155. “We have $22k in cc debt—but I want to renovate the house” (Part 1)

If you've recently discovered this podcast and you've wondered, how can I get Ramit to answer my specific money question, There are two ways to do it. Number one, you can apply to be on this podcast, although we are already full for the rest of the year. Number two, you can join my Money Coaching membership in this program. We do a ton of cool stuff I want to make sure you know about it. We do a monthly live call with me where I cover some of my favorite money topics that I can't go into publicly in as much detail as. And I break down our members conscious spending plans. Plus I answer your questions live. We also have tons of virtual events coming up that cover every aspect of.

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Paul really, just when he wants something, he's gonna get it. Like, there's no sense of, can we afford this? We haven't carved out the time to make a plan. And it's not just on me to make the plan.

Oh, we could talk about money or we could just go out on the lake for three hours. You know, it's summertime. You know, I guess I always had this view or fantasy, Like, I'm always gonna be making more money. Like, as I get older, I'll get more raises. I'll be fine. And then like when we were putting.

This all together, I realized we're kind of like at the edge of this cliff and we can back up or we would launch into, I think, a lot of debt.

What would you want him to change?

I think more restraint.

And then your role is what?

The fun killer.

When was the last time in a conversation about money you actually pulled out full, comprehensive numbers of your financial situation? Never, never, never. Meet Paul and Morgan. Paul's 37. Morgan is 33. They've been together for 10 years and they have two young children. The major issue here is that they talk about changing their money behavior, and they talk and they talk, but they.

Don'T really make any changes.

This is so common among couples. So I want you to pay close attention as I try to peel apart what's really going on here. This conversation, by the way, was filmed live in New York City, so I would encourage you to check it out on YouTube so you can see the body language and the facial expressions which are so important to the story here today. Let's meet Paul and Morgan.

Morgan, within the past couple months, says things like, I'm very stressed about money. I'm so stressed about money. We. We gotta, like, work on our money. I. I would look at the bank accounts, and I would see, like, maybe what I have coming in in the next couple months. And in my head, I'm like, we'll be fine. Or we had two kids in daycare. We got one out of daycare. We're fine.

Like.

And how does she take that?

Not well, I guess. Sometimes when it comes up, it's. It's at random times. So in my head, I'm kind of avoidant or I don't want to deal with it in the moment. Maybe it's like, I don't know, at dinner time or like, oh, my God, we need more money. We don't. We don't have enough money. And I'm like, I. I don't feel like talking about this right now, or I don't feel like dealing with it.

It's usually until I bring it up again, and then it can become like an argument.

You feel like you're constantly the one bringing it up. Yeah, definitely. And then who makes the budget?

We've sat down together to make a budget a couple times, or we tried apps like Mint or Y N A B, but nothing has stuck.

And then what happens when it doesn't stick?

We just fall back into the pattern of what we've been doing.

Okay.

Yeah. I mean, life is.

So.

We both work full time. We have two young kids. I think life moves really fast, and it's hard to carve out that time or I don't carve out that time.

Like, today you're here. We're gonna speak for a few hours.

Right.

Have you ever carved out this amount of time to talk about money?

No.

I feel like we have these moments of, oh, something has to change. We have kind of a big discussion, and we're like, we're gonna do this. We're gonna change. We make a budget, and then, like, within days, it's gone.

Days I think so.

I don't say days.

I think, like, when we were putting this all together, I realized we're kind of like at the edge of this cliff, and we can back up or we would launch into, I think, a lot of debt.

Wow.

Okay.

All right. Why now? Why are we talking right now?

I think that things have just felt so out of control that there has to be a change.

And then how long has it felt like that?

I think it's just been building, building. But now we have two younger kids, so now I have an income. For a while, I didn't. I was in school. So now, like, I guess stakes feel.

Higher because you have an income. The stakes feel higher. Why?

Because. I don't know. I guess. Or with kids, too.

Kids. I understand.

Yeah.

Two kids, that's a big deal, right? You want to make sure that they're protected and. Okay. Your kids are three and six, right?

Yeah.

Okay. Nice, nice. How about for you, Paul? How would you describe your relationship with money in the last decade?

I guess I always had this view or fantasy. Like, I'm always going to be making more money. I'm just going to get more money. Like, as I get older, I'll get more raises, I'll do this and that, and I'll be fine. And then that was my thinking when I was younger, than adding two kids to the mix and then a mortgage that I didn't plan on when I was younger. And then breaking it down and seeing, like, all the other things that we pay for. I'm just starting to realize that, well, I. I need to make some changes to. To hold on to what I have and to plan for things. I want more than just assuming I'm gonna have money and I'll get whatever I want.

Like when you were younger and you thought about yourself with money, what visions came to mind? Like, some people are like, I'm gonna fly on a private jet. Other people, like, I'm going to have a house in the suburbs. What was your vision?

