126. “We have $30k of CC debt. Why did we buy a $10k timeshare?” (Part 2)

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When we were down.

In Jamaica, you went to a timeshare presentation.

We did.

Is this a joke right now?

So it's a 15 year vacation club membership. It's not a timeshare per se. It's a vacation club. The timeshare, they did start the package off at 36,000 and because I kept on saying no, no, no, no, no, no, no, no, no. I got them down to 10,000 for it.

Wow. Bravo. You put down 5,000 while you had tens of thousands of dollars of credit card debt. Do you think that's a good decision? Now that I'm saying it out loud? Nope.

Nope.

So we have this club for 15 years. Prime Deals on everything that the Hyatt owns, I think Premier everything. So VIP and concierge services, better rooms and then we get a crazy amount off of them.

Oh, the stuff you already paid $10,000 for, you get a little discount on it. Wow.

Yep, pretty much. We said yes to going to a free breakfast. That's what it was.

I wanted free breakfast. I didn't know that that was going to be a timeshare presentation.

Free breakfast cost you $10,000, I think.

I just didn't know how to get out of it. I felt very uncomfortable in that situation.

Oh, my God, there are suckers. You two are the suckers. Welcome to part two of my conversation with Christina and Ron. You can check out last week's episode for a lot of important background information on these two. But let me give you a quick recap. She's 30, he's 45. And she's frustrated that she's the one who manages money in their relationship. I thought that was the major problem. But as I started looking at their numbers, including their net worth of negative $47,000, I discovered they have a ton of big red flags in how they spend their money, including a timeshare, which we are going to talk about today. Now, some of you love to talk about the things that you enjoy spending money on. You know, for me, I have an Amex platinum card. I like it for the lounges. Doesn't make any financial sense, but I love it. This coming Saturday in my newsletter, I'm going to talk about different money lenses that we can look through. A lot of people use frugality or cost. That's the number one money lens they look through. But there are so many more. Just remember, a timeshare does not fit into any of these. Okay. Make sure you're on my list@iwt.com podcastnewsletter that's the only place you can get this material. Now let's get to the conversation. All right. You have pet insurance? Is this for real?

We. We do. And it's.

I don't. You know what? I don't even know nor. Whatever. It's fine.

All right.

Your car payment is $1,000 a month. What car is this?

That's two cars and two motorcycles.

Okay. That's a lot of cars for two people. Debt payments. What is 450? What is this? Debt payment.

That's the credit card that.

Huh?

We have a credit card debt.

How much?

Right now we have about 30 of. That is credit card.

$30,000 in credit card debt. How did this not come up before? Is this the minimum? $450 a month?

Yeah. There's no interest on them right now because I balance transferred them, but 30,000 is the whole lot of it.

Everybody sounds real calm about $30,000 of credit card debt. How come I'm the one freaking out about this?

I'm not scared of debt at $200,000 of a student loan. That's scary to me. More than the $30,000 credit card debt. And we've paid off a lot from that.

Your pet care is 500 bucks. So, I mean, really, Your pets are also. Plus the 175, that's 675amonth. Plus probably some extra stuff you didn't counter. That's 7, 800 bucks a month for pets.

Yeah.

Okay.

Mm.

Domestic help. 380. Somebody to clean your place. Is that what we're talking about? Okay, fine. And you have a vacation. Oh, my God. Do you have a timeshare? Is this a joke? What is this?

I'm gonna let him take it.

What is this?

So, yeah, it is.

What is this? Life insurance. Is this whole life insurance, Christina.

Full and term.

Oh, my God. What the.

I know.

How much are you. You're putting $430 a month into this whole life insurance policy.

Yeah, for both of us.

That's a lot of money.

I read it in your book. I know, but that was the time that his dad passed away. And that, like, that's, like the first death that I've experienced and he's experienced. That's close to us. And so we decided to get a life insurance because it scared us both. And it was a fight. And so I fought with him about it. We ended up getting it right. But there's still a part of me that's like, did we make a right decision financially to get this life insurance? Some people say it is, some people say it's not. But I don't care what other people say. What I want is what he thinks and what would be best for us. And I just felt like he gave in because I convinced him.

