168. “I’m going to die with student loans. Why should I count them?”

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We keep getting into debt and getting out of debt and then getting back into debt.

I was in the dark. My head was in the sand. 100% overspending.

Antonio always managed the money.

I get anxious because I know what's coming next. Where this much more money in debt.

This month while Emmy buried her head in the sand.

I've never been involved in our finances. I got a free pass to walk away and not take responsibility.

Emmy is a therapist and she can't figure out her relationship with money.

It's anxiety inducing. It's overwhelming. I don't understand it.

They've been in a cycle of racking up debt and paying it off since they got married six years ago.

We both knew we were in a good amount of debt, but the amount was climbing.

How much did you raid from this emergency fund to pay off the credit card debt?

$77,000.

It's unrelenting.

There's nowhere else to go after this. We're selling our house and having to move in with one of our parents.

What were you feeling as you were asking these questions like the walls were.

Closing in, like I was going underwater.

Can they break the cycle of death? What's going on, Emmy?

I just need a second.

Let's dive in with Emmy and Antonio.

There was one day we were leaving church, and there's, like, a fast food restaurant, like, down the road, like, on our way home. So we go, and he's like, oh, no, don't use that card. And I was like, why? And he said, because it's almost maxed out. And then I told him. I was like, that's never happened to us before. I, like, spiraled kind of after that for a while. To be honest, I don't remember any of the questions I asked. It was all. It's kind of a blur.

What were you feeling as you were asking these questions?

Like the walls were closing in, like I was going underwater.

Mm.

Have you ever felt that before with money?

All the time. From forever.

So it's a familiar feeling to you?

Much worse.

Yeah.

It just got. It's like the feeling was always there, but the intensity got, like, 10 times worse in, like, a second.

Okay, Antonio, what do you remember about that conversation?

Almost shame. Up to that point, I was basically the main person in charge of finances. And, I mean, as you'll see, we never really figured out a way to make it work for both of us. I've come up with plans in the past, and we failed. And in that conversation, it was just like, here we go again. Like, before we were married, I always paid off my credit cards in full. And I made one decision that was the first time that I ever knew I wasn't going to be able to pay off my credit card in full. And that was when we got back from our honeymoon. Her ring that I got her was a cheaper ring because I got what I could afford. It actually tarnished in the ocean. And so when we got back, I was like, you know what? I. I gotta get her a good ring. I gotta. I gotta make sure that she's taken care of. So we went to the store, we got her a good ring, one that I knew would last. And that was the first time I made a purchase that I knew I couldn't pay back that month.

How much was the ring?

That one was, I think, 3,000. Okay.

And how long did it take you to pay that specific charge off?

It snowballed. I couldn't even tell you.

Okay, after the seal broke, the next month. You charge more the next month. And it just never really got paid off for years and years.

Absolutely.

What do you make of that?

We felt bad. It never stopped. Basically. Like the, the feeling of bad never stopped. We never like got past it. But there was. I don't think there has been a day since then that we haven't talked about finances or stressed about finances or prayed or like just like, it's been a snowball effect since like, we never like moved on.

What do you talk about day to day? About finances?

Oh my God, everything.

Yes. And the thing is that we use so many different cop outs and ones that yo, yo. You wouldn't like to hear. Sure, we'll go over it, but we've used a lots of.

Tell me, what do you say to yourself?

Really? I can only think of the most recent one. Most recent one being. Being, hey, she's going to have a full time job soon.

What's yours?

I physically could not get a job for a while because I was working. So I was like, I just kept my eyes on when I'm working, we can climb out.

Okay, what's next?

It wasn't even just like mental things that we told ourselves. Like other accounts that we had used that were saved for things in order to pay off our credit card debt.

Okay, so you raided another account to pay off debt. Okay. What was that account for?

I had a savings account coming into the marriage that helped us purchase our home and it was meant for like big purchases. Slash, emergency fund. Um, like if hits the fan, like, this is the money that's there. Don't touch it. It was actually in the hands of a financial advisor. Um. Yeah, I know, we'll get to that. Not anymore.

Which mid tier local financial advisor was it?

UBS knew it. But it's not my fault. It was, it was give. It was handed to me as like a, like a present.

All right, so how much did you raid from this emergency fund to pay off the credit card debt?

$77,000.

Whoa.

Okay. Yeah, I didn't know that until recently.

At what point did you go, isn't this like called emergency fund and we're paying off credit card debt? At what point did you say that, if ever?

Constantly. Constantly.

Okay, so you said it, but didn't change your behavior?

I guess. Yeah.

All right.

What other cop outs did you use?

So because she was in school, we actually went into student loan debt to pay off a lot of stuff too.

You took the student loans and you paid off credit cards. Okay, how much?

Yeah, it was almost 40k. For student loan? For student loans. For like actual school. Then we put some of it toward the down payment of the house. Then some was for credit cards. There was maybe 10k of that was for credit cards.

Maybe the last one that I can remember was was we opened a personal loan through Bestech.

How much?

That was 30k and that's the one that we had told ourselves when we hit the submit button on that one. Hey is it last chance we get to fix fix our problems with money? This is there's no more options after this. And then we got ourselves in way more.

