106. “I’m about to make $300k but we might have to live in our car”

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This is the plan that we want and we're going to earn more money. However, my worry is we're gonna spend even more. She's a spender.

But my argument is that our son is never gonna be three years old again. I worked 80 hours a week for three years. I have this kind of I'm stealing from my future picture myself because I have this contract that I signed and I'm going to start summer that will increase my salary three or four times.

You know the reputation of doctors with money, right?

Doctors don't know anything about money. I don't want to be that. No, I think we just went all out. I honestly I don't know what happened. We just decided to like upgrade our lifestyle. Trips, clothes, furniture. But like a nice furniture from West Elm. We need to pay deposit. We need to pay first month payment and we didn't have any money, no money. And I got scared that like where are we gonna live?

Meet Jack and Christina. They're both 33 years old. They're from the same town in Russia, but they met in LA 10 years ago and they were married in 2020 they earn a lot. Christina, for example, is a doctor. But what you'll hear today is an interesting combination of their culture, their upbringing, and a lack of financial discipline which has led them to a very troubling situation. They are in tens of thousands of dollars of debt and they even admit that if and when they start earning more, it's not going to change a thing. Now, a couple things I want to point out before we go on. Of course you can watch this Entire episode on YouTube. It's fascinating to see the body language and the eye contact. There is a little bit in today's episode about travel which got me inspired. So on Thursday's episode, just two days from now, I'm going to share how I plan my travel, how I take my dream vacations. And then on Saturday on the podcast newsletter, I'm going to talk a little bit about some peculiar psychological things I've noticed about money and travel. So to get that, you can go on iwt.com podcastnewsletter I send that out on Saturday. Now let's get to the episode. Let's talk about a specific example in the last month or two where you were not on the same financial page.

We rent. So we were notified by the landlord that she wants to sell them the place and we were given 60 day notice and now we have to find a new apartment so they need to run our credit score. When I looked at my credit score six months ago and I was like, oh holy crap, we need to pay deposit. We need to pay first month payment. And we didn't have any money, no money. And I got scared that like where are we going to live? Nobody will rent us like a normal place and we have two kids, we need to stay in the area because of the school and et cetera. That's when I felt very scared. I really was scared because we needed to pay $7,000 for the apartment, for our townhome deposit and first month and everything. And we didn't have that.

When did that happen?

Two months ago. Honestly, pretty scary. It was really scary. Yeah.

It's interesting hearing the two of you living paycheck to paycheck, making $207,000 a year. Do you think that that's normal?

We have never been connected in terms of money. So when you ask like when did you guys disconnect? We've never been connected. So we kind of were separated from the get go.

We've been together for quite a few years. We got married in 2020. Before we got married, we got a first kid and then we got a second kid. We got married. We never talked together how we're going to handle finances together from now on.

Do you have conversations about having kids?

We did.

You have conversations about where you're going to live and if you're going to buy a snoo or some type of diapers? Yes. Not money, though.

Not money really. We didn't know what we're going to get into in terms of money issues. We thought we're not going to have any issues.

How often do you think about it.

Lately? Quite often. If one of us brings up conversation about money on a daily basis, that would be every day you fight about it? No, every time we do have conversation about money. First of all, it's rare, Christina says. We just need to make more money and we'll be fine.

Just a quick reminder that 100% of the couples I speak to who have a spending problem always believe that if they just earned more money, their problems would vanish. And of course, this is totally untrue. This is what I call being a believer, believing that the next raise or the next deal or the next lottery ticket is going to change everything. You know. In fact, most believers would rather believe they're going to win the lottery than take a hard look in the mirror at their own behavior. Real question for you. Do you know how often you're supposed to see your primary care physician? How about the dentist? How about a dermatologist? A lot of us just wait to get a text from the dental hygienist to know it's time to make an appointment. But your health is important and we talk about going from defense to offense with your money. What about with your health? Why not make your life easier and book this year's appointments today with zocdoc. Zocdoc is a free app and website where you can search and compare high quality in network doctors and click to instantly book an appointment. They have over 100,000 doctors across every specialty from mental health, dental, primary care and more. Just filter for the doctors based on your insurance, your location, even ratings and find a doctor who's a good fit for your needs. Plus, Zocdoc appointments happen fast, usually within 24 to 72 hours instantly. Click through your options, book the appointment and you are good to go. If I needed to find a new doctor today, this is what I would use. Stop putting off these doctor's appointments and go to Zocdoc.com ramit to find and instantly book a top rated doctor today. That's z o c doc.comit z zocdoc.com there's this myth that if you rent, it means you haven't made it. I don't really believe that I rent and I want you to know that you are not a failure if you choose to rent. In fact, I want more freedom right now than buying a 30 year mortgage. But if I'm spending thousands of dollars a month, I want to get some of the perks that homeowners get. And that is where Built comes in. BILT is a loyalty program for renters. You pay your rent through BILT and you can earn points for it. Think about it. You're earning points for your biggest expense every single month and you can redeem those built points towards flights, hotels, Lyft rides, or even future rent payments. BILT has evolved into a complete rewards ecosystem where you get rewarded for the first time as a renter. And it's easy. Almost any payment method is compatible. So you can start earning right now. I wish I had had this when I first started living in New York. Plus BUILT recently announced that homeowners will be able to get rewarded the same way on their mortgage in 2026. So stay tuned. Join the loyalty program for renters@joinbuilt.com Ramit that's J O I N B B.com Ramit and make sure you use our URL so they know that we sent you.