That I was going to be rich.

Okay, rich means what?

Well, in. In that time, when I was younger, rich meant having a lot of money. I think when I was younger, I just assumed, like, super materialistic. Like, I'd have, like, a Ferrari, I'd have a mansion, I'd have a pool.

This is.

We're talking about when I was, like, younger.

Okay, and then how about like, in your mid-20s?

I realized that I. I chose a career. That doesn't necessarily mean I'm going to be a million billionaire. As I Imagined when I was five or six, but when I was in my mid-20s, I. I still thought that, hey, I'm. I'm going to be making more money later. I'm not going to have to really worry about anything. Whether I have a Ferrari or a Toyota, I will be, like, financially stable. Okay.

You know, Paul can be very, like, it's fine, it's fine. And really glazing over things or generalizing issues.

Why do you think he does that?

Because it helps him not really be able to pro. Like to see what's going on and continue doing, engaging in behavior that he wants to.

So when you come and you're like, hey, I'm stressed out about money, or we need to make this change, and he goes, ah, we're fine. Look, one kid's out of daycare. We did that. How do you feel at his reaction?

I think dismissed. Yeah. Yeah.

And how does that feel?

It can feel hard. Yeah. I usually will get angrier or give, like, a bigger reaction. And then typically we'll have these conversations. I'll have a reaction, and then we'll have this reckoning of, like, okay, we have to do this, and maybe we'll identify some action steps. But then it never really moves past that.

I'm fascinated by the moment where people realize life isn't going to turn out the way they envisioned it. For example, when we were kids, maybe we said we want a Ferrari or we want to be a marine biologist. And then we start to learn how much things cost. And slowly we change our mind. Now, when I'm speaking to Paul and Morgan, I heard several other clues. Paul loves to reassure Morgan, but he's light on the specifics. This is something really common that we hear over and over on the podcast, especially with men. They recently added an income, they subtracted childcare, but it doesn't really seem to.

Have made a difference.

Another common issue when you don't know your numbers. And finally, I pay really close attention to the words they used. Stressed, angry, dismissive argument, edge of a cliff. Remember, two kids, the stakes are high. We'll be right back after this short break.

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Now back to the show.

We had this argument over this subscription service that Alex wanted to get.

Which one?

Nugs.net have you heard of it?

No. What is this?

It's like for live music. Okay, so he had brought it up really casually like at dinner, and I was already feeling stressed about, just like it was on my mind. Money. I reacted to it like what are you Talking about that doesn't make any sense. We already pay for Spotify. You have Sirius Radio. Why do you need another subscription services? And where this money is this money going to come from? So it kind of really escalated. He got really defensive.

Hold on, let's just hear what happened. So you said that, and then Paul, just respond as you did.

Music is one of my hobbies. I love live music, and it's something that makes me happy.

You can listen to music all the time. We listen to it. We go to live music. You have Spotify. I don't think this is a justified.

And I said, it's only $149 for the entire year.

And then where is that coming from? Like, from your budget, from the money you have? Where's the $149 coming from?

I couldn't answer the question. Like, I think the way you phrased it was, well, how much money do you have to spend on that? And I couldn't answer.

And then I think it spiraled into, we need a budget. We're spending so much money, we don't even know how much we have, what's going on. And I think I bring, like, the emotion into it, and he stays very neutral.

Retirement comes up a lot. Like, how much do you have for retirement?

You bring that up, right? Morgan, you ever brought up retirement in your life?

No.

No.

Okay, so nugs. Why is it called nugs? First of all, is this like a. Is this a word? Because I never heard this word. Am I saying a word that I'm going to get in trouble for?

No.

Okay.

I think it's associated with, like, Jam Ban Jamban, so.

Well, what does nugs mean?

Your nugs, your. Your stash. I don't know.

What the hell? What's a nug? All right, I don't know anything about this brand. Please.

I'm not.

Don't get me in trouble for whatever this site is and word. I'd never heard it in my life. So did you end up signing up for.

No, I did not.

Okay. This live music thing, Nugs was the wedge into a much bigger, more contentious discussion about money. And it never really seems like it got settled.

No, it hasn't.

Does this happen a lot? Somebody brings something up and then it just. Nothing happens from it?

Okay.

I was informed by my editors that nugs means weed. If you want to laugh at me, this is the time. Look, I don't know anything about drugs, okay? What I do want to talk about is that a 12 subscription for this couple leads into a fight. About retirement. This is so common with couples. They use a tiny expense as a wedge to talk about bigger topics. But if scarcity around that smaller issue is your entryway into discussion about money, it almost always means your conversation is going to go poorly. Like, if somebody looked at you from the outside, where you live or work or things like that, what kind of conclusions you think they would draw about the financial part of your relationship?

