179. “He just turned 50 and we have no savings. I’m panicking.”

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Money I want to do something with it right away. It's very uncomfortable for it to just.

Sit there, kind of take a step back because if I know that number, that panic, it would really hurt me inside.

Today, meet Kate and Drew. Kate is a 43 year old mother of two and a homeschool teacher. Her husband Drew is a 50 year old college professor.

This is so stressful for me. My whole energy around money is stressful.

It feels like we're taking one step forward and two steps back.

Kate is a worrier. She's terrified they haven't saved enough for retirement. Drew is an avoider. He's completely hands off with the money.

I am more driven. I take the lead on it. He doesn't want to be bothered with that aspect.

I've backed away all this time more for selfish reasons to protect something inside myself.

Together they overspent and after 25 years of marriage they have amassed a crushing amount of debt.

I don't know how to get out of that hole. Having a plan is non existent to me.

When I look back I feel like we made so many financial Mistakes. And I don't want to do it alone.

Can they ever pay off this mountain of debt, or will the vicious cycle of overspending continue? Well, let's find out.

I was sitting right here in this. This chair, and I'm. I think I was looking at my finances, and he was out with our son at a soccer game before we left. I was like, all right, just get one thing at the concession thing. You're good. And then he texted me while he was there, a picture of our son with, like, sad face saying, can we get another, like, thing of fries? It's like, oh, no, he didn't. I think that for us, things always are going fine until, like, those moments where there's a trigger in that sense, where I realize I think we're on the same page, but we're not.

Out of curiosity, how did you reply to the text message?

How did I reply?

I think you just said flat out no. And that was. That was the answer. All I needed to see.

And that I didn't like either, because I feel like we're in this parent child dynamic that just. I don't want that with him. I'm like a gatekeeper, and it's like a child being like, mommy, can I have this? And it's like, it's as if he doesn't know what's going on in our financial picture. I felt like he shouldn't have even asked, knowing what our numbers are.

Drew, I'm curious what was going on for you when you sent that text message?

I guess trying to take advantage of that small situation and tried to get some extra fries out of that, Knowing that our budget is. Is tight just to be able to go to the soccer game with my son was. Was a lot, and it was nice, and I just wanted that little extra treat sometimes. But I try to be funny. Maybe not in the best way, but comedy is my way of how I kind of handle things. I dress it up and hide it as a comedic act.

Drew, what do you make of Kate bringing up this parent child dynamic?

I don't really like the dynamic to be like that. I feel like I should be free to do or get whatever I want with our money because it is ours as well as Kate. She can do what she wants with the money as well, I think. I think where the disconnect is, we have an issue with our finance. That's not good. We have debt, a lot of debt. We have some issues we have to deal with, and I can't be as free with the money as I'd like.

Hey, you mentioned that you haven't seen eye to eye on money for a while. How long would you say you haven't been on the same page, financially speaking?

I started dating him when I was 18, almost 19. Our spending habits were very different. He's a saver, and so he's more conservative with money. And I'm a spender. When I started making money, we actually had a joint credit card. Even though we were, I think, just still dating. Right. We lived together and so we would tally up our expenses individually and pay them and every credit card bill. I remember being like, oh my God. Like, I wasn't, I wasn't keeping track of things. And it would, you know, the credit card bill would be so long. And he just kept his spending just very minimal. Could pay it off very easily, not an issue. So we were very different in how we saw money then. And then it evolved.

When you got married, how'd you decide how much to save for the wedding?

I went in thinking my budget was going to be 25,000.

How much was it in the end? How much?

Oh, 50. 55,000.

Yeah. That's double. That's about exactly what happens.

Exactly.

Point five to three X of whatever people come up with first. It happens. I mean, it happened to me. It happens to everybody. Even if you know the principle, you're still, you can know it all and you're still. It's going to happen to you for the most part. There are some people who are very disciplined. Okay, great. So where did you come up with the extra 30,000 bucks for that wedding?

My parents are very generous. Very generous and multitude of ways. So my mom was upfront that she was going to help me pay.

Your parents still help you with finances.

From time to time? Yes.

How does that work? Like they write you a check? Do you call them up? How does it work?

This is where I'm like, I'm 43. I should not be doing this. So it's in various ways.

What's the most recent way that they've helped you?

They paid for an entire vacation for my family to go to Universal Studios. I was very grateful. I was very clear to my kids, we would not be on this vacation if it wasn't for Nana and Papa.

