154. “We’re drowning in debt, but I drive a BMW”

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When you discuss money, what actually happens?

It's an argument. Pretty much. We're just never on the same page about it. I guess. Even though I say I do trust him all the time with finances, I guess I really maybe don't trust you as much as I thought.

I always tell myself I'm going to change and do certain things, but then it's like I'll do it for a few weeks and then I'll take a couple steps back. We're just going to dig our hole deeper. We're never going to be able to pay our debt.

God forbid something happens.

God forbid something happens, then we're really going to be screwed. And then what are you going to do?

Then we're going to have to sell the house. I don't know, move back home. It's going to be horrible. We'll both feel really like terrible. Like we really just failed.

I feel like it was always just easier to push the problems to the side just to highlight how that is. Tomorrow we have a dinner with her brother and his girlfriend, also here in New York City.

So it's hard to get the Reservation? Yeah. Good. Tough reservation. Which restaurant?

Teresi.

Teresi.

Kevin and Michelle are in their early 30s. They've been married for two years with a three year old, and they have another on the way in six months. But they are drowning in debt. And when you hear why, I think you're going to be shocked. I will tell you that my jaw dropped several times during our conversation. Kevin and Michelle are textbook examples of the chaser, avoider dynamic. She's a warrior and she chases him. He's an avoider and he runs. That part is obvious. But I'm more interested in why they behave the way they do now. This is our first ever live recorded episode, which took place in New York City earlier this year. Head over to YouTube to watch and subscribe for even more exciting updates coming soon. And make sure to comment and let me know what you think of the new format.

She was out of the country with our son and her mom. She went on a cruise. She calls me and she tells me, hey, like, you have to pay this, our mortgage this day. You have to deposit the money into the account. Being busy and stuff like that, I had never gotten a chance to just go to the bank and deposit the money.

Okay, how much are we talking about?

It was like 800 or a little bit more, maybe. It was just sitting in my car and she tells me to go deposit it. And she told me that before she left. Now I didn't deposit it. I think it was Friday was the first and also one of the days I get paid, so I knew I was getting paid regardless. I didn't put the money in, but I had just held the cash on hand. So she logs in on the cruise and she sees that I haven't deposited the money. She's like freaking out. I guess in her eyes or in her mind, I had spent that money on something and I'm like, michelle, I have the money. I just haven't had the time to go deposit it. I was like, if you want, I'll transfer you the money. But before we got even to that point, she was just so upset and disappointed because she felt like I had let her down. I understood what she. Where her frustration was. She was. She was on vacation. She was trying to enjoy herself, and she just felt like she couldn't even leave me one task and I could complete it. Mm. It's like, I feel like her approach in certain situations, it's just like, not aggressive, but she's just so quick to like. Her approach sometimes isn't the greatest.

So, like, I'm accusatory to you almost.

And then I get, I guess, defensive, and then that's when kind of, we have, like, a disagreement.

Did you pay extra for that Internet on the cruise?

I did. I wasn't sure I was gonna have anything, like, in terms of Internet. So I'm like, you need to, like, make sure you pay this. I gave him all the login information for everything because he had not once since he bought the house ever paid the mortgage. Because he'll just send me the money and then I'll pay it.

Why?

I guess it's just how we did it.

Why all the decisions you made, the hundreds of decisions you made well before this cruise?

Because I could handle the. Well, like, you know, it was. I'm the financial person. Like, I'm the one that's going to handle everything. I forgot exactly what I said, but I did say something. So where's the 2000? Or something like that? And then he probably already. Okay, I understand. He felt accused. So then that's why he maybe felt, you know, upset about the whole situation.

No, I feel. I feel like if we were able to pull up those messages, it was more along the lines. I knew I couldn't trust you with this.

Could she?

She could.

Because, I mean, it hadn't been paid and it was the day.

Yeah, it's, like, really hard because I feel like I'm, like, investing so much time into this. I want him to, like, ask questions. I want him to get engaged into, like, our finances. That's what I really want.

And how would you describe Kevin's relationship with family money right now?

Not scared of it, but just, like, just avoidant. If I give him. If I'm like, oh, here's the password. If he's like, oh, can you. Can you send me a hundred dollars for this or something? I'm like, yeah, just log into our account and just take it yourself. But you don't have to ask me for $100. Just go get it. Then he's like, well, no, I'll just wait. Then, like, you just log in and.

Get it, and then what happens?

Then I log in and I send it to him.

So doesn't he just pretty much get what he wants?

Yeah, Yeah, I guess that's true.

I've always felt like the finances, even though we are married, obviously it should be very open. But at one point, I thought it should be more private, and I didn't want to feel like I was kind of being nosy and, like, looking at her stuff. I'm I know what I should be doing, but I still overspend here and there. Whether it's like little things, stopping at a 711 and just buying like water, juice and stuff, things, unnecessary spending. I personally, I don't know how she feels about that, but I think I've.

Been better because I'm like, I wanted to realize, like, you can go to 711 and get whatever you want. You can go get whatever, like a slushie, you can go do whatever, buy candy, like, you know, whatever. Nothing's off the table, but it just, you have to stay within the cert, like the 25 or whatever it was that your guilt free spending is. You know what I mean?

I'm so. I have so many things going on currently that it kind of like my mind is all over the place. So I guess I, I appreciate having her kind of handle our finances. And I feel like a lot of the stress comes off of my shoulders because I'm. I feel sometimes overworked with work and school, like two jobs and then trying to be there for the family at the same time. So it kind of feels good to have that pressure off of my shoulders. But then I realized she wants to know that in the future I am going to be good with my money. She wants to make sure that once we are making more money, we're not just spending it all.

I noticed that Kevin has given up all responsibility of the family finances to Michelle, and Michelle eagerly accepts it. She tries to give him a login, but when he doesn't even open up the link, she just transfers money over to him. He also says, I guess I appreciate her having a handle on our finances. This is a classic phrase. People who don't want to be involved in the money tend to lavish praise on their partner, saying things like, she's just better with money or he knows how to handle our family finances. I'm not a math person, but in reality this is just an unconscious or sometimes conscious technique to avoid responsibility. We'll be right back. 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 Zoc Talk 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 d o c.com ramit zocdoc.com ramit 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. 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 Last thing, the comments about 7 11. He mentions overspending at 711 a lot. Frankly, I'm skeptical. Nobody gets into tons of debt from 7 11. Let me keep going and find out how they grew up with money.

Think back to being a kid. What phrases do you remember your parents saying about money?

Dad definitely like save, save, save. That's too expensive. You know we can't eat out. We'll go to like this place we had down the block and it was just like a $12 like combo like where we live. It's like a Portuguese food place and it was like we would just the whole family feed, like everyone with $12. And he was so happy about that.

Wow.

How many people in the family?

Well, it's four of us.

Okay.

Yeah. And my mom, not really much. I think my dad was more in control of the finances.

She grew up with both her parents. I grew up with a single mother. Now, my mother worked very hard to provide for myself growing up, but her way of thinking was she would try to provide and give me all these things. Not materialistic things, but she would try to give me experiences that she felt would bring us closer together. So she would work her butt off just for us to have a very nice dinner on the weekend. And, like, that would be our thing. We would have one very nice dinner on the weekend. She was almost like living paycheck to paycheck, but all of that was still trying to spend on. She would spend that all on me in the sense that she wanted me to have good things, quote, unquote.