This is the plan that we, we want and we're going to earn more money. However, my worry is we're gonna spend even more. She's a spender. If we get a good check or she gets a good check, she can go ahead and spend it on, on something nice. I have a feeling that we're going to change our lifestyle and I don't want to be in the same situation we're in right now because I want to be conscious what we spent on.

And when we got married, maybe we started to plan it more together. But again we, because of the differences in our money philosophy, we are not doing a good job.

This ever come up before you got married? Like for example, hey, I've noticed that you blank, blank, blank. And it makes me feel blank, blank, blank.

Coming from her or you. No.

I knew he was worried about money, but I didn't, I think I didn't realize how much he was worried about money. Up until we were like married legally, I did not feel comfortable to ask for money, like anything to do with money. Once we were legally married, then I kind of like became more comfortable.

And that was exactly when the Debt started.

Correct.

We got married debt free as far as I remember.

Really?

Yeah.

You got married only three years. Three years ago, yeah.

So we all the debt accumulated within the last three years.

So what happened in three years?

The credit card debt is huge. We don't have money to pay more than minimum pay. And the minimum pay equals the. The apr. Yeah. So we like at the like don't.

Move anywhere, you know, that got you worried?

Yeah.

I can go back to was it last year? The plan was let's plan a trip to Hawaii.

Cool.

Is when you look at the, you know, flights and bookings, everything. You see the number, let's say $5,000 for the whole trip with the family. And I know we don't have immediately that number. The only way to pay for it is credit card. So my argument is, hey, maybe we should skip the trip this year. Let's just save up. Let's get rid of some debt. Let's plan it ahead of time. But next time when, when we do have cash. And Christina's argument is, hey, I'm going to be on vacation. What else am I supposed to do on vacation? I want to go somewhere. I'm tired because I'm always working. I want a vacation. Let's pay for it. So we went on that trip. Trip was amazing. Great experience, pictures, everybody had fun, awesome trip, came back happy. But that dark spot in our wallet is still there because it left a scar which is more credit card debt.

What do you mean it left a scar? It was a $5,000 trip. You put on your credit card. And then what happened?

And that trip never got paid for.

Still.

I don't think it has been.

I'll take the complete silence here to mean it's still not paid off.

We actually planning the trip in July. This come in July.

What.

What trip do we want to go to? Singapore.

What the. Did you already book stuff?

Not yet.

How much is this Singapore trip gonna cost?

The flight only is like $10,000.

Oh, that's nice. And how much for all the other stuff too?

Yeah. So you can imagine it'd be at least five grand more.

Yeah, at least. Let's say 25,000 total. Would that be fair? You factor it all in taxes, all that stuff, don't you think? 25,000. Okay, so where's that gonna. Oh, you're going on that because by that point you'll be making a lot more money.

No, actually starts right after. But again this pressure, it's like pressure of myself on me. The society. Pressure of the society.

You Know which society is pressuring you. Go to Singapore.

Not to go to Singapore, but, like, oh, I'm a doctor, so, like, I can afford, like, my friends, like the friends that we plan to go with to Singapore. You know, everything.

Should we get them on this zoom call right now?

They don't know. Yeah. The thing is, they don't even know.

Yeah.

They don't know you have debt, right?

Yeah.

If they knew you had debt. I'm not asking you to tell them, but if they knew, what do you think they would say about you taking a $25,000 trip to Singapore?

No. Yeah, they would say we're crazy.

Do you think you're crazy?

When I think about that that way, yeah.

Would you be open to canceling or delaying the trip?

Sure. Yeah. And I probably won't have another opportunity to go until later. But my argument is that our son is never going to be three years old again. And I want to give them, like, the best what I can. I want to give them this experience. And again, as he said, I worked 80 hours a week for three years. So now when I am having, like, more free time, I really kind of feel guilty that I didn't spend the time with my kids. And I have this kind of. I'm stealing from my future myself because I have this contract that I signed I'm going to start summer with that will increase my salary three or four times. So I'm kind of thinking like, oh, that's not a big deal. And then I pay my $100,000 credit card debt, but I know that's not right thing to do. But then again, so what's the problem? Because I'm stealing from my future in a future myself.

You care? Does it really matter to you if you're going to triple your income?

It does. Because again, I won't be able to use the money because I'll have to pay off my credit cards. And then I think I won't be able to save safe for the house or for whatever it is vacation. And I'm afraid that it's gonna be the same and it actually might get worse. I might have even more debt. Right. So if I don't stop, well, you'll.

Definitely have more debt. I mean, what are you paying, 26, 28% on your credit card?

Yeah.

You're using the magic wand right now with debt free, same income, we're gonna go back to debt with current lifestyle. That's the truth.

That's consideration of higher income, actually. What caused this, all this debt to be Honest.

Yeah, yeah, yeah, keep going.

And we, we should stop considering that until we have it.

Oh, shit. Okay, talk it out. I want to hear you tell me what do you mean by that?