I don't know. I get in my head and feel pretty self conscious about that, especially with the house, because it's not the way that I envision it to be. And we bought a. Like, we bought a fixer upper and we haven't fixed it up. So I get very self conscious about, like, having people over and that creates some tension. Paul can get pretty defensive about it.

Yeah, I feel like buying a house was. Was a huge investment. It took a lot of time to save up the money and it was. It was me doing the leg work with that.

The savings.

The savings, yeah.

Yeah. Paul, he saved while I was in college. We lived with my parents for a year.

When we got pregnant, we. That was one financial decision we made.

Like, oh, to move in with her parents. Yeah.

To save money.

Paul was able to squirrel away, like, how much?

Over 60k.

Really?

I'm like, well, I'm proud of doing this. And to have somebody be like, well, this isn't the way I want it to look like I'm embarrassed by it.

Right.

It's kind of like hurtful or.

Yeah, I can see that. So, like, you really worked hard for that.

Yeah.

You accomplished a lot to be able to put that 20% down.

Exactly.

Okay.

All right.

And I understand that you have watched the Netflix show. You've been listening to the podcast. Okay. So, Paul, did you start to hear Morgan saying stuff like, ramit said this or like, etc.

Totally.

Okay.

That's.

I'm like, who's this Ramit? Yeah. I may have said something back about like, oh, great, someone's gonna tell me to, like, stash all my money, not save my life or not live my life. But Morgan made a point like, Ramit's not like that wants to push, like, things you enjoy and have fun and live a fulfilling rich life trying to get the hook. Yeah.

Did it work?

I mean, he's here.

Okay. You mentioned Paul in the pre interview. You said, she tells me things about money because she's listened to his podcast, so now she thinks she's an expert.

I guess that's what it felt like. It was like tidbits throughout the day about when she was like, listening to you, like, non stop.

She's like, it was like, time for.

A low cost Vanguard index fund.

Yeah. And I'm like, okay, you've been listening to Remy for a week. Like now. You're like, just telling me what to do, but not really giving any advice or setting a plan or anything.

We haven't carved out the time to make a plan. And it's not just on me to make the plan.

Is it time? I know you have two kids, but if I looked at your calendars, what would I see on your calendars?

Work. And then I usually do, like, drop off in the morning with the kids, then I work, then I get the kids and I do dinner and all that stuff. And then I feel like by the end of the day, it's like, yeah, it's tough.

Yeah, I get it. What about weekends?

There's kid activities, work around the house, errands.

There's definitely time.

Let's talk about time. I don't love the phrase we all have the same 24 hours because a lot of us have different obligations, different capabilities, different experiences and different lives. But with that said, ultimately, if you want to get good at money, you have to spend time on it.

There's no way around it.

There's no trick.

It's that simple.

It's the same as if you want to learn how to cook or you want to speak Spanish. Now, in an ideal world, you would build the right systems and habits before you have kids, because it's tough to start something new with really young children. But if you didn't already build those financial habits, it's not too late. It's just important that you are both on the same page and that you both share some of the responsibility of money. So it's not just one person doing all the lifting. Listen, as Paul tells me how he avoids money.

I don't know. Avoidance, maybe. Putting things that it. Things that give instant gratification first. Maybe like, oh, well, we can. Well, where we live, we live on a lake, right? So. Oh, we could talk about money or we could just go out on the lake for three hours. You know, it's summertime, you know, you have a boat.

No, that's another. What? Someone wants a boat. Oh, you want one?

Yeah, but we're. We didn't put it on the.

Hold on.

We're not.

I always have to ask because every.

Time someone has a boat, they don't put it on the conscious spending plan. And then they just discover it randomly, like Four hours. I'm like, what, you have a boat?

Because I.

It goes like this. They have a huge truck. You have a truck?

Yeah. Okay, well, not a huge truck, but.

We'Ll talk about what truck is not huge.

The Tacoma. The smaller. Okay. I don't know what that is. Yeah, I know you're not a good brand.

Toyota. I love it. Then they tell me they have a truck which is like, you know, 120k TCO. And then I go, hey, you know, you live in Kansas. You literally have no hills, no nothing. Why do you have a truck? And they look at me like I'm stupid. They go, ramit. How else am I going to pull my boat? Go, what, the boat? Where's that? All right, so you have kayaks but no boat. Fine. I'm not. I'm not even getting into that. Yeah, yeah.

Like, Paul really, just when he wants something, he's gonna get it. And that's felt hard. Like, there's no sense of, can we afford this? Or where is that money coming from? It's very much like, I want this. He almost gets, like, hyper focused on it. Like last summer, it was like, the boat. I'm getting a boat. He's, like, looking at boats. No, we're not getting a boat.