Tell me about that time, Ron. And I'm sorry to bring up memories of your dad passing away at that point.

Yeah, it was. It was a little hard just to have that conversation.

I know. You know, sometimes people overcorrect. You had a death in the family, you want to protect all that stuff. I would look at what your options are in terms of getting out. You probably spent, you know, a certain amount of money on it, but I never am a fan of throwing good money after bad, especially for the next 20 years. Insurance is insurance. It's not an investment. It's different. Oftentimes it's better to take the same money you would have put in to a whole life insurance policy. Just invest it, Right? Invest it whether through a retirement account or even a taxable account, and you'll end up with way more money. Don't fall for the sales guys talking about cash value. Borrow against it. All this Nonsense. That right there is a lot of cash flow every month that you could get.

Yeah, yeah.

Listen up. Whole life insurance is not an investment. In fact, insurance is not an investment. Insurance is insurance. And whole life insurance is a scam to fill the grubby little pockets of these insurance salespeople. Almost everyone would be better off buying term life insurance and investing the difference and all the fat fees that you would be paying this salesperson. I say almost everyone because there's this myth that rich people can benefit from whole life insurance. But I'm rich and I know a lot of rich people, and we've never been able to make the numbers work on whole life insurance. I avoid it like the plague. I'm going to go out on a limb here, Ron. Can I guess that you absolutely hate debt?

Absolutely.

Yeah. So how long is it going to take you to pay it off?

I mean, my plan is to pay off aggressively within a year or two if we find a way to make some money, some extra money that we get, since we both are, you know.

Yeah, I got away commission. It's sitting in your garage.

Is it smart to do, like, balance transfers, you know, from one credit card to another to get out of, like, the interest to a zero percent, you know, even though you have to pay a little bit to do it? Or is. Are we giving money away at that point still?

You know, it's a good question. Balance transfers can be okay. They can save people a lot of money. But I will tell you that I often find people in credit card debt will do everything except making a plan to actually pay off their credit card debt. They use balance transfers as a gimmick, basically, how do I buy myself another 12 months? But what they don't do, which is the most important thing, is they don't look at their fixed costs and they go, okay, what are we eliminating? Okay, we're going to cut $500 a month off, and it could be by. We're going to eat out way less. We're not going on vacation, et cetera, et cetera. And I'm going to take all that money and I'm going to automatically set it up to be transferred to my credit card bill every single month. It's not a choice. It's not chance. It's math. It just happens automatically. So do the balance transfer. Don't do the balance transfer. But what matters really is setting up an automated transfer every single month, aggressively paying off your credit card bill. Okay, all right.

I am still at school. I'm getting my PhD. That's why there's such a big student loan. So after calculating the cost of the program, after the P with all the PhD and everything, my student loan is going to be around 250,000. I have not paid because I've always been in school. And then when Covid happened, there was a postponement, there was no interest. So it's almost like I didn't worry about it, but I will be having to pay for it in 2025, 2026. So I don't know what to do either.

Do you know the interest rate, the.

Ones from the Bachelor's were about 3.99 or something around that. And then the ones for my graduate school and the PhD program is about seven or eight, I believe.

And any chance of income based repayment.

I could try to apply for it. I know I was approved before, after my bachelor's, but the difference is because we are dual income now, I don't know how much that's going to save me or not.

Right.

Okay, well, why don't you find out and also find out about any possibilities of student loan forgiveness. You know, there are people in your program who will definitely be able to advise financial aid office for sure. Let's assume the worst case where nothing, you're not eligible for anything. The way that I would think about it would be, okay, you know, the bulk of your higher income is probably going to have to go to loans. You control how fast you pay those loans off. But I would definitely pay more on the 8, 9, 10% interest and I would pay the minimum on the lower interest ones. Anything with a higher interest rate, high being like over seven, I want to pay that off as aggressively as possible.

Okay.

