Ramit Sethi of I Will Teach You To Be Rich talks to Stephanie and Chris, an early-40s couple with three young children, two of whom have special needs. Chris is a professor, and Stephanie, an RN, has recently cut back her hours due to burnout. Despite Chris’s confidence that “it’ll all work out,” their current financial situation is dire: 92% fixed costs, $544K in debt, and virtually no savings. Stephanie handles the books but feels dismissed when she raises concerns, while Chris struggles to listen and often interrupts. Ramit helps them uncover hidden money scripts, gender dynamics, and a profound lack of communication that has kept them stuck in an “avalanche of inaction” for years. Can they finally align on a concrete plan and connect meaningfully about money?
In this episode we uncover:
The stark reality of 92% fixed costs and zero investments
How Chris’s “it’ll all work out” dismisses Stephanie’s worries
How their money conversations always end in gridlock
Why a wobbly kitchen sink reveals their deeper financial issues
The surprising cost of their kids’ swim lessons
How their combined salary still leaves them broke
The emotional toll of their financial situation on Stephanie
Chris’s self-awareness about his “ignorant reassurer” role
How their money “inaction” has cost them hundreds of thousands
Why Stephanie feels unheard and Chris struggles to listen
The plan to drastically cut fixed costs and tackle debt
Why it’s time to stop making excuses and start taking action
Chapters:
(00:00:00) Introduction
(00:04:47) Their repetitive money conversation
(00:08:24) Chris’s “natural reaction is to shut down”
(00:10:40) “He’s a buzzkill”
(00:16:35) Breaking down their assets, debt, and net worth
(00:22:04) Stephanie’s emotional confession
(00:24:00) Chris’s desire to comfort without listening
(00:48:47) The cost of their inaction on investments
(00:56:56) How Chris can better support Stephanie
(01:11:00) What true financial partnership looks like
(01:12:00) Transforming their conscious spending plan
(01:21:00) A path to a 60% fixed cost future
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Transcript
[00:00:00] Stephanie: If we have an emergency, I don’t know where we’re gonna pull money for that from. ’cause we don’t have an emergency fund.
[00:00:08] Ramit: What’s the closest you’ve got to a true financial emergency?
[00:00:11] Stephanie: Now
[00:00:13] Chris: we need to get outta this hole and get our plan together and make some sacrifices. That’s the key thing that’s been missing.
[00:00:19] Stephanie: I feel like we’re just kind of floundering and not going anywhere. We’re treading water, but not even anymore.
[00:00:25] Chris: I don’t trust and I don’t know, and I’m very uncertain about Stephanie’s future from a career point of view.
[00:00:32] Stephanie: I don’t necessarily think like you have to like love what you do, but I just don’t wanna dread it.
[00:00:40] Ramit: Also, accept that you’re gonna pay thousands in interest. That’s why you’re stressed. That’s it. That’s the ball game. You’re broke.
[00:00:46] Stephanie: Feel guilty, you feel stupid. I’m mad at myself.
[00:00:51] Ramit: Today I’m speaking with Stephanie and Chris. They’re in their early forties, married. They have three young children, including two with special needs.
[00:00:59] They recently bought their forever home in Canada, where Chris is a professor on the tenure track, and their finances can be described as an avalanche of inaction. Stephanie says they have no investments and barely any savings. She manages their bookkeeping, yet she feels ignored when she pushes for change.
[00:01:17] Chris says. It’ll all work out. So every conversation they have quietly goes nowhere. It’s become two people just walking on financial eggshells around each other. If you feel like your talks about money never actually result in anything changing, then this episode is for you. I’m about to open up their conscious spending plan, which breaks down their net worth income and where they spend their money.
[00:01:39] If you want my help navigating your own conscious spending plan, join my money coaching program at iwt.com/money coaching. Here’s a snapshot of where they stand. Total assets, 555,000 investments, 228,000 savings, just $1,662 debt, 544,000, which gives them a total net worth of $241,000. Now look at this.
[00:02:05] Their fixed costs are at 92%. That right there tells me a lot, tells me they’re broke, tells me they’re spending more than they make, and this number, which should usually be below 60%, automatically tells me that they are stressed and overwhelmed with their finances and their investments and savings are at zero and 1% with their fixed costs eating up just about every dollar in sight.
[00:02:30] I’m not surprised that they have been ignoring it. Imagine having 92% of your money accounted for the moment it hits your bank account. It’s incredibly scary. What do you do in a situation like this? We’ll get into exactly that with Stephanie and Chris. Stephanie, you said something in your application that really caught my eye and I’d like to read from it.
[00:02:54] You said, I take care of our finances and feel dismissed when I bring up investing, saving, and planning for the future. He feels like it will all work out. I get overwhelmed. I’m not confident talking about money, so I drop it and continue to worry. Do you remember writing that?
[00:03:13] Stephanie: I do.
[00:03:14] Ramit: When Chris says it will all work out, how does it feel to you?
[00:03:19] Stephanie: Like I said, it feels a little bit dismissive. I know he doesn’t want me to worry. I know he wants the best for me. Um, and I think he thinks maybe that will. Not placate. ’cause I, I, that kind of has connotations to it, but kind of will reassure me in a way that it doesn’t. Um, so it’s very frustrating. Um, and I still kind of feel like I’m floundering with things as a result.
[00:03:48] Chris: I know she does worry and that it bothers her. So as that husband, I just don’t, I don’t want her to be stressed.
[00:03:57] Ramit: Hmm. Would it surprise you to hear that? I don’t mind if my wife is stressed sometimes.
[00:04:03] Chris: No, it doesn’t really surprise me. I guess like some stress is obviously good.
[00:04:08] Stephanie: You’re a fixer and I think he wants to fix, um, whatever is going on with me because I mean, I know he loves me obviously, so I think it kind of stresses him out when I’m stressed out, um, because he’s feeling bad about it.
[00:04:22] So I think, I think that’s what, sorry if I’m stepping on your toes here, but I think, I think that’s what it is.
[00:04:28] Ramit: You agree, Chris? Yeah. Okay. Alright. How often do the two of you actually talk about money
[00:04:34] Stephanie: in a meaningful way? Mm-hmm. I’m not sure we do. I think we have the same conversation over and over.
[00:04:41] Ramit: What’s that conversation go? Like
[00:04:43] Stephanie: The credit cards are creeping up, we need to get on a budget. Where can we cut back? And I am worried about retirement and the future and he wants to deal with our debt in the present. Now I shut down, rinse and repeat.
[00:04:59] Ramit: Wow, that sounds fun. Love the joy.
[00:05:02] Stephanie: It’s awesome.
[00:05:03] Ramit: Oh, okay.
[00:05:04] Like I was like counting one, two, all these sound horrible. Keep going. Not a good single thing in sight. Okay. You ever have a positive conversation about money? I’ll take the deafening silence as a no. Uh,
[00:05:19] Chris: I mean from my perspective, the every six months we potentially like bring up a budget and try to.
[00:05:27] Talk this out. It, usually we do it at night and as soon as there’s a disagreement, it just kind of falls apart.
[00:05:35] Ramit: Can you think of a time in the last three, six months where you were not on the same page with money?
[00:05:41] Chris: Uh, well, we moved to a bigger house in November and there are cheap DIY stuff that Stephanie would like to get done.
[00:05:53] However, knowing the debt we have, I’ve been, you know, even if they’re a hundred dollars, $200 things to do, I’ve been a little bit like, well, we have to handle this debt. Um, and it’s, it’s caused some friction.
[00:06:08] Ramit: Let’s go back to one of those conversations. Uh, can we just, can you actually have the conversation in front of me,
[00:06:14] Chris: Stephanie?
[00:06:15] I don’t think that, I realize the kitchen sink is a wobbly and it’s an annoyance and, you know, but it’s still functional at the moment right now. Can we not replace it at the moment? Um, because we’ll have to replace the sink, the countertop, et cetera. Um, and I think it’s something we can just de deal with for the next year or two before we get, get our stuff together.
[00:06:42] Stephanie: Well, I’m frustrated because I am often using it and we always have to end up vering it every couple of weeks because the faucet isn’t stable and it drives me nuts and it’s frustrating being in this house with this problem that we could just knock out pretty quickly, I think for not that much money.
[00:07:05] So I don’t see why for our quality of day-to-day life, we can’t just address it.
[00:07:11] Ramit: Okay. Pause. Great. And then how does it end?
[00:07:16] Stephanie: I tend to shut down and in arguments, so I just say whatever fine for, forget it, and kind of just walk away and go about. And be mad about it.
[00:07:27] Ramit: Is the sink fixed now or not?
[00:07:29] Stephanie: It’s not.
[00:07:30] Ramit: Okay. I noticed that money did not get brought up specifically in that conversation.
[00:07:36] Stephanie: You’re right.
[00:07:37] Ramit: Like if you, if you were to analyze that conversation as almost like a disinterested, scientific observer, what would you notice about what happened?
[00:07:46] Stephanie: It’s more about, I guess, uh, not, I guess quality of life versus dollars, because if it really was about dollars, I would have the research set and say, okay, well it’s gonna cost X amount of money to replace the sink and the countertop if, if it needs to be done.
[00:08:05] Um, and we have X amount of money laying around or not, um, to do it.
[00:08:11] Ramit: Okay. Chris?
[00:08:13] Chris: I think regardless of whether it costs money, when Stephanie says, I want to do X, my gut is usually, okay, let’s talk about the reasons why we can’t do x. I’m probably guilty of that.
[00:08:25] Ramit: Okay. Wow. So Stephanie, you’re saying you, you don’t talk about the financial side of it because if the financial side were core to it, you would come prepared to discuss numbers and Chris, you are saying your natural reaction is to basically shut down what Stephanie wants to do without looking at numbers.
[00:08:45] So I have a question about this. You mentioned you didn’t get the sync. Do most of your conversations end up with you not spending? ’cause if so, what’s the problem?
[00:08:54] Chris: The only pushback I’ll, you know, we do talk about the costs and even to the point about this sync issue that we cashed in some like Air Mile type points for a home, a Home Depot gift card of 950 bucks.
[00:09:09] So we technically have the funds, we can do it, but there’s, the downstream thoughts I have is, well, we want to do a big catch and Reno in about five, 10 years. Why? Why do something now? Um, if we’re gonna do something mm-hmm. In five, 10 years. But I do get that this is important for Stephanie. And, and the problem is, is I already have poisoned the well and she’ll walk away and I will come to her and be like, okay, yeah, just like, let’s do it.
[00:09:44] Let’s get it done, kind of thing. But it’s already been poisoned and she’s already kind of angry and, you know, in, in her shell. So like nothing ends up happening. It’s not like Stephanie says like, okay, like, let’s do this. I’ve kind of already ruined the moment, I guess. Um,
[00:10:03] Ramit: ruin the moment. That’s an interesting turn of phrase.
[00:10:08] The moment. What is the moment?
[00:10:11] Chris: I think the moment what she wants is when she brings up the ideas in the moment. Yeah, that’s, that’s a good idea. We could do that. Let’s, let’s figure out how to do this, like, and get this done the way. Okay.
[00:10:22] Ramit: Stephanie, is that accurate?
[00:10:24] Chris: It is.
[00:10:25] Stephanie: Can be a bit of a buzzkill.
[00:10:27] Ramit: Okay. So he’s, you describe him as a buzzkill today.
[00:10:29] What would you like him to be?
[00:10:31] Stephanie: Um, just a little bit more excited, especially if he sees I’m excited.