You know, Let me ask a couple questions. When you say a very nice dinner, what are we talking about?

We would come into the city and have a dinner at an expensive restaurant.

Or like a sit down restaurant.

Like a sit down restaurant. It would be like a restaurant that, I don't know, maybe you'd run into like a celebrity kind of thing. But she. She would kind of want me to experience those things. And she'll be like, hey, we're going to go out to dinner at this place. And. And I'd be like, okay, I didn't know anything about it. But then she would show me, like a newspaper article where she read about it and stuff. So she was like, yeah, I want to, like, treat you to this.

So, okay, now knowing that you also mentioned she lived paycheck to paycheck, when you look back on those experiences on the weekend, going to these nice restaurants, what do you take away from those experiences?

I don't think it was worth it. She could have done so much more with that. And it's funny because she's older and I still sit down and have conversations with her and I tell her these things. Like, I told her we were coming here to the podcast, and I told her about how that I don't think that when I was younger, she did the right things financially and she understands that.

What'd she say?

She agrees, but she blames it kind of on the fact that she's an immigrant and doesn't really speak good English. She kind of like, she could have been more successful if she had understood the language. Better. And she would have been able to do more with her investments and stuff like that. As a single mother, she was able to buy a house. And we had the house for two to three years, but then she ended up having to sell it because it wasn't set up for her to be successful and for us to be successful in the house. It was kind of like one of those balloon payment kind of things where she ended up never paying towards the principal of the house. And that was when the market was terrible in 2008, around that time. And she fell victim to, like, you know, to those terrible mortgage practices that were going on at the time.

Why do you think that she took you to those restaurants now with some perspective?

She just wanted to have a good experience together. Memories that we would create and, and. And we could talk about and say that we did those things. Whether it was that. Whether it was some vacations and stuff. And I was always in. It's funny that I'm terrible with finances because when I was younger, I was the one in charge of handling all her bills. I was the one who. She would give me pretty much access to her paychecks or to her bank accounts. And I was the one. She would tell me, hey, you have to pay this, this and that on certain day, certain time, whatever.

Hold on. She would tell you that you have to pay this bill and that bill on this day?

Yeah.

Does that happen in your life anywhere else right now?

Yeah, it does.

Who does that?

It all came full circle, and it's the same situation now with my wife.

But you did pay the bills for your mom. Why don't you pay the bills for me?

I'll give you a perfect other example. Our taxes. We just did our taxes. Now I ask all these questions, and when I ask the questions, she gets annoyed with me.

Put yourself in her shoes. Why do you think she might be upset?

Because she feels like I don't ask the questions any the other time. So why am I asking it now?

Yes. Feels like. Can you give me an analogy?

It feels like I'm trying to kind of sit on the sidelines all the time, and now all of a sudden I want to hop in the game and play.

Yeah, because you're going to get your money. Because you're going to get your.

Well, it wasn't that. It wasn't that we were going to get your money.

No, I know, but, you know, that's my interpretation. Like, you know, you're expecting a lump sum money, and then you want to know what to do with it when, like you didn't know it, like we didn't. You didn't contribute the whole year to like the, you know, the bills or whatever.

It feels a bit like backseat driving. Let me ask the question a different way. What is a better way for you to change throughout the whole year?

Be more involved.

How?

Ask the necessary questions. Take initiative. Be a part of paying the bills. Be aware. We need to be on the same page and ask each other the questions. That's what we're. Our goal is here, is to feel comfortable and realize and break those barriers that there should be no, I wouldn't say secrets, but like there shouldn't be any disconnect when it comes to knowing each other and our finances.

Okay. What would have happened if the mortgage had not gotten paid on the 1st?

I have no idea. Probably a fee. A late fee problem.

What do you think, Kevin?

Definitely. Probably a late fee. Definitely a fight. The trust would have been completely gone at that point. I feel like.

Michelle, did you ever think about not checking in on the 1st?

No. I probably was always going to check my case.

Oh, she was absolutely.

Because I wasn't going to check in with him. If I looked at the account and everything looked right then I would have just been happy. But when I looked at it and then there was the 2000 missing, I'm like, oh, like I have a problem. It's already the first. The, the. Like I said, we didn't. I didn't have wi fi that day. I was already. I was just in. We were, you know, the crew stopped at the port and we were leaving Mexico at 3pm so I'm already like spiraling like, okay, it's going to be. It's like already 1pm I need to like make sure this gets paid before three so I can like, you know, rest my head tonight.

There's one area I want to comment on here. The dynamic of money between them, the way that they have set their money up. Michelle is the parent and Kevin is the child. He has to ask for money to be transferred to him. He doesn't do much because his parent, excuse me, his wife Michelle, handles everything. This is insanely frustrating to her and understandably so. But of course she's co created this dynamic. At one point I said, what would have happened if the mortgage hadn't gotten paid? What I was really looking for was what kind of boundaries Michelle has ever set. What kind of consequences would he face? But the answer was none. Michelle would never let that happen. Which is why she was logging on to check if her husband paid the mortgage, as she asked him to, from thousands of miles away on her vacation. But why would he change? There's no reason for him to. I'm not saying this is right. I'm simply demonstrating that people will often rise or fall to the level of expectation around them.

When you discuss money, what actually happens?

It's an argument, pretty much.

Mm.

We're just never on the same page about it, I guess. Kind of thing.

Go deeper. Who's the one who brings it up?

Me.

Uh huh. Who's the one who makes the decision?

Me.

When was the first time that you remember sitting down and having a serious conversation about money?

I think the first time I ever really even did that, honestly, from my records, was. Was December of 2023. Like literally just recently.

Recently?

Yeah.

Yeah. Why?

Because I started listening to the podcast.

No one ever has thought of us as struggling or stuff, or with our money. I feel like everybody just assumes we're good with money.

Do you need to struggle in order to plan?

Definitely you do. I feel like. Well, no. Now that we've kind of gone to this place where we realize we need to discuss our finances, I don't think we should struggle in order to plan. I think we should plan so that we don't struggle. That is the goal for both of us. But again, it's.

It's.

It's easy to. To say these things, but putting action down and actually doing the things that need to be done is kind of where I lack the most.

What's your reaction to all these, quote, discussions?

Defensive. Almost like, let's get this over with and move on.

Why?

Because I don't like to hear the. The facts, almost.

Why?

Because I don't feel like I'm leading like I would like to.

Well, you're not leading. You're not even in the ball game.

Yeah.

What else? Why are you not participating in these conversations?

I don't feel comfortable almost. I feel like she doesn't trust me.

Yeah, I think there's an. I mean, rightfully so. Yeah. What else? Is there any reason for you to participate in these?

Yeah, there should be.

I'm not saying is there should be. I'm saying is there. You ask her, can you transfer me a hundred dollars? She says something and then a week later transfers you $100. You get what you want.

Yeah.

She says, let's talk about X. You say, great. You sit back, wait for her to finish talking, and then it gets handled. Mortgage payment. She tells you to do it, you don't do it. And then she calls while you're getting defensive, reminding you to do it. I'll ask again. Is there any reason for you to participate in the finances?

No.

So it's never been established. And anytime there's a financial challenge or question, who's the one taking on the burden?

Look at me.