So first it started with Jack's job giving him higher salary. And then all of a sudden the business went down, but the lifestyle did not. And then now I am approaching my, the end of my training. It's actually like two months pretty much. And so I'm just like all out spending whatever credit cards I've got.

Have you actually thought about what you're going to do with the new income?

Yeah. So that actually makes me very anxious.

Oh, why is that?

I don't know. So that's why I've started to look into all this retirement plans. First of all, I'm scared of the taxes have to pay. And second of all, I again, like, yeah, I don't know what to do besides of paying off my dad. I don't know how to save. I don't know how to use money. That's the problem.

Great. Very honest answer. Okay, I could work with that. Jack, what's your take? When her income goes up, have you thought about what the two of you should do?

Yeah, that was my primarily concern.

Right.

That's why I applied, because it's coming, it's around the corner, and it seems to me that, hey, now the income is more, let's go on this vacation.

Yeah, but look at Christina smiling right now. She's like, that sounds pretty good to me. Christina. Am I reading that right?

Yeah.

Notice the clues. They never really talked about money when they got married. Then they had two kids and realized they were in financial trouble. They were almost homeless and now their backs are against the wall with tens of thousands of dollars of credit card debt. Now, Christina has lots of very logical reasons for her spending. For example, her son is only going to be three once, but the fact is they're in debt and they are trapped. She admits that with more money, their situation wouldn't really change. Now let's talk about her salary. To set the stage. She currently earns $136,800 per year and she's expecting that number to go up. What comes to mind when I share these specific moments? Renewing your passport, scheduling a dentist appointment, Replacing that light bulb that's been out for six months and you're not sure what's the right bulb. We all procrastinate on weird stuff and taxes are usually right at the top of that list. We wait until the last second, then we get Overwhelmed. We got to pull all this paperwork and we're panicked because the deadline is approaching. That's why I recommend guilt. Now that tax season's over, this is actually the best time to get ahead. If you run a business or you filed for a tax extension, one small move right now could could save you thousands later. Gelt is not just another CPA firm. They helped one of my colleagues rethink his entire tax setup. Now he's saving more than he spends on tax prep. With G, you get a proactive year round strategy, not just a one time filing. Credits, deductions, business structure. It's handled. And their tech platform makes it easy to stay organized. You'll also get access to G's full tax library with guides on retirement plans, QBI and more. So if you've got a business or you filed for an extension, this is the window to take control of your tax plan. Head to joingelt.com ramit to book a consultation. And as a member of my community, you get to skip the waitlist. Again, that's joingelt.com ramit join G-E-L-T.com ramit taxes don't have to be a task with Gelt. They can be a tool to build wealth. When I talk to new business owners, I hear a lot of the same motivations. I want to make extra money. I want more freedom. I want flexibility. But I will tell you something that I've never heard. I want to start a business so I can fill out a bunch of tax forms. That sounds like my hell. The good news is you don't need to be a tax expert to start your own business. Instead, you can use Gusto, this episode's sponsor. Gusto is online payroll and benefits software built for small businesses. It's all in one. It's remote, friendly and it's incredibly easy to use. So you can pay, hire onboard and support your team from anywhere. They offer automatic payroll tax filing, simple direct deposits, health benefits, workers, comp 401k, matches, you name it, they can help plot. Plus, it's quick and easy to switch to Gusto. Just transfer your existing data and get up and running fast with no hidden fees and no surprises. Try gusto today@gusto.com ramit and get three months free when you run your first payroll. That's three months of free payroll@gusto.com ramIt once more. Gusto.com ramit what kind of doctor are you going to be?

I'm going to be oncologist.

Oncologist. All right. What are you going to make?

About 300,000 a year.

So when you were doing your residency and then your specialty and you know, there's the moment where you really start to get it. You can see all the concepts coming together. You can see how things link together. It kind of starts to make you understand why you did Humbayo way back there. Would you say you have made those connections with money or do you still feel like it's a bit murky or dark for you?

It's a bit dark still.

I just realized something. One of the reasons we got into debt and we allowed ourselves our current lifestyle is first of all, we knew about Christina's path, right? It's pretty straightforward. Hey, I'm in training now. I'm going to triple, quadruple my income later. So I will have opportunity to pay off if we get in debt, which we did. And the thing with me, right, we were talking like, hey, hey, Jack, what is your, what do you want to do with your life? You want to earn more? You good? Where you at? And I said, I want to earn more too.

So he had jump in his salary during COVID and when he started to have this six figure salary, he shared with me that he never thought he would have that much money. Although it was not a lot. But he, for him it was like, oh, I would never even think that I deserve that. I think that.

Hold on just a second. Just to clarify, six figures is not a lot to you?

So I mean it was like low six figures. That's what I mean.

Low is what?

Low is what, like a hundred thousand? Okay, so pretty much, yeah.

What is a lot to you?

Okay, that's a good question. Maybe half million dollar. Okay, a lot.

Did you expect to be the higher earner when the two of you met?

Not necessarily, no. Okay.

And is it common in Russian culture for women to be the higher earner?

Probably not.

Is that an issue for the two of you or.

No, no, not. I don't think that's an issue for me, Jack.

On the, on the surface, I don't think it's an issue. Just growing up, right? In our culture, men would be always a breadwinner. At least in my family, that's how it went. I've had conversation with my dad when we talked about my current income, my future income, and he did mention that, hey, you're supposed to earn more no matter what because you're the man. You're supposed to provide for your family. That's this kind of thinking I grew up with.