[00:10:37] Ramit: Mm-hmm.
[00:10:37] Stephanie: Even if he knows like, oh, this is, this is not gonna work. Like, just the initial like shutdown is, it just feels so deflating sometimes.
[00:10:46] Ramit: Are you picking up on the contradiction here? Chris says it’s gonna be okay, but then the moment Stephanie asks for something like to fix a faucet or to improve their day-to-day life, the answer is no.
[00:10:59] So which is it? If it’s going to be okay, why does every request get shut down? I think the message that she’s likely hearing is it’s going to be okay as long as you don’t ask for anything. This is a pattern I see all the time. In fact, a lot of men fall into it without even realizing it. They start seeing their wife’s role as she wants this.
[00:11:21] She wants that. When is it ever going to end? It’s never enough. And in this dynamic, they cast themselves as the reasonable one, the protector, the adult in the room. Has anyone ever heard this dynamic? I know you have. For the person on the receiving end of this dynamic. It’s incredibly frustrating. Every suggestion gets dismissed.
[00:11:44] Every request denied. There’s rarely an explanation, but when there is, it’s just an opinion. No numbers, no facts, just one person’s entrenched opinion. Against another, and that’s hard to argue with. Once that dynamic sets in, it creates a lot of tension. That tension is difficult to dislodge. It’s kind of like gluing two pieces of paper together.
[00:12:08] You can separate ’em, but it’s hard. And the more time that glue has been together, the harder it is to take them apart, each person in their own corner of the ring. It’s almost like these magnets are repelling each other. When if you just flipped them, they would actually be attracted to each other. It’s a lot of opinions, a lot of feelings.
[00:12:28] I like feelings sometimes, but sometimes I like some freaking numbers. How about you? There’s no partnership in this dynamic because everyone is too busy negotiating about their random opinions, but what you notice is there’s actually nothing shared that they can work together on. It’s Stephanie versus Chris when it should be.
[00:12:48] Stephanie and Chris create our rich life vision together. If I had to bet, I would guess that this dynamic shows up in more than just the kitchen sink. So let’s keep going. You have, uh, three kids, is that correct?
[00:13:07] Stephanie: That’s right. Mm-hmm.
[00:13:08] Ramit: Okay. How old are the kids?
[00:13:09] Stephanie: Six, four and almost 21 months.
[00:13:12] Ramit: Okay, great. Was there something about spending money on the kids?
[00:13:15] Um, something about swim lessons
[00:13:17] Stephanie: Sure. Was.
[00:13:18] Ramit: Tell me, tell me a little bit about that. Take me to the beginning of that.
[00:13:21] Stephanie: So we’ve been wanting to put them in, in swim for a long time. So I looked into private lessons, got the two oldest into private, so the two of them with one instructor and then the little guy, um, just.
[00:13:36] You know, your Aqua Baby swim classes. Um, but because they’re private lessons for the whole year, September to next April, it’s just under three grand. I told him what the cost was gonna be beforehand. We discussed it, I went ahead and registered them and they do offer, um, that you can do installments. So it’s not three grand up front.
[00:13:57] We can break it down over the next few months. Um, but he was like shocked, like he’d never heard the price before. And I was just like, well, I don’t know what to tell you.
[00:14:07] Ramit: Is that what you said? I don’t know what to tell you.
[00:14:09] Stephanie: Yeah.
[00:14:10] Ramit: Okay.
[00:14:10] Stephanie: Yeah, it is ’cause ’cause I had told him, I did tell him we discussed it.
[00:14:14] Ramit: Okay. Alright. Let me check with Chris here. So Chris, do you remember discussing the $3,000 originally?
[00:14:20] Chris: Yes.
[00:14:21] Ramit: Okay. And then when the payments started, you were surprised.
[00:14:25] Chris: When the invoice came, there was a bit of sticker shock. I totally agree that swimming is important. It’s an important life skill, but I’m just afraid, like at this moment in time, maybe a year later from now mm-hmm.
[00:14:38] That it’s really tight as far as fixed costs go.
[00:14:41] Ramit: Okay. What do you think that this swimming bill reveals about the way that the two of you make financial decisions?
[00:14:49] Chris: We make them without much planning.
[00:14:52] Ramit: Yeah, I agree. What else?
[00:14:54] Chris: I feel we don’t think about our fixed costs. We just mm-hmm. Mm-hmm. We agree that, oh yeah, swimming’s important.
[00:15:01] Let’s do this. And I, and I do agree it’s important, but we don’t look at the numbers. We don’t run the numbers.
[00:15:07] Ramit: Mm-hmm. So it’s like, is the sink important? Is swimming important? These things are, are they important? Yes. But when you talk about ’em, there are very few numbers involved. It’s strong feelings.
[00:15:23] Even feelings about family or convenience, but you don’t have the added, uh, lens or layer of money.
[00:15:32] Stephanie: Yeah, you’re right.
[00:15:33] Ramit: You know, that’s a lot how a lot of people make decisions. They buy a car, they just go, we need a car. They buy a house. They don’t run a single number. They go buy a mattress, they go to dinner, vacation.
[00:15:46] They don’t talk about it, but it’s, they feel very strongly. We work hard. We deserve to take a vacation. Wow. A lot of nods happening.
[00:15:54] Stephanie: Guilty.
[00:15:55] Ramit: Both feel that way.
[00:15:57] Stephanie: We’re guilty of malls of those things.
[00:15:59] Ramit: Mm-hmm.
[00:16:00] Stephanie: For sure.
[00:16:00] Ramit: How do you think it affects your money? The actual numbers?
[00:16:03] Chris: They’re much lower than we thought they would be each month because you lose tr when you don’t think about it actively.
[00:16:10] You kind of can lose track of the spending and then you wonder at each month when it’s time to put some more money onto the debt or something. Where did it all go?
[00:16:19] Ramit: You spent it?
[00:16:21] Chris: Yeah.
[00:16:22] Ramit: What does that look like day to day?
[00:16:24] Stephanie: Well, day to day there is the stress of if we have an emergency, like with a house or otherwise, I don’t know where we’re gonna pull money for that from.
[00:16:39] ’cause we don’t have an emergency fund. We don’t have much savings at all. Okay. Um, so I think we’d be in big trouble. And we have three young kids. Two with special needs.
[00:16:52] Ramit: Hmm. That’s serious. What’s the closest you’ve got to a true financial emergency?
[00:16:57] Stephanie: Probably pretty close now. Quite honestly.
[00:17:00] Chris: This, I would say is, is the closest we’ve been.
[00:17:04] Ramit: I like to take a look at the numbers. I think it’s gonna help me understand a little bit more. Can we have Stephanie read off the word in bold and then the number in full next to it for this entire box, please.
[00:17:17] Stephanie: Okay. Assets, $555,000 investments, $228,500 savings, $1,662. Debt $544,000. Total net worth $241,000 162.
[00:17:41] Ramit: What do you think about those numbers
[00:17:42] Stephanie: for early forties? I, I don’t think they’re great.
[00:17:47] Ramit: Okay. Chris?
[00:17:48] Chris: I agree they could be a lot higher.
[00:17:51] Ramit: Okay. Lemme just understand the assets. 555 is at a house?
[00:17:54] Stephanie: Yes. House and two vehicles.
[00:17:57] Ramit: Okay, cool. And, um, the debt, can you break that 540 4K down for me?
[00:18:03] Chris: The mortgage is about four 60.
[00:18:06] Ramit: Mm-hmm.
[00:18:07] Chris: There is credit card debt at about probably 15 K.
[00:18:13] Ramit: Okay.
[00:18:14] Chris: There is a line of credit. That is about 13 K and there’s about 50 K that we owe parents that has no interest and no current payback plan really.
[00:18:28] Ramit: Got it. Okay. Alright, let’s go on to income please. Chris, can you gimme the combined gross monthly income
[00:18:37] Chris: 12,960?
[00:18:39] Ramit: Um, and that means that combine, the two of you make $155,000 per year. What do you both do for a living?
[00:18:45] Stephanie: I’m a registered nurse.
[00:18:47] Chris: I’m a, a professor at a university.
[00:18:50] Ramit: Okay, cool. Um, who’s the one who makes 9,500 a month and who makes 34 60 a month?
[00:18:57] Stephanie: Chris makes 9,500 a month and I make 34 60 a month.
[00:19:01] Ramit: Okay. And how is it possible that your net is higher than your gross?
[00:19:07] Chris: You included the, uh, child benefit.
[00:19:11] Stephanie: Oh, that’s right. Yes, yes, that’s right. We get, um. Child tax benefit from the government monthly. That’s about $1,100 or so.
[00:19:21] Ramit: Oh, okay. Cool. Let’s continue on to look at your fixed costs. What’s that number?
[00:19:26] Stephanie: 92%.
[00:19:27] Ramit: Whoa. So that’s it. That’s the ball game.
[00:19:29] Stephanie: Yeah.
[00:19:30] Ramit: You’re broke.
[00:19:30] Stephanie: Yep.
[00:19:31] Ramit: Yep.
[00:19:32] That’s why you’re stressed. That’s why you don’t have any money left over. That explains everything right there. Did you know that?
[00:19:38] Stephanie: I, well, I didn’t know that until we sat down and did the CSPI. I guess I could feel it because we were stressed, but I didn’t know that it would be, I knew it would be high, but 92 I was shocked.
[00:19:50] Ramit: What did you think it was? What did you think the problem was?
[00:19:54] Stephanie: I guess I didn’t really think of it in terms of fixed costs. I just thought like we just weren’t paying attention to where, to what we were spending on. Not necessarily that it was fixed costs or it was, uh, not frivolous spending, but like just on spending on whatever on.
[00:20:12] Fun or anything else? I just, I don’t know. I didn’t think of it in terms of fixed costs, though.
[00:20:18] Ramit: Most people don’t break down their finances into four categories. That’s why we have the free conscious spending plan. But in addition, most people actually don’t even think about their problems in a solution oriented way.
[00:20:35] It’s more like a, a stew. It’s just this vague stew like floating around in the back of their head, like, something sucks. That’s a lot of couples. And to ask ’em what is the solution, which we haven’t even gotten to a very, very single digit percentage of people think that way. Alright. Fixed costs are 92% investments.
[00:20:59] Zero. Uh, it’s a little surprising ’cause you have $228,000 in investments. How, how did you accumulate that while you have $0 going per month to investments?
[00:21:09] Stephanie: So most of that was from when we were living and working in the US and that’s my 4 0 3 B and 4 0 1 a. As well as we have registered disabilities savings accounts, um, that are invested for our two kids that have disabilities.
[00:21:27] Ramit: Hmm.
[00:21:28] Chris: So about 50 k of that is my pension that has accrued over the last three years starting my faculty position.
[00:21:37] Ramit: Okay. Alright. Your savings are at 1% and that’s $100 a month for gifts that is reflected in your total savings right now, which is $1,662. It means that if you stopped earning money, do you know how long you would last?
[00:21:55] Stephanie: We wouldn’t.
[00:21:56] Ramit: Yeah. You would last less than a week.
[00:21:57] Stephanie: Yeah,
[00:21:58] Ramit: that’s it. Game over and you have three kids. Okay. Everything else, guilt-free spending says $636 a month. Hold on, Stephanie, what’s going on?
[00:22:10] Chris: It’s okay.
[00:22:10] Ramit: Take your time. We’re in no rush. I want to hear from you.