There are often options for student loans that a lot of people are not aware of. I'll take you back to my undergrad. When I was in school, my dad literally marched me over to the financial aid office and he introduced me to Mary, head of financial aid office. He'd been emailing with her for weeks, months. I literally knew Mary by her first name. Okay? And that's how I got to know all kinds of financial aid options that most people just don't take the time to get to know. If you are in school or even if you have graduated. I want you to use every resource at your disposal, including going back to your college financial aid office and asking for help. 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 a hundred thousand doctors across every specialty from mental health, dental, 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-o c.com ramit zocdoc.com ramit 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 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, check out Whisper Flow. Try it for free at whisperflow AI ramit. That's whisperflow AI slash ramit W I S P R flow AI ramit or click the link in the description below. Okay, now let's talk about this timeshare.

When we were down in Jamaica, you.

Went to a timeshare presentation we did. Dude, you're a finance manager. How did you sign this? Is this a joke right now?

No, because I have a wife that I want to please.

Okay, so what did you sign?

So it's a 15 year vacation club membership.

It's not a timeshare per se. It's a vacation club.

It's a timeshare. Go on.

So, yeah, so we, you know, we get like four weeks in the U.S. we get a couple of weeks overseas, you know, then we get discounts over the next 15 years on Stuff.

So.

But I will say, and I'll say in our defense, they did start the package off at like 36,000 for this package. And because I kept on saying, no, no, no, no, no, no, no, no, no. For like five hours, and I was trying to leave, and they just kept me there, I got them down to 10,000 for it.

Wow. Bravo. Bravo. So how much did you put down?

50%.

50%. Okay.

Put down 5,000. Okay. And by the way, this was. How long ago was this?

Last year, The December.

You put down 5,000 while you had tens of thousands of dollars of credit card debt. Do you think that's a good decision? Now that I'm saying it out loud?

No.

No.

Okay. Some people ask Ramit, does it actually feel good when. When other people realize that you were right and they were wrong, and the answer is yes, it feels great. But it also does not feel good to know that you're now locked into payments for how many more years?

Just. It's 48 months.

So you have to pay $5,000 more or so for 48 months.

So.

But no interest.

Wow, great. For four more years. And then what happens after that?

We just have it. I don't know.

What? You don't know? Please, someone tell me what happens after 48 months.

We have it for. So we have this club for 15 years. So we get prime deals on everything that the Hyatt owns? I think so. Whether it's in the US if it's out of the country, uh, we get premier everything.

So, yeah, the hell is premiere anything? What is that? You get nuts when you get into your room? What is that?

No, we get like VIP and concierge services, kind of like better rooms, and then we get a crazy amount off of them.

Oh, the stuff you already paid $10,000 for, you get a little discount on it?

Wow. Pretty much.

All right, so let me tell you, Let me tell you the following. First of all, timeshares are a scam. They are never Financially, a good decision. You can see this because there are forums and forums of desperate timeshare owners who are trying to offload for literally pennies on the dollar. You can buy timeshares contracts for super cheap, but even still, it's not a good decision. There are lots of different ways to take vacations in an economical level. Here's the facts. You already signed up. Their contracts are pretty ironclad. You could try to sell it for pennies on the dollar. If it were me, I would try to sell it. Let me tell you why. This is just my personal opinion. It's, of course, your money. It's up to you. I don't like throwing good money after bad. And what I find is that when people make a decision that they then are committed to, they really sort of twist themselves into a pretzel trying to justify it. And oftentimes they wake up and their fixed costs are really high, and it's on stuff they bought, like six years ago, and they don't even remember why they bought it anymore. Sometimes you have to take a loss on certain things. Like, I've had people on the show who bought a house they couldn't afford. I was like, get rid of it. Just sell it. They go, well, we're going to lose money. I go, yeah, you either lose it now or you're going to lose it over the next eight years and fight every day of your life. That's just my personal opinion. I don't even know if you can sell. But I think what's more interesting to me is what happened to cause you to get into that situation. Have you ever considered it?

I haven't considered it.

All right, let me just break this down for timeshares. First of all, the math is extremely complicated on timeshares. And just like a casino, it always advantages the person selling the timeshare. Okay, next. It is almost always a better decision to simply spend money on your own hotel or Airbnb or even rent someone else's timeshare. You can tell because there are so many desperate timeshare owners, you can often get these things for a steal. Then we hear the argument that a lot of people say, if we have this timeshare, it will force us to take vacations. Are you kidding me? That's the same argument with people buying a house. This will force us to save money. In what world do you think I'm going to approve of people literally spending hundreds of thousands of dollars to force yourself to take a vacation or to save a little money? Get your Life together. If you want to take a vacation, put it on the calendar and take it. In fact, you can actually take more vacations, longer vacations, better vacations. And you can end up with hundreds of thousands of dollars more by doing one thing, one secret little trick. It's called avoiding timeshares, you, timeshare industry.