You said that we're not getting one. Yeah.

He's like, come on, we live on a lake. We need a boat. Like, we need a boat. No, we do not need a boat.

Okay, so, Morgan, if you could have Paul change the way that he relates to money and you could wave a magic wand, what would you want him to change?

I think more restraint.

And then your role is what?

Like, the fun killer feels right. Yeah.

But we'll also say, oh, don't worry. Like, I'll. I'll be getting this commission in a couple months. Like, we'll have this money coming in. Ah.

Even, like, putting this together, he's like, we're. We're not in a bad spot. It's pretty good. Like, we're going to figure this out. Like, very positive, but not no action or like, how are we going to figure it out? Like, we can say, yeah, it's good, but how?

Yeah, reassure.

Do you know why you do that?

Maybe to take some of the steam off in the moment. I don't know. In my head, like, we're young. I'm just still optimistic. Like, we'll. We'll. We'll figure this out. We'll. We'll have money. We'll be making more money. We'll have more money coming In I think that that's an issue that I always have, whether money or not. Like, I always want to solve the problem right away. Like, I'll take care of it. I'll. I'll fix this.

Okay.

Then I get fixated on, like, fixing something.

Have you fixed your financial problems?

No, I don't. I haven't fixed the problems, but I think I try to assist with bringing more money in as I can. But in terms of fixing our quote, unquote financial problem, no.

Do you understand the problem?

Yes, somewhat.

Oh, yeah. That's a yes or no. Why is it that I meet so many men who reassure their wives that everything will be okay with money without them even knowing a single number in the family finances? Literally. How are you going to reassure your partner that it's all okay when you don't even know where your money is going? This really frustrates me. It goes from helpful to purely delusional. If someone walks up to me and they have a gaping chest wound, am I going to pat them on the back, say, hey, you'll be fine, it's going to be okay? Of course not. I know nothing about that injury. So what makes you think you can simply say, it'll be fine to your partner? By the way, your partner is almost always the one who actually handles the money. Guys, stop saying this. Your partner wants competence, not reassurance.

I want to say that again.

I want you to hear me closely. Your partner does not want your reassurance. They want your competence. So get involved with the finances and take on some of the responsibility. Hold that thought.

We'll be right back. 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 that 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 tax 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. 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 Gelt, 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 Gilt's full tax library with guides on retirement plans, QBI, and more. So if you've got a business or you filed for an extension, this is the window to take control of your tax plan. Head to joingelt.com ramit to book a consultation. And as a member of my community, you get to skip the waitlist. Again, that's joingelt.com ramit join G-E-L-T.com ramit taxes don't have to be a task with Gelt. They can be a tool to build wealth. When I talk to new business owners, I hear a lot of the same motivations. I want to make extra money. I want more freedom. I want flexibility. But I will tell you something that I've never heard. I want to start a business so I can fill out a bunch of tax forms. That sounds like my hell. The good news is you don't need to be a tax expert to start your own business. Instead, you can use Gusto, this episode's sponsor. Gusto is online payroll and benefits software built for small businesses. It's all in one. It's remote, friendly, and it's incredibly easy to use so you can pay, hire onboard and support your team from anywhere. They offer automatic payroll tax filing, simple direct deposits, health benefits, workers, comp 401k, matches.

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Now back to Paul and Morgan.

Yeah, so my parents, they owned a business, but my parents have always been just like, spend beyond their means. I lived very comfortably, but never really like a sense of. I would hear like under like conversations of, oh, we don't have any money, but then they would be buying things. So it was always very confusing and like, a little unsettling.

How, how old were you when you started to hear these messages?

Probably, like in elementary, middle school.

Okay, who was it that said, we don't have enough?

I think, like, my dad would say it a lot, but then he would also spend. They're like, looking for dopamine, like, just purchasing feel good. I want this. We're gonna get that. Like, what I remember Christmas time would go way over the top, and then always as, like, Apple started becoming bigger and bigger, we'd open all our gifts, and then in the corner, there'd be, like, a new computer, a new iPhone, like some ridiculous, very expensive thing. It would be very exciting. But I also, like, sensed from a young age, like, this just feels like. Like it's too much. Right. Like it's okay to say no.

What about as you got older, like, you became a teenager?

Yeah.

What do you remember then?

They also would make a lot of financial choice. Like, they. I think they spent a lot of money. They would borrow money from someone else to pay another person.

Really?

Yeah. Like taking money out of the cash register at the business to buy something, and they always just kind of, like, figured it out, but I'm sure they paid so much extra money. Um, like, my dad, when we were looking at a house, he was always like, do a balloon. He. He has this idea of this balloon payment.

You know what a balloon mortgage is?

I know what a balloon is.

That's how he.

He told you to do that?

Bought his business. That's how he bought his house.