Putting an additional five pound weight on my back every single time there's an issue. Who's doing that?

Michelle.

Michelle. No consequence, no burden.

Really.

Living a very great life, honestly. I see something, I get it. Not my problem.

Right?

Yeah. Why would anyone change?

Right?

Why would they?

I would love to be in that position where I'm just like, oh, I get it. And someone else deals with the problems.

Right?

Yeah.

It's true.

Kevin. When was a chance where you failed and faced the consequences with money?

I went to college right out of high school. I had no debt. I had gotten pretty much grants and like a scholarship and stuff like that.

Nice.

So I went to college and I ended up not doing exactly what I needed to do. I took college almost as a joke that my first year I did terrible. And my mom decided to just retire and she moved back to Colombia and she kind of told me, you need to grow up and, and figure it out. Wow. Kind of thing. So she left. And I kept my apartment that we had at the time. I think I was paying like 1500amonth, which at the time was a lot. It was a two bedroom, nice area. So I ended up having one of my friends move in with me. And for the first few months, it was great. Everything was working out. But then I started getting reckless with my spending habits and I started spending it on partying and just going out all the time and stuff like that. And then he ended up moving out and I started falling behind on payments and it got to a point where I almost got evicted and I almost lost that apartment. So at the time, I mean, it was frustrating. I was stressed out and I was disappointed in myself. It was terrible because the apartment was in my mom's name. So I messed up her credit with that. It wasn't mine that got messed up, but it was like at that point, it was almost like she couldn't trust me financially either. That was like the start of, I guess, the same old habits. It was like it was a situation where I wasn't trusted to. To stay there. Things got tough for me and that's kind of where I had to, like, dig deep and really, like, change a lot of my habits and stuff like that.

Oh, that's what it Took for you to change your habits.

Yeah, and my mom told me that, and it was kind of. She told me I would hit rock bottom.

I wonder if there's any relevance to the situation right now. Anybody?

Yep, absolutely.

What do you think? Yeah.

Yeah. I guess I'll try to convince him to care, but in, like, the wrong way. Like you said, you know, ask me any questions you have or, you know, here, let's just pay this mortgage payment. Like, we don't really talk about it. It's just like, I give him a task to complete, and then I'm like, okay, here. You know, do this. But it's not like we're talking about it. I'm just, like, telling him what to do. So that's not really fair either.

Yeah, because that. That's kind of where I feel like it. Like, just exactly how she said it almost feels like she's giving me tasks. And then. And then. And then you. We talked about how it almost feels like. And I've told her this. I'm like, it almost feels like you're my mother, but, like, it shouldn't. I shouldn't have to feel like that because you're my partner. We're a team. We should be doing this together.

Even though I say I do trust him all the time with finances, I guess I really maybe don't trust you as much as I thought it did.

What does that feel like to you?

It kind of feels exactly how I've always thought of that situation. I've always felt like she didn't trust me with the finances. I know I've given her reasons in the past to not trust me, but I want her to know that everybody could change. Everybody could evolve and grow and learn, and that's what I want. That's where I'm trying to get to, because I want us to. Besides those tough financial conversations, everything else is great. So I want us to be great in every aspect. And, yeah, we're going to have tough times, and we're going to. And we're going to struggle here and there, but if we work together, I have. I've always been confident that if together we could do whatever.

Just so I'm clear, besides the way that you talk about money, everything else, financially, is good?

I would think so, yeah. In my opinion.

How much debt do you have? Oof.

We're gonna get back to the answer to that question, but trust me when.

I say everything is not good.

You know, sometimes I read the comments on this podcast, and people really want me to just blast one or both of the guests who come on this show. And it would be easy for me to sit here and scream at Kevin for not taking on a leadership role or really any role at all in his family finances. I always ask myself, do I want to feel good about myself or do I want to help this couple? If I simply wanted to shame people about their money, I would not be doing what I do. Anyone can bring a couple on, shriek at them for how much they spend on eating out, slap an ultra offensive thumbnail up and call it a day.

That's not what I want to do.

And in the past I have lost my temper on this show. There were a few instances where I heard something so wrong or or so offensive that I just let loose. It happened on episode one and several other places. But it rarely helps. Yelling at someone is what some people in the audience want, but I find it intellectually lazy and I find it unhelpful. And I know that because personally, if I needed help with something, the last thing I would want is to be yelled at. It's much more interesting, in my opinion, to examine the money dynamic of between Michelle and Kevin. Why has Kevin abdicated all responsibility for money because he faces no consequences and because Michelle handles everything for him? Me saying that does not mean I'm blaming Michelle, but I am acknowledging the very real dynamic that exists between them. The only way for them to change is to truly, deeply understand the dynamic that they have co created and for both of them to decide they want to change it. But trust me, yelling at someone does not change their behavior. Let's take a quick pause for a message from our sponsors. 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.

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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. 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 or one small move right now 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-.com ramit taxes don't have to be a task with guilt. They can be a tool to build wealth. Now back to the show.

So he was working as a maintenance manager. We did not pay rent. Like we did not have a housing cost because he was doing that. So as part of his salary we would get free rent. So also at the time it was during COVID so it was like we were making a lot of money and we weren't paying rent. It was like we didn't have to talk about money. Yeah, not that we didn't have to, but it was More so. Like, we didn't. It was whatever. Like, you know, it was like, oh, Michelle, I want to buy this PlayStation 5. Yeah, here. Like, go buy it. No, it was no questions asked. But then when we. When he did make that career change and we did move, we bought a house. So many things happened. It was like, okay, now. Now what do we do? Like, now what do we do?

What did you do with all that extra money you had during that time?

We brought. We. Well, we got married. We had a wedding.

We.

We spent a lot. We, you know, use a lot of it for the wedding. We went on a honeymoon to Barcelona. We paid for my son. Our son's formula and diapers and stuff.

How much did the wedding cost?

You know, there's not really a real answer.

I mean, I would say about 90,000.

90. That's a good number. Yeah.

How come you don't know the number? No.

Well, there was a number on a.

Spreadsheet which you quickly exceeded. Right?

Yeah. The. The figures changed with, like, unexpected costs about the wedding, whether it was invitations or.

I've heard that happen.

Yeah.

Yeah. There's. There was just a lot of other expenses, and it wasn't even unexpected cost.

Like, we knew what the cost was going to be. But then we took a pay cut. Like, out of nowhere, Covid kind of came down. So we took. I took a pay cut at my job. He obviously took a pay cut at his job. So it was like less income and increased money that we had to spend. Yeah.

In my mind, I felt almost like school at this point in our life wasn't even worth it. Like, I almost felt like I should have stayed in property management and kept doing what I was doing.

This is another classic mistake. People decide to make a major purchase without factoring in phantom costs and assuming everything is going to be perfect. And then something happens, like a job loss, but they don't adjust their spending. By the time they realize they're in trouble, it's too late. Let's look at their conscious spending plan now. You can Download your own CSP template to follow along at iwt.com CSP I.

Got home, I would say, probably like an hour before her. So I went ahead and I wrote down all my spending and everything. So I had everything ready.

Nice.

But then I thought it was wrong, and I just went and checked it anyway.

So you didn't trust him?

No.

Okay.

I kind of, you know, just sat down. I was. Okay. Well, this is what I have on the.

Let me pause you right there. So you started off the meeting by.

You taking the initiative.