We said yes to go into a free breakfast. That's what it was.

I love those sales things. I love those because you get to see really talented salespeople at work. My parents used to take us to them when we were kids because you get a free breakfast or a free whatever. I would just watch these salespeople at work. Of course, we didn't ever buy anything. My family literally had no money to be able to afford it. But I learned to really enjoy it. It's really interesting dynamic, Ron. Especially, you know, most days you're sitting here saying no to the things that your wife wants to do. Dinner, trip, whatever. But on this one, it's like, it. Let's go. $10,000 Hyatt, here we come. It's kind of interesting, right?

No.

Yeah. He's visibly uncomfortable. He's, like, stretching in his chair. What do you say, Ron?

I didn't want to do it.

You didn't want to do. Oh, she wanted to do it.

Wanted to do it. If I would say I didn't know what I was getting into.

Okay.

I wanted free breakfast. I didn't know that that was going to be a timeshare presentation.

Free Breakfast cost you $10,000.

I know, but I didn't know. And I was really rely. This is the moment I say I relied on him to make the decision.

Bullshit. Look, you can. Come on. Let's be honest, all right? I don't mind, Christina, that Ron has admitted he has not been a financial partner. He's admitted that, and I think he's willing to make some changes. But you can't be like, I'm the one who manages all the money day to day. I know all this stuff. And then like, oh, Ron, what do you think about this little old me?

True. Okay.

I would say it's not fair to put it on him if you're the one who wanted it and kind of drove the decision.

I think I just didn't know how to get out of it. I felt very uncomfortable in that situation.

Let's role play right now. Here, I'll show you how to get out of it. I'll be the aggressive sales guy. Okay, well, if you come to this Hyatt thing, you get an extra discount. Then the VIP and the concierge will even pick you up. We'll send you a town car. And of course you get a preferential rooms. And you'll never have to worry about where you're going on vacation. Just think about having kids in a family. It's so beautiful. You'll bring your dogs too? Of course. We're pet friendly. And I'll give you a special deal. It's. I know you started 30,000, but for you, just for you, because you're so special. You folks are so great. I could bring it down to 23,000. How's that sound to you?

Sounds great.

Oh, my God, there are suckers. You two are the suckers.

It does sound great.

What in the hell is happening right now? Here, why don't. Why don't we flip it? You be the salesperson. You have to do the whole thing, and I'll be me. This is as recent as 3 years ago when I sat in a sales presentation and I watched. Go ahead.

Okay, baby, you do it because you do this.

This is for you. You wanted this thing.

We have a timeshare. Really great. You get VIP premiere discounts. You have a concierge and you'll have a great time.

Oh, that sounds really great. I appreciate it, but I think we're gonna pass. Have a nice day.

Literally even walked out and I said to Ronnie, you take care of this. Like, literally. There was a moment I said, I gotta take a business call.

Wait a minute.

Walked out of the room.

Well, I don't even know what to say. I'm like, you literally, like, this is so. It's so American that I actually. I'm speechless. To not want to make somebody uncomfortable. So you just sign over a $10,000 contract instead of being like, not interested. Bye.

I. Yeah.

What the hell?

Yeah.

