cannot stop it. So I remember very vividly. And I'm so glad that we get to talk more in detail here, because financially speaking, the fact that you've accomplished this in what, just three years? Is that true? Yeah, yeah.

It's outstanding. Thank you. Seriously outstanding. So well done. We all start from different places in life when it comes to money, when it comes to understanding of physical fitness, everything. The fact that you have made these changes in three years is really exciting to me, and I think you should be commended for it. So together, the two of you are going to make $290,000 a year. And how's that number sound as a household income? I think it sounds great. I think it sounds good. Okay.

$290,000 at 35 and 40. That sounds pretty good to me. That's not even peak earning years. And you got the side business cooking. Oh, there's a lot of potential here. All right. I'll take the silence to be complete agreement with me. Let's move on. I want to say for the record, I am very proud of him with his side business because I think it's

you know, helpful. Like I think one of the things you say is there's no maximum to the amount you can earn. And that's true. And he also loves it when he talks about it. He just loves it. So I am very happy and proud of him. And I love hearing that. And what does that make you feel when you see him excited about his side business? Oh, it just, it fills me with joy too. And I want to help him achieve all those goals. I love that. Nothing better than seeing your partner

really locked into what they're doing. They love it. They're good at it. They're thriving. It's just, it's one of the best feelings in the world. Emily, I wonder what it would feel like if the two of you could feel like that with money. I think I would have to feel like that about money for myself first before we could get there. You're exactly right.

It's like people asking me, how do I teach my kids about money? I go, you get good with money yourself. You have to master it yourself, become very good and confident before you can turn around and teach your kids. I think you're exactly right.

All right, you save Emily 12%. So you have vacations, gifts, long-term emergency fund and whatever fun type of stuff. And then your guilt-free spending, Emily, you're spending 29%. Is that correct? No, I mean, it kind of fluctuates because if I don't spend it, then I just move it over to savings. I will say at this point in my life, I can spot a lie on a conscious spending plan within milliseconds. It is an amazing skill.

that absolutely nobody on this planet cares about. Anyway, you can get your own copy of The Conscious Spending Plan at iwt.com/episode71. - So how much do you spend a month on guilt-free spending? - I would say, let me think. I try to keep it under 500. - What? - Yeah. - Why? Why do you do that? - Because I want to save more. - Okay, I don't mind you saving more, but what's the purpose of saving? - To enjoy it later and plan for things.

Going back to that prepper psychology, what was it again? Oh, to control. Yeah. Like, I don't mind that you save aggressively. I don't mind it. It's fine. Yeah. But there are little signs that you give me that you're not enjoying your rich life today. No, I'm definitely not. So let me just ask you this, Emily. How do you want to show up with money to yourself?

Well, I'll give you an example. So if a friend wants to go out and meet, you know, everything is very social around food and food is expensive right now. And so if they want to go to dinner, it stresses me out because I'm thinking, well, I didn't plan for that. And that's going to be expensive. And I don't want to pay the money. Even though I want to see my friend, I don't want to pay the money to go. Okay. Can you remind me what my question was to you again? Can you say it out loud?

How do I want to show up? Yeah. And what was your answer in one sentence? My answer was a negative answer about money. That's correct. I'm giving you the chance to blue sky. Tell me how you want to show up with money. Okay. I would like to be able to go out for that dinner with my friend and not worry about the cost. I would like to be able to get my nails done and not think it's a ridiculous cost. What else? Um, I, um,

Want to be able to travel and have a cabana, pay for a cabana on the beach and not worry about it. I like it. And how about feelings about money? How would you like to show up? Who do you want to be with money? I don't want to have to worry about money and constantly check my accounts. How often you check your accounts on your phone, which I know you have like 10 apps on your phone. I check them. I mean, I don't check them every day, but I check them every week. What's that feeling you get right when you click submit and you're about to log in?

That's dread. Really? Dread? Yeah, I do dread sometimes. 35 years old, $239,000 net worth, and you feel dread logging in. Why is that? Because it just feels like it's not enough. Or I could be doing better. Yeah, you could be doing better. You could be in the NFL or you could, I don't know, be making $10 million a year, but you're not. That's true. It's hard to feel good

looking forward if you're always looking backward and what a tragedy it would be if you go through the rest of your life feeling behind never to realize that you were actually at the front of the pack that would be a tragedy yeah when you say it like that so how do you want to show up with money who do you want to be um

I want to feel good about saving and then be able to enjoy. You know, I do work very hard and I've worked really hard over the last three years to save. And so I don't, something you said earlier too, when you have someone talk negatively to you about money, it can really affect how you view yourself and view money. And then how sad that you have someone talking negatively to you about money. And then you talk to yourself that way. Yeah. Yeah.

So I definitely want to show up in a positive mind frame with money. I love that. I love that. Can I share how I want to show up with money? Yes. Yeah. What do you think my answer is, by the way, before I give it? How do I want to feel about money? You want to feel good. You want to feel positive. Yeah. Enjoy it. Yeah. Positive. Yeah. Good. What else? You want it to bring you and your spouse joy. Yes.

So for the loved ones in my life, I want to be able to use it to solve problems, to be adventurous, to give ourselves the gift of leisure and adventure. All of these things are true. I want convenience and I want to be able to be spontaneous. If a friend says, let's stay for an extra couple of days on vacation, why not? Let's do it. I want to also be safe. I want to know that I'm not going to run out of money.