How did you receive that when he told you that.

So I, I don't, I don't fight my dad. I, you know, whatever I feel, I'll just tell him. But I, I don't, I don't fight about it because I know he's not gonna change his views.

How would you describe the way you grew up when it came to money, Christina?

And I remember my dad, he's a physician and, and he had to take like extra night calls. And then he also was like a taxi driver to like earn a little more income. Up until I was eight, we were kind of struggling. So I was born in ussr, so there was like not much money overall in the society. When I was eight, he, he opened up like a, a business clinic that grew substantially. So now he has a chain of clinics. So he, he did a really great job. So I don't, I didn't have any needs in terms of like financially when I was growing up. He did, we did need anything. He paid for my medical school. You know, like I didn't have medical school debt, which is huge. But then I kind of got myself into worse debt.

And what about your mom?

So my mom is a spender like me. So she, again, I think because she, she never really worked. I don't think she has a real like understanding what money is. And I think it's, for her it's really easy to spend. So she's kind of spender in our family, still is.

Would you say that you have an understanding of money?

I don't think so, but I kind of, at least I am curious about it now and I want to learn. So I think that's a first step.

First of all, you guys really have to stop using low six figures and mid six figures. None of you know what you're talking about and you always use it incorrectly. Have you ever noticed people totally use these phrases and they always twist it to their advantage? You have some 23 year old banker living in Murray Hill, he's out, he's trying to hit on people. He goes, yeah, I make mid six figures. He makes $149,000 a year. And then you have some wealthy person, you ask them, are you wealthy? They go, me? Little old me, I'm no Jeff Bezos. I only make six figures. I'm working class. Turns out they make $979,000 a year. Please stop it with this six figure mid low bullshit. Let's get honest with each other, okay? Now to Cristina and her background. They started struggling, in her words, in the former ussr and Climbed the social ladder to where she, quote, didn't have any needs. Her dad paid for med school for her. Christina's mom is a spender like her. Did you hear that? And interestingly, she said that her mom doesn't really understand money. Never did. But when I ask if she does, Christina says, I don't think so, but at least I'm curious about it. Lots of clues here that are getting me thinking. What do you notice? Seems like you're comfortable, if I'm reading it correctly, that Christina earns more than you. Would that be fair to say?

Well, yes and no.

Tell me.

So currently, right? Because we kind of go up and down, at least in my incomes. I was a high earner, then I dropped down to be not the high earner. I don't even know how I feel. Right. I feel fine. And I don't even think about how I feel about that right now because I think about how we handle our debt situation.

So would you say that the two of you are on the same page right now?

I think we're getting there slowly.

Really?

Now, why'd you fill out the application then? It doesn't look like it from the application. Should I read it?

You can read it.

Have you read it, Christina?

No.

No.

She wish.

I know because. Because I wrote it twice. And. Well, I guess the. The second one. Oh, I. I got picked.

No, I. I have no idea.

Okay, let's just take a look here, shall we? What is the biggest challenge you are facing when it comes to love and money in your relationship? Answer. Lack of responsibility for our money. Living a lifestyle we can't afford. Is there one main issue you'd like help with from Ramit? Answer. We earn good salaries, yet we have debt that keeps piling up. However, given our spending ambitions, we are very likely to keep living paycheck to paycheck. We'd like to both understand that no matter our income, we must still be conscious of our spending and money relationship. That answer is where I knew both of you did not fill this out. One of you filled it out in code for the other one to be able to do that. Jack, am I telling the truth here?

Yes.

Yes, Christina.

Okay, I agree with all of that. In theory.

Oh, in theory. Oh, please tell me.

But no, I. I totally agree with the. The problem.

And what is the problem in a.

Sentence or two, like living the. Our expenses like the. The lifestyle is way beyond what we earn.

This is becoming more and more common on this podcast. One partner submits the application, the other has no idea that first partner who submitted the application is worried. They're concerned, the other one, not a care in the world. Everything's fine. It'll all work out in the end. This is kind of mind blowing to me because they go through application, a screening interview, they get detailed instructions. There are so many opportunities for them to talk about things. How can a couple end up talking to me finally after this entire process? And they never even shared the application with each other. Whatever. People are weird. This is why I love my job. Let's take a look at some of their numbers. Their assets are $11,000 in a Jeep Grand Cherokee. Their investments are $54,400, savings are zero, and their debt is $87,475. All of which is credit card debt. What credit cards, by the way? What do you have, Chase? Huh?

I got three of them and we have, like, Best Buy. We, you know, bought some stuff on it.

But hold on, hold on. Was this like you were in line at Best Buy and you're like, no, I know. I'm gonna save 10% on my 30 purchase. How did you get a Best Buy card?

The thing is, we've been moving from place to place at least once a year. Sometimes this is where the card came from because, oh, 0 APR. We can get a fridge. Let's look. Look at it online. We don't have money to pay for fridge right now, but let's get, you know, that 0 APR, whatever.

Did it work?

The 0% APR we gotta reach the 0 APR. Didn't work.