All right, well, listen, luckily it was only $10,000 and your stupid whole life insurance policy, which is another scam that you fell for. Can I just say, it's really important that the two of you build the skill of saying no together, okay? Because the world will come after you to take your money. All right? When I was a kid, my parents loved timeshare presentations, okay? They loved it. Why? Because they sit there for two hours knowing full well that they're not going to buy anything. They can't afford it, but they get a free gift. So one day, as a little kid, my dad's very excited. Hey, everybody get in the van. We're going to a presentation. All right? So we go there and He. They sit there for an hour and a half, two hours, and they, you know, they get that cardboard breakfast and they have to listen to the pit. Well, does that sound like that'd be something you'd be interested in? And my dad just smiles. Like, literally. There's no universe in which he was gonna sign a single thing, by the way. Which is exactly how I feel. I find it so comical that people are afraid they're going to trip and fall and sign for $200,000. I'm like, in what world? But obviously it happens. So my dad comes out of the presentation with this box in his hand. He's got a pep in his step. He's excited. We go, dad, what'd you get? Because you got a grandfather clock. We drove like two hours with the entire family for him to sit in this presentation with my mom, and then we get a grandfather clock. We said, wow, okay, that's actually pretty cool. A grandfather clock for a house. We get home, he pulls out the box, opens it up. The grandfather clock, literally. Let me show you how big it was. It was like this big. We thought we were getting a six foot grandfather clock made of oak. We got a plywood piece of crap that was this big. That thing sat in our house for years. First of all, props to my dad, who just loved it. He loves, loves that story. I love it because I love the chance, as I got older, to sit in those rooms and watch these salespeople at their craft. Now do I respect them? They're definitely going to hell. But I like to watch their sales techniques. And I will say, occasionally, I speak to couples who just constantly get taken advantage of. Okay, constantly. And at first I feel sorry for them, but then it just happens over and over. And I realize they also play a major part in it. It's not like they're innocent. Does walking through the world literally hand over their credit card repeatedly and then rationalize their decisions? Christina and Ron have yet one more example of this. Listen, I'm telling you right now, you make $200,000 plus everybody's going to come after you. Financial advisors charging 1.45% whole life. Do you have that, too? What's that look on your face? Christina, how much do you pay your financial advisor? You don't know? How did this not come up in the prep?

What the.

All right, let's get into this. All right, so just 1, 2, 3. Let's just. You got the whole life insurance. You got the timeshare, and you got the financial advisor charging Aum. You Are the trifecta of Americana. The two of you, you know, you, you. The more money you make, the more you are giving away in fees every single day. And one day you wake up, oh, the American dream. What happened? American dream got stolen by Wall street and the two of you let it go with a big old smile on your faces. How much is the financial advisor? Are they managing all your investments?

I don't DO investments. The 4. The Roth IRAs with them and the life insurance is with them.

Of course the life insurance is with them, which is why they're a salesperson.

Yeah, they were a friend from high school that I met up with and told me that they were a financial advisor. And I was like, great, help me, Ron.

What are you hearing when you hear this?

That if it sounds good, she's gonna go with it.

How many of you would trust your high school friend to manage your money? Half of you wouldn't even trust your high school friend to cut your hair. I'm gonna do an entire episode about paying a financial advisor a percentage base fee, which you should never do. Stay tuned for that soon. And if you have any crazy stories about paying 1.5% AUM to a financial advisor and finally discovering it, send it to me on Instagram dms. You know, I love these stories. All jokes aside, I think what I'm. I'm really noticing is that at the beginning of this call, there was this dynamic that Christina is kind of like in charge of money and Ron is this like hapless guy. He's just like not into money, so Christina doesn't. And truthfully, what I'm really hearing is that both of you are not especially savvy with money, right? And that's okay that you haven't made huge mistakes yet, but I'm concerned for you. And all jokes aside, I don't want you to get taken advantage of by financial advisors, whole life insurance salespeople and timeshare salespeople. Okay? I don't. So the way that I would look at it if I were the two of you is, gosh, like we've almost been battling each other for years on this. And what we need to do is realize that, like, it's gotta be the two of us against the world. That's the way to look at this. Okay? If you two work through my book together, right, I would recommend you, you get the book, get the journal, each do a six week thing, right? Six week program each week, the two of you read it, you put your questions and notes in a Google Doc. And alternate. Who leads the conversation? Oh, bank accounts. Like, I'll take this one, you take that one. You two are going to be so much smarter and more confident with your money. And I think I'm just going to fast forward to the end. What you will realize is that you need to fire your financial advisor, who's not really an advisor, they're a salesperson. You need to get out of that whole life insurance. If I were to go look through it all, I'm confident that's the conclusion I would come to. And this timeshare, if you can get rid of it, I would hopefully get rid of that. I would then take the money that I saved and I would put it all towards credit card debt. I would get extremely aggressive. Now I understand why the two of you seemed so calm about the credit card debt. And the answer is that you don't really understand the implications of this debt. If you can't pay this debt off quickly, it will stay with you for five or ten plus years.