[00:22:15] Stephanie: Feel guilty, feel stupid. They just, they deserve better.
[00:22:21] Ramit: Your kids.
[00:22:22] Stephanie: Absolutely.
[00:22:24] Ramit: Okay.
[00:22:25] Stephanie: I’m just, I’m mad at myself.
[00:22:28] Ramit: Do you deserve better?
[00:22:30] Stephanie: Yes, I do. Um, but I don’t really know like where to start. There’s a lot going on for me career-wise in terms of, um, burnout. Uh, I have been burnt out from nursing for years. Um, but I’ve just found it incredibly hard to pivot, um, into a different direction.
[00:22:59] And I’m only working part-time ’cause that’s kind of what. I can manage at the moment, but, uh, it’s not enough.
[00:23:09] Chris: Mm-hmm.
[00:23:10] Stephanie: I don’t want to keep dreading going to work every day, and it’s not the work itself. Like I, I like helping people. I’m good at what I do. I just, my heart’s not in it.
[00:23:24] Ramit: When we talked about your savings and how long you would last financially speaking, you started crying immediately.
[00:23:35] What was it about that?
[00:23:37] Stephanie: It’s scary. I’m scared.
[00:23:41] Ramit: Did you know that before? Now?
[00:23:43] Stephanie: I did, but not so tangibly.
[00:23:45] Ramit: Mm-hmm. Black and white. Here it is. There’s no avoiding it anymore. That is scary. I’ve always thought we should shine a light on the stuff that we tend to avoid. I’d rather know. It is scary. It doesn’t feel good.
[00:24:03] Sometimes it feels horrible. Sometimes we cry. But ignoring, it’s not gonna make it better. It hasn’t worked, has it?
[00:24:13] Stephanie: No.
[00:24:14] Ramit: So sometimes we gotta walk straight through the fire, try to find out what the solution is. Notice Chris, that I am not trying to tell her it’s all gonna be okay. I’m not trying to get her to stop crying.
[00:24:27] Chris: There’s a voice in my head that obviously when I saw her cry, that wanted to, you know, comfort her in that way. And there’s even a small logical person in my head saying like, don’t worry Chris. You know, in a few years as you keep climbing this ladder, you’re gonna get paid enough that she can work part-time.
[00:24:52] Ramit: Maybe true, maybe not. Totally irrelevant.
[00:24:54] Chris: Yeah.
[00:24:56] Ramit: The thing is that your natural desire to comfort, it’s a good goal. You can comfort in ways that don’t shut somebody else down. Stephanie, I appreciate you being so candid. Like money is emotional. Money makes us cry. It makes us angry, it makes us jubilate, it makes us all, all kinds of feelings, but nothing wrong with that.
[00:25:22] I love to see it actually. It helps us really connect with
[00:25:25] Chris: the
[00:25:25] Ramit: power of money. I am noticing a pattern emerging here with Stephanie and Chris around gender roles. Are you seeing it? If you were raised in America and you were giving a tour to someone visiting from Japan or India or Kenya, how would you explain gender and money in the us?
[00:25:42] Like what if they asked you, who earns more here? Men or women who takes care of the kids? What do men and women spend their money on here? And you started to answer them. As you start to answer them out loud and you notice their confused reactions, you would notice how much we simply take for granted, even if it doesn’t make logical sense, because that’s just what we grew up with.
[00:26:05] That’s culture. And I have found that especially in Western culture, there are specific areas of life where gender becomes salient. For example, in parenting, a lot of women bear the responsibility of caregiving for children. While men often focus on providing or the division of chores around the house, we often see women taking on the role of, for example, cleaning.
[00:26:28] While men are handling things like car maintenance or lawn care, there’s very good data. Corroborating this, and with Stephanie and Chris, we have two relatively high earning, educated people who have fallen into their own version of these archaic gender roles, even when it comes to money. Think about it, Stephanie took a step back from working full-time so she could be there for the kids.
[00:26:50] She manages the day-to-day bookkeeping for the family, but she has entered into the role, maybe put herself in the role of the convincer. When it comes to any decision on spending like a new sink or swimming lessons for the kids, she’s reduced her role with money to be the one that has to ask for permission.
[00:27:10] And Chris has fallen into the role of what I call the ignorant reassure. I’m not using that term to be disrespectful or demeaning, but he doesn’t have an active role in their day-to-day finances, and he’s therefore ignorant of the family money. And then when Stephanie shows any negative emotion about their financial situation, he simply reassures her that it’s going to be okay.
[00:27:33] He’s an ignorant reassure. I see this often with couples. The ignorant reassure, by the way, is always a man. Do you see how gender and culture influence money before a single dollar gets spent? There is an entire dynamic at play here and neither of them actually feels good about it. My hope today is to help them change that.
[00:27:54] So we’re gonna get back into the numbers right after this.
[00:27:59] If you don’t mind, I would love to just finish going down this so I can understand the big picture. Feel free spending says $636 a month. I don’t really believe that. I think you spend more.
[00:28:09] Stephanie: Yeah.
[00:28:10] Ramit: What do y’all spend your, it’s not guilt-free spending ’cause you’re both racked with guilt. What do you spend your discretionary money on?
[00:28:17] Chris: For me it’s, it’s mostly toffee lunch.
[00:28:21] Ramit: Okay.
[00:28:22] Chris: You know DoorDash?
[00:28:23] Ramit: Mm-hmm. Okay. Eating out. What else?
[00:28:26] Stephanie: I mean, well, since we’ve moved into this house like. Things for the house.
[00:28:31] Ramit: Oh, I thought that once you buy a house, your mortgage is capped and uh, that’s it. It’s just like nothing ever increases. At least that’s what they tell us in America.
[00:28:42] You telling me that’s not true?
[00:28:44] Stephanie: It is not true.
[00:28:46] Ramit: Alright, so when you evaluate your conscious spending plan, you have 92% fixed costs, 0% investments, 1% savings, and 7% guilt-free spending, which is almost certainly more than double that. What do you think of your spending?
[00:29:04] Stephanie: It’s not directed.
[00:29:06] Ramit: What do you mean by that?
[00:29:07] Stephanie: Like, there’s no planning behind it. We just kind of take things as they come.
[00:29:11] Ramit: Oh, okay. You know what’s interesting is your housing costs are not particularly high. They’re a little high, but nothing crazy. They’re like 32%. Okay. I, I would love it to be under 28, but, okay. However, if we look at your fixed costs and we drill down a bit, let’s just take a look here.
[00:29:31] Your mortgage, 34 89 plus utilities of 700 bucks. You have a car payment of two 30, um, or gas. Mm-hmm. Childcare at 4 45, child activities at three 12. Debt payments of 400. But what’s this number? Groceries, how much?
[00:29:48] Stephanie: $2,000 a month.
[00:29:49] Ramit: One more time.
[00:29:50] Stephanie: $2,000 a month. I do the grocery shopping, so I can’t really put that on, on Chris.
[00:29:56] We don’t really meal plan or anything, so I’m just kind of buying things willy-nilly and we do end up with a lot of food waste, but, um, there’s just no, again, no thought, no planning behind it.
[00:30:11] Ramit: Okay. Where else in your financial life do you not? Plan ahead?
[00:30:17] Stephanie: Savings, retirement, investments.
[00:30:19] Ramit: Mm-hmm.
[00:30:20] Chris: Every, every, everywhere else.
[00:30:21] We’re not
[00:30:22] Stephanie: everywhere. Yeah.
[00:30:23] Ramit: Okay. Is there any part of your financial life that you do plan for?
[00:30:27] Stephanie: I don’t think so.
[00:30:28] Chris: Our mode up until now, especially before the last child, when Stephanie was working full time, we were, we were, our heads were above water because we just kept enough in the checking account that we didn’t have bank fees.
[00:30:44] And when mortgages and other automatic payments would come out, and we felt like we were doing okay. ’cause that checking account had like a decent balance and we had a buffer. Mm-hmm. Um, but we still didn’t plan for the investments, et cetera.
[00:31:01] Stephanie: I will say, sorry to cut you off there, Chris, but when we were, when you were doing your postdoc, I was making very good money where we were, we.
[00:31:11] Didn’t have children. Um, and we managed to put away a lot of money. Um, but we still didn’t plan anything. It was just like, oh, well we have enough to kind of spend without thinking and still save money and put money away. So this is fine.
[00:31:29] Ramit: Are you both lazy with money?
[00:31:31] Stephanie: Yeah, I think we are.
[00:31:32] Ramit: It just kind of heads up, right?
[00:31:34] Yeah. Everything kind of makes sense. You’re spending $2,000 a month on groceries ’cause you don’t plan for it. Savings are at less than 2000 bucks. I’m not blaming, I’m just saying it actually kind of all makes sense. What do you think about that?
[00:31:46] Stephanie: You’re right. Yeah, I agree. I think we, we kind of knew this in the back of our, our minds and just didn’t quite wanna face it this, this bluntly.
[00:31:59] Ramit: But then it raises the question, if you thought that was a problem, why not change it before talking to me?
[00:32:04] Chris: I think when it comes to communicating to Stephanie, if I just sit there and say. Hey, we should be able to find savings. That’s not like, and that’s probably what I do. You know, Stephanie will be defensive.
[00:32:18] Well, you do the groceries kind of thing, right? So, you know, trying to find a way to, you know, as a team kind of look into this deeper, where, where is the gro within the groceries? Where is the money going? Can we find cheaper alternatives or deals or blah, blah, blah.
[00:32:37] Stephanie: Or, or even, sorry Chris, again, to cut you off, how much should we be spending on groceries?
[00:32:43] Like, we don’t even have that. It’s just kind of, well, we’re buying what we’re buying. Like we don’t even have like a starting number of, okay, let’s try to keep it at x, x amount of dollars a week for groceries, say, right, let alone where the savings are to be had. Does that make sense?
[00:33:03] Ramit: Are you all agreeing or disagreeing?
[00:33:04] I can’t figure it out.
[00:33:05] Stephanie: I can’t either.
[00:33:06] Ramit: What’s happening right now?
[00:33:07] Stephanie: I don’t, I don’t know if like, I’m, I’m just saying this is what we
[00:33:11] Chris: do.
[00:33:12] Ramit: So what did each of you just say? Because I, I suspect this is what happens a lot with your money. Somebody brings something up, the other just starts talking and then you’re both like, uh, alright.
[00:33:22] And then you just don’t talk about it. It’s not productive. So let’s, we’re gonna drill in right now. I’m not gonna let this go. Chris, zoom up as if you’re floating above the conversation. What just happened in that conversation? What did each person say and what was the role they were playing?
[00:33:37] Chris: I said that we do spend too much on groceries.
[00:33:41] I, I did say that, you know, looking at what the average family of five spends on groceries might not be, you know, accurate to where we live, et cetera.
[00:33:55] Ramit: You said we spend too much on groceries. We should probably be able to cut that down. But if I brought that up to Stephanie, she would be defensive. What did Stephanie then say?
[00:34:03] Chris: Stephanie said that, you know, she kind of agreed.
[00:34:08] Ramit: You think Stephanie agreed with you?
[00:34:10] Chris: I mean, agreed that we don’t discuss it.
[00:34:12] Ramit: Okay.
[00:34:13] Chris: A agreed That we don’t really look for sales. Agreed that there’s food waste.
[00:34:17] Ramit: Mm. I don’t think she said any of that stuff. What did she say?
[00:34:20] Chris: I’m honestly struggling to remember.