No, it didn't. I'm so shocked. Don't even tell me, let me guess. 12 months, 0%. And then you got to 12 months or 12 months and two days and you missed a payment or you. You didn't realize it was due on this day and they backdated all the interest and now you had to pay it all. Did I get that right?

Not quite right.

You just kept using the cart. That's the problem.

Oh, yeah. So you did get 0% APR for a year.

For a while. Yeah. And then you just kept using way over it now.

Correct. And like. Yeah. So it was not just the fridge. Cost of the fridge. So.

And how much debt is on that Best Buy card now?

Things like, maxed out, probably.

Best Buy is fine. Hold on, hold on. I think have it.

Jack wants to set the record straight. Hey, Ramy, don't rag on my Jeep and my Best Buy car. Go ahead, tell me. Jack.

2500.

Okay. Not bad.

Yeah, but you know the Home Depot one It was banished.

Don't ask why. We have Home Depot. So it was the same. No Home Depot. We actually, I paid it off, so that one works.

There you go.

What else do you have? Best Buy, Home Depot. What else?

I have Capital One, Citibank. I have two Chase credit cards. Yeah, I have like seven.

Why?

I don't know.

You know, you know why. Tell me why.

Again, it's the same story. So we, we went to Hawaii vacation to get with a 0% APR for 12 months that were never paid at all. And then Jack went to Florida to visit his friend. That's why we got Alaska card. So we get miles.

How much is on that Alaska card now? Please tell me zero.

No, it's actually $12,500 and it's pretty much maxed out. So I think the credit limit is like 14,000.

Yeah. So you're paying almost as much in debt debt payments as you are for rent. And this is like what, the minimum?

This is only the minimum, literally. Wow.

You know what? The minimum. You're basically going to be paying this for like 25 plus years.

Yeah, that's what they send me. Yeah, 30 years. Recently I forgot and I got like the fine and like another fee of like 60 bucks and I was like always like, oh, I should call them. And I never did call because I think I, I feel embarrassed. That's the reason I didn't call you.

You feel embarrassed to call bank of America. But you're on this podcast.

I know.

You know how you hear stories about people opening up credit card after credit card jumping from zero percent gimmick to another gimmick and you go, hahaha, that's so crazy. There's no way that's true. It's just something people talk about. Nope, here we have a chance to meet people who actually do exactly that. I have a real problem with people who write me asking if they should open up the 0% balance transfer thing that they can get for 12 months because why do they have to pay interest? It turns out that people who ask those questions are almost always looking for a gimmick, a hack, a shortcut to avoid doing the one thing they need to do. If you have credit card debt, the single thing you need to do is to set up an automatic payment plan so that you are paying off your credit card every single month. And if you set that up, that means you will naturally be controlling your expenses. But most people don't want to do that. They want to jump on any particular gimmick they can find Instead of the single thing that actually works. Stop it with these gimmicks. Spending $50,000 so you can make 10 cents in free Marriott points, jumping around from 1 0% balance transfer to another. Promising yourself that you will magically change in the future when you're not even willing to change today. Get real. Take control of your money and do it the real way. That is the only way to start living a rich life. Jack, your total net worth is how much?

We're negative 22,000.

How do you feel about that number?

I feel like that's. That's not good. And I feel like that needs to change in the opposite direction.

Christina, how do you feel about that?

I was actually pretty happy when we filled it out because I thought we're gonna be like a hundred thousand in credit card debt, but then I forgot about my retirement account. So that kind of is it that.

You are surrounded with other, like, physicians who have tons of debt.

So.

So it's normalized to you?

Kind of. Yes. That's. I guess there's, like, delayed gratification and. And knowing that we'll have. I will have money in the future. And many of my physician friends do that. Yeah.

You know the reputation of doctors with money, right?

Kind of. I mean, I can guess.

What. What is your guess?

That, like, doctors don't know anything about money.

You care.

I do. I don't want to be that.

All right, let's move on. Let's take a look at the income. I'm so interested in this line. Christina, can you read this to me?

The gross monthly income for me is $11,400.

And what about for both of you?

For both of us is $17,268.

What do you think about that number?

It's a lot.

Yeah.

Did you know that actually, when we put the numbers again, I was surprised and I don't know where it goes.

Literally, you don't know where it goes?

Pray for death.

Well, we're about to find out. But, you know, if we annualize that number, that's $207,000. That's a pretty good income, wouldn't you say?

Yeah.

Fantastic. Any comments? You don't think. Wait, wait, didn't you say that, like, $100,000 is, like, not that much? So is $200,000 a lot or.

No, it is. I mean, it's definitely enough, especially if we didn't have a dad.

How much were you making when you got married?

Probably around the same. Right. So if you. Yeah, it was around the same because Jack was Earning more, but I was earning less.

Was it enough for you then?

No, I think we just went all out. I honestly, I don't know what happened. We just decided to like upgrade our lifestyle trips, like clothes, furniture, but like a nice furniture from West Elm.

So it's kind of interesting that you said just a minute ago 200k, 207k is good if we didn't have debt, but you used to make the same amount with no debt and it wasn't enough for you. What's your takeaway from that?

I mean, we definitely increased our spending.

Do you ever want to go down in how much you spend?

I don't know. I don't want.

Yeah, I suspected that. And why is that?

Because I want to go out.

Why?