I wonder if that perpetuates any dynamics. What do you think?

Right. Yeah, I think it does. I. And I started out excited, but then it just became homework real quick because, you know, it was getting late, and then I knew we had to have it submitted, and I just. Yeah. And we weren't talking too much?

Yeah. I mean, at first, to be honest, I saw it, I guess, as homework, but after, I was kind of excited about it, because as much as it doesn't seem like I want to discuss. Have those tough conversations, it was nice to actually see the numbers.

Basically, I just asked him for his because he had, like, a couple, like, debts. I was like, oh, what are the amounts on those? What are you owing your car payment? Okay, thanks. And then I just plugged the numbers in, and then I said, do you have any questions?

Did his fingers touch the keyboard?

No, I don't think they said.

I want her to understand that I could be trusted as much as I haven't proved to be able to. I want her to understand that I'm very capable to lead and explain to her, like, these are the numbers that I came up with. Let's go over your numbers, and then if you think that we're wrong, let's talk about it and figure it out.

How does that sound?

Yeah, that'd be nice.

That sounds great.

Say something during the conversation.

I'll tell you what.

It's really impressive that you prepared the numbers. I really like that. I think that going that last step is where you really get all the benefits of doing the work. And then you come, you say, you know what? I realized that I want to take more of a leadership role when it comes to money in our family. So I know I got to work on it. Here's what I did. I went through my numbers, I analyzed this. I might be off on a couple of them, but I'd love to talk to you about it, but here they are. I wonder if we can go through them together. How do you think that would have gone over?

Oh, that sounds great. I think that would have worked pretty perfectly. And honestly, I feel like she would have appreciated that.

I think so, too. Right.

What do you think, Michelle?

I'm giving you a big kiss.

Okay, let's see.

Michelle, let's do the net worth. Can you read the word in bold and then the number in full next to it?

Sure. So under assets, there's $251,000. Okay, next, and keep going. Okay, so investments is $43,700. Savings is $500 and debt $628,500.

Okay.

Total net worth, negative $333,300.

All right. What do you think about that number?

Not where I want it to be.

Nowhere near where it should be.

Okay. So the $251,000 is your house.

Yes.

Okay. And your investment's fine. Savings. Okay. And your debt. Break that down for me. $628,000 of debt. What is that?

So 414,000 is a mortgage. 30,000 is my car.

Okay.

69,000 is Kevin's car.

Okay.

My student loans, 18,000.

Minor. About 12,000. Mm.

Credit card debt. About 73,000.

73,000 in credit card debt.

Right. Well, one of them's. Well, so one of them's a loan for six. For 55,000. And the credit card debt is 18,000.

What's the loan?

It's consolidation of all the other credit card debt. So that's why I put it all under the same.

Okay. What's the interest rate on that consolidation, do you know?

17%.

Right.

It's effectively credit card.

Right.

How come we spent so much time talking about 711 snacks?

Right.

But we're over here with over $70,000 of credit card debt.

Right.

A $69,000 car loan.

I know. Yeah. I knew that was coming. That was. I don't even know why we got that car, to be honest, because we did. We did the math on it, and we couldn't afford it. And then I don't know what happened. And we. Not that I don't know what happened. I know what happened.

What happened.

We still went for it because I was just being an enabler, and I said, yeah, like, it's okay. We'll figure out how to make it work.

And when you figure it out, who do you become in the relationship?

The hero.

Yeah. And by the way, what kind of car was it? Kevin ever?

BMW. A lot of this was before I took that pay cut, but now that I have taken that pay cut, it's. It's so ridiculous. And I know I have to get out of it.

So how come you haven't?

I. We just haven't.

Because then we'll take a loss. Well, I mean, regardless, I. Yeah.

So the reason. The.

What was the net worth of the. Or the worth of the car or whatever he did? The Kelly.

So the. The car's valued at about 48,069 is what I owe on it. So I definitely would take a loss, but I just. We haven't taken the time to go in and figure out, like, what. What our best option is. To be honest, the reason I stayed with them. So I had a BMW previously. She. Hers is a Mercedes. So we both have luxury vehicles that we both have no reason to be in.

You, you have a BMW and a Mercedes?

Yep. That's literally like, half of our income.

And those cars also take some pretty expensive gas, huh?

That is why I say I spend a lot of money on gas.

How come you got the cars? That's what I'm curious about.

I don't know. I've always had a luxury car since I was younger. Like.

Oh, that's a good reason, too.

Well, because my dad always had a luxury car, too. I don't know, it just seemed like a asset that you had that, like, it made you feel good because you work so hard. You. You. You know, you want to have a nice car. So. I've always liked to have a nice car. So I had a Lexus RX. This is getting into specifics, but I had Alexis RX 500. And then I was paid off. It was great. It was fine. And one day, I don't know what happened, we walked into a dealership, and we were looking at cars, and there was a really nice, like, M series BMW. So I traded in my Lexus for the BMW that was on a lease.

Wow.

So then after that, I realized, like, this lease, you know, we were having a baby. It was a kind of too small for the baby and everything. So that's why I decided on the Mercedes that was bigger.

And then you.

Hold on, hold on. This is like classic Americana in the worst ways. First of all, a luxury. How much were you making at the time where you had that Lexus?

Maybe 60,000, $70,000 a year.

Okay, thank you. This is making my story even better.

I know.

Making $70,000 a year, buying a Lexus.

Yeah.

Basically spending 100% of your salary on a car. Then you go, hey, this car's paid off. I know what I'm gonna do. I'm gonna incur more payments.

It was the worst thing I ever did.

So you go in there, and then the minute you have a baby, what does every single parent in America do?

We need a house and an suv. Why?

Because our little infant that can't even move needs to run around, Right?

Yeah.

And then so you go, you buy 1, 2, 3 things. Income goes down, Right. One of you goes to school, one of you takes time back from work, etc. So you have these skyrocketing costs, lower income, heavier costs. With the baby. And now what happens?

You're trapped, Stuck in a. Yeah.

You have car payments and transportation of $2,495 a month. That's one of the highest I've ever seen.

Really? Yeah. That's the car payment plus gas.

So I had a BMW before and it was a lease. Okay, that one. That's when I really started taking coaching seriously. I really almost took it like as a second full time job. And I didn't realize I didn't account for how much I'd be traveling. So I had, at first I had, I think it was a 10,000 mile lease and I was way over my miles. Then I had someone sideswipe me on the car and it wasn't. It was like a hit and run kind of situation. I started realizing that I was gonna be way over my miles and I decided I had to go get a new car. So I went in and tried.

What the hell? What?

Yeah.

So then why did you make that decision?

Because I knew that I knew I was gonna get screwed in the end. So I, now that I think about it, or now we've been watching this, I got screwed even worse.

Yeah.

So what happened was you screwed yourself. Yeah, definitely. So I started going to many car dealerships. I was not trying to go luxury.

Okay.

But what the issue I kept running into was the only dealership that would give me the highest cost of my car was BMW. If I stayed with them, every other car company wasn't giving me anywhere near what the car was worth. So I ended up rolling all that negative equity into this new car payment and. And financed it.

Well, the good news is that the car dealers of America love both of you because you're exactly what they want. They will run you into the ground if they can.

Yeah.