Yeah.

Okay. All right. Any reactions to that?

A lot.

Yeah.

Yeah, yeah.

Ron.

Yeah. I mean, just hearing, hearing you talk about it, it's, man, it's kind of like a slap in the face to see some of the decisions we've been making and the money we're just wasting. You said it's better to take a loss right now than to have that loss follow you. And you're paying it off for years and years. So kind of just cut it and be done. Makes sense.

Yeah. There's a sense of freedom and there's a sense of agency about being decisive. Like, yeah, we made a mistake. We were new. We weren't paying attention. We weren't aligned. But we caught it. We got rid of it. Sure, we took a little bit of a loss, but we're not going to make that mistake again. Something very powerful about exerting control over the world instead of letting the world exert its control only over you. Here are my observations. Number one, we learned that Christina, who was painted as the responsible money manager in part one, is honestly just as in the dark as Ron is. And that false confidence in her abilities has led to some really bad spending. And then Ron, who's very quick to defer to her, he's starting to get empowered to make hard decisions for the benefit of. Of himself. And Christina, 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 Gilt. 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 save you thousands later. GT 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 Gelt, you get a proactive use 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 wait list. 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 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. 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 at gusto.com/ramit once more, gusto.com/ramit. Now let's zoom back out because they're going to have to make some difficult decisions. But why? One of the things I like to do is to show people why they have to make these difficult decisions. In other words, what do they get? So if it were YouTube. Well, it is YouTube. What do you want to do with your money?

I want to be smarter with it. I want to save and invest more.

Okay, how much more?

Well, you know, you're talking about, you know, the life insurance is, you know, like 400, and then this vacation club is another hundred. So, you know, at least putting that extra 500 into investments or savings, even if it's split up or if it's split 60, 40, 70, 30, whatever it is.

I like that. All right, good. What else? Christina? Let's go back and forth. Each of you give me one thing and then go back and forth. What else would you do?

I want to lower our fixed cost as much as possible and then increase our investment.

Okay. What do you want to lower on your fixed costs?

I really want to lower a car payment.

Okay, how do you want to do it?

Sell the motorcycle.

How much can you get for these two motorcycles?

Oh, man. So tired of. Well, we already know we're selling the more expensive one.

How much you going to get?

Realistically? Depending on when we actually sell it. Like, if I sell it now, it's towards the end of the season. I might only be able to get like 8 for it. If I wait until the next season when it starts, I can probably get like 10 for it.

How do you make that decision? Should you do it now or should you wait?

Obviously, I want to get the most for it. It's just, you know, we're in. In the Midwest. You know, it's coming down to that time where the weather is just starting to. Starting to turn.

So how do you make the decision?

Shoot or get off the pot?

I say take the money immediately. That would be my approach. I would be like, there's a fire. We're going to move fast. Even if we're not getting a hundred percent. Perfect. We're just moving. We're executing. What do you think about that?

I guess some money is better than no money.

So, bingo, bingo. Whether you are making 8, 6k, 8k, 10k in the grand scheme of your overall income, how much is a 2K difference matter to you?

True.

It's 1%.

Okay.

Right. Don't agonize and don't think small. Christina, any comments or questions on that? All right, what's next? How else. So you're gonna. Oh, you're gonna take that. Let's just say you end up netting 6k. What are you gonna do with it?

Pay off the credit card.

Yeah, put that towards the credit card immediately. What else you wanna do? Gotta cut this fixed cost down.

I don't. Well, you already said we're gonna get rid of the life insurance than the vacation club membership.

Yeah, yeah.

I don't, Yeah, I, I, there's nothing else.

Okay. All right. So that actually will make a pretty big difference. Honestly, that's like you throw the $6,000 right at the credit card debt. Amazing. You get rid of this, $430 a month of whole life insurance. Put that, where does that go?

Investments or savings?