We'll be back after this short break. Real question for you. Do you know how often you're supposed to see your primary care physician? How about the dentist? How about a dermatologist? A lot of us just wait to get a text from the dental hygienist to know it's time to make an appointment. But your health is important and we talk about going from defense to offense with your money. What about with your health? Why not make your life easier and Book this year's appointments today with Zocdoc. Zocdoc is a free app and website where you can search and compare high quality in network doctors and click to instantly book an appointment. They have over 100,000 doctors across every specialty from mental health, dental, primary care and more. Just filter for the doctors based on your insurance, your location, even ratings and find a doctor who's a good fit for your needs. Plus, Zocdoc appointments happen fast, usually within 24 to 72 hours. Instantly click through your options, book the appointment and you are good to go. If I needed to find a new doctor today, this is what I would use. Stop putting off these doctor's appointments and go to Zocdoc.com ramit to find and instantly book a top rated doctor today. That's the 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 at gusto.com ramit Once more, gusto.com/ramit now back to the show. Let's rewind back to the incident at the fast food place. So what came out of that conversation.

What clicked differently during that conversation was just the fact that the credit card was maxed out and that was the first time that that happened. That's it, basically. Yeah, we both knew we were in a good amount of debt, but the amount was climbing a lot. Every month when I do the bills, I basically, I get super introverted, anxious because I know what's coming next and I know that, hey, I'm going to have to tell you that we're this much more money in debt this month.

It was genuinely like I was in the dark, my head was in the sand. Absolutely, truly, 100% overspending.

You know, I'm always fascinated with the first time that something big happens with money, like when he went into debt to buy her a ring. And when a couple realizes they are in serious financial trouble, like when they're at the fast food place. Do you see how mundane these examples really are? A lot of us believe that there are these singular moments where the sky's clear, the trumpets play, and everything changes in our finances. Guys, these are extremely rare when it comes to our money. The best predictor of our future behavior is our past behavior. And, and usually what I see is a series of mundane day to day decisions which people make because they're easy and they don't understand how to connect today's decision to tomorrow's consequence. Now, this is true for money, for food and relationships. And once you see the pattern, once you internalize that, what I do today has a profound effect on tomorrow. Sometimes if the stakes are high enough, you can start to make a change. Did you realize the severity of the situation when you were taking out a $30,000 personal loan to pay off credit card debt?

I feel like we realized the severity. I, I also feel like we still didn't have the appropriate tools.

We had no tools, but we're panicking every day. So the last coping, the last thing that we haven't talked about yet is that we Refinanced our home. And that was, like, the last thing.

Free money, right? It's all about equity.

We've learned. We've learned.

Who told you that?

Your broker?

Who told you? The. The agent who told you that?

Everyone. Actually, you know what? Now that you asked that question, everyone told us to do that.

Okay, hold on, hold on, hold on. Before. Before we go on, tell me what you thought refinancing meant and what it would get you.

I had absolutely no idea. Like, no clue. Like, I literally had never. I didn't know what a for. I did not know anything.

I feel like I knew exactly what I was getting myself into. It just felt like the best option. And in a way, I still feel like it was because it led us. Believe it or not, it led us to you.

How?

The broker that we used, it was very open, very honest. I told him everything. And I'm like, listen, man, this is. This is why we're doing this. We're doing it for debt. And I. I told him about our cycle, too. I was very honest with him. And. And he was like, listen, man, we don't want to see you go into more debt. I hear you. Look this guy up and he talked about you.

Hold on. This is a mortgage broker. Yeah, yeah, he recommended me.

He did.

The guy who says, I trust him as far as I can throw him. Wow. I don't even know what to say. This is insane. Anyway, thanks. I appreciate that from the mortgage broker.

And we continued to overspend and dug ourselves in a lot. And we. And we. We've asked ourselves throughout the past couple months, what. What are the habits that we have that really get us there? And I think we have some answers, but tell me. We'll get to that in your time.

Let's. Let's talk about it. I love that you're introspective. Tell me what you discovered. What habits?

So I think the biggest one for me is just the fact that I'm overly generous when I don't have. I. I mean, I'm a recovering people pleaser, so there's that. But I. I like to make other people happy. And. And sometimes that's spending them and buying something. Buying them something that I know they like. Like, I have a list on my phone of things that I hear people say, I like this. And I will. I will write it down, and I will say, this person liked this. I will do everything in my power to make sure you get that thing.

Okay, so one is, you're overly generous. Antonio, when was the last Time you said no in your relationship.

We don't say no. Yeah, we don't say no.

We.

We've changed our wording, and I'm not going to go down that rabbit hole of recently. But no. No, that's not something that we have.

You don't say no because if you said no, that would make you. What?

Make me the bad guy? Because you're not getting what you want.

Right. So let me give whoever's around me what they want. I'll find a way. Right. I am a. I'm good at making.

People feel good, making people feel loved. It's my superpower. But I recognize that a lot of the time, it's at my own expense.

What do you do for a living? You in hospitality? What are you?

I'm a firefighter.

Firefighter. That's interesting. Why do you laugh at me?

He's a first responder. Like, he's like. He. Like the stories that he. He saves people. It's. Sorry, it's just the irony of what I do for a living and what he does for a living and this being a blind spot is just. I cannot see past that. It's just hilarious and crazy. Anyway, sorry, go ahead.

So you. You think because he saves people's lives, it's ironic because what.

He does, he doesn't put this label on him, but other people do. They're like, oh, like you're the. The hero. Like, you are someone that can do this. He'll never say that, and he doesn't put himself in that. But maybe like that connected with the people, pleasing. Maybe had a little bit of connection.

Definitely a lot. That's a good insight, Antonio. A lot of times, what we find. You called it the good guy. A lot of times folks will call it the hero. It makes them the hero. When they remembered something somebody said seven months ago and then give it to them for a holiday gift. It really is quite amazing.