All of those things can be true. So take your answers for me. We're all awesome. They're all totally accurate. Can you take those answers you gave for me? And can you give me your own answers, Emily? They don't have to be mine, but give me yours. Okay. So I want to be able to go out for dinner with a friend and, or go on a trip with a friend. I want to be, I don't want to feel like I'm going to run out of money, but that I can choose a job that,

I love, but that maybe doesn't pay as well at some point in the future. Or if we have kids that I can stay home for three years while they're young and not go back to a ruling job right away. That Alex and I can travel together and travel with our families. I think that would be nice for both of us. I think we'd both appreciate that. And no, yeah, not worry about the cabana. Yeah. Yeah.

Gosh, that felt so different to hear you talk like that. Did you notice it? Yeah, it feels a lot lighter. Gosh. Yeah. It's probably been a long time since you talked about money like that. Yeah. I mean, I have not dreamed about money in a long time. Yeah. I like this idea, this metaphor of it was so heavy for so long, but now I've taken that weight off my body and I feel lighter.

I like that. It almost lets you choose which direction you want to go. Let me trace how we got here. First, Emily came to this call disappointed with Alex's finances. We later discovered that she'd gone through a traumatic previous marriage where she was called a parasite by her ex-husband. Now, in this relationship, she hyper-focuses on things like a hundred euro cabana and the way that Alex has set up his accounts.

And she also feels behind about her money, even though she has hundreds of thousands of dollars in her thirties. Now I don't agree with her, but I can understand why she feels that way. And through our conversation, now she's finally realized that she wants to show up differently with money. As she puts it, she wants to feel lighter. She wants to be more positive. I think this is a huge realization and the key is,

This is the extra step that I take with my I will teach you to be rich philosophy is to go beyond intention and to actually make the changes be part of a system. So what I suggested to her was that she carve out a specific amount of money for her guilt-free spending that will let her feel lighter and more positive. Did you hear her say that she doesn't really do much with her guilt-free spending money? In fact, she just saves it.

I go, why do you save it? She goes, I don't know, I need to save more. So what I proposed to her was that that money could be used the next time they want a cabana together or to go out to dinner and not worry about the bill. It can be used for anything she wants. But with money, you have to go beyond intention. You have to make it part of a system. So when I look now at your guilt-free spending, which technically allows you to spend $2,000 a month, you tell me, how can you use that money

to match up with how you said you want to show up? Gosh, that's a good question. I think too, going back to your word, I like the word light. I want to be light about money. I don't want to have this heavy burdensome weight about money. So for my guilt-free spending, I think...

Alex and I could explore, do weekend trips around the area. We've talked about different places we want to go so we could do that. I'm having a hard time thinking about how I want to show up with this money. Remember how you said that Alex has thought this way about money for 17 years and it's going to be tough for him to change. Remember that? Yeah, absolutely. It doesn't just apply to him. That's right. Yeah.

Yeah. It takes time. I love this first step you're taking. I think it's very powerful. And the larger question beyond that is how you feel good about doing it together. Yeah. It's going to be very tempting for you both to go back into the weeds. Emily, you're especially comfortable there. I love the weed. I know, but it keeps you small. That's, yeah, that's a good perspective. It's hard to see through the weeds. Yeah. You've been down there for too long.

And I want both of you to elevate. When I think about you, Emily, and you, Alex, and the two of you together, I want to be able to use words like generous or adventurous or spontaneous, whatever the word is that fits the two of you. And you know what? I trust Alex. Do you trust him, Emily?

Yeah, I trust him. Alex, what you have achieved in three years of getting ramped up with money is incredibly impressive. It really is. And I don't care how old you are. We all start from a certain point. Three years you did this. Within the next five years, I can't even begin to imagine how far you're going to go with your money. And if the two of you end up combining finances in some joint way, you two have an incredible future together, financially speaking.

Alex mentioned earlier in this conversation that he didn't think Emily trusted him. That's a haunting comment from a partner. And I'm glad that we were able to at least partially work through that. I have a lot of confidence for the two of them. They are very open. They're both willing to play ball and engage. And Emily, who, as I mentioned at the beginning of this episode, she spent a lot of time talking with me. In fact, we spent the bulk of our time focused on Emily. And I'm glad that we were able to at least partially work through that.

She was here for it. She was engaged. And even on the occasion where she got defensive, she recognized it. So I have very, very positive and high hopes for Emily and Alex. After our conversation, I received a follow-up from them. You can get the full letter from the show notes, but here's what Emily said.

Quote, on an unconscious level, I knew I was carrying a heavy burden with money and control, but it was much harder to admit it out loud and have it mirrored back to me. It made me incredibly sad to think that after getting away from someone who used to berate me, I am doing the same thing internally to myself regarding money.

Alex and I had a good conversation about finances last night, our strategy for combining finances, where we want to spend and how much we want to save. We can travel and not worry about a hundred euro charge. I want us to get to a place where we are money partners and it becomes our money, including dreaming about what we can do with our finances to live the life we want. I think they can do it. You can read the full follow-up letters on

from the link in my show notes. And thank you for listening to I Will Teach You To Be Rich. Thanks for listening to I Will Teach You To Be Rich. I'm Ramit Sethi. Please follow the show on Apple, Spotify, or wherever you listen to podcasts. If you haven't read I Will Teach You To Be Rich, my book, pick up a copy. You can get it at any bookstore or any library, and it will show you the specific tactics for how to build the I Will Teach You To Be Rich system

into your personal finances.