And all the reasons they gave you, like, let me tell you, all the ways that you pursued this that I would not have. First of all, I got a BMW when you couldn't afford it. Two, a lease.

Why a lease?

Well, the first one was a lease. This one's not.

Why? There's no reason. There's only two people who should get a lease. One, if you're incredibly wealthy. Two, if you have some type of business where this could be considered a business expense. There's zero reason to have a lease, especially for a BMW or a luxury car when you don't have the money for it. Yeah, you are exactly who they love. And then third, you take it and cash it in early and roll it over like 1, 2, 3. Perfect for the car dealers.

Terrible for myself.

Yeah.

And again, we're spending Hours talking about 7 11, right?

Absolutely.

When the house is burning down over here.

Right.

Another thing that we tend to do that I was telling her we need to stop doing is taking vacations. We take a lot of.

Well, hold on. We'll get to that in a second. And how about the mortgage?

We owe 14, $414,000.

What's the interest rate?

6.25.

Yeah. Why'd you buy a house?

Because we need to establish roots somewhere.

Huh. What's that?

Well, one, I was getting out of the whole property management thing, so I had gotten out of that. So I would have lost the 50% discount that I was getting. The apartment where I was working and living. I would say that I think that apartment was 3200 if I had. If we had to pay it. So Instead of paying 3200 towards rent, we figured 3700 on a mortgage would be way better.

But 3700 plus, what are all the phantom costs when it comes to housing? Y' all had any repairs recently?

Yeah, we did a lot.

We renovated the whole.

How much?

About 80,000.

Yeah, I'm just counting all the different industries that love you. Car Dealers of America. Home Renovators of America. Home Depot of America.

We don't have a Home Depot card, though.

That's good. That's good.

The mortgage lenders love us.

What's the thing about vacations you mentioned, Kevin?

I feel like Michelle loves taking vacations. It's always like, it'll be like a weekend thing. It'll be like a one week thing. And like, I get it. She. She. I love to travel. She. We both love to travel. So, yes, we want to explore the world and, and, and do all these things. And she's like, well, we. We can afford to do it, so, like, why not? Like, we should do it.

Where was the last place you went?

Austin.

Bahamas.

No, Bahamas.

That's nice.

But after that, she was just on the cruise that she just went on with her mom.

And then when she suggests these vacation spots, how does it make you feel, Kevin?

My first reaction is like, I don't think it's necessary. Then obviously I enjoy it. I have a great time. Who wouldn't? So.

So, But I just.

I'm hesitant. That's. I'm really actually hesitant because I don't feel like it's necessary in that moment or I don't feel like it's. It's the right time because there's been situations where we Took these vacations and I had to take off from work. So now I'm missing out on money that I could be making. And a lot of the times I've expressed that to her. I got to cancel coaching. I got to do this and stuff.

And move things around.

She responded, we'll figure it out.

Yeah, I feel like where he may overspend with, like, you know, the little things. Like, this is my. Like, it is my biggest problem, like, feeling the need to go on vacation because I see a cheap flight and I'm like, oh, well, look, I'm gonna buy this cheap flight. But then, of course, comes other costs, like the hotel might not be as cheap, and then of course, the food and whatever else comes with it. So think I get lured in by that, like, small, like, oh, my gosh, the flight's $80. Like, we have to go, but it's not $80 in total.

How many vacations you take a year?

Maybe.

Three.

Okay, round up.

Last year we took about ten. Wait, it literally.

It's my math exact.

Exactly.

I say take whatever it is and triple it. However much you say you eat out, triple it. However much you say you take vacation, triple it.

It never fails.

Yes.

Everybody make a note. Ramit's rule number 318, vacations.

Whatever you say, you spend triple it.

Right.

How do you pay for all this stuff when you go to the Bahamas?

Well, the flight, I usually use miles and then the hotel, I'll get like, through my job. They have, like, discounts, so I'll get a discount through my job, but I'll. I'll pay that on the debit card. But when we get there, it's like a free for all. Like, I'll just use a credit card. And we have a lot of credit card debt.

Yep.

Credit.

Banks and credit cards love you, too.

Yeah, they all love us.

Whoa.

I know. I don't know. I truly. We're in a really bad financial position, and I think we need to come up. Well, I hope that our plan to get out of it works well and that we can keep our house and keep everything running smoothly and then that nothing happens to either one of us in the next two years. Because if it does, we're screwed.

The next two years where you have a new baby coming, Right. And your little one's going to be getting older.

Yeah.

Let me just ask, to refresh your memory, how much do you have in savings right now?

$500.

How long would that last you if one of you lost your jobs?

Not even a week. Yeah. I think it's scary. I think it's reality is really setting in now.

Honestly, I'm at a loss. We spent almost an hour talking about 711 snacks and Kevin not paying the mortgage. And then we look at the numbers and find two luxury cars, $80,000 of credit card debt, tens of thousands of dollars on a home renovation, and 10, literally 10 vacations last year. It's almost hard to believe, but it's real. There are a lot of people like this in America. They make a nice income, but they spend every last cent. And rather than looking at the real problem, which would invariably require a total lifestyle shift, they pick out one random area and fixate on it. At this point in my conversation, I'm still not sure how serious they are about changing. We'll see. 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 ramit w I s p r flow AI ramit or click the link in the description below. Here, by the way, are the income numbers for Kevin and Michelle. Kevin makes $4,000 a month gross. Remember that? He's in school. Plans to make more soon. Michelle makes $14,000 a month gross. She's a nurse practitioner and adjunct professor. They combined have a household income of $216,000, which is a very good income, meaning they probably have some options. Let's take a look.

So $216,000 is a lot of money, right?

Yeah, you would think so.

Yeah, exactly.

I mean, regardless of where you live, that's a lot of money. Okay, so what do you think's going on here where it feels so tight? Michelle, I'm going to ask you because you manage the money.

Okay. So, you know, when I go through the fixed costs, like, I don't think it's the housing because it's under the. Whatever it is, under the 28%, I believe. But I know the car payment, transportation, like, you know, the gas, the car insurance, that's a big one. And we're aggressively trying to pay off the credit card debt. So that's another huge one for fixed costs. So that's why I think it's so tight right now.

It feels like we're fine, I guess, because she does always take on that role to make sure that we're fine. The reason I feel like we're fine is because we don't, like, miss our payments. So in my eyes, we're fine.

That's a pretty low bar. How do you think she receives it when you tell her that?

Probably doesn't believe it. How do you feel about it?

Yeah, I. I feel like almost like, okay, but not. Not like, who are you to say that? But like, yeah, like, you know, again, you've not been involved in it. And it's kind of like I thought that you seeing it on paper would make you feel like, whoa, like, know, we do need to change, but it didn't. So then I'm kind of more concerned.

That's honest. That's honest. Like, I thought this would finally be the moment that he gets it. And not only does he not get it, now he's sitting over here reassuring me, telling me it's going to be okay. Is he ever going to get it right? He's not engaged. He's not working on this. I give him one assignment, he doesn't do it, and so I have to call. And now he's trying to smooth things over, telling me it's going to be okay. It would make me wonder if we're ever going to be on the same page.

Right.

Those are my words. Can we look line by line at your fixed costs? Okay, so, Michelle, what's this number here next to your combined fixed costs?

73%.

What do you think about that number?

I think it's high.

Yeah, it's high. Let's just do the rest of these categories and then we'll break down into your fixed costs, investments. What numbers here?