What I'm getting from this is that it's something that I'm probably gonna have to be very intentional about. And the second I stop being intentional about it is where we end up in a lot of debt.

What else? What other habits are there?

It's gonna sound like a justification, but I don't think it is. Context.

Throw it out.

We didn't know what fixed costs were, and so we had no idea that just our necessities was well over 100%. So every month we were in the red and didn't know why, and then kept feeling like crap because we thought it was us. And then we look at each other, we're like, is it us? Like, I've never been involved in our finances. I've never talked to him about him. I've been very panicky, very nervous. Just never involved on purpose.

Why?

I would say a severe lack of knowledge, but that's on my part. I don't put that on him. I just had no idea. I put my head in the sand and I said, it's anxiety inducing. It's overwhelming. I don't understand it. It's not my thing.

Why?

I think it was just deflecting responsibility. It's all on you. I trust you. You got this. I support you. I'm gonna keep putting my head in this hand.

You know, Emmy was really descriptive on her pre screen call when she talked about her aversion to anything relating to finances.

And that's when I started watching Ramit's videos. But I watched.

She had to very aggressively convince me to watch. I refuse. I was like, I'm not watching anything financial. I refused. I don't give a. I was like, I don't care what we're doing. I don't want to watch anything. So finally I was like, okay. And like, it was like a whole thing. And all day, he's like, okay, we're gonna watch it today. And I'm like, like, deep breathing.

Okay.

And like, I get my notebook out. I'm like, okay, let's watch whatever. Like, I could not. Would not want to do it fast enough.

Antonio, why did she deflect responsibility to you?

I mean, I don't know.

Did it cost her anything?

Yeah. Us ending up in debt again and again.

But that. It didn't cut. It didn't cost me anything.

How do you mean?

I got to put the stress on you. I got to put the weight of the world on your shoulders. I'm so sorry. And say, you got this. You can do it. And I could walk away. What did I put on my shoulders in that? Nothing. It's like I. I got a free pass to walk away and not take responsibility. Like, that's completely unfair. And I see that. I. I see that, and I'm. I am sorry that it's taken this long to see that.

Yeah, I hear you. And I mean, I. I forgive you. You're doing way better now, but thank you for. For acknowledging that.

No, for sure.

Emmy, how you doing over there?

Sorry. I'm good. I'm just. I'm okay.

Still. Problem.

I love you.

Love you too.

What's going on, Emmy?

I just need A second.

Okay, we have all the time in the world. What's it making you feel as you come to this realization right now that.

I. I wish I figured that out sooner.

Let's take a second to talk about what is happening. When people get emotional on this show, it happens all the time. Women cry, men cry. Couples get mad at each other. They roll their eyes. They get sad, frustrated. They tell me it's hopeless. They also have breakthroughs. They smile, they laugh. They touch each other on the arm. I have these conversations so that I can help couples, which is why I make it really hard to get on the show. You have to fill out an application. You have to go through screening. We give you lots of off ramps before you ever speak to me. So the couples you see, the couples who come on this show, really, really want to be here, and they are courageous. Can you imagine going on a show where you and your partner talk about every financial detail in your life, where you reveal it to literally millions of people? This is hard and is really uncomfortable, but every couple on this show does it because they want help and they want to do it together, which I think deserves a lot of respect. I've noticed that people cry the most at two topics. First, when we talk about the habits that they are teaching their children. And two, when they have a huge realization like Emmy just had. This is one of those rare moments in life where somebody looks back and sees everything through a whole different light. That's emotional. I don't know about you. I don't know how it shows up in your body, but for the handful of times it's happened to me, only a handful. I get a tingle that runs from my head all the way down my body. And I'm sharing this because you would never think that talking about money would make people cry. But if you've listened to this podcast, you know that money goes far beyond the numbers on a spreadsheet. And I think Emmy's realization is just a beautiful example of how money can affect your relationship in a very deep way. What was your interest rate before and after?

We had a beautiful interest rate before. 2.2.99.

Yeah.

Okay. What the. That was the before.

Yeah.

Yeah.

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What's the after oh 5 5.99 what the.

Why'd you do that? Wait, now I understand why this mortgage broker loves you. Why did you do that.

Well, okay, so we, we initially ended up buying our house during COVID So it, at the time, right before everything, pretty decent interest rate. And then afterwards the, the 5.99 was what we figured would help us, you know, get out of the 29 that we were paying in credit cards.

So you refinanced from 2.99 to like 5 point something percent.

Right. To pay off all of our debt.

You paid off all the debt. So now it's all rolled into five point something percent. How much were you paying off from the credit card debt?

The credit card debt alone ended up being 50. A little over 50k. Yeah, we paid off credit cards, we paid off our car. And so wiping everything clean and then being able to build our savings and all that just seemed like everything weighed out pretty well.

So you now have like a 29 year loan at roughly 5.3% at that point, once you sign the deal, your debt was all paid off. Blank slate. Not bad. Not bad.

There is an asterisk there.

Oh, okay, Go ahead, tell me.

The student loans, those aren't paid off.

How much is that?

Yeah, that's 60k.

It's kind of interesting, right? You took out that $30,000 personal loan, you said this is our last chance, and then a short while later you refinanced your house to pay it off. So what do you think about the fact that it wasn't really your last chance?

There you go. Yeah, that was the, that was the problem that we, we weren't able to figure out any other way to crawl ourselves out of.

Aren't both of you married? Contributing to the financial picture?