[00:34:22] Ramit: Okay, guys, do you, do you not see that this is part of the problem that Chris, you, you’ve been talking about groceries for two and a half minutes, but you don’t even know what you’re responding to. It’s just this. What do you think is behind that?
[00:34:37] Chris: I think I have a habit of interrupting folks of kind of vacuuming up space, typical white male stuff.
[00:34:45] Um. Yeah. And I’m con like, I catch myself and I try to be aware of it.
[00:34:51] Stephanie: Mm. What,
[00:34:52] Chris: oh, sorry. I try to catch myself. Oh, okay. When it not always successful.
[00:34:58] Ramit: Okay.
[00:34:58] Chris: Okay. Um,
[00:34:59] Ramit: but Chris, you know, okay. That’s, that’s perceptive. That don’t think you even heard what Stephanie said and the fact that you have now twice mentioned, you know, I don’t remember what she said.
[00:35:09] Like, that actually tells me you’re not really being present and listening. ’cause Stephanie had an extremely good point. Stephanie’s point was, well, how do we even know what our target is? But you didn’t even hear that. You literally did not hear it. I think you just heard words, Chris, you heard her say the word groceries and number, and you, you were like, got it.
[00:35:31] I’ll take it from here. And it, and you actually didn’t respond to her point at all. You didn’t acknowledge her.
[00:35:37] Stephanie: Mm-hmm.
[00:35:38] Ramit: And so we’re often left field here. How often does this happen?
[00:35:41] Stephanie: A lot. A lot? Yeah.
[00:35:43] Ramit: Okay. You guys can’t fix your money. Until this gets fixed, we could fix your CSP no problem. But two days from now, you’re gonna have exactly the same conversation.
[00:35:53] You’re gonna regress right back into where you are. What do you think?
[00:35:56] Stephanie: You’re right. It’s what we’ve been doing. We’re just spinning our wheels, having the same argument over and over again.
[00:36:04] Ramit: Yeah. So what’s it gonna take to change
[00:36:07] Stephanie: therapy?
[00:36:08] Ramit: Oh, did you ever see one?
[00:36:11] Stephanie: I see one.
[00:36:13] Ramit: Okay. Stephanie sees one. Chris,
[00:36:14] Chris: it’s on the to-do list.
[00:36:16] Ramit: Oh, am I reading it wrong? Or Chris, do you look upset right now? What’s going on, Chris?
[00:36:23] Chris: Um, shame, guilt. Mm-hmm. You know, obviously on paper I’m like, I’m, I’m, I’ve been so career focused and Stephanie has been great at supporting that. ’cause not everybody understands the long journey of becoming an academic.
[00:36:40] Stephanie: Yeah.
[00:36:41] Chris: And then not only that is like my work comes home with me. Because of the nature of it. And you know, I live most of my day thinking like a scientist being hypercritical of everything. And it’s hard to turn that off when you get home. And it’s not fair, Stephanie, it’s also not fair to myself to like live a life without that joy, without that excitement.
[00:37:07] Ramit: Hmm. Chris, that’s the most honest thing I heard you say today. Like I say that in the most complimentary way, I think that is extremely self perceptive. I also love that you acknowledge Stephanie and you also acknowledge yourself. It’s not fair to you. That’s true. It’s not fair to her. It’s not fair to your kids.
[00:37:31] Yeah. I appreciate you being so candid. Stephanie. How did that strike you?
[00:37:36] Stephanie: I’ve never really heard him say that in that way. Hmm. I think I’ve heard him say it more in an, uh, in an intellectual kind of way, a heady sort of way. But it was kind of nice to see that emotion, I guess around, around that. And I appreciate it.
[00:37:53] I know it’s, I know that’s hard for you. Thank you.
[00:37:57] Ramit: I actually love the honesty that we just heard from Chris. And in a way, this is just another example of those traditional gender roles permeating different parts of their daily lives. He goes to work, he brings that same work home with him. He’s so caught up in being a provider that he’s unable to be present and actually hear what his partner is telling him.
[00:38:16] And I see this a lot, men who are afraid to stress out their wives. It’s a very well-trodden, invisible script. I’ll give it to you in simple terms. It goes something like this. My wife is emotional, emotions are bad. They make me uncomfortable. My job is to be a provider and to calm her down. So I’ll tell her it’s going to be okay.
[00:38:38] What is that? If we actually interrogated that script, that deeply held belief that we have, we might realize, I don’t know if I even believe that. Why do I think that? You know, often as men, we are not always equipped to deal with feelings, and I talk about my experience with this all the time. It took me a long time and a lot of hard work to access my own feelings, even to be able to answer a question like, what do you feel about X?
[00:39:06] My normal tendency would be to answer I think X, Y, Z. I was cerebral. I’ve had to learn how to connect with how I feel about something and it’s lifelong journey that I’m on until I actually could access my own feelings. My default when dealing with other people’s feelings was, I wanna make this go away as quickly as possible.
[00:39:26] Like I remember when I was an early manager and I had somebody crying in my office, and I was in my head, I didn’t do this out loud, but in my head I was like. How long is this gonna go for? I need these uncomfortable emotions to go away. That takes a lot of reflection and actively hard work to change.
[00:39:45] And as men, we often deflect. We go, it’s gonna be fine. Such a surface level reaction, or worse of all, we ignore those feelings that come up, especially from our partner, just like Chris has done. I don’t even think he heard the words that were coming outta Stephanie’s mouth. And so the cycle continues. The result is that they both walk on eggshells and every money conversation they have ends with indecision.
[00:40:07] How could it not? They’re not even actually connecting on what’s really going on here. The fact that Chris can acknowledge this and express emotions around it is actually amazing. That was a breakthrough moment and it indicates to me that he can change. I am willing to bet that these hidden scripts and gender dynamics started decades ago, likely even generations ago.
[00:40:30] We’re gonna get into their histories with money right after this. Can I understand a little bit more about how you grew up with money? Stephanie, what do you remember your family saying about money when you were young?
[00:40:43] Stephanie: I remember I knew when it was like a pay week versus, versus when it wasn’t. Um, because one of the things I used to do with my dad was go grocery shopping.
[00:40:55] Um, just to spend time together. It was just like a thing we did. And on a pay week, I could get like an extra little treat and when it wasn’t a pay week, I couldn’t. Um, so there was that and I remember hearing well, there’s no money for that, so, nope. Uh, just in general about things, um, I didn’t think we were poor.
[00:41:22] By any means. Um, but I did not, I knew we weren’t like wealthy or anything like that. Um, they didn’t talk to us directly about money, um, other than we have it, or no, we don’t have it. So you can’t have that. So there’s no talk about, um, like investments or any kind of these bigger picture things, credit cards, bad, save your money was basically the gist of it.
[00:41:50] Ramit: It sounds a bit erratic, like we have it, we don’t
[00:41:53] Stephanie: mm-hmm.
[00:41:54] Ramit: On a almost weekly basis. Am I reading that right?
[00:41:57] Stephanie: Yeah.
[00:41:58] Ramit: And would you describe socioeconomically, were you poor, lower middle class? How would you describe it? I think
[00:42:06] Stephanie: we were probably middle class
[00:42:08] Ramit: then. Why, why was it so erratic?
[00:42:10] Stephanie: I think it’s just the way my dad in particular talked about it.
[00:42:15] Ramit: Oh, wow. Mm-hmm. So it’s possible that you actually had more money.
[00:42:19] Stephanie: Oh, I, I’m sure we did now. Um, he’s since passed away. Um, and my sister, ’cause my, again, my dad took care of all the finances and stuff, so my mom really needed help when he passed away. So my sister stepped into that role. She’s well taken care of for her retirement, like houses paid off the whole thing.
[00:42:42] Um, so we definitely were not, I we weren’t struggling, at least from what I can tell. Um,
[00:42:52] Ramit: what do you make of it now, looking back, the fact that, you know, you could get certain things on certain weeks, but not on other weeks. What do you make of that?
[00:42:58] Stephanie: I think they prioritize their money better than we are, quite honestly, because I grew up playing sports.
[00:43:06] There was always money for me to play my sports. Mm-hmm. That was never an issue. We traveled, stayed at hotels, the whole deal. Mm. Um, but. There wasn’t an importance on like extras. ’cause I remember like getting to high school. My friend’s parents would like buy them Lululemon. That wasn’t happening. And you buy a house.
[00:43:26] Ramit: Yeah. And in the shopping, you mentioned that on a pay week you would get something. What would you choose back then?
[00:43:32] Stephanie: Oh, like a bag of chips or like a chocolate bar.
[00:43:36] Ramit: When you go to the grocery store now?
[00:43:38] Stephanie: Mm-hmm.
[00:43:39] Ramit: As an adult.
[00:43:40] Stephanie: Yep.
[00:43:41] Ramit: Do you consider it a pay week or a non-pay week?
[00:43:45] Stephanie: I don’t.
[00:43:47] Ramit: It’s just whatever I want.
[00:43:49] I’m an adult. I’ll get it.
[00:43:50] Stephanie: Yep.
[00:43:51] Ramit: How do you feel when you check outta the grocery store
[00:43:54] Stephanie: lately? Like oof. Like, oh god. Like a little bit of dread, quite honestly.
[00:44:02] Ramit: Hmm. Feels bad.
[00:44:04] Stephanie: Yeah.
[00:44:05] Ramit: You change anything because of the bad feelings or? No?
[00:44:08] Stephanie: No.
[00:44:09] Ramit: All right, Chris, can you tell me what your family said about money as you were young?
[00:44:14] Chris: So my, I think my dad, you know, he did tell us how important saving was, how important, not paying interest was that, but it definitely came from, you know, a classical family where it was more of barking orders. Right. Like a lecture.
[00:44:36] Ramit: Mm.
[00:44:36] Chris: And you know, growing up I thought we were like lower middle class, middle class.
[00:44:43] And it wasn’t until my teens, I was like, oh, they make pretty good money on the verge of upper middle class. But they, they were saving and investing in stuff. I think the biggest thing was when I had my paper route, when I worked part-time as a teenager, my dad did demand to see like checking accounts and balances and I would get a scolding if I wasn’t.
[00:45:07] It basically, I got scolded for saving. Uh, so for spending. Sorry.
[00:45:12] Ramit: Okay.
[00:45:12] Chris: And, and I think what I learned was, well, as soon as I get outta here, I’m gonna buy the video games and the stuff that I want. Um,
[00:45:21] Ramit: you’re gonna reject and rebel what your dad told you about money and you’re gonna get what you want ’cause you are an adult.
[00:45:28] Chris: Yeah. And that’s kind of what I did in my twenties. Mm-hmm. Whether it was clothes or video games or other stuff that probably didn’t matter in the long run.
[00:45:37] Ramit: Looking back on what you learned from your family about money, which of those lessons do you think you bring to this relationship?
[00:45:47] Chris: I mean, I love my dad, but I think broader than the money thing, I think the, uh, not listening to people slash interrupting definitely comes from him.
[00:45:57] Um, this obsession with paying down the credit card debt, it did come from him as well, but like none of the other, you know, potential. Saving and investing.
[00:46:08] Ramit: That’s pretty interesting. I, I think the first one you mentioned about not listening is quite savvy and it seems kind of out of left field, but probably directly related to money.
[00:46:22] What do you think if you became a better listener with Stephanie, specifically as it relates to money, but in general too, how do you think that would improve your financial situation?
[00:46:31] Chris: I think listening to Stephanie in generating the plan of what our categories are, specifically, what is our plan to move forward with money.