3%. So I think that's low.

Yeah. Savings goals.

4% combined.

Okay. And your guilt free spending, 19% which I don't really believe. You think this number's higher?

No, I think it's lower.

Yeah.

Can't be lower because where would the rest of the money be going?

Oh well, where is it at? 7 11.

That's 7 11.

I'm just kidding. I don't know.

I mean, do you see my, like how would you characterize my reaction to these numbers?

Exactly how I expected it to be. Because it's not. Okay. And you're, you're very, you're realistic.

And what are you?

I'm living a fantasy over here.

Oh.

Because I just haven't sat down and really thought about reality. I haven't sat down and realized that we're struggling.

Why?

Because I've always had Michelle who kind of like protected us and took care of the bigger issues and stuff.

Michelle, do you see what has happened here?

Yeah. He's saying what he's saying and then I'm supposed to be the protector, but in fact I actually messed things up even more by like saying, yeah, we should get those cars, we should do that. Like I'm to blame as well.

So both of you are enabling each other.

Absolutely.

We're both guilty of it.

Hurtling towards disaster.

Right.

Do you hear the alarm in my voice?

Absolutely.

Okay.

I feel like it was always just easier to push the problems to the side.

How do you get that to change?

Besides ask the questions, become more involved, Take the. But you would have take the initiative to.

You would already done that. If that's all it took, you would have done that. You've been together for a long time.

Yeah.

What needs to change in order for you to change?

My mentality.

How?

Digging deep and realizing where my issues are and understanding and reflecting and kind of just saying it's not going to do anything. And then, and then thinking of the worst case scenario if I continue these habits, how it could affect my son and our, our soon to be here child also.

You coach soccer?

Yes.

How old are the kids?

All ages. So I coach a high school girls varsity team that I just got that job actually. So I haven't started with them until the fall. I also work at an elite academy that is top in this area and in the US and with there I coach kids. Youngest I've worked with there right now currently is probably like 8 year olds and then it goes up to like 5th, like high school.

Let's talk about that. Okay. I used to be a soccer referee. So when you get into the older kids yeah. Especially at an elite place. They're serious.

Yeah.

They're not messing around.

They're not.

All right, let's say you take one of your under 15 kids, okay. They're acting up at practice. They're not doing what they need to do. They're talking back to you. What do you do when game time comes around?

They get limited playing time.

Yeah.

And then where I am, parents will ask you, and I'm very quick to let them know.

Oh, what do you say?

I actually just had this happen recently. So I told them. I'm like, Listen, they play 9v9. Right now I have 19 kids on my team. 12 get rostered. So 7 kids weren't rostered. And I had the one parent reach out to me and ask me, hey, what happened? They said that their child was working hard at practice. And I explained to them, your child was working hard at practice, but they've been distracting all the other kids on the team. They are fooling around a lot of the time, and unfortunately, their mentality wasn't there. And I bring it up to them, the kids themselves. And I try to. I try to. It's funny that I'm about to say this, because now I'm like, this is just. It's just so funny. But I tell them that I want to teach them to be. How to hold themselves accountable.

Oh, wow.

For their actions. And even at a young age, I try to teach them that, because I try to. I try to teach them. Not only am I teaching them soccer, but I'm trying to teach them life lessons that they could take with them forever. And I want them to be able to grow as young men and young women, and. And I want them to be successful in every aspect of their life. So I treat them like adults. I ask them the tough questions that they probably don't want to hear.

You're a good coach. Would you say that?

Excellent. I would say.

All right. I like that answer. I love the confidence.

Great.

Okay, so I'm talking to a good soccer coach here. You know what it takes to create a player who cares, who wants to be better, et cetera, who works hard. Yeah. You also know that you have to set some boundaries, right?

Absolutely.

Okay. Now apply that to your own relationship with your family, money, you've tried to dig deep. Michelle said, hey, I want you to care. You don't. What's the solution?

The solution is, is just changing, just literally becoming disciplined.

Isn't that what you try to tell your students?

Yeah.

And some of them listen and some don't. How long has she told you? Be better. Get involved.

Yeah. For about a year or two now.

What's the next step?

He needs to prioritize. Not even.

Maybe it's not about him. You're the coach right now. What do you need to do?

Use a different should. Like to go in a different direction.

Yes.

I don't want to cut them from the team, so.

Yeah, you can't cut them from the team. We're not talking about that. But there's something else, right?

Yeah.

What is it?

Change.

The next step is boundaries. Because we can't just sit here and berate each other and berate ourselves and say, like, I got to be better. You need to be better. That doesn't work.

Right. It's true.

Right now you have no reason to be motivated.

Right.

Why would you. You get playing time every single week, no matter what. You're very responsive to crystal clear boundaries, Michelle.

Yeah. I think it maybe set some boundaries. Like, I don't even know how to do that, to be honest.

That's okay. That's what we're here for.

How about you send me the money and I pay the bills instead of me sending you the money? You saw her. Okay.

Okay, I like that.

That's a good.

The big change for me right now.

Maybe you're not comfortable with that, but I like that. That suggestion is pretty bold.

Cool.

Split the finances.

Even like a good idea.

I'll handle these five bills. You handle these five.

Wow. I like it.

Yeah.

Okay. That's definitely one option. Great. Put it on the table. What else? Let's get a few out here.

We eat a lot.

Like how much?

Like at least twice a week or once a week.

No couple ever says to me, we.

Eat out a lot.

And then the other one goes, once a week. No way.

At least on the weekends. We've been way better.

We've been way better since we did this.

Yeah.

To be honest. But besides that, no. And it's not like we're having cheat meals. And just to highlight how that is, tomorrow we have a dinner with her brother and his girlfriend, also here in New York City.

So it's hard to get the reservation where you. Yeah, good. Tough reservation.

Where?

Which restaurant?

Teresi.

Teresi.

Okay. For everyone who doesn't know, can you just look to the camera and tell them what kind of restaurant is theresi?

Fancy Italian restaurant.

I'll put it this way. David Beckham's all over their Instagram or social media for being there.

Yeah. Like, would you say that it's like a hot restaurant.

Yeah.

Yes, yes, yes.

So you're like, but it's a. But it's a super hard res. We nailed it.

I mean, we have to go.

How much you think it'll be?

Well, she. Yeah, she can't drink now. But I already know that we have a 250 minimum. I think that we have to spend.

No, we would. We were going to spend that. I think it's like 400 more than 500. Maybe.

I would say at least 500.

For the two of you?

No, for all four.

And then, like, you're driving into the city. Parking.

Parking.

So we're looking at like 350, something like that. Right? Minimum.

Yeah, that makes sense.

Fair. All for an experience.

So I gotta.

I got a question. Yeah. I mean, in a way, it kind of reminds me of your mom taking you into the city.

Right.

Going to the hard to get res. That's in the paper.

Right.

Is this not exactly the same thing?

It is.

And then what did you tell your mom? Like, later in life, you're like, mom, looking back, I think, what'd you say?

We shouldn't have done that.

But I look at it the wrong way because I don't. Like Ramit mentioned, like, okay, the toll, we're gonna pay the toll, we're gonna pay the parking. Like, we're gonna pay all this stuff that I wouldn't even take into account because I'm just thinking, oh, well, we already each paid $50 for the reservation. We're going to lose the $50. I don't want to do something and feel bad about doing it. Like, I want to go knowing that, like, wow, like, you know, we were able to go because we could afford it this month.