All right, this is where it's like a chef. It's kind of like, how much salt do I want to put in my dish? How much do I want to put towards these high interest student loans? How much do I want to make sure that I'm contributing jointly to our investments? There's a little. There's no perfect answer. Over time, you're going to start to see certain things. For example, when you pay off your cars, which is going to free up a ton of money every month, remember this. Don't get a new car for a long time. Drive that for as long as you can. Because can you imagine having an extra thousand dollars a month right now?

Yeah.

So imagine when you have these costs that just stop. Wow. You can you get the chance to redirect it to something you care about, like investments or savings or debt payments.

Yeah.

But let me just give you an example, Ron. In this, in the stock market, we can safely assume that over time you make about 7 to 8% per year. Roughly. When your credit cards start charging you interest, they're going to charge 26.99%. So where do you want to put more money?

Credit card.

Exactly.

Pay that off before we start investing more.

Exactly. And the good news is with your income, you can actually do it. You can actually get really aggressive. But what you can't do is only pay the minimum.

Got it. Okay.

Okay. All right. So you got 430amonth going now towards 24,000. That's good. Plus the 450 already paying your vacation club membership. Let's see if you can even get out of that. I hope you can. Maybe that frees up an extra a hundred bucks a month if you are able to get the credit card debt done. If you get rid of your timeshares and whole life insurance and financial advisor. All those need to go. You can invest on your own. You, you have a very simple needs. Or if you need to get a financial advisor, you know, pay an hourly rate. That's the way to do it. That's. I've even done that myself when I've had a financial advisor look over my investments.

Okay.

Really what it is beneath all the numbers is the two of you working as a team and learning how money works so that you don't get taken advantage of again and again and again. You know the craziest thing about getting taken advantage of in America by financial companies is you don't even know you got taken advantage of. Do you realize it the way you described it? You go whole life insurance, It's a gift timeshare, vip. We have a concierge like it all actually is sold to you as sounding good. Meanwhile, they are just taking your money for things that you could get for a tenth of the price somewhere else.

Yeah.

Leaving the two of you to fight over a dinner out.

Yeah.

Sad to hear.

Notice what's happened so far? We've gotten all their expenses out on the table. We've established their spending way more than they ever realized and that candidly, they make poor financial decisions. Now they are starting to realize the seriousness of the changes they have to make. And I will say it's not enough to leave people like this. Okay. Yeah. Right now it's like catastrophic. Things are bad. I want to give them a vision of why they are making these changes. Remember, people aren't logical and they're not rational. They rarely make big changes with their money simply because it's the right thing to do. People need a vivid reason to make a change. And specifically I'm going to get Ron involved in that vision. 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 BILT 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, BILT 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 I L T.com Ramit and make sure you use our URL so they know that we sent you. Okay, I want to know if I'm the only one whose algorithm is showing me pizza and sourdough bread on my for you page. Like that's it. People just sitting there pulling stuff out of the oven and and all I do is look at it. I just click it and I ooh that cheese looks really good. I know I'm never gonna make it myself, but I just love to watch it. If you are watching sourdough bread and people making a bunch of pastries, you know you're not gonna make em either. But what if you had access to be able to have sourdough bread beautiful delicious croissants in your house right now using a Wild Grain subscription. Wild Grain is the first bake from frozen subscription box for sourdough bread, fresh pastas and seasonal pastries. You take it out of the freezer, put it straight in the oven, no thawing, no prep. You can even customize your box. You can pick classic, gluten free or plant based. My colleague recently went gluten free and she tried one of their boxes. They sent her the gluten free tortellini, brioche rolls and giant chocolate chip cookies. Here's what she told me. She said it was so easy and fast to make. It felt homemade. I made an egg sandwich with the gluten free brioche rolls every morning last week and it was amazing. It was ready in 10 minutes. This fall, treat yourself and your loved ones to warm sourdough breads and seasonal baked goods from Wild Grain. I also heard that they have apple cider donuts and pumpkin cinnamon biscuits, so get them before these seasonal items run out. For a limited time, Wild Grain is offering our listeners free $30 off the first box plus free croissants in every box when you go to wildgrain.com ramit to start your subscription. That's right, free croissants in every box and $30 off your first box when you go to wildgrain.com ramit. That's wildgrain.com ramit or use promo code ramit at checkout. Don't miss their seasonal products. The good news is that you can change it, but it's going to require the two of you together. Let's play a game of another couple. Dual income, no kids. They earn the same as you two. Okay. They live in a similar city. What do they do with their money differently than what you two do?