Yes and no. I was working full time up until maybe about three years ago. Two years ago, something like that. My master's degree program was about three years and unfortunately my internship was unpaid. So I wasn't contributing financially for about two years. And that I think that's a significant piece to this as well. And now I am. So now I'm. I'm in my career and now I am working and now I'm contributing financially.

Got it. Did you both go into debt during that time?

Yes.

Okay.

Had you been in debt before that time period?

Yes.

Yes.

Okay. So it wasn't just that unpaid time.

No.

But it got significantly worse. Very much like much quicker. Like it like sped up times like a hundred, like during that time.

Okay.

Like we did the math and like we know the number of how much we were hemorrhaging each month now, but at that point we didn't know.

Huh.

Okay.

It sounds like you learned to live with being in debt. Am I reading that right?

Yeah.

Okay, so you're. So, as a mental health therapist, you know about tools for coping and stress and overwhelm a variety of different things, right?

Very much so, yeah.

What do you think, hearing yourself describe your relationship with money?

I get so frustrated because it's that one blank space. I have gone through inner child work, and I help other people go through real healing, and I'm. And I'm confident and proud of. Of who I am and what I've gone through and worked through. But when it comes to money, I do not know. I cannot. I can't self analyze. I can't. I. You're sitting on top of my dsm. Like, I can't figure it out of why my relationship with money is what it is. There's a blind spot there. I.

All right.

I think that this is something that I'm. I'm even just hearing and learning about myself, too. Like, it's. It's nice to have the trust in me, but I thought I had the trust. I mean, I don't even think I did.

That's profound. She trusted you with money, and now you're realizing you didn't even trust yourself.

Yeah, I mean, I. Looking back, you can. I mean, our track record speaks for itself. Yeah. I mean, the. The results showed that for one reason or another, even I was in charge of the finances. And whether it be assertiveness, whether it be my overspending or not making enough, we still ended up in debt again and again and again.

Now, that is honest.

Yeah, I just. I. I don't think I ever was able to admit that.

So why is it that bad? I mean, technically, y' all could go the rest of your lives. You did this refinance. D. What's the problem?

No, that will not be happening.

It's the stress.

The stress? Oh, really?

I mean, having having that loom over you every day, knowing that you can't technically really afford anything because you're technically.

What's that? I mean, how many tens of millions of Americans are in credit card debt?

Yeah.

I mean, you all did it for many years, right?

Absolutely.

You're still here, still alive. Still got a nice Netflix subscription roof over your head.

No, we don't.

Wow. Okay.

All right. I appreciate it.

All right. Whoa.

We haven't gotten there yet.

You destroyed my own punchline. Okay, I'll take the win on that. Good job, you guys. That was good. Big kudos to Emmy for admitting she has a Blind spot and for saying our track record speaks for itself, referring to their poor financial situation. This is a great example of what I mean when I say to live a rich life, you have to be honest. Honest with yourself and honest with the people around you. Emmy is a therapist, and she can't figure out her relationship with money. We've had people who are, quote, personal finance experts or instructors on this show. They can't figure out their money. It doesn't surprise me. Just because you are an expert in one domain does not necessarily translate to something even adjacent. It would be like asking a bodybuilder to give you tips on Pilates. To an outside observer, they both seem like fitness experts, but in reality, they are totally different skill sets that are also inextricably tied together. The good news is that Emmy and Antonio are here asking for help, which I totally admire. It's one of the best skills you can possibly have. Listen now as I ask them about their childhood experience with money.

My mom was always great with finances, and she. She was the one who always talked to me about them and, you know, taught me, hey, this is how you use credit cards. Pay them off, you know, squeeze them for what they're worth. Up to the point of us getting married, I followed all that. Wow.

This is. What'd your mom do for a living?

She worked for a supermarket.

Okay. How's she doing financially now?

They're doing great. They just remodeled their home.

Whoa. Okay. All right. What do you remember learning about money as a young kid?

I learned that money. Serious. I believe that money is one of the big reasons my parents are separated. My biological parents, they always argued about money.

Like, what'd they say?

Honestly? Screaming matches.

Really?

To the point that I would lock myself in the bathroom? Yeah. I never knew exactly what the issues were, but I knew that they disagreed a lot about money. And I. I always. I always thought that was one of the big reasons that they separated.

You remember any phrases they use as a kid about money?

Yeah. Excuse my French. Every month.

That's what they said.

That phrase. That phrase is ingrained in my head. What does that mean that this keeps coming up? That. Why. Why is this always an issue every month?

What lessons do you think you learned about money, looking back to your childhood and your teenage years?

Money is serious. It's a big tool, and there are ways to work the system to your benefit. Don't let them work you.

Credit cards, for example.

Exactly.

In your own personal finances with the two of you. As it relates to credit cards who got worked did the credit card companies or did the two of you get worked?

Oh, we got worked, absolutely.

Both of our. I think a cultural aspect is also important. Like, his mom and my dad were both came here from other countries and like, built themselves up and are doing very well and they pride themselves on. We did this. I want to teach our kids, the kids being us, like to do well. So my dad was also a supermarket, worked his way up just like his mom. And I remember one time there was a huge fight. And this is also burned into my brain. I must have been maybe like, I don't know, 12 or 13. And I remember my dad was at the door waiting for my mom and they had a very toxic relationship. I need to clarify with that. They're no longer together. They're both doing fantastic, but growing up, not healthy. And my dad told me to go to my room and to not come out. And I did. I. I don't really remember ever coming out. And they had a huge, huge, huge bad argument because my mom had spent money that my dad didn't know about. I don't know how much it was. I don't know. I don't know. I don't know anything about it. But that's the only thing I remember about money talk was that fight.