You know, like I always believe like in growth and like going up, not going down means. Means like, like anything. Right. So like lifestyle wise, money wise, the earning potential.

What is the word up to you means what?

It means like I don't worry about my finances and it means that I don't work for the money.

We have a bit of a conundrum though, because you told me 200k is enough money for our family if we don't have debt. But then we realized you used to make 200k, you had no debt, it wasn't enough. And now you've told me you don't want to go down in spending, so we've kind of boxed ourselves in. What do you think the solution is here?

I mean, I think the solution will definitely have to go down in spending to pay off that debt and then be more careful in the future and like use cash. So that's.

Do you think that that's possible for you?

I think so, yeah.

You seem very achievement oriented. Seems like you've been like that for most of your life. Would that be fair to say? Yeah. So if you have been doing this for your whole life and suddenly you're asked to do this, you think it's possible for you to do it?

I think I can.

Why?

I mean, I do have experience with delayed gratification in like through medical school and through my training. Totally. So I think I can handle for another year.

Another year?

Yeah.

What if it was. What if it was two years?

I mean, two years also should be okay.

You know, what Christina said resonates a lot with me, this idea of wanting to go up in life. And I'm going to give you an example from my own life. I'll use hotels because I love hotels. I want to go up in life. When it comes to hotels, if I go to the same hotel, I want to stay in the same room or nicer, I don't want to go to a less nice room. Now that might resonate with you. Or if you don't like hotels, think about the food you buy, think about your kids activities, the think about the clothes you wear, whatever it is that's important to you. Most of us have at least one area of life where we want to go up, we don't want to go down. So I get it. Christina. In order to do that, in order to have a constant upward trend, you need to keep an eye on two things. Number one, your income and number two, your expenses. Now Christina's income is going to go up. That's fantastic. But she has not kept an eye on her expenses. They are going neck and neck with her income. In fact, they're actually exceeding how much she makes. And so it's very predictable that when her income goes up, her expenses will go just as high. Now again, it's very, very difficult to cut your spending on things that you've become accustomed to, especially if they're important to you. In fact, for a lot of people, it's psychologically devastating to have to downsize your house or pull your kids out of certain activities if you have to do it. But the ideal situation is to monitor your income and expenses so you never have to make that decision in the first place. What situation are you co creating? Because then and only then can we start to change it. Otherwise we're just talking at the superficial plan level. So what is going on?

I kind of have this, you know, like emotional, I'm getting emotional after I spend a lot of time working and then I have this vacation. And when you're in medical training, you do not get to choose your vacation. They just tell you, oh, your vacation is July 15th to July 30th, that's it. And in order to relax or do something, I just have to, oh, we'll go to Hawaii or whatever.

Yeah. So it's like you have this compressed period of time where you're off work, you don't even know when it's going to be. And when you're at work, you're working like crazy hours. So you're just like, ah, this is my 15 days and we're going to use it to the max. Correct. And so therefore you go, I don't really care what it costs. Like, let's just go and we'll deal with all that stuff later. Right?

That's correct. That's exactly correct. And sometimes Jack would say, like, oh, maybe we should not. He's been very nice. And he, like, maybe we should think about that. Maybe we should save for the next vacation. Like, we went to Las Vegas in October for my. My Thursday, and it was like all credit card again.

And.

I know you didn't want to go, but you just went because I was pressuring.

How's that work, Jack?

It's very tight. It didn't really work. Yeah.

And yet, like, considering you've tried that, like, what, 25 times, has it ever worked?

No, because something else feels very convincing.

Neither of you really took it seriously either, because dynamics win, not a plan.

I'm. I'm trying to think of other areas of our life that I think we excel. That. Right? We. We both. We. We eat healthy foods. We work out every day.

You work out every day.

We.

We wake up at 5am and we go work out first thing.

You know what I want to do? The way you two treat fitness. Calm, cool, methodical. You have a training plan. You show up every day. You have a goal. And do you have people in your life who go, how are you so motivated? How do you go to the gym every day? You ever have people who say that to you?

Yeah, all the time.

What's your response to them?

You have to do that. You have. That's what people always ask me, like, how do you do with the kids and working out? And you just basically choose to do that.

Wow.

You don't have another choice.

That's so interesting. And, Jack, what about you?

I. I say the same thing. Plus, I. I just add my little philosophy.

Right.

When it comes to training, eating healthy, to me, it's. It's to have more energy for my family and kids because it takes energy.

And so you developed a philosophy around your training. I love that.

Right.

Either of you seeing any connections to the way that you handle or don't handle money?

Yeah.

What do you see?

Disconnect in money philosophy and lack of our own money philosophy together.

Beautiful, Christina.

Yeah. So I agree. So we don't have any plan. We do have this workout plans, but we don't have any plans regarding our money.

Yeah, exactly. Exactly. In fact, I would be willing to bet the two of you are so advanced, like, when people ask, how do you make time to work out? Or how do you motivate? You're just like, in your head, you're like, what? Like, I don't motivate myself. It's just, we go every day. It's A habit. It's important to us, so we do it. It's just.

That's what I say. I say discipline. It's not motivation, it's discipline. Yeah.

So right now there's no consequences. But there's also no consequences in fitness if you don't train for a week, a month, even a year. Okay, whatever. So you found meaning in coming up with a training plan and going, etc. You found meaning there. I don't think you found meaning with your spending. Would you agree with that?