What did he tell.

What's his reasoning? Like, he's like, what do you say?

They. They don't have great credit.

You just. You pay a little now and then. It gets more and more as you get settled. He always would. He. I didn't really explain to me what it meant.

Okay.

But more of like, just do it. This is what I did, and it worked for us. Look what we have.

That's very interesting. Did you do a balloon payment, by the way?

No.

How did you know not to?

Because I've learned to do the opposite of what.

That's a simple, nice, heuristic. Whatever dad says, I'm going to go ahead and do the opposite. Right. All right.

Yeah. It was always, like, confusing. We had a lot of things, and we also. So I grew up in, like, the suburbs of New York City, like, in a pretty affluent area. We had less money than those of us around us, but lived within those means around us.

So you lived above your means?

Yeah.

Okay.

And like, we had cars repossessed.

Really?

Yeah. Like, chaotic. Like, just always very chaotic. And, like, what is going.

Like, wait, how come this didn't come up? What?

Like.

Yeah, I mean, that's surprising to me. It's kind of extreme. That's not a common thing.

And it was always, like, kind of humorous. Like. Like, they talk about that. Like, oh, they saw that the van was just, like, gone. And then they didn't know what happened. And then they figured out.

What did you make of that?

Oh, it's. This is so chaotic and fucked up.

Yeah. Yeah. I think Morgan's dad told me a story because you guys had, like, a Honda van that they financed, and I think they, like, refinanced it a couple times. And he told me he ended up paying, like, over a hundred thousand dollars for the Honda minivan.

He, like, says it's, like, glorified. Like, oh, I survived. This is what we did. You'll be fine. But I remember, like, filling out my FAFSA and my mom being like, take out the max amount because you wanna buy new books and have everything for school. And I was just like, okay. And then now I'm realizing I did not need to take out the maximum amount of the loan. For what? For a new book that I barely opened.

Right.

Like, and how much do you think they made?

Well, he tried to sell us the business, so we knew. He said, yeah.

A couple years ago.

Yeah.

And you were like, if Dad's trying to sell this, I'm not getting it.

He didn't tell us an exact number. He just said, you'll be making more than you're getting now.

Yeah.

That's.

First of all.

So comfortably. And you'll.

So I said, sign.

I'll do that. No.

And I was like, no.

How did he react when you said no?

I think he was wounded, like. Yeah. Hurt by it.

Does he still have it?

No, he sold my. Well, my sibling took it over.

Oh, really? And how are they doing with it?

And then they sold it again.

It's like a hot potato. What the hell? All right. Don't tell anyone what this business is, because if they're trying to sell it again, it's gonna be dead in the water.

Nope.

Okay. Wow. How are your parents doing with money now?

I think they're living comfortably, but they're.

Gonna run out of money.

I get worried.

Do they know that?

I don't think they acknowledge it now.

What will happen if and when that happens?

I don't know. It's a big point of, like, stress for you about. Yeah.

How did you grow up with money?

The complete opposite. My parents were great with money. Like, amazing. Like, to the point where they would come home from the store, they would take. Save the receipts. They would write everything down in a notebook. When I was 4, they purchased their second home. Well, they sold the first home, but we moved into a bigger house. And I remember my mom telling me, when they lived in their first house, my mom was a teacher, my dad was an engineer. They were banking away my dad's entire salary. They didn't spend it on the house at all. They were just putting it in the bank.

Where did they grow up?

They grew up in Bergen County, New Jersey. Like North Jersey. They both came from, you know, not having much money, growing up, living in tiny, tiny houses.

Okay.

And they wanted, like, a big suburban house.

Okay.

When I was four, they bought a 4,000 square foot house.

What?

Yeah.

And that's really big, especially for that time.

Yeah.

And they still live in it?

Yeah, still living. It paid off? Completely paid off. Now they own it.

What do you remember them saying about money when you were elementary school age?

Don't buy something you can't afford. Don't use credit card. Like don't. Don't put money on credit and don't finance. Just save the money.

Did all the lessons start with the word don't?

No, but I think they didn't. But I saw, I guess, growing up, the length of time it would take to purchase something or buy something.

And what was your conclusion? A long time.

I think as I got older, I was like, well, I could. You could get this right away and put it on a credit card or, or.

When did you first go into credit card debt?

When I was in college. I maxed out a credit card.

Are you in credit card debt now?

Yes.

How long have you been in it?

Probably since after we bought our house. But it, it, it fluctuates. Like, it'll. It'll go up to. It'll get higher. I'll pay a huge lump sum and then I'll. It'll get low or close to zero, and then it'll start to trickle back up again, and then I'll start paying it off quickly.

Does it matter to you if you have credit card debt?

I guess, hypothetically, no. But I understand the repercussions that you're paying more than what your purchase was with interest and fees.