What was your mom's relationship with money?

My mom trusts the financial advisor with everything, with all of her self, basically. Like, not like in a weird way. She just like fully trusts, like all her money's with him. And like, she fully trusts him because again, it's intimidating. My mom can spend and she doesn't feel guilty about it. And I envy that about her.

Was your mom engaged with money?

No. Not even. Not even? No.

Until recently, were you engaged with money?

Not even a little bit.

You said your mom trusted her financial advisor. Who do you trust?

Yes, my husband.

Emmy follows her mom's pattern by burying her head in the sand and trusting someone else with money. In her mom's case, a financial advisor who's almost certainly charging aum, plus a bunch of dog annuities and whole life insurance. She does the same by simply trusting her husband. Antonio follows the script of his parents phrase every month, where they always felt behind the same way he feels with Emmy. Think about the power of that phrase every month. Like it's unrelenting. Like you can never get ahead because something always comes up. Of course, there are lots of other details and nuances, but at the core, their stories are remarkably similar to the examples they saw modeled for them. You've got a Double whammy here. Not only have you been in debt for the majority of your marriage, but you've actually felt bad about all the things you were doing.

Oh, yeah.

I mean, if you're gonna spend all this money, you might as well feel good about it.

We never did. And I think that's where, like, I'm getting hung up on. I'm like, oh, if we're like spending frivolously, it's like, like in the, like fun. And it never was, ever. And I'm like, damn.

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, then we get overwhelmed. We gotta pull all this paperwork and we're panicked because the deadline is approaching. That's why I recommend Gilt. Now that tax season's over, this is actually the best time to get ahead. If you run a business or you filed for a tax extension, one small move right now could save you thousands later. 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 G's full tax library with guides on retirement plans, QBI and more. So if you've got a business or you filed for an extension, this is the window to take control of your tax plan. Head to joingelt.com ramit to book a consultation. And as a member of my community, you get to skip the waitlist again. That's joingelt.com ramit join G-E-L-T.com ramit taxes don't have to be a task with Gelt. They can be a tool to build wealth. Let's get back to the conversation. The two of you just kind of got on this escalator and just started riding it. No one thought to ask, are we on the right escalator? Are we going the right direction? Are we even on the same escalator? Do you understand why until just now you have been avoiding the debt? Do you guys get why that's happening?

I have a very negative word that I don't ever like to say in my head.

What?

I don't like to say the word stupid because that's self. Just. It's not a good word, but it's just. It's just stupid.

Okay, so you. Yes. So you feel shame, embarrassment, and you want to avoid it. I agree. That's part one.

Yeah.

What's the second part?

Not sacrificing enough.

Yeah, that's true. But what I think is going on here is you have two major feelings about debt, both of you. The first is that shame, guilt, embarrassment. The second one is you don't actually believe you can make a change. What happens if this pattern doesn't change?

I fear what happens to us. I mean, I saw my parents argue about it. We end up having to sell our home, move out, put ourselves in an uncomfortable situation.

I mean, how old will your daughter be at that point?

10? 11?

What do you think she'll be seeing an instability?

Sort of.

What messages will she be learning from her parents about money?

My parents aren't cool with money. I mean, pro. I'm sure there'll be many times that we can't get her something that she wants, or we'll get it anyways, and.

Then I can't think of if this pattern continues. I can't imagine you ever saying no to your daughter. Not once.

Yeah, she'll get whatever she wants. You're right. Yeah. Yeah.

There's no way you. You would ever say no.

You're right.

What would she learn from that?

That she can get whatever she wants. And maybe she shows no restraint in her buying. Yeah.

So when she becomes your age, what would she be doing?

Getting herself into debt.

She'll tell herself that she's not good at it. She'll put her head in the sand, she'll avoid it, and she'll say, that's for my partner. That's for my dad. That's not for me, and I don't want that for her.

Sounds familiar.

Of course it.

What's going through your head right now, Antonio?

I feel like there was a little light bulb. I switched there.

Every single couple who has credit card debt struggles to say no to their children. It's exactly the same thing. And that is because if you can't say no to yourself, how are you going to say no to your kids?

Yeah.

So it's really up to you to internalize. What are the stakes we're talking about here? Because it's not just about a vacation. You all want to take it's not that. It's not even about, oh, my gosh, I'm worried about going back into debt, which is a legitimate fear. I understand that, but it's so much bigger. It's what is the culture we want to create in this family that's bigger than any financial decision. Speaking of that, let's take a look at your numbers. That's what I want to get into. All right, I'm going to put this up in a second. What was it like to go through your conscious spending plan together?

I will speak for the first time. The first time was painful and long and emotional.

Long, like how long?

Eight hours.

What? Eight hours.

We're at 75% when we first started this.

So under 80.

We're first under this. It was first of this was what?

We were at like 102%.

No, we were like 107. 108%. Yeah, we were close to 110% to fix cost alone because it's over with.

Oh, the miscellaneous. But it's okay.

It's not even here.

It's not even on there.

Post retire, post tax retirement savings. That sentence would have used to give me aneurysm. Why am I losing my mind every month if we're at 75%? I shouldn't be distressed, like, almost. You and I have been hardcore stressing.

Yeah.

That'S 100% we shouldn't be stressing. See, this is the cycle issue. We need to get go deep into this. I'm ready for some insight.

Let's go.

What's my problem?