[00:46:44] I think that’s where the true like listening would be be, because I think up until this point, even when I quote unquote agree, there’s no action that follows.
[00:46:57] Stephanie: Mm-hmm.
[00:46:57] Chris: Right.
[00:46:58] Stephanie: I think we’re both kind of waiting for the other one to take the lead.
[00:47:02] Ramit: Oh.
[00:47:03] Stephanie: In a lot of ways, I feel like we’re just kind of floundering and not going anywhere.
[00:47:08] We’re treading water, but not, not even anymore really.
[00:47:12] Ramit: You’re kind of going underwater.
[00:47:13] Stephanie: Yeah, exactly. So I think you’re, you’re spot on. When you, when you’re saying our communication is gonna be the foundation for all of this,
[00:47:23] Ramit: what role do each of you think you play when it comes to money? If you just zoomed up and you just looked in general, Stephanie, when you talk about money, bring money up, what is your role?
[00:47:35] And Chris, same question for you. What would your answer be?
[00:47:39] Stephanie: I think I’m a bit of a, I don’t wanna say nag ’cause I, I don’t, I don’t think I’m, I’m nagging, but I am the, I bring the problems. Bring the problems up.
[00:47:52] Ramit: Okay. And Chris,
[00:47:54] Chris: if I’m being honest, I think my mode has been make it, make the money. Like provide.
[00:48:02] Then everything will be okay.
[00:48:04] Ramit: How does it strike you both to hear these roles just laid out Stark and bare?
[00:48:09] Stephanie: Neither. Neither one are particularly helpful. ’cause we’re not working with each other.
[00:48:15] Ramit: I mean, there is a role to talk about problems. Yes, there is a role for one or both people to earn money. Yes.
[00:48:24] But it’s almost like you’re operating in a different matrix.
[00:48:27] Stephanie: Mm-hmm.
[00:48:28] Ramit: And notably, I don’t hear anyone say, oh, I’m the solutions person. Like where’s the solution coming from that we need that role too. And most of all, we need them to all talk together. The thing is, you’re married, you have kids, ostensibly you want similar things, you want a successful family.
[00:48:47] Financial security. We can talk about what the rich life is, but it’s not happening in part for pretty obvious reasons. The roles are not talking to each other. There’s not a habit of follow through. Mm-hmm. I don’t see any mysteries here. Do you
[00:49:04] Stephanie: Not when you zoom out like that.
[00:49:07] Ramit: Now, I’m curious, when you were together before kids, did you talk about money at all?
[00:49:12] Stephanie: I
[00:49:12] Ramit: think we did.
[00:49:14] Stephanie: Well, I will say that I, I remember on more than one occasion when we were living in the States, actually after starting to watch your, your Netflix show and listening to your podcast, wanting to start investing
[00:49:30] Ramit: Uhhuh
[00:49:31] Stephanie: and Chris being like, there was always a reason kind of not to where it was like, well, we’re gonna move back to Canada, so do we wanna like even bother setting something up here or now when we’ve talked about it in the last couple of years, it’s, well, we need to save like $5,000 to get us started in investing.
[00:49:55] And it just, I don’t really know how to counter because I don’t know how it really works. I don’t feel competent in that area. So again, I shut down and then drop it, and then a couple months later, we have the same conversation.
[00:50:11] Ramit: What’s your take on that, Chris?
[00:50:12] Chris: Yeah, I think Stephanie in, in general is, is right.
[00:50:15] It, she is right. Uh, when we were in Houston, uh, I felt like it was just overly complex to invest in, in, while in the States and then move back to Canada. So I kind of kicked it down the line.
[00:50:29] Ramit: How much money do you think you lost by not investing?
[00:50:32] Stephanie: I try not to think about it. ’cause I,
[00:50:34] Ramit: oh, let’s think about it now.
[00:50:35] I love it.
[00:50:36] Chris: I mean, we, we, we pulled in pretty good money in American funds while down there.
[00:50:41] Ramit: How much total?
[00:50:43] Chris: First years it would’ve been about, you know, one 20.
[00:50:47] Ramit: Mm-hmm.
[00:50:47] Chris: But by the, by the final year, it would’ve been closer to one 50. One 60.
[00:50:53] Ramit: One 60. How many years were you there?
[00:50:55] Chris: Six, five years. Yeah. Almost six years.
[00:50:57] Mm-hmm.
[00:50:58] Ramit: Six years. Should we just do the math for fun? Sure.
[00:51:01] Chris: Yes.
[00:51:01] Ramit: All right. So let’s say 10%. That’s conservative. You should have been able to do more since you didn’t have kids, but let’s 10% of gross just to make it easy. Years to grow. Well, let’s just do five, six just for fun and we’ll do 7%. Alright. So just, just from then until now, you would’ve had $107,000 just sitting around.
[00:51:25] How about if we just let that thing keep growing and we didn’t, uh, add any more to it? So we add nothing more to it for the next, what, 25 years? $581,000. In today’s dollars, the amount you would see in the bank, the nominal would be $1.1 million.
[00:51:46] Chris: Ton of money. Can I offer a little bit more detail though?
[00:51:50] Ramit: Why?
[00:51:51] Chris: So the first couple years down there, we were actually paying down Stephanie’s student debt.
[00:51:56] Ramit: No. Why are you offering more details? Is it to, is it to justify not investing?
[00:52:02] Chris: No, I totally agree with you. We should have invested.
[00:52:05] Ramit: Okay.
[00:52:06] Chris: Totally agree. I just, the reality would’ve been, well, the first couple of years, like we did, we probably wouldn’t have been able to put away what, what we’re brainstorming right now.
[00:52:16] Mm-hmm. That’s, that’s all I, I’m not denying that would be all be tons of money that we would have, that we clearly don’t have right now. Um, I think I just, I get focused on details like that and I know it derails conversations and stuff like that. Yeah. It’s
[00:52:30] Ramit: happening right now. Yes.
[00:52:31] Chris: And I’m doing it in real time and I’ll stop.
[00:52:36] Ramit: The point is whether you would’ve invested 10% or 8% or 13%, you would’ve had a lot of money. Yeah. And the inaction is not just with this, it’s after you went to Canada.
[00:52:51] Chris: Mm-hmm. Yeah.
[00:52:52] Ramit: And it’s after you had kids. Basically. It’s not based on the circumstances around you as you’ve been telling yourself it’s you.
[00:53:01] Until you acknowledge that the decisions that I see reflected in your finances, there’s always a good reason. Like, well, we didn’t have kids, but we had debt, but then we had kids and now we have this and we live in this remote area. Like all of it is actually very compelling. But when you zoom out and see the totality of it, you go, oh, this is just habits you didn’t save when you had a lot of money.
[00:53:22] You’re not saving now. You just don’t save. Now you can change that ’cause you don’t have to be the same person you were. You can also change your behavior. That’s even easier. Start investing. We can talk about the numbers, but you have to admit and really take a hard look in the mirror. Oh my God. It’s, it has nothing to do with the circumstances around us.
[00:53:47] While true other people in the same circumstances probably would’ve reacted differently.
[00:53:52] Stephanie: You’re right. And I think to not just throw Chris under the bus, I sat around and did nothing too.
[00:54:02] Ramit: Yeah. You comment that I didn’t, I’m not confident about money. Why don’t you get confident? It’s not that hard just to be very, very direct with you.
[00:54:10] Again, I’m not trying to talk down to anybody. I’m saying money’s important. It’s clearly important ’cause you bring it up. You describe yourself as the person who brings up the problems. Why not add that layer of. Bringing up the solution. Mm-hmm. Right Now what happens is you bring up a problem, Chris, who wants to deflect and, uh, kick the can down the road and nitpick all the reasons it won’t work.
[00:54:31] He’s, he actually is only nitpicking your feelings. It becomes a much different conversation when you say, I ran the numbers knowing our fixed costs. Here’s what we would have to do. Here’s what it would cost us. Here’s our trade offs and here’s how I would do it. But I’m totally open to hearing how you would do it, because I want you to be a part of this as well.
[00:54:48] Well, now it’s not so easy to just be like, blah, blah, blah, blah, blah. You actually have something to look at. Have you ever had a conversation like that?
[00:54:56] Stephanie: I have brought the CSP to you before.
[00:54:58] Ramit: Ooh, what happened?
[00:55:00] Stephanie: You called it a budget and we’re like, well, we on hold a budget. Hold
[00:55:03] Ramit: on, hold on. Now I’m gonna start crying on this show right now.
[00:55:07] These are tears. You can’t see ’em. They’re uh, they’re skin colored. My tears don’t come out like other people’s tears, but I am crying inside. You called it a budget. I,
[00:55:16] Stephanie: I apologize. I don’t, I don’t remember when this was.
[00:55:19] Ramit: Okay.
[00:55:20] Stephanie: Okay.
[00:55:20] Ramit: That’s fine. I don’t mind that you said it was a budget, even though it’s not a budget.
[00:55:23] What happened then, Stephanie?
[00:55:25] Stephanie: Uh, that’s again, I shut down. I get frustrated ’cause I didn’t feel like I was explaining it in a way that made sense to Chris. Um, and then I just got frustrated and dropped it.
[00:55:39] Ramit: What if it doesn’t need to make sense to Chris? What if your need to have Chris understand things is actually one of the blockers in you moving ahead.
[00:55:51] You two are partners and the fact is you need to invest, you need to pay down debt, you need to save. If one person doesn’t understand, then make ’em understand or move forward anyway. But right now, putting it back on yourself and then describing yourself as, oh, I just get frustrated, that actually isn’t acceptable.
[00:56:10] Mm-hmm. If you wanna change your finances. Chris, do you see the effect that your responses are having on Stephanie,
[00:56:17] Chris: you know, in the long term? Obviously it, it can put strain on the relationship, the partnership in general. You know, we need to work through this thing where, you know, if my reaction, my instinctual reaction, which can be bad, can, you know, I obviously need to work on that to avoid making step, like Stephanie’s reaction of shutting down.
[00:56:41] Ramit: How are you gonna work on it?
[00:56:43] Chris: I mean, I’m gonna need help to figure out how, um, that’s just the vulnerable part.
[00:56:48] Ramit: Agreed. So let’s just decide right now though, how are you gonna do it?
[00:56:51] Chris: Therapy.
[00:56:53] Ramit: Okay. I think that’s really good. I think there’s like a lot to dig into there. And Stephanie, do you wanna ask her how she would like for you to show up?
[00:57:04] Chris: Stephanie, how would you like me to show up?
[00:57:07] Stephanie: I would like you to show up with an open mind. Without feeling like you have to manage my feelings or solve whatever the problem is.
[00:57:17] Ramit: Chris, you know, you may find yourself in old patterns, as you said, you’ll get some new tools in therapy, but you can, you can always stop and just be like, uh, uh.
[00:57:26] I think I’m going back to the old Chris, Chris, the dream crusher. Uh, lemme just stop right here. Do you mind if I take 10 minutes? Just think for a second. I’d love to come back and start this over fresh. That’s. Totally cool. So feel free to use that tool and many others that you will both learn. I have to say I love the level of self-awareness that Chris and Stephanie are showing.
[00:57:51] They’re not being defensive. They’re actually each stepping up to own their side of the road. When it comes to what has gone wrong, there is a recurring pattern in story after story that they tell me about their money and it’s inaction. For Chris, it was not wanting to go through the hassle of investing in the US knowing that they were gonna move back to Canada inaction.