Wow. They're probably having a lot more fun. They're probably traveling, probably happy, enjoying life together.

Tell me more. Are they talking about it?

If they're smart, they are.

Okay.

Just budgeting how they're gonna. How they're gonna plan a couple vacations, you know, two vacations for the year. If the wife wants to go get, you know, a bag, you know, a new purse or something like that, whatever her thing that she's into, she goes and does that without any worry on, you know, what the husband's going to say and vice versa. He can go do what he wants without.

I like it. How often are they talking about money?

Probably twice a month. Once in the middle of the month, once at the end of the month or.

Nice. What's the tenor of those conversations?

Just going over what they have in their. In their accounts and just. Just saying, oh, this was a good month. This is how much we earned. You know, we had a really good month.

Good means what?

Good means that they're able to enjoy that month. You know, they're able to just not stress and worry about going out to dinners and going on, you know, just going away for a weekend.

Okay, well, this couple earns a similar amount as you two. Do you think that a couple who earns the amount you do should have to worry about a dinner out?

No.

Let's say in those conversations that not everything goes right. They overspend on something. How do they handle that?

I would say that they say, okay, well, we spent a little bit too much last month. You know, this month we, you know, we should really just watch it. If we're planning on taking a trip later on the year. No shopping sprees or maybe just one dinner this month or something like that.

I really like that. There's a sense of ease I'm getting from you right now, Ron. It just feels very calm, like, yeah, something happened. Okay, we noted it. Write a little note to ourselves, and we'll fix it next month and we're partners. High five. You Hear that?

Yeah. That's the way that I want to be.

Okay. Christina, what do you notice about Ron's example? As he went through each of those.

Scenarios, he sounded calmer. Yeah. To me, hearing him talk like that, it sounded like I can approach him.

Approachable.

Yes.

Okay, I like that. I think we can work with that. Okay. What do you notice about that example, Ron?

That they're probably happy?

I think so. What else?

Comfortable. They're. They're synced.

They're sync. They're connected. They're connected. Yeah. I love that. And you know what's interesting? The two of you can be connected about money. Even though you see it totally differently. You can be. Culturally, the two of you are totally different. You're still connected. Right. You grew up in different countries, different family structures, but you're married and you're connected. That's even more extreme than money. Okay. Yeah. You see money differently. Okay. That's probably not going to change. For some of the big things, that's okay. But you can still connect and you can actually still have fun, still spend a little bit on the things you love, still save. All those things are possible. Let's check out Christina and Ron's follow up video.

What surprised me from our conversation was how open Ronnie and I were and how we were able to quickly work together and figure out our next steps.

I guess what surprised me was seeing or hearing, you know, how much money we actually make.

The best thing I learned was maybe the idea of working together as opposed to working, working against each other and honestly getting that call of, yeah, we're not savvy with our money and we need to learn together and make these decisions together.

Yeah. I learned that I need to be more hands on with, you know, making the big decisions of how we're going to spend our money, how we're going to save our money, you know, for the future.

So a few changes we've made is we've definitely canceled the life insurance. That's gone. We've also lowered our, some of our fixed cost, like our phone bill we actually were able to lower. So we're able to save some money. And now we're gonna use that to invest and pay some of our credit cards.

I put the motorcycle up for sale, so now we're just waiting to, to, to get a couple of bites on it so I can sell it and use that money to pay off some of the debt.

We appreciate all your help and we want to thank you for having us and talking to us.

Christina, Ron, I want to thank you for coming on this podcast and having these conversations with me. For all of us who are watching and listening, it is so rare that we get a chance to listen in on real couples, including their real, real numbers and how they think about money and talk about money and even disagree about money. So thank you Christina and Ron. Thank you every guest that's come on this podcast. If you are interested in learning more about money psychology. Every Saturday I release a newsletter where I share material you will not find anywhere else. You can get it@iwt.com podcastnewsletter thanks for listening. 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.