I'm surprised, honestly. You've been doing really good with this stuff.

I know, but this is stressing me out.

I'm surprised. It's okay if it does.

Now let's take a look at their numbers. Assets, 387,000. Investments, 16,700. Savings, 1500 dollars. Debt, $362,000. Net worth, $43,200. You can get a copy of my free conscious spending plan, which will help you calculate all these things for you@iwt.com CSP again, it's free iwt.com CSP so you two collectively make $114,600. Did you know that?

We figured that out together. And she was like, no way.

And Emmy, why did you say that? Can't be right. Is it higher than you thought or lower than you thought?

It was much higher than I thought.

Ah. Ah. Even more interesting. So, you know when y' all kept talking about, like, one day she's going to get a job and one day we'll make more income, and that will solve all our problems. And then you discover you actually make more than you thought. And it did not solve the problems you thought. What does that feel like?

At first, it was. Thinking that it was a simple answer. Money.

I personally knew that we were making over that, But I remember her and I sitting down doing this, and she was talking about, like, oh, you know, one of my goals is making over six figures as a. And I'm like, personally or as a. As a couple? And she's like, as a couple. I'm like, we're already doing that. And she's like, what.

How much did you think you made before you did the CSP together as a household?

Under a hundred thousand?

Like, what, 90?

Between 80 and 90.

Okay, let's say 80. So you make $34,000 more than you thought you made.

Yeah.

That hasn't solved your financial problems. Right. So what do you make of that?

It's behavioral. It's more behavioral and more emotional than I ever gave it credit for.

Yeah. It's not about a number. Maybe it's about a number, but it's definitely more complicated than that.

Absolutely.

Your fixed costs after, I'm sure a lot of changes, are 75%. How'd you bring it down from 110 to 75%?

Honestly, it seemed like a miracle. But that's the whole point.

Right. I don't agree with that.

So logically, it makes sense. Right. We. We cut a lot of fixed costs down, but it's. It felt like there was such a blockade there, and that's why it took eight hours. Uh, because we. We went through every single subscription, every single thing, and it was like, oh, I really don't want to get rid of that, but okay. And I guess at the end of the day, and for me, not realizing that going. That cutting so many fixed costs down so many subscriptions really added up to 35%. Okay.

All right. What were some of the biggest things you cut?

Phone bill, Shout Out, Mint Mobile. We were subscribed to probably every streaming service you could think of. So we had a peloton that we were subscribed to. We cut that out.

That's 5%, not 35%.

Yeah. Maybe I'm missing the big things.

Okay. Emmy.

I don't see it as a miracle, because a miracle doesn't, I don't think, encapsulate the fact that we took, like, a machete and, like, set on fire. Like, we, like. We slashed. We slashed every line you could think of other than the house got slashed.

Is the credit card debt finally zero now?

Yes.

How long has it been?

Zero for two months.

All right. And you're both, like, really nervous about going back, right?

Oh, yeah.

Yeah. People who pay off debt are extremely petrified about going back. They often worry more after paying it off than they worried all the years they had it. Did you all used to tell yourselves something like, once we get our debt paid off, then, like, there'll be a rainbow at the end. Did you all say stuff like that? We'll be happy, it'll all be okay? That kind of thing.

And not. But not just once we get our debt paid off once. Once you get a job. We said that all the time. Once you get a job. That was. That was a daily. A daily phrase.

So you got the job. That didn't change the way you felt about money. You paid off the debt. Did that change the way you feel about money? No. Are you telling me that the way you feel about money is highly uncorrelated with how much you've got in the bank?

What a shock. Crazy.

Can I. Can I bring something up? And this is going to be very, very raw. And. And it's just that the. The student debt, it doesn't come to mind because I think that this is the first conversation that we're actually counting it. So true.

We.

We have talked about it and haven't necessarily agreed. Babe, but we. When we talk about it, your. Your verbiage has been that you just don't think it counts.

No, you're absolutely right.

And you're like, people just have student.

Debt, and so I'm gonna die with it. I wasn't taking the responsibility needed to say, hey, this is debt. This debt is bad. Whether debt is debt is debt, whether it's credit card or whatever, we should be being aggressive about it. I'm like, oh, I'm gonna die with it. Everyone dies with student loan debt. And I justified my way and out of it. And I see that now. And that's. I'm sorry again, like, I don't want to. I don't want to justify my way out of things anymore when it comes to our finances.

I appreciate that. Very, very healthy, very mature conversation right there about money. It's great foundational stuff. So 62,000 at a 7% interest rate. Let's just assume. And your expected monthly payment you're currently paying is about 198. Correct.

All right.

Okay. Well, at the current interest rate, you cannot pay off the debt with that payment. Amount. So you'll basically be paying this forever. It's actually quite simple. We're looking at the numbers right now. We're either going to make it work or we're not. They did their CSP based on last year's numbers. Since then, Emmy has gotten a raise which added an extra $600 to their guilt free spending. So where do you want to put it? You have approximately $600 of money that we're going to take from guilt free spending.

I'd like to put it toward the debt.

Your debt is currently at 198. I'm going to add $600. Now you're paying $798, roughly $800 a month towards debt. That's a good change. You'll pay that debt off in just under nine years. Wow, that's a big difference, don't you think?

Being fully debt free with no asterisk.

That's that moat life that we talked, we talked about. Yeah, like that's, that's patching a big hole.

That does not factor in any salary increases. And of course you could create a money rule where if and when your salary increases, you know, 50% of that salary increase goes towards investments, 25% goes towards debt, making that debt paid off even faster. And the remaining amount goes, you know, between savings and guilt free spending. That would be highly effective.