Sounds kind of intellectual. I understand you're paying more in interest, but does it matter to you here?

I think recently it does, because I'm. We're kind of in this cycle or we're. We're hitting a wall within the past couple years of buying the house and having, like, the second kid that our savings is not going up past. It's. It gets to a certain point and we're not growing anything more than that.

Yeah.

And I, I think that's what I'm realizing But I also, I'll buy things on the credit card that I don't have the money in, in the instance to buy. And I'll, like I said, I'll get commission and stuff quarterly. And I'll, in my head I'm just like, okay. And within a couple months I'll, I'll have more money coming in. I'll just put that on the card.

So the commission ends up going to pay off the debt. It's already spoken for. So you never really get ahead.

Correct. Okay. It's just a cycle.

How are your parents doing with money now?

Great. I think they feel happy and a sense of self worth that their house is paid off. You know, I've said you don't need, it's just the two of them there now in a 4,000 square foot house. I'm like, you don't need this. Why don't you move closer to us or get a condo somewhere? And they're like, well we worked for this, we paid this, we don't want to move. Like this is all our stuff is here.

What do you think about that?

I guess half is like frustrating, like you don't need the house but at the other half is like they did this, they accomplished it.

So do they live in a way that you admire when it comes to their money?

I guess partially that they're so in tune with where every dollar goes, what they have, what, what they've invested, what they're growing, they're pretty frugal. So I, I'm not like a frugal person so I don't admire that part. Like growing up, my, my dad always had like the, the beat up car and he was handy and would keep it running and stuff like that to, to so they can still live the life they want and provide for their kids.

Morgan, anything that Paul missed? Any surprises for you?

No, I'm always like, well you had that modeled for you so why don't you model it for me? Yeah, like teach me that. I don't, I have no concept of that.

And what does he say?

He feels more restricted by that idea than he was letting on with you. I think it's so telling too because when he is like telling a story about me restricting his spending, he uses the same voice that he does describing his mom. Restricting. Like we have the same voice in his dialogues.

Really?

Yeah.

What's that?

It's just a naggy like don't do that. But I'm like, you are using the same voice you use when you're talking about Your mom.

Let's double the therapy amount and go to couples therapy. What do you think?

Right.

That's pretty deep. Yeah. How did I not know this until now, Paul?

Maybe, like, because my parents were frugal, maybe I felt restricted.

And because you felt restricted, now you.

Feel that I need more.

More what?

Money, things.

Yes.

So would that start to explain why on a weekly or monthly basis you come home saying, like, I want to get this, I want to get that, I want to get this. Yes.

Right.

And then when you bring those things, you don't look at the money. Right. You're not, like, pulling out your conscious spending plan or even how much is on.

I just see the thing.

You see the thing?

And I said, yes.

And then who makes the decision about whether you get that thing or not?

Myself and Morgan sometimes.

What's the difference? Like, how do we know if it's going to be you making the decision, Paul or Morgan?

If it's disgust, it's Morgan. If it's an impulse. If it's an impulse and I just do it, it's me.

Yeah. Okay.

I think Paul is very, like, rebellious against, like, limits.

Paul did say, I need someone to tell me what to do, but when they tell me, I resist.

Yeah.

Paul, you remember saying that?

Yeah.

Okay, so he's rebellious. Go on.

It was difficult for me to hear that. He's saying he was restricted. Cause I think he got everything he wanted as a kid. Like, I think they went on vacations. He has tons of toys, like, tons of things, material possessions. So I don't think there was a lot of restriction. I think there were maybe limits set. And hearing that, as someone who didn't have limits, I'm like, I want this. Give me those.

You want limits?

Yeah.

Well, who do you.

I want someone to tell me.

No, who do you want to set the limits? You want him to.

Yeah.

Okay.

Or us both set the limits.

Okay. Just a question. Like, how likely do you think it is for him to set limits for you?

Very unlikely.

I mean, let's be real. He's not setting limits for himself.

Like, I think he feels like. Like he doesn't like that. Frugality.

Yeah.

I just want. I earned this. I should be able to.

Yeah, I get that same sense. I'm a little puzzled, Paul. Like, if I grew up with parents who pulled out the receipt and then wrote it down in a notebook, and then. And then I'm, like, sitting over here, age 5, and I'm like, I want a Ferrari, and now I want to go and spend My money on travel and credit card stuff and et cetera. Like, something doesn't match there.

I guess. Also, I. I have the mentality, like, I work. I work a lot. I work hard for my money. I want to enjoy it. I work a lot of hours per week. I have a stressful job sometimes, most of the time. And having experiences or doing things that cost a lot of times cost a lot of money, I jump into because I have this mentality. I work so hard that I want to. I want to spend my money or I want to do things and not be restricted.