Can I tell you something? Couples who make $216,000 should not be thinking about being able to afford something this month. If you made $50,000 a year, okay. We'd be talking on a monthly basis making over $200,000 a year and being concerned if you can afford a meal.

Right.

That's a problem. You're playing smaller than your income suggests you should be.

Right.

And the reason you're playing smaller. You have to play smaller is why?

Because our fixed costs are really high.

Exactly. Your fixed costs are super high. So therefore, you're obsessing over haircuts and snacks. It's not the point. That's like a total distraction from what's really going on here, which is the house is burning down.

Yeah.

Okay. Your phone is $330 a month. Why?

Because everyone's on the phone, Payment plan.

Why?

For just us two, it was like 200 something. So I put, like, his mom, my mom, my dad, my dad's wife, my brother, me and Kevin on it.

Why'd you do that?

They were all also paying a lot of money. So if we all combined, it would make sense that everyone just gives me for that for their phone. And then.

Do they do that?

My dad does.

How about everybody? How about the other 19 people on the plan?

Well, I. You know, I feel bad asking my mom because she takes care of our son. We pay no childcare fee or anything. My brother, I mean, he could probably pay me, but it's like $30. So I'm like, all right.

No, she's just too nice. Because I've told her, I'm like, listen, I'll send you, like, let me know exactly how much I owe you for my mom and myself. You just gotta let me know and I'll send it to you. She said, don't worry. Just focus on your other bills.

Because when you're nice, you are saving people. You're the hero.

Yeah.

Do you see how that comes out in so many different places in your life?

Yeah.

Financially and probably otherwise, Right?

Yeah, that's a problem I have. I. Yeah.

The thing is, you're actually just playing small.

Yeah.

Shows up in other parts of life, too, right?

Oh, yeah. Yeah.

Okay.

I think we're both people pleasers. That's a lot of the. A lot. Our biggest issue. What?

What? If you were a people pleaser, you would have been pleasing Michelle by taking on 50% of the finances.

Right.

You're not a people pleaser. Not when it comes to finances. You're deeply avoidant.

Yeah.

Very true.

So what's up? Do you all see that this isn't just one person here? Right, Kevin, you're avoidant.

Anything.

It's like water off a duck's back. Any financial thing that comes in, you're just like, great. Goes right off my back. Right, Michelle, you pick it up so much, you internalize this idea of yourself as. What is your identity when it comes to money in your relationship?

The person that will handle it.

Yeah, the person that handles it.

Good.

What else? Keep going.

The. Yeah, the. The. The expert. The money expert in our relationship.

Good.

The expert. And when you solve it and you save the day, you ever save the day when it comes to money? Where are we supposed to find the money for this or that? What do we call the person who saves the day?

Yeah, the. This.

You know, the hero.

Hero, Right?

Yeah.

You don't feel good about that? You sure?

Right?

I. I guess I subconsciously do, but in reality, like, I'm just looking at, you know, I'm just like, looking at myself. Like, well, I had to sacrifice on this, that and the other.

So what do you do it. You must be getting something out of it.

That I'm just the good person and.

Like, I'm a. Yeah, yeah. And if you were to say no to your husband.

Right.

What does that make you?

The villain.

Oh, yeah.

What do you think about that? That's kind of powerful. The villain.

Yeah.

That's not like just a bad person.

The villain.

I don't think she should feel that way. But that doesn't make me feel good that she does feel like that.

Hmm. And yet you ask her two days ahead of getting paid for $100 and you don't even transfer it yourself. You wait for her to do it.

Yeah.

So in a way, the dynamic here turns her into the villain, the one that you are participating in. But Michelle, you also actively participate. You two have co created this dynamic.

Right? Right.

Hmm.

It's like a knot.

And when one pulls on it, what happens to the knot?

Yeah, yeah, absolutely.

And the more he avoids it, the more you say, I really want you to dig deep and participate. But that doesn't. That's just words.

Right.

The only thing that causes change in a scenario like this is actually boundaries.

Right.

And you know that because it happened to you in your life. That's the only thing that got you to change. Took years.

Yeah.

You know, it feels uncomfortable because it's like you're almost taking, like, x ray glasses to your own relationship.

Right.

You two are the same people. You were walking in here, but you're just seeing your relationship with a new lens. And sometimes it's uncomfortable because you're like, oh, like what we thought was, like, quite simple. We just need this one little budgeting tip. And then you realize there's a knot here.

Right.

That's incredibly complex. And if we try to get out of it the way we've tried, it just gets tighter.

And that's the thing too, because I feel like we keep coming back to, oh, well, this is just temporary. In two years, I'll have my degree. But it's not because the way we're thinking about it, like, our mindset isn't there.

That's right. That's right. That's a great insight.

Yeah.

Right.

You keep having these temporary things that come up.

Right.

We just had our son. It's going to be tough for a while, right? I just went back to school. It's going to be tough for a while, right? It's going to be tough for a while.

Forever.

Unless you change the dynamic.

Right? Yeah.

What do you want to do? You could again. It's up to you. It's your money. It's your res. It's up to you.

Right.

What do you want to do?

I don't think we should go.

How come?

We just can't afford it right now. We have to worry about other things and.

Yeah, I don't think we should go either. Well, because we truly can't afford it. We would just be digging ourselves in a deeper hole that we're trying to get out of. And it goes back to, like, everything you were saying. Like, we're just going in a circle here.

Yeah.

So it takes, like, a boundary to, like, say, hey, we need to stop.

Love that this is a boundary. I love that the two of you are doing it together. This is a real discussion. I don't think we should do it. Here's why it would be. You know, the next step is to say, what do you think?

Right.

But in this case, you two are totally aligned. So where's your phone? Okay, we'll grab it for you. And let's just send that text. Let him know, boy, I'm interested to see. Yeah, there we go. Okay.

You're making me be the bad guy. That's interesting.

You're not a bad guy for setting a boundary. Hold on, let's. That's actually really interesting.

Yeah.

Person who sets a boundary is what, like, smart?

Yeah.

And responsible.

Yeah. In fact, to me, that's somebody who's a hero. That is the kind of hero that I want. Someone who says, look, we have a goal. This is what we're doing. We're going to say yes to this, but we're going to say no to anything that's not in our primary goal. I'm not the bad guy.

I'm the hero.

Right.

And in this case, both of you are the hero. Because you're deciding.

Yeah.

Now, who sends the text, that's up to you.

Right.

But approach it as if you're doing the right thing, not you're being the bad guy. Go ahead.

I said, hey. Hey, guys. I don't think we can make it to Teresi tomorrow. I'm sorry.

Okay, so the fact that you're both saying no, we're gonna put ourselves first.

Right.

Not this dinner. I think it's amazing. I think it's especially meaningful because you've gone to the city. There's sort of a. There's something very meaningful about this type of restaurant for you and for you to say, no, we're coming first. I think that's. That's really awesome. So great work. First of many boundaries.

Yeah.

Okay.

It's true.

I feel good about the decision.

Yeah. What do you want to do to fix costs? We need to get this number down.

Well, like, the glaring number is obviously the car.

I guess I'm really going to have to go and. And figure out what options I have to getting out of that car payment.