Yes, Jack.

Yeah.

Yeah.

And so I. I hope you can see there's so many strands here, we could pull them forever. Because you could just as easily say that in the morning. In the morning, I'm tired. I don't want to work out. But you've created meaning and a plan and a set of behaviors, and when it comes to money, it's totally absent. And especially when you combine all those absences with really hectic work schedule. Of course you're just going to spend money to feel good. So looking at your conscious spending plan, what do you think is. Well, what's your goal? What do you want to accomplish here?

Pay off the credit card.

Is that true?

Yes.

What do you think is a good plan to do that?

Kind of limit as much as possible, other expenses. Okay. And use that free money to pay out the credit card.

So what would be an example?

So our son will start public school in summer. So we can use that. A thousand dollars to pay my work. Also will start giving me housing allowance in summer. 1600amonth. So we can use that to pay.

Hold on, let me make some notes here. So you're going to get a thousand a month for housing?

1600.

1600.

Wow, great.

Okay. And how much are you going to be able to spend from your 1, $345 towards debt. That's your daycare. And after school.

Likely maybe 900.

Can we be conservative? Maybe like 800.

Sure, 800.

I don't want. I don't want to have any bad surprises. So that's 2,400amonth more towards your credit card. That's kind of amazing, don't you think?

I read somewhere that, that you can spend extravagantly on the things you love.

Oh, my God.

Right?

This like music to my ears.

Keep going. Yeah. And you caught mercilessly on the thing you don't care about.

This is the greatest podcast conversation of all time.

Okay.

And so all that sounds really good. Where'd it go wrong?

That's what you would do, right? That's what you would do. Yeah, that's what you would do.

That's.

Yeah, it's exactly what. That's. That's exactly what I want to do.

Oh, so who's. So you want to do it? I want to do it. So who's missing from this equation?

I. I'd like to hear.

We. We want.

We want it today. Why don't you. Why don't you say that? Tell her.

Yeah, I. I mean, I want to do that. I agree.

Sometimes the best thing I can do is to help people make a connection between money and something that they are already good at. What is it for? You could be cooking, fitness, organizing your house, whatever it may be. Think of all the work that you've put into getting good at that. Think of all the subtle behavioral tweaks that you make on a daily basis. That. That keeps you on top of it. That's the same with money. A lot of us think that money is some mystical thing. You're either blessed and good at it or you're not. No, what I like to do is make that connection and show you. Just the same way you practice cooking for thousands of hours is the same way you can get good at money. You can take control of your money. You can use it to live a rich life. Now, if you listen to this podcast, this gives you an insight into how other people are doing it. It. If you want more specific help, get my book. It's in every library or any bookstore. And if you want to ask me questions and surround yourself with other people, get more hands on help. Go to iwt.com money coaching. I do a live Q and A every single month. I know that some of us think better when we write our thoughts out, but for a lot of us, including me, I'm better when I can think. Think out loud. If that's you, I recommend you check out Whisper Flow to save you tons of time to bring your ideas to the page. Whisper Flow turns your voice into clean final draft writing inside whatever app you're already using, Email, Slack Docs, even text messages. And it works on Mac, Windows, and iPhone. So instead of spending all of your time responding to messages, especially while sitting at a computer, you can hit a hotkey, speak, and the text appears. It's accurate, it's fast, it's all formatted so you can get back to work. Here's what my friend said about it. Whisper is amazing because it learns the way you speak. So you can send this rambling note as a text message and it kills all the filler words and it perfectly formats it for you. They said it's much better than using the Apple Voice to Text feature. The spelling is way better. If you want to buy your time back and get back to what matters change, check out Whisper Flow. Try it for free at whisperflow AI ramit that's Whisperflow AI Ramit Wisprflow AI Ramit or click the link in the description below. I think one of the best characteristics for people who actually end up living a rich life is being curious. Like lots of people will say their rich life is traveling more, but I think that's just a word. Where do you want to go? What specifically do you want to see? And if I were to ask you, what could you do to make your trip 25% more amazing? If you want to explore your curiosity, I recommend checking out Masterclass. I love Masterclass. I've gifted memberships to family before and very soon my own masterclass called Financial Wellness will be added to their library. With Masterclass you can learn from the best to become your best. Plans start at just $10 a month and you get unlimited access to over 200 classes taught by the world's best business leaders, writers, chefs and more. Plus, there's no risk. Every new membership comes with a 30 day money back guarantee, so you can try it out before you commit. One class that I recently watched was Prepare to Be Unprepared Amy Poehler. What I learned in that masterclass was how to adjust to situations on the fly. Very similar to what people in improv do. Masterclass always has great offers during the holidays, sometimes up to as much as 50% off. Head over to masterclass.com ramit for their current offer. That's up to 50% off@masterclass.com ramit masterclass.com ramit now you're starting to really get into what the core cause of this is. For so long you have been subsidized or been made consequence free. Think about it. You were very fortunate that your dad paid for medical school. Amazing. That's like awesome. You were doing okay on your own, you got into a little bit of debt, paid it off, fine it. Three years ago, what happened? The two of you combined your finances. Suddenly it appeared that you had a lot of money. So because of this compressed work schedule, small vacation, you were like let's go. What's the phrase you two use? It starts with an A. All out, let's go. All out. Dinner, Fuck it. Trips. Book it. Right? And that debt starts accumulating and you still kept going. 1000-020000-50000, $87,000 of debt. Honestly, what's the problem? Jack's a little uncomfortable sometimes. Jack writes this application. Big deal. But then you almost got kicked out of your housing. And what was the one thing that saved you from getting kicked out of that housing?