All of in, in our, if I'm looking at, if I'm being analytical and our marriage is a pie chart in all other aspects of our marriage. Like we kick. I'm proud of us and I'm proud of my husband. Like our communication is typically very solid in every other aspect. It's not being put in finances, it's not being put in money, it's not being put in this area of our life that I just want to bring the good into the, the good dynamics into the finances.

Sometimes it can become intoxicating to constantly talk about problems. People with problems love to talk about their problems. And one of the things that I can help you do is to refocus on talking about what is going to happen when you make these positive changes.

We're going to take all of the skills and resources and positive perspectives and all of the genuine skills and positive things that we have in other areas of our life and in our marriage that we know we do well and we're going to apply it to this piece of the pie chart, to this.

Piece of our marriage. I like that a lot. I love that it's positive. It acknowledges that you're already Successful in tons of areas. And it just says in so many words, we know how to do effective stuff in all these other parts of life. Let's just transfer those skills to. Over to this burning area here.

And just because we haven't done it before doesn't mean that we can't do it. We've done a lot of things in our marriage that we've never done in our life that we. Babe, we're doing good. We can do this.

We can do this. I love that.

Babe. When we first started, when we got married, we never owned a food scale. That food scale is out four to five times a day.

That's true.

We put it in a drawer specifically. That's easy and convenient to grab. We make it easy for oursel to do this. We set systems in place so that way it's easy for us to make better choices. We can do this. We've done this. Like I'm seeing, like I.

What about the vision for the two of you? You talked about two things you're not yet skilled at. What about for the two of you? I want us to become. We are going to become.

I want us to be dialed in. I want us to just completely be on the same page with everything money related. And I feel like we're so close.

Okay. How do you feel saying that?

It feels, believing, having. Having had all of that on just my shoulders basically throughout most of our relationship. And again, I see it. It's right there. She's. She's the most involved in finances that I've ever seen her. And I'm very proud of her for it because I know it takes a lot and. And I just feel like we. And that's why I kept going back to. I think we just need to be honest with ourselves. I feel like there's still gaps.

I noticed that you still struggle to ask for what you need. I think that's a skill you need to work on individually because if I were in your position and I had the ability and skills and I'd worked through some stuff, probably with somebody third party, I might say something like, you know, until now it's felt like I was taking on the responsibility of money in this household alone. And it felt really lonely and I don't feel that I'm particularly skilled at it. I want us as a team to become really good with money. I want us to be debt free. I want us to learn how to spend money effectively. I want us to build a huge financial moat that is savings, investments, so that we are safe and we are growing for the future. But in order to do all that, I'm going to need a financial partner in this. Emmy.

Yeah, right.

You didn't say that.

Yeah.

That takes a lot of skill and a lot of introspection to be able to say, here's what I need from you. But notice Emmy's response. Emmy's nodding the whole time. Emmy, how do you feel if he had said that?

He says it about so many other things. He can do it. He can say no about food. He can whip out that food skill. He can share that he wants to go on a family walk. If I want to stay home, he can do that. And I know that he can when it comes to finances. But in all those other aspects, we've done it as a team, and in financ, we haven't. So, yeah, that's going to be. That's going to be new, guys.

If you want hope and you want peace, the only way is straight through the fire. That means paying off your debt first and acknowledging we did this and we can fix it, but only if we go straight through it together.

It's so funny. We've done this about other areas in our life, about taboo subjects in our. We have done this. I'm like, just. I can't believe this mirror in front of me that I have not seen. Like, I'm like.

So many fascinating threads in that last exchange. Like the very common invisible script that student debt doesn't count. I'm just going to die with it. There's a lot of morbid student debt holders who love to talk about how one day they're going to die with it. It happens all the time. It happened to Frank on my Netflix show. A lot of people repeat this same phrase. Also, notice the challenge in asking for what you want. That's something I'm personally working on. And my favorite part, when a couple realizes that they excel in one area and they can actually transfer those same skills to money. Money is not mystical. It's not limited to only a few high priests. It is accessible to. To everyone. And that's why I do what I do, because I think all of us should have access to save and invest and spend our money on the things that matter to us. There was one other thing I wanted to talk about this time with Antonio, and I want to hear him ask for what he wants. I mean, look, savings are a little low, but what can you do? It makes me nervous that you have only 1500 bucks. That number really, theoretically, needs to be at least 15,000.

I agree with that. I. But I feel like this is something that we've had deep conversations about is savings. Because for. I'm so focused on that emergency fund, and I'm like, man, I want us to have at least three months. And. And I think that the. That 300 was actually a compromise that we came to of, like, okay, 300 savings, 300 emergency fund. And if I could put more, I would.

Can I. Can I jump in?

Yeah.

Okay, so remember what we just did, like, 10 minutes ago about, like, being direct and, like, you calling me out and holding me accountable, and I responded and threw the ball back to you. Can you do that about this, about the compromise?

I can, but I feel like we've already had this conversation, but my mindset.

Honestly, has changed, and I'm not just saying that to, like, I feel like there has been a mirror with a giant freaking black construction paper on it, and I'm like, get it off. And I have not been able to get it off, and I feel like I'm getting my head above water trying to take the freaking paper off. So, like, I. I want to revisit these conversations, if that's okay with you.

Yeah, absolutely.

Right now, if something happened to one or both of you, you have enough money in your savings to last you for about one week. You see that, right? And you have a young daughter. Incredibly risky.