[00:58:13] For Stephanie, it’s getting frustrated that she doesn’t have the knowledge or the language to be able to meaningfully contribute to the conversations about money, and so she shuts down inaction. Part of the reason they have been able to get away with this inaction is that they haven’t really faced any real consequences.
[00:58:31] They’ve been able to lean on family in the past and sure they’ve been racking up debt, but. What’s a big deal? Still got a roof over our head, still have our phones. What’s the problem? If they had faced real consequences, they would probably have a bigger sense of understanding of the urgency, but the fact is these consequences are coming and they are coming fast with 92% fixed costs is just a matter of months, maybe even weeks before they will have to face real and possibly devastating consequences.
[00:59:01] So next up, I’m gonna get real about their debt. So the debt of $544,000, what is the plan to deal with this debt?
[00:59:11] Stephanie: I mean, the bulk of it is the mortgage. So like of course we’ll be paying, making our mortgage payments. But for like the line of credit and the, the credit cards?
[00:59:23] Ramit: No.
[00:59:24] Stephanie: Like we know we have to pay it off.
[00:59:25] I think we could probably, there’s one that’s kind of smaller that we could knock out. Fairly quickly, um,
[00:59:32] Ramit: how’d you get into credit card debt?
[00:59:34] Stephanie: It’s funny ’cause we, again, the whole treading water, we only really got into it a couple months ago where we were paying off our balance every, every month. So I’m, I’m working part-time now, but I had picked up another kind of casual position, um, and then I, it didn’t really suit our family life, so I stopped that.
[00:59:57] So that income stopped coming in. Expenses just kind of crept up and we just couldn’t pay off the full balance. So it just kind of snowballed since July.
[01:00:09] Ramit: Why are you not able to pay full balances
[01:00:12] Stephanie: life? Right. Where again, the whole not paying attention to where our money’s going and it just,
[01:00:16] Chris: can I add a little bit of information?
[01:00:19] So from a snapshot, the move, the move to a bigger house in November. Obviously there’s indirect costs of buying a new house, furniture, other stuff. You going from two Jo, like full, basically full-time to halftime.
[01:00:34] Stephanie: Mm-hmm.
[01:00:34] Chris: We don’t think about the numbers. We, we need after the third child, we needed a bigger place and we sort of semi ran the numbers and said it’s doable.
[01:00:46] But at the time we had two, two, like, uh, Stephanie had, uh, the full income.
[01:00:53] Ramit: But when you, when you dropped the income a bit, did you adjust your expenses at all?
[01:00:57] Chris: No, not at all.
[01:00:58] Ramit: Nobody does?
[01:01:00] Chris: No. Okay.
[01:01:01] Ramit: Then you owe, uh, 50 K to your family. What’s that about?
[01:01:05] Chris: So most of that is to my dad. Um, he’s, that was actually a contribution to the down payment for, um, most of it.
[01:01:19] Stephanie: No, no, no. We, we had saved enough for the down payment. It was for. Like everything else. Right? Because it’s more than just a down payment when you buy a house. So the indirect had to buy. Yeah, like buying like furniture. We needed to get a second car when we moved here,
[01:01:34] Chris: but that, that wasn’t, wasn’t for the recent house in November.
[01:01:37] It was when we moved back to Canada. Back to
[01:01:39] Stephanie: Canada. Yeah. It was to help with like the other kind of costs of moving
[01:01:44] Ramit: Yeah.
[01:01:45] Stephanie: Internationally, I guess. Yeah.
[01:01:46] Ramit: Oh, I’m sorry, I just woke up again, sorry. And, uh, two hours later we’re still talking about irrelevant details.
[01:01:53] Stephanie: Yeah.
[01:01:53] Ramit: Guys, come on. What’s going on here?
[01:01:55] What is, what is the need to get into the details? You owe $50,000 to family on top of credit card debt, on top of a line of credit. What’s happening right now? I want to help you. I’m not giving up on you, but I can’t pull you up out of the weeds over and over. I need you to be able to do it. You’re adults, you made the decisions to get into this financial situation.
[01:02:21] I’m just asking you simple questions. What would somebody else have done, uh, before they moved into a bigger house? How would they have handled it? Someone who’s better equipped with money
[01:02:31] Stephanie: looked at the actual numbers and whether it was actually feasible.
[01:02:35] Ramit: Mm-hmm. What else?
[01:02:36] Stephanie: And if it wasn’t coming up with a plan,
[01:02:40] Ramit: what would the plan have been
[01:02:41] Stephanie: like coming up with what, how much we actually needed.
[01:02:46] Ramit: Mm-hmm.
[01:02:46] Stephanie: And a timeline.
[01:02:48] Ramit: Yep.
[01:02:49] Stephanie: And then like a plan to get there, whether that’s, um, again, picking up another job, cutting our expenses and if to see if there’s ways to do that.
[01:03:00] Ramit: Yep.
[01:03:00] Stephanie: Um,
[01:03:00] Ramit: Chris, what do you say?
[01:03:02] Chris: So I totally agree, like there’s a lack of timeline and a lack of discussing the sacrifices needed. You know, we were, we were not happy in the smaller house.
[01:03:13] And so like. Took it me as that fixer of like, okay, even if it’s we’re gonna struggle a bit, let’s get this bigger house. But yeah, the smarter decision would’ve been to stay in that smaller house for longer. Right.
[01:03:25] Ramit: Do you see, this is powerful. Do you see how the dynamics between the two of you have cost you tens of thousands of dollars and this is very common?
[01:03:35] Male, female. The guy is like, I’m gonna just fix it. Like I’ll take the burden on my back, like my, and then my wife just wants stuff. Oh my God, I gotta find a way for her to not want it. Oh, okay. I’ll work with, it’s very gender stereotypical and I hate it because nobody ends up happy. There’s all these invisible expectations, which are often from a different generation where one person worked and another didn’t.
[01:03:59] You’re both working, you’re both highly educated, and nobody even’s talking about these expectations. They’re just invisible. I want you to be able to make better decisions, and I think that the way you communicate it, it needs work. Help. I’m getting a little frustrated in this conversation because it feels like I’m taking one step forward and two steps back.
[01:04:20] Yes, the gender roles are a major issue, but so is this near term view that they both have around their finances. They’re basically stuck in the weeds, and so they talk and shut down and talk and shut down and never make any meaningful decisions. Candidly, this is a luxury problem that they can only afford because they haven’t actually really faced true consequences.
[01:04:44] My philosophy here is why would I ever let my back get against the wall? Like for the parents listening, let’s say your kid comes home crying from school One day somebody stole their lunch. The next day they get pushed down on the ground. Would you wait and let your kid get punched in the face and come home with a bloody nose and missing teeth?
[01:05:00] Of course not. So why do you allow that for yourself? I remember a friend once saying, I wish I could tell people to get impatient with themselves. We get impatient with other people, but why don’t we do the same for ourselves with our career, with our money, with our relationships? If you are stuck in the weeds and every time you talk about money, you just end up going in circles, you probably need a totally new way to look at your money.
[01:05:24] I want you to join my money coaching program. Aside from you coming on this podcast, it is the only way to get coaching from me directly. It doesn’t matter if you’re married, single, you’re nearing retirement, or you’re just starting off. You’re gonna get the tools to take control of your money and create a radically different relationship with money.
[01:05:42] I want you to change your relationship with money from being on the defense to going totally on the offense in creating your rich life. You can sign up at iwt.com/money coaching. Now, getting back to the numbers, Stephanie recently made the decision to work less, which is a big factor in their high fixed costs, and I have some questions about that.
[01:06:02] Stephanie, in your application you wrote that you feel you are not contributing enough. What do you mean by that?
[01:06:10] Stephanie: Well, I’m only working. Part-time. So I definitely could be bringing in more money, especially with my profession and skillset. So
[01:06:21] Ramit: is it possible for you to work more?
[01:06:23] Stephanie: It is.
[01:06:24] Ramit: Family-wise, there’s no, uh, barriers there.
[01:06:27] Stephanie: Well, the simplest way for me to work more would be to go back to the bedside. Bedside pays more, but then comes with, uh, 12 hour shifts and overnights.
[01:06:41] Chris: Mm-hmm.
[01:06:41] Stephanie: Which is tough with three young kids. So that’s kind of why we’ve avoided it. We did it initially when we moved back here, and it just, it, it didn’t work.
[01:06:52] It didn’t work for us.
[01:06:53] Ramit: So I’m just looking for, if it’s not possible, I totally respect it.
[01:06:57] Stephanie: Mm-hmm.
[01:06:58] Ramit: Is it possible or not? Yes or no?
[01:07:00] Stephanie: No, it is. It’s to stop dancing around it,
[01:07:04] Ramit: you know, part of changing the dynamic with money is becoming decisive.
[01:07:08] Stephanie: I struggle. I will say I struggle with that big time.
[01:07:11] Ramit: Yeah.
[01:07:12] Nobody ever tripped and fell into a rich life. And part of living a rich life is being honest with yourself and the people around you. If you can’t increase your income right now, say it. If what you currently spend on groceries is X, say it. ’cause we gotta work with what is real. Then we can improve it or change it.
[01:07:31] Okay. Chris, you started your career a little bit later because of what you do. You have a pension, I think that pension is gonna grow. So you feel confident in the future. While Stephanie worries about the present, what do you make of that?
[01:07:45] Chris: I should be focused on the present. Um, even though I trust my future, I don’t trust and I don’t know.
[01:07:57] And I’m very uncertain about Stephanie’s future from a career point of view, if I’m being honest. And, and Stephanie can correct me if I’m wrong, but I fear that. Even if Stephanie found a great community nursing position that was full-time, she still wouldn’t be happy. And so we need to get outta this hole and get our plan together and make some sacrifices, I think.
[01:08:22] And I think that’s the key thing that’s been missing.
[01:08:25] Ramit: Stephanie, what do you think about Chris’s comments?
[01:08:27] Stephanie: Uh, he’s right. I don’t necessarily think like you have to like love what you do by any means. Um, but I just don’t wanna dread it.
[01:08:38] Ramit: How do you think other people who don’t dread their job do it? What is different about them than you?
[01:08:45] I, it’s okay. It’s a tough, tough thing to think about. What are you thinking?
[01:08:52] Stephanie: I don’t know what the tears are about. Honestly. I, I don’t know what this is about.
[01:08:57] Ramit: Can I ask the question again?
[01:08:59] Stephanie: Mm-hmm.
[01:09:00] Ramit: The people who don’t dread their job, what do you think they do differently than.
[01:09:06] Stephanie: They probably have a plan.
[01:09:08] Ramit: Mm-hmm.
[01:09:09] Stephanie: They have a direction.
[01:09:10] Ramit: Do you mind if I suggest a couple of things?
[01:09:13] Stephanie: Sure.
[01:09:14] Ramit: Your kids are in swim class now, is that right? Mm-hmm. Swim lessons? Mm-hmm. What happened when you put ’em in the pool?
[01:09:19] Stephanie: Oh, he hated it.
[01:09:22] Ramit: Oh, really? What happened?
[01:09:25] Stephanie: He like, I don’t know if it was the temperature of the water or, or what it was, but he just was not impressed to be there.
[01:09:33] He, he warmed up to it a little bit, but, uh,
[01:09:36] Ramit: wasn’t enjoying it. Huh. And were you there?
[01:09:40] Stephanie: I was there, yeah.
[01:09:41] Ramit: What were you saying to him when you saw him thrashing around and crying and screaming?