You previously said that we work hard, we're going to go visit places. If we have to pay it off months later, that's how it is. Tell me about that.

Well, last. Last year, we booked, like, we never. We don't get that much time alone, being with two kids. And last year, we.

We.

We booked a trip to Key west together. It was somewhat spontaneous, I think a couple months. A couple months before we, like, planned it out.

How did it come about?

I was on, like, Instagram and saw an advertisement for, like, some bands we, like, playing and.

Okay.

At Key West Amphitheater, we booked the trip. I used credit card points that only covered one. One room of the stay one night. Because we booked, like, the bougie room on the beach with the balcony.

Okay. Did you know that?

What?

Like, oh, we're gonna use our points. It's gonna pay for one night, and we'll have to figure out the rest.

Once I started, like, looking at the hotels, and it was one of those high, high weeks, you know, where all the hotels are more money.

Okay, so what'd you do?

I booked three nights at the hotel. It was like 800 a night, 900 a night.

Okay. All right. Pretty expensive.

Yeah.

So you got one night covered and then two nights on the credit card. This credit card, did it already have debt on it?

Yeah, but I don't recall how much. But not crazy. A couple thousand, maybe. Okay. I don't think we used the credit card. A crazy amount. When we were there, it was mostly cash or debit cash. Yeah, but the airline and the hotel was on the credit card.

How much did it end up costing in total?

I think when we ran the numbers afterwards, it was over $5,000. Maybe closer to seven or something.

No, it was probably like eight if we factor everything in.

Yeah.

Can't. Can't move forward if we're not honest about what the numbers are. The numbers are the numbers. So I'll just say, like, that's A very easy to adopt technique, which is if you have a range. First off, if the range is like 5,000 to 5,500, fine. I get that there's going to be some play. If it's like 5 to 7,000, that's a pretty big range. And if you're going to have that range, go for the top.

Right.

All right. What did you do about the $7,000 in costs on the credit card?

Yeah.

You still paying it off?

No, it got paid off toward the end of last year.

There's new things on there.

Oh, like what?

Home improvement stuff, car maintenance, unexpected car stuff. Oh, and concert tickets.

Which concert?

Fish.

Okay.

Yeah, yeah. All right.

And what kind of renovation stuff?

The bet we're redoing the bathroom right now.

How much? There's. There's no budget.

There's no budget. We started redoing it. We found bigger issues, like in the house that had to be dealt with. So that. That's kind of. It wasn't just taking off a finish and replacing a finish like we had hoped for. I'm doing it myself, so saving money there.

That's a very Midwest thing to say. You know what? I talk about the Midwest money psychology. Can we look at the numbers?

Yeah.

First of all, what was it like.

Doing this conscious spending plan together?

Definitely eye opening. I don't. Like we said we made a budget previously. Never really stuck to it, but I think because we haven't done. We haven't put the numbers on paper in front of both of us in quite some time since things have changed.

What? What? Hold on. I already love this. You did. When you. When you said you did a budget before, did you put numbers on paper?

Yeah, Excel spreadsheets.

But it's been, like.

I'm saying it's been a while since we've done that.

All right. How long has it been?

Two years.

Like, when did you do it last?

Like, what.

What were. What was going on?

There was like a financial planner through my work that we met with. Oh, I know. He tried to sell us whole life insurance, and it was just like. It got like a little bit of a fire going.

Was that so you could run away from his bad advice?

I think so. But it.

Yeah, we had the initial meeting. We both got life insurance, which we didn't have. Which we didn't get. The.

You got term life insurance.

Okay, good.

We didn't have it. We had two kids. We're like, we need life insurance. Okay, all right, that's taken care of.

And then what happened? Did you change Anything after that?

I don't know.

That's pretty much how budgets go.

Yeah.

Yeah.

It's like, oh, this sucks. And then you do nothing about it.

Yeah.

All right, well, the good news is your situation is not that uncommon. Like, but nobody likes budgets. The bad news is that you did not change anything anyway. So you put the numbers into the csp and what was that like?

It was stressful. There was just a lot of, like, I think with us, when money gets talked about, like, I. Immediately there's emotion. Like, I get activated. I feel stressed. Paul gets very defensive, and it just kind of gets. It's difficult. We don't move forward. We did it, but it was like cramming final hour. Like, we gotta get this done. I think we were both avoiding it a little bit because.

Why were you avoiding it?

Just Cause I knew what the conversation was gonna be like.

What would it have been?

It very much goes to. It feels like I'm the fun killer policing Paul. He gets very defensive. I have to convince him or kind of rationalize, like, talk him in the direction I want him to go in, which doesn't always work.

What's that direction?

Just toward, like, solution or spending less money.