Yeah, absolutely.

Say what you want, Antonio.

I. I feel like I want.

Yeah.

So I want us to have a good savings account.

How much?

I want. I wanted. Honestly, I wanted it all.

Say that again. Say it slow and really listen to yourself.

I. I wanted to put all of it in the emergency fund.

Okay, Is that in a past tense or is that present tense?

I mean, I'm. I guess present.

Say it. Say it in a full sentence. Look directly at Emmy.

I. I would like to put the $600 into the emergency fund.

Amy.

I hear you saying that you want to put $600 and not split it. I'm with you. We're a team. Let's put $600 into our emergency fund and get to 15k. Incredibly faster.

That's it. All we got to do is ask for what we want, and we oftentimes get it with our partner. Is that what you're telling me? Yes. Whoa. Take the win. Good job, you guys. That was really good. That was really good. Antonio, take a breath. Guy looks like he just ran a marathon. What are you feeling, Antonio?

A lot, like. I don't know. My eyes are rolling up a little bit. I. I don't know why that's so difficult for me. Yeah.

Yeah. First of all, great job. That was actually awesome to watch you go step by step by step to ask for what you wanted for. You're right by the way. You are right.

Proud of you.

I love this.

I know we're over on time but like I have to hug him.

I don't care how much time this takes.

This is okay. I'm so proud of you. I know that was party to come.

That single conversation right there has the potential to completely redefine Antonio's relationship with money. Now I know we left their fixed costs at 80% and the fact is all of their easy options are gone. So I told them point blank your incomes need to come up. They can use my earnable program to learn how to start a side business which you yourself can check out@iwt.com earnable I told them that guilt free spending needs to stay at that 500 mark. No new car, no vacations, no more credit cards. Focus on earning aside income to cover tithing or to help pay down debt and create money rules for unexpected windfalls. Please remember this is one conversation we have. It takes years to get into a situation like this. Sometimes I see comments from people who are disappointed that I didn't chant some magic incantation and somehow fix people's financial situation in four hours. That's not how it works. It was a long process to get into this situation. It will be a long process to get out of it. Emmy and Antonio have serious work to do. But they have finally connected on money. They have become a team. They've realized they can do this together. Even if it takes them nine years to pay off their debt, they can do it side by side. Truthfully, my guess is that they'll do it a lot faster than that. Let's check out Emmy's follow up.

Hi Ramit, it's Emmy here checking in.

So.

So for the follow ups. What did I learn? Definitely learned that we were lacking in the communication and taking responsibility and that there needs to be actual concrete behavioral changes that need to be made. And it's time to dip into our our toolbox and learning how to adapt other communication skills to finances. And it's time to do that. No more time left. It's the time's now. Second thing being what surprised me, it surprised me that I was looking for hope in a spreadsheet. Knowing especially how faith is so important to me that hope doesn't come from the spreadsheet. It comes from the Lord. That Was a big thing for me, definitely processing that. The second thing was, man, the elaborate narrative I am telling myself to avoid the more it was put in front of my face. I appreciate you bring that, that, that to light. And I was forced to look in that mirror and it's time to change that. No more avoiding. Okay. Changes. We have a lot. So changes being we're increasing our debt payment, being more aggressive at $600 a month. We are increasing emergency fund to $600 a month. To get to that 15,000 number, we are increasing my Roth every month by $50. We updated the CSP to reflect all of these things so that we have something concrete to look back on as far as increasing salary. My husband has some opportunities for overtime that he will definitely be trying to utilize and I will be potentially opening up my hours at work. This has the potential to bring in, bring in an extra four to $800 a month. So that's something that we are going to be intentional about. And the last thing is the money rule. I love that you brought that up. And I realized we didn't have any. So a money rule being 50, 40, 10. So this is for any increases or like unexpected income. 50% toward debt, 40% toward emergency fund, and then 10% toward guilt free spending. So whether that's $100 or a thousand, anything, that's what we're going to go by.

And now Antonio's follow up.

So I learned a couple things. First was how much I am not good at speaking up and saying no in this case specifically when it comes to money and money decisions. I think that what surprised me was how much my household dynamics need to change in terms of, yeah, my marriage and finances, but also even in parenting. What this has shown me is the need to be more unified with my wife and just to have a, have a firm stance and a firm opinion and to say no and to say yes. The money rules. We have money rules now. At least one. And we also are being very aggressive with the student loan. And I'm very happy about that. Lastly, we're adding more toward our emergency fund. Also very happy about that. So thank you to you and your team. You guys are awesome. Really appreciate you.

There's one last thing. I just wanted to share this moment from their screening interview because it personally means a lot to me and I want to thank Emmy, I want to thank Antonio and I want to thank every single one of you for watching, listening, and reading my material.

Is there anything else that you think is important for him to know for me. It's important to tell him that, like, he's really helped me and changed a lot of our dynamics already. And that's not something I ever thought was possible. And so I'm very thankful. And it seems so stupid. It's like just a podcast, just a YouTube channel. But, like, what he does matters and it's been very, very impactful.

Yeah.

So, you know, even if we don't get picked, just so he knows that like, what, like, everybody does matters, you know?

Thanks for listening to I will teach you to be rich. I'm Ramit Sati. Please follow the show on Apple, Spotify or wherever you listen to podcasts. If you haven't read I will teach you to be rich. My book. Pick up a copy. You can get it at any bookstore, store, or any library and it will show you the specific tactics for how to build the I will teach you to be rich system into your personal finances.