[01:09:46] Stephanie: It’s okay.
[01:09:49] Ramit: What else?
[01:09:50] Stephanie: I mean, I was singing to him, uh, trying to soothe him a little bit.
[01:09:55] Ramit: Wow, wow.
[01:09:57] Stephanie: Taking him through the water, trying to be calm.
[01:09:59] Ramit: So when he was going through something stressful. He had somebody who loves him cheering him on and supporting him. Something that people who work hard and sometimes work really stressful jobs might have somebody cheering them on and supporting them at home.
[01:10:24] Chris: Stephanie, do you feel that I don’t, when you’re, when you’re working stressful positions that I’m, that you’re, you’re not getting support from me.
[01:10:37] Ramit: Ask it slightly differently, Chris, ask, how could I support you more?
[01:10:42] Chris: Oh, uh, Stephanie, how could I support you better when you’re, when we have to make these sacrifices and you have to make these sacrifices, you know, working high stress jobs, et cetera.
[01:11:00] Stephanie: You could support me more, Chris. By communicating with me in finding a vision and a direction that helps me understand why I sense
[01:11:15] Chris: you’re making the sacrifice.
[01:11:16] Stephanie: Yeah. Why it’s worth it, at least for this point in time.
[01:11:22] Chris: Are you asking me to take more of a lead in the finances and the vision for like a rich life, et cetera?
[01:11:30] Stephanie: Not even that. Not so much of a lead, but just
[01:11:34] Chris: a part
[01:11:35] Stephanie: to just have the discussions and get on the same page.
[01:11:41] Chris: I can do that.
[01:11:45] Thank you.
[01:11:47] Ramit: That’s how you do it. Chris asked, how can I support you? And Stephanie gave a beautiful answer. Stephanie needed to know that someone is in her corner, not solving it for her, not taking over, but simply saying, I’m here. Just like she did for her son in the pool. She let him feel that fear and the support at the same time.
[01:12:10] That is what financial partnership looks like. You’re not shielding each other from stress. You’re not deferring every decision. You are standing side by side even when the numbers are scary and you’re saying, we are going to figure this out together. You know, people can do really hard things when they know they are not alone, and that is how you build a rich life.
[01:12:30] We never try to avoid discomfort. We get strong enough so that we can handle what comes our way together. We gotta go back to the CSP and we gotta make some changes.
[01:12:44] Stephanie: Yes, yes.
[01:12:45] Ramit: Your CSP is currently a 92% fixed cost. Our goal is to get this down to 60% or lower. Where would you like to begin?
[01:12:53] Stephanie: I think groceries is the most obvious.
[01:12:55] Ramit: Okay, it’s 2000 right now. What do you wanna put it at
[01:12:58] Stephanie: realistically to give a little buffer? I think we could do 1200.
[01:13:02] Ramit: Alright. 1200 is watch what happens to the fixed cost number. Ready? What’s that number now?
[01:13:07] Stephanie: 84%.
[01:13:09] Ramit: 84% From 92 to 84. Okay. We’re moving in the right direction. What else?
[01:13:14] Stephanie: I think we take a look at those, uh, subscriptions.
[01:13:17] Chris: I want to be realistic. Like two 20.
[01:13:20] Ramit: Okay. From 2 95 to two 20. All right, fine. What else?
[01:13:23] Chris: So the child activities includes this swimming, you know, we have them in swimming for the next eight months. I just don’t think private swimming will be sustainable after that eight months. And so I’m not pushing, you know.
[01:13:39] If we have to, if we have to somehow exit it as a sacrifice to lower these fixed costs. And maybe I need a slap in the head that like, this is one of those tough calls that like maybe next year, right? If we can somehow get outta it. Who’s
[01:13:52] Ramit: gonna slap you in the head? Stephanie is the one who wants it. So who, when you say, if I need, who’s gonna slap you in the head?
[01:13:58] Chris: You No, I, I, I just feel like it is one of those fixed costs that, that we can change right now.
[01:14:08] Ramit: Why is everybody walking on eggshells right now? Mm-hmm. If this, I feel like it’s something we can change. Say what you wanna say, Chris. Be direct.
[01:14:14] Chris: I think we should remove it. I think we should delay it.
[01:14:18] Ramit: Okay.
[01:14:18] Chris: I think so.
[01:14:19] So pull, pull them for
[01:14:20] Stephanie: now?
[01:14:21] Chris: For now. Yeah.
[01:14:22] Ramit: Okay. So that means zero.
[01:14:24] Chris: I mean, that, that’s, is that just the swimming or is that some, they also do some of the summer stuff. There’s
[01:14:30] Stephanie: like, I think it had the music therapy and stuff in there, but that’s done for now anyway, so we won’t,
[01:14:36] Chris: so right now it would be zero.
[01:14:38] Ramit: Sometimes the simplest thing you do is just get clear on what you want and then say it. The dancing around is not just from the other person, it’s coming from both of you inside.
[01:14:50] Stephanie: Yeah.
[01:14:50] Ramit: Like what you’re really trying to say is, I want somebody to say that we can’t afford this, but I am not saying it. So somebody up there in heaven, please say it for nobody’s up there.
[01:15:03] Okay. It’s only us.
[01:15:04] Chris: We can’t afford it.
[01:15:05] Ramit: There you go. We can’t afford it. I love that. I don’t usually love that phrase, but right now I love it. Okay. $0, $312 in child activities getting dropped to zero. Whoa. What’s that number?
[01:15:17] Stephanie: 77%.
[01:15:18] Ramit: 77%. Okay. Lemme just pause here for a second. How are you both feeling right now?
[01:15:23] Chris: I feel fearful that we’re house broke and you know, there is an unwillingness right now. Like we’re not gonna sell this. We are in our dream.
[01:15:35] Ramit: Okay.
[01:15:35] Chris: Uh, we, we don’t plan to move again, but I do feel like up as far as, you know, being okay with the move last fall,
[01:15:45] Ramit: do you see how you got to this point?
[01:15:48] Chris: Oh yeah.
[01:15:49] Yeah.
[01:15:49] Ramit: By feeling the need to reassure and acquiesce to Stephanie. Stephanie by saying, I want this, but also not running the numbers. But also Chris didn’t run the numbers either. Like you were co-creators in this.
[01:16:04] Stephanie: Yeah.
[01:16:04] Ramit: But the fact is you’re here. I actually think, first of all, I just wanna say from a how do I feel perspective.
[01:16:09] I think you’ve made some pretty good progress. That was actually really impressive. I just wanna take a second, uh, give you a round of applause. You didn’t get stuck, so I’m impressed. I’m impressed. I can sense that everybody’s feeling a little bit stuck.
[01:16:24] Chris: Yeah.
[01:16:25] Ramit: It’s like these changes are not making any more changes.
[01:16:29] Chris,
[01:16:30] Chris: my head wants to go back to income. The only other option right. Is, is can, can Stephanie pull in more?
[01:16:38] Ramit: Stephanie?
[01:16:39] Stephanie: I mean, I’m gonna have to sacrifice.
[01:16:42] Ramit: That’s actually the kind of energy I love. I love it. Do you think you could do that, Stephanie?
[01:16:48] Stephanie: I do.
[01:16:49] Ramit: Okay.
[01:16:50] Stephanie: Yeah.
[01:16:50] Ramit: And is there a possibility of Chris earning any extra income as well?
[01:16:53] Chris: My job is unionized. I get three grand to seven grand a year, added to my salary every April. So my, you know, if you look at the curve of my income, like, you know, in six months from now, it’ll go up by, actually, it’ll go up seven K next April. So even if I did nothing, my, my income will be double within 20 years.
[01:17:18] Like I will be making 200 grand, you know, in today’s money, you know. 20 years from now.
[01:17:25] Ramit: Stephanie, are you aware of this?
[01:17:26] Stephanie: Yes.
[01:17:27] Ramit: What does it mean to you when you hear that?
[01:17:29] Stephanie: Not a ton, because it doesn’t help us. Now
[01:17:32] Ramit: see what I mean about living in the future versus living in the present. It’s gonna go up, which is gonna bring your fixed costs down naturally, but we also gotta be a little bit more diligent about the earnings and the expenses.
[01:17:43] Would you agree? Yeah.
[01:17:44] Stephanie: Yes.
[01:17:45] Ramit: Alright. So at $400 a month for your credit card debt, it’s gonna take you about three years to pay off that 10 K.
[01:17:56] Stephanie: Yeah.
[01:17:57] Ramit: It’s quite interesting. If you make it $500 a month, you can pay it off in two years. What does that tell you?
[01:18:05] Chris: Put put more, as much as on debt as we can.
[01:18:08] Ramit: Yes. And also these random expenses that you’re buying that oftentimes you say you need.
[01:18:16] Stephanie: Yeah,
[01:18:16] Ramit: I need to pay off my credit card debt faster than I need. Whatever arbitrary thing came up today. Basically when you really break down what you need versus what you want, it can be very stark when you’re honest with yourself. What are some examples of things you have spent money on that you could have rather put the money towards?
[01:18:36] Credit card debt
[01:18:38] Stephanie: Surrounding lessons.
[01:18:39] Ramit: Yep. What else?
[01:18:41] Stephanie: Well, nonsense, takeout, eating out, that kind of stuff. Stuff you have nothing to show for at the end of the day,
[01:18:49] Ramit: how often would you say you eat out?
[01:18:50] Stephanie: Oh gosh. Um, at least twice a week at home with the kids. So we do like a Friday night and then once on the weekend, and then it’s like random, like breakfasts or coffee while we’re working.
[01:19:04] Ramit: How many times total coffee, dinner, lunch, takeout, whatever, delivery.
[01:19:10] Stephanie: So for me, I probably on myself, probably three or four times a week. Two with the kids.
[01:19:17] Ramit: Okay. Six. Chris.
[01:19:19] Chris: Uh, at work, probably almost every day. I’m quote unquote using my, you know, guilt, free spending, whatever. But, um,
[01:19:29] Ramit: five.
[01:19:29] Chris: Yeah.
[01:19:30] Ramit: All right. So what do we say?
[01:19:31] Six plus 5, 11, 11 times a week? Mm-hmm. Probably more. Mm-hmm. Because I’m not even getting into the math, but it’s usually triple whatever people tell me, whatever. That’s a lot.
[01:19:44] Stephanie: Mm-hmm.
[01:19:45] Ramit: You could knock off a year of payments with, and you could still actually eat out, you could still do a big family dinner.
[01:19:51] You decide when? Maybe once a month. If I’m in sacrifice mode, I’m doing once a month. It’s a big thing. We’re all not a big dinner. Yeah. It’s, we talk about it, we put out the options, everybody votes. It becomes a big, fun family thing. Then we go there.
[01:20:04] Chris: I think this all goes hand in hand with other aspects of our lives.
[01:20:08] Right. You know, the discipline, the sacrifice that’s needed,
[01:20:11] Stephanie: but also on top of that, we don’t have a clear. Vision as to like why the sacrifices is worth it.
[01:20:20] Chris: Yes. And I, I’m only now seeing why that, like, that’s very critical for you.
[01:20:25] Stephanie: Yeah.
[01:20:26] Chris: To see that, that’ll allow you to make these sacrifices without, you know, you’re still gonna be stressed, et cetera, but you’re still gonna be like, oh, this is what it’s worth.
[01:20:36] Like this is,
[01:20:36] Stephanie: this is the why. Yeah.