When high numbers were coming up, Morgan in the moment was like, oh, we gotta stop spending this much. We need to do this, we need to do that. But it was. All we were trying to do is let's just put everything in here first, and then let's figure out the solution. Put point A to point B.

Do you know why you were doing that, Morgan?

I. I could be wrong, but I feel like you were looking for me to create the solution right then and there, or to have the solution in that moment.

Here's what I wish couples did before they filled out the conscious spending plan. I wish they would both sit down independently and ask themselves, how do I show up with money in my relationship? Am I an avoider? Am I a worrier?

Do I always try to get it.

Done as fast as possible? And then I wish they would both write down how they want to show up. Maybe one wants to be more understanding instead of judgmental. Maybe another wants to be more engaged instead of avoidant. I wish couples would spend an hour talking about that and then 30 minutes on the CSP numbers themselves. It's like that old quote about spending all the time sharpening the ax before you go and cut down the tree. Of course, nobody does this, but that's.

How it should be done.

Focus on your own psychology, then the psychology of the two of you. And then, and only then, the numbers. We'll open up their conscious spending plan after this.

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.

Thanks for your patience. Let's get back into it as we go through the conscious spending plan. By the way, you can download the template and follow along@iwt.com CSP Morgan, can you walk through the net worth section? Just read off the words in bold and the full number next to it.

Assets, 495,000.

Okay.

Investment, 16,994. Savings, 5,744. Debt, 218,718. And total net worth, $299,020.

All right.

What do you think about that?

I think it's pretty low. Okay.

What do you think, Morgan?

I thought we were going to be like, negative, so.

Okay. All right. Damn, it's like depressing in here right now. I'm like sweating. How do we know if this is good or not?

I don't know.

What do you think, Paul? What? You said it's pretty low. What number would be good?

Just looking at the numbers, like a higher savings and a higher investment would be good.

So your response is I don't know what would be good, but I know, this is bad. That's pretty much how most Americans feel about their money.

It's like.

All right, well, that's why I'm always going to have a job. All right, so, look, I don't know if it's good or bad. I know that in general, it's positive. I know that you're in your 30s. I know that looking at this, you have a net worth of $300,000, including a house and alone. That just gives me a snapshot of where you are, your income, your expenses. That tells me a lot more.

Right?

Right. So let's put a pin in the net worth.

First of all, it's positive.

That's a good sign. It's positive with 300,000 bucks. All right, income. Paul, what is your combined GROSS Monthly income?

14,307.

All right, so you make $14,000 per month, gross, gross. So what do you think about that number?

I don't think it's. I wish it was net, but damn.

A lot of depressed responses. I've never had a couple making $14,000 a month. Telling me all the things wrong with life. What the hell is going on here?

I just feel like, where's the money?

It just seems like, yeah. With all the costs and living in the area we do, it seems like it doesn't go very far. Mm.

Have you ever felt good about money? Yeah. When?

When? I guess when I see a lot of it.

How much is a lot?

I don't know. 10,000?

Well, look right here. Look at your investments. Read that investment number to me.

16,994.

Okay. Do you feel good? I.

That number needs to be higher to be on track for retirement. So. So, no, no, not for investment.

So you told me just a second ago, I feel good when I have 10,000. You have almost double that. You don't feel good. Is it possible when you have 50,000, you're not going to feel good?

Could be. Maybe. Because once you have more money, maybe you think you need more money.

I think he puts values on things, like, versus numbers.

Like.

Like the things he has, the experiences, like what he does. Like cars, a boat. Not that we have a car. No, but, like, I think in your mind, that's what you feel like.

All right, your fixed cost. What's that number, Morgan?

84%.

84% on fixed costs combined. What do you think about that? Oh, I just saw that look on your face.

I went, yeah, yeah. It just feels like out of control, like.

Yeah, it's a lot, right?

84 is pretty high.

Yeah.

Right here. If I had never met you, I could have already told you. Just from looking at this single number, one or both partners feels totally stressed by money. They feel like they're never going to get ahead. I feel like it's never enough. They're probably fighting about money. Probably one other partner is avoiding it. I could see that from the differential in spending between partner one and partner two. And you know, I could kind of name off the type of dynamics happening in the relationship just from the numbers. And now that I've met you, we can tell that those are all true.

Right?

The problems when it comes to money are not about a one off concert or a one off subscription or eating out. It's not about that.

It's about the big numbers that change.

It and our behavior.

Remember that the challenge with Paul and Morgan is that they talk and talk and talk about money, but they never really change much. There's also the fact that Paul avoids money and Morgan chases after him.

So after all all the gloom and.

Doom you heard from earlier in the conversation, what do these initial numbers tell you? Well, come back next week as we go deeper into their conscious spending plan with even more surprises.

Thanks for listening to I Will Teach youh to Be Rich.

I'm Ramit Sethi.

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