Like, because everything else is just. It's not really doing. We can't do anything else.

I definitely would love to get into a new car payment. I just don't know, like, how to go about it. I guess I would have to go to a dealership, look at some cars, and then see what options I have.

No, that you're not going anywhere near a dealership. Every time the two of you go into a dealership, you end up buying another luxury car.

Yeah. I've never felt good leaving a dealership ever.

Oh, shocking. That's really shocking.

Wow. Yeah.

So, no. What do you want to do?

I don't know. Sell the car.

It's going to suck. You're going to lose money. But over the course of 12 months, 18 months, 36 months, that's when you're really going to start to see those savings. And it's not like you're going to get a big fat check that says here, you did the right thing. It simply means that the amount you're paying towards your car payment is slowly going to go down. You're going to have a little bit more cash every month. And that is money that can be.

Used for what, credit card payments?

Yes. Savings, all those things. But it's going to feel horrible. That's the situation you're in.

Yeah.

Let's. Let's be conservative. Remember how I always say, like, I want to be conservative with my assumptions. Let's drop this down by $1,000. So 1,295. And therefore, your car payments per month become $1,495.

That's like only Kevin's car right now.

Yeah, pretty much.

Yeah. Which is insane. Well, first of all, what just happened to your fixed cost number?

Yeah.

Wow.

It went to 67%.

Yeah. That's really good.

We're getting close.

We're in the right direction.

Yeah.

So what are we noticing with all these examples.

That we have options that.

Yes.

That there's definitely ways to work on things and get it done.

Yes. What else?

That I shouldn't be so hesitant to come up with an idea. Like, if I think of something, maybe I should just say it instead of like, oh, I don't know if that'll work. I don't know.

Yeah, I noticed a lot of self censoring. A lot of kind of digressions about. I'm not trying to say this and I'm not trying to do that.

And not, not, not, not, Not a.

Lot of ego protection.

Right.

Instead of, like, let me be straightforward.

Right.

I'm not sure if this is the correct solution, but here's what I think. What do you think?

Right.

That's a discussion. Yeah. Can't dance around everybody's feelings the entire time. In fact, you're actually hurting both of you by not being direct.

Right.

Honestly, you could go out and eat at some nice restaurants and take some vacations and it will be okay. What do you think would happen if you keep doing that?

We're just going to dig our hole deeper. Our debt's going to be our debt. We're never going to be able to pay our debt.

Yep.

And something, God forbid something happens. God forbid something happens, then we're really going to be screwed. And then what are you going to do?

Then we're going to have to sell the house. I don't know. Move back home.

Two kids move back home.

Right.

What else?

Credit's gonna be super bad. Gonna have a hard time, like, coming up from that.

How's it gonna affect your relationship?

It's gonna be horrible. We'll both feel really, like, terrible. Like we really just failed.

Kevin, you agree?

Yeah, I agree.

If you were engaged with the money, Kevin, you would be able to open up the csp, point out the fact that there is no specific vacation thing here, except there's $0 save for vacations. And you would be adept at saying, look, right now it's not in our csp. If we want to make a plan for it, we can make a plan for it. Let's talk about it. Where can we draw the money from? But because you don't live in this world, you live in just a world of, like, I don't know. What do you think? Okay, well, I trust you.

You're the leader.

You leave it up to her. And she wants to go on the vacation, so she's going to go on the vacation. Do you see how that dynamic works?

Yeah.

You down with it? You look a little Hesitant.

No, it sounds great to me. And that's what I. Where I want to get to. I want her to not have to check anything. Just trust in me that I can get it done.

Okay.

And. And I feel like if she gives me that opportunity, I could show her that I can excel and do just that.

If you create that opportunity for yourself, she doesn't have to give it to you. Yeah.

It takes discipline. Holding each other accountable, huh?

I'm excited about what we have, like to kind of look at and move forward. I think that we, if we work together, we'll be way better off, to be honest.

Yeah.

And I think as. I think we're very capable. I mean, you're definitely capable of it, but I think so are you? Absolutely. Communicating.

What's the dynamic today? Before we started talking, what was the dynamic?

Separate.

Separate. Yeah. And who, who did what? What was the roles?

The hero and I guess the villain.

It was like the.

The.

Not the avoider.

Yeah.

Yeah.

The avoider and the worrier.

Yeah.

Worrying. Yeah. Living in the spreadsheet as well. You can now be saving thousands of dollars per month.

Yeah. That was really good.

That sounds.

And actually it's a perfect time because you have a new baby. You're not going to be going out to restaurants. In many ways, this is the time to hunker down, focus on the family.

Exactly. Right. Yeah.

Turn off the outside noise and build up a war chest, a moat where your family is protected. And more importantly, the two of you are connected.

Right.

What do you think?

I love it.

Yeah. That's really good.

It sounds perfect.

There's a path forward. That's what I see.

Yep.

Okay.

So now what is the new dynamic? How would you describe it?

Like united.

Yeah. United for sure.

Love that.

United. Super team.

Yeah.

Huh.

Strong.

Yeah. Love that for us. And I think it'll be great. And I know we could do it, so.

I like that.

Yeah.

At least as long as you know that we're going to work together and get to where we need to be, that's all that matters.

I'm in here.

Yeah.

It's okay. We said it would get hotter when the questions got hotter.

Yeah.

I thought Kevin and Michelle were extremely interesting. They have a very good income, but they have co created a dynamic that is not serving them anymore. Now, while Michelle and Kevin did not send follow up videos, I did receive this letter from them. Let me read it to you. We left the meeting feeling hopeful and optimistic about our financial future. The past couple of days we've been discussing options regarding selling our vehicles and and paying off the loans associated with them. A family member is purchasing a new vehicle in the near future and he is willing to sell his old car directly to us instead of trading it in. Don't worry, it costs less than $15,000. Our plan is to buy this car and sell my Mercedes within the next two months. We are also looking at websites like Carvana and KBB to sell Kevin's car and then hopefully find another vehicle in the $10,000 range to purchase. Although we still have a lot more to work on, just having this discussion together regarding our car situation has been extremely refreshing. We've been collaborating as a team on which car makes the most sense, what timeline we need to stick to, and most importantly, how we will manage our finances for the purchase of the new cars and the sale of the old ones. Coming up with a plan together is a big leap in the right direction for us. We realize we have a lot of work to do. We have cut our guilt free spending to only 10% and plan to keep that for at least a year. We've put together a debt payoff schedule. If we commit to spending only 10% of our income for guilt free things, putting an extra thousand dollars monthly towards our debt, we can pay off our $55,000 loan in only one year and eight months versus the currently projected two years and nine months. This will free up over $3,000 a month for us in as little as two years, not to mention the $5,000 in interest we will save. We are committed to working on these financial changes together and setting boundaries when it comes to our friends and family and our finances. Next on our list of things to tackle, we'll be cutting everyone off our Verizon phone bill, setting up automatic payments, which we plan to do together. This weekend, we finally see a light at the end of the tunnel. We are excited that we are slowly untangling the tight knot we have created for ourselves, eager to move forward with our growing family. Thank you for all of your help. It was a pleasure meeting and speaking with you and your team. Thank you Kevin. Thank you Michelle. Thanks for listening to I Will Teach youh to Be Rich.

I'm Ramit Sethi.

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