[01:20:38] Ramit: Now, if we do all that stuff, going back to the CSP, Stephanie, did we talk about your earnings?
[01:20:44] Stephanie: No, not yet.
[01:20:45] Ramit: Did you agree that you could earn more?
[01:20:48] Stephanie: Yeah.
[01:20:49] Ramit: Okay. How much could you earn?
[01:20:50] Stephanie: I think at least 6,000 a month.
[01:20:53] Ramit: Okay. What would the net be on that
[01:20:56] Stephanie: with removing like benefits and taxes and stuff?
[01:20:59] Oof.
[01:21:00] Chris: It would probably realistically be more like five grand total, right? Like or,
[01:21:05] Stephanie: mm-hmm.
[01:21:06] Ramit: Do you want me to put five grand here?
[01:21:08] Chris: Sure.
[01:21:08] Ramit: Because that changes things. Watch, now you’re at 67%. That is a good number.
[01:21:14] Stephanie: Okay.
[01:21:14] Ramit: To me, that’s. Pretty impressive. 67% is impressive because you have your debt payments, which will be 400 bucks.
[01:21:24] Those will be paid off in a couple of years. Well, at least the credit card will. Mm-hmm. So you knock off at least a couple hundred bucks actually, all of that. So it’s 500 bucks. ’cause you’re gonna knock it off in two years. Then we’re gonna drop it down to zero. You’re now at 63%. Not to mention Chris’s income has gone up by a a bunch.
[01:21:42] So you’re actually below 60%. Guys. That’s, that puts you in a phenomenal position. You now have hundreds of dollars extra per month to be focusing on things like investing, savings, account, paying off the mortgage, and on and on and on. Mm-hmm. That’s a really good position to be in. What do you think?
[01:22:02] Stephanie: Yeah, I think we’d both feel less stressed.
[01:22:06] Ramit: You have a vision of where you’re going. Yeah. So it’s like when you get up for work every day, you’re not just going to work for a day, you’re actually working for a rich life. Mm-hmm. And when you have a reason. For the things you’re doing. You can take more arrows than anybody thought possible, and you actually better yet might actually come to enjoy it because you see the connection between your work and what you’re able to do.
[01:22:30] Now. Can I just point out a couple of other things here? If you were to increase your income, Stephanie, mm-hmm. And we do all this stuff we talked about, you now have $3,400 a month in guilt-free spending. That’s obviously too much.
[01:22:42] Stephanie: Yeah. Yeah.
[01:22:43] Ramit: That’s 31%. And the Ty typical number I recommend is 20 to 35%, but because you are in aggressive debt payoff mode, that number should probably even be a little bit less, maybe like 15%.
[01:22:54] So what do we wanna do with that money? We probably wanna put some towards an emergency fund. So what I just did was I put $1,250 a month in an emergency fund. I actually think it should probably be a little bit more, because right now you have 1,600 bucks. You guys need to get that number to 42,000 at a minimum with three kids.
[01:23:18] You need it to be your fixed cost times six minimum. So that’ll take, while it’ll take years, but what you’ve done is at least you can see you have 500 bucks a month going to investments, 1250 going to emergency fund, I would sure like to see that at 2000 or more. What do you think?
[01:23:36] Chris: I think it’s amazing.
[01:23:38] Ramit: Yeah.
[01:23:38] Chris: I, I do have a question I’m curious about though. Sure. Until the credit card line of credit is paid off, would it not potentially be a benefit instead of 1250 into the, this, the, uh, emergency fund, maybe clawing that back quite a bit and applying like a grand of that to the debt repayment to try to get, to pay the debts as fast as possible.
[01:24:03] Does that make sense?
[01:24:05] Ramit: It make, uh, it makes sense. Yes. You want to pay off your debt because you’re paying interest.
[01:24:13] Chris: Mm-hmm.
[01:24:14] Ramit: But also what if you theoretically put all of your money towards debt Okay. And you start paying it off rapidly, and then one of you gets laid off.
[01:24:23] Chris: Yeah.
[01:24:23] Ramit: Or injured or something like that.
[01:24:25] What do you have to fall back on?
[01:24:26] Chris: You’re right. Yeah. Yeah. Like you need that, that, that buffer.
[01:24:30] Ramit: Yeah. You will pay interest by virtue of the decisions you’ve made that have brought you here. So just accept it. Okay. Minimize it. Like paying an extra a hundred dollars saves you a year of payments, do that.
[01:24:41] ’cause a hundred bucks is nothing. You can find that easily.
[01:24:44] Stephanie: Yeah.
[01:24:44] Ramit: But also accept that you’re gonna pay thousands in interest. That’s just the decision you made. So prioritize it, but also you need to be saving for your emergency fund. What stood out to you most about today’s conversation, Stephanie?
[01:24:58] Stephanie: That while, yeah.
[01:25:01] It’s about the numbers. It’s not about the numbers.
[01:25:05] Ramit: What is it about?
[01:25:05] Stephanie: It’s about, it’s about how we communicate with each other. Hmm. Um, being honest. With each other, not dancing around the issue and then using, we both were doing it using each other as the excuse for inaction.
[01:25:21] Ramit: Powerful. Okay. Chris, what about you?
[01:25:22] What surprised you?
[01:25:23] Chris: I mean, definitely like at myself and how emotional I got. Um, and how, you know, I really need to, you know, it’s always been on the back burner to do my own therapy, and we’ve talked about couples therapy. I still worry about Stephanie in the sense that, like, when I get home after this, how upset she’ll be that, you know, we might be taking them out a swim.
[01:25:47] Right? Or like, you know, I, I think now that we’ve done this, I, and there’s a vision, I, I think there’ll be meaningful change, right? Mm-hmm. Like from, from the ability to make sacrifice and like you said earlier, we’re strong and capable of doing this.
[01:26:06] Ramit: Yes, very powerful. Both of you are strong, capable people, parents, professionals, partners, and although it might feel uncomfortable to know that your partner is experiencing some type of distress, you’re both gonna feel distress ’cause you’re like turning a ship around in a completely different direction.
[01:26:32] Stephanie: I feel relief that we have a plan and a direction and that we’re both on the same page with it.
[01:26:40] Ramit: We’re gonna get to their followups in just a second, but I wanna give a huge thank you to Stephanie and Chris for being so vulnerable and so open with all of us today. Did you notice in today’s conversation how much time we spent on the numbers as opposed to their communication and psychology around money?
[01:26:57] I noticed that we knocked out the numbers in about five minutes, and it’s interesting because I see a lot of internet comments that say, Ramit, you spend too much time talking about feelings. Just give me the numbers. I would’ve said exactly the same thing when I was starting with money, but I want today’s discussion to tell you why I do things the way I do.
[01:27:17] I can tell you right now, if we hadn’t spent hours talking about how they really feel, there is no way they would’ve attacked that CSP and brought their fixed cost down by 30%. Money is not just about numbers. That’s the point of this entire podcast. It’s deeply intertwined with our feelings, with our psychology, with the way that we were brought up in our cultural background and our unique personal experiences.
[01:27:43] Don’t skip that. The point of living a rich life is not to be efficient. It is to create and live and enjoy a rich life. If we simply skipped over the emotional and psychological aspects, we would never uncover the real reasons that we behave the way we do with money. It’s not enough to just know the numbers.
[01:28:03] You’ve also gotta master your psychology, and that is a gift to be able to understand why you do things the way you do. Stephanie and Chris, they made huge strides today. I wanna encourage them to keep going. It’s probably gonna take seeing a therapist probably together. It’s gonna take a lot of practice, but they took the first step today and I am rooting for them.
[01:28:22] Now let’s check out their follow-ups.
[01:28:25] Stephanie: Hi Ramit, Chris and I just wanna say thank you so much for having us on. It was really valuable having an impartial third party look at our finances and our dynamics from the outside. Um, and your insights were, were really helpful to us. So we have had weekly money dates.
[01:28:42] I think we’ve had about three so far. We meet, uh, during the week, in the morning on the same day. Um, and they’ve gone really well. Those conversations are way less fraught than they used to be. Um, we each take the lead and the respective areas that we kind of have been in charge of. And it’s a really good back and forth and it’s really helped us stay on the same page and have a positive, uh, kind of dynamic around money discussions.
[01:29:09] We also have shortlisted, uh, couples therapists are in and are in the process of booking meet and greets to find someone who’s a good fit. So in terms of the changes we’ve made. We canceled and we’re refunded. We’re refunded for swim lessons. So that was the first thing. We’ve cut our subscriptions by about 75%, so we’re down to $88 a month for subscriptions.
[01:29:34] We have managed to keep our grocery bill to under $300 a week, which will bring our monthly total down from 2000 a month to 1200, uh, for groceries, which is huge. We’ve also deleted the takeout apps off of our phones and we are doing a family either takeout or mail, uh, twice a month. And that seems sustainable for us right now, but we’re open to re-looking at that.
[01:30:01] Um, we have stopped using our credit cards completely and have paid off our lowest balance credit card, which is about $2,000. And, uh, in terms of me for work, I have been applying to different nursing positions, and I interviewed this week actually for a position that is higher paying than the one I have now and would bring me up to full-time hours.
[01:30:26] And in addition to that, I was offered the opportunity, uh, for a position, uh, that is completely outside of nursing and it would be like a project management, um, video production position. And I’m in the process of meeting with the, with the board of directors and negotiating, uh, pay and everything around that.
[01:30:46] So I think everything is heading in a much. More positive direction now that we have kind of a vision and a plan together. And we just wanna say thank you, Ramit, for helping us get there. We really appreciate it.
[01:31:00] Chris: Hey Ramit. Uh, it’s Chris. Uh, firstly, I just wanna personally thank you and of course Stephanie and I want to thank you and the whole team, uh, for everything you’ve done for us.
[01:31:10] The past three weeks have been really life changing, um, in the sense that I already notice a huge new positivity, um, from Stephanie and from both of us. Uh, we’ve been meeting every week to talk about the CSP and the changes that we’re making, basically no more eggshells. And I came home one day a couple weeks ago and Stephanie had posted this as well as, uh, the joke about being on the same team and.
[01:31:41] That’s, that’s what we’re striving to do. So we’ve cut a lot of subscriptions, about 75%, uh, of the costs. Luckily, a lot of these subscriptions I use for work, so I put them on my work budget, uh, which has been great. We’ve, at least for the last three weeks, uh, successfully cut our groceries down to about 300 a week.
[01:32:06] So 1200 a month. Uh, so that seems to be doable. The girls, we did end up cutting the swimming and getting a refund. Uh, but luckily we have added them back into music therapy, which starts in a couple of weeks, and that’s something that they both really enjoy and it’s, it’s much more affordable. And within the CSP our meetings are every week, uh, it’s been positive and I’ve seen, you know, great change in mood.
[01:32:32] And, you know, there isn’t, we, we have to bring up the eggshells if, if, if we have to sort of say what we mean with each other. And. And that’s the goal. We may have basically full-time, uh, funds coming in on Stephanie’s side, which would really help. Finally, and probably most importantly for me is on top of looking into couples therapy, uh, I’ve been inquiring for personal therapy for myself as well.
[01:33:00] Uh, so we have coverage, uh, for a certain amount of therapy. And, uh, I’m currently, I’m inquired and currently booked for a consultation, uh, with a therapist. So again, thank you so much. Um, everything’s been, uh, so helpful in us getting our financial, uh, vision and beyond just our finances, uh, but more of, more of team energy together, period.
[01:33:30] Thank you so much. Bye.