What was it? My dad. Yeah.

Another check, another subsidy. So I don't mind that you have a dad who's really generous and he's able to. I don't mind that.

All right.

What I would like is for you to create your own subsidy. I would like for you two to create your own emergency fund. I would like for you to create your own plan fund for Singapore trip before you go. And most of all, the way to do that is to create your own vision. Okay. That is the most important part. A vision would be something like, we never take a vacation unless we can pay for it in full.

Okay.

A policy would be, we are going to accelerate our debt by cutting back on X, Y and Z and pay it off automatically every single month. Okay. Another philosophy would be, we're going to celebrate along the way, but we're going to do it more modestly because we want to live an even richer life in the future. How do those things strike you?

I like that. I. I completely agree.

Let's just look at this right now. So I have your debt payoff plan. Now, is it actually true that you're paying $3,841 a month towards your credit cards?

So it's gonna go down? Because again, it's like payment plans. So it's gonna go down, but I hopefully will not go down because. Oh, I mean, I will remain it at that amount just to pay it faster.

Okay.

But it will go down. But the last six months, they were like this. 300,000, $3,000, 3,841. Right about that.

Okay. All right. That's quite aggressive. Great. And with your income, you can afford it. Okay. Right now you're going to pay it off by January 2026. Okay. If you take it up to the number that you discussed, which is with your child care and the housing allowance I want to show you from January 2026, which is about three years, you can actually pay it off by October 2024, one year. What do you think about that?

Oh, it's. It's pretty fast. I. I would like to do that.

That's, like, amazing. Jack. What do you think?

Yeah, I think it's.

It's.

It's more than possible.

Okay.

All right. I think that part is really good. So what that shows you is, yes, you have a lot of credit card debt, but you also have a high income and you have money starting to become more available from other places. That's fantastic. You know, it's very possible, you know, you're going to make what, 300 plus, like $370,000 or something like that. It's extremely possible for you two to live check to check on that. It is extremely possible. I've met people on this podcast who do that. What a tragedy if that's the way you live your life. You know, at $370,000 a year, you could be multi, multi, multi millionaires easy. I'll tell you, like, truthfully, I want to pay this debt off fast first, just for a sense of pride, but really because I'm like, we're young and we have an awesome life ahead of us. We have two kids, we love to travel, we love to have a good time. And so we've like created this thing that's just dragging us down and we're going to be doing this for the rest of our lives. That let's get out of this, get rid of these things that are holding us back, and then we can start to do some awesome stuff. That's how I look at it. What do you guys think?

Yeah, we need to grab this by the neck and really attack.

Attack. Exactly.

Yeah. I like it. I like it very much.

And now for their follow ups. First, Christina. Christina writes the podcast was truly a life changing experience with many insights. I was surprised how easy it was to talk with you about this very intimate topic. I consider my financial issues a weakness and I do not want to be viewed as a weak person. Moreover, I think I hide behind more spending from the fact that I'm in debt just to make myself look better. I realized that I always refer to help from my parents as help from my dad. Probably that's the reason I never connected with Mike on the topic since I've never observed that connection between my parents. I do understand mutual financial goals are essential and we'll take steps every day to build that connection. I admit I'm a spender and enjoy it. However, we plan to take care of the credit card debt ASAP before any trips. Lastly, we were truly surprised to find out how much guilt free money we will have when we updated the csp. We plan to invest a lot and save up for a Singapore trip that actually was canceled for July 2023. Jack said being a guest on your podcast felt literally like being a guest at someone's house warm and comfortable. I was actually surprised to see my wife and I so easily share our money struggles publicly, and I'm glad we did. Our talk together helped both of us realize that like other aspects of life, we need to create rules and stick to them. We are now committed to having more money dates together to discuss our rich life and fine tune it as necessary. At least one in two months. I was personally surprised to see my wife change her mind about the trip to Singapore and make a better decision together. And by the way, we are not going to Singapore this year. Instead we are going to plan a smaller trip close to home in California with a couple of nights with the kids. I want to thank you Christina and Jack. And I want to remind you on Thursday on this podcast, I'm going to do a special episode where I talk about how I plan my dream travel. I got a bunch of questions from you on social media. I'm going to answer them, including specific locations, numbers, everything. And on Saturday on the podcast newsletter, I'm going to share some peculiar things I've noticed about the way that we travel and spend money on it. You can get on that podcast newsletter@iwt.com podcastnewsletter thanks for listening. Thanks for listening to I Will Teach youh To Be Rich. I'm Ramit Sethi. Please follow the show on Apple, Spotify, or wherever you listen to podcasts. If you haven't read I Will Teach youh To Be Rich my book. Pick up a copy. You can get it at any bookstore or any library and it will show you the specific tactics for how to build the I Will Teach youh to Be Rich system into your personal finances.