I noticed that when you talk about your parents giving you money, there's seems to be a little bit of guilt or shame.

I'm having a full body reaction right now because on one hand I'm so grateful for it, but at the same time I should be. Be Able to manage my own finances. I should be able to take my own kids on vacation. I should be more financially independent.

Thank you for sharing that. I have to tell you that I have recently started asking people about how they get financial help from their parents. And there's a lot of shame, a lot of guilt, a lot of complex emotions because so many people want to help their own children.

I actually just said to Drew, I am. I want to be able to do this for our kids.

Wait, what? So you want to put them in the same position you are?

I want to be financially abundant that I could give, get, be generous with them and take our grandchildren on vacation.

It is interesting, though, isn't it, that so many of the things that make us feel bad are the exact same things that we want to recreate for either ourselves or our children. Drew, any surprises? As you heard, Kate explain that dynamic with her parents?

Her parents are very generous to us and especially our kids, and they've always been there to help us out whenever we needed.

What's that like for you as the son in law?

I'm very gracious that they can help us out because again, I don't like that feeling of being behind the eight ball and being in a lot of debt. Like, if they can help out and maybe give our kids a trip, I. I appreciate that when I know I'm not in that position to do that and someone else can. Something that's more important to me than money is time. And my kids aren't getting any younger. So if they can go to Disney World or Universal and someone can help out, I want them to take that. That opportunity.

I want to interrupt here to share an early clue I'm picking up on. Kate and Drew have admitted they have fallen into a parent child dynamic. Kate is policing the money, and Drew is constantly asking her for permission for small purchases. And you can tell when Drew is asking for French fries. It's not really about the fries. What Drew is doing is absolving himself of responsibility when it comes to their debt problem, leaving Kate to shoulder the burden alone. The challenge here is to get Drew to stop merely being a passenger so that he and Kate can work together as a team. But first, let's get into the specifics of their numbers. How long have you been in debt?

I would probably say close to maybe close to 10 years. I think I felt the debt more once we moved. We were in a condominium, and then we bought a foreclosure property. We fixed it up, and that's where I really felt the real hit of the debt becoming what felt insurmountable.

Out of curiosity, why'd you move?

We were in a thousand square foot two bedroom home. Our second child was 18 months. So it started to feel crowded because the our children are four and a half years apart and they were sharing a room. And I had my parents in my ear also saying, you need to get another house. That house is too small. My husband did not want to get a new house and I, I really pushed for it.

What did you say? Do you remember the exact words?

I think it was like, if you can't stay here forever, that's a good one.

That resonates. It rings true. We can't stay here forever. Therefore. What's the end of that sentence?

Therefore, we need to start looking for a new house now.

Right.

Even though we didn't have money saved up, that's where my parents helped out again. They gave us another chunk of money to put a down payment on this house so we can carry two mortgages while we renovated this house.

How much did they give you for the down payment?

100 grand.

Okay. All right. So they give you 100 grand, put in the new house, some renovations, etc. And that is when the serious debt started. Is that right? Yeah.

I was thinking we got a deal. You know, this isn't a real estate investment. We're going to put money into it and you know, we'll, we'll, we'll put more equity in. I hypothetically was like, oh, we'll just do the kitchen and the bathrooms and It'll cost about 50 grand. Yeah, well, we had to add another zero.

What, is that an exaggeration?

I wish it was.

Hold on, just tell me the full number you spent on renovations.

We did two, so it's about $525,000.

$525,000. Let's hear more after a short break from our sponsors. Real question for you. Do you know how often you're supposed to see your primary care physician? How about the dentist? How about a dermatologist? A lot of us just wait to get a text from the dental hygienist to know it's time to make an appointment. But your health is important and we talk about going from defense to offense with your money. What about with your health? Why not make your life easier and book this year's appointments today with Zocdoc. Zocdoc is a free app and website where you can search and compare high quality in network doctors and click to instantly book an appointment. They have over 100,000 doctors across every specialty from mental health, dental, primary care and more. Just filter for the doctors based on your insurance, your location, even ratings and find a doctor who's a good fit for your needs. Plus Zoc Talk appointments happen fast, usually within 24 to 72 hours.

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$525,000 on renovations on what we thought was a deal.

How is this possible? Like as a guy who's used to exceeding the numbers, I get it. I get 50 turns into 200. I get it. But 500? How did that happen?

When we first bought this house, Drew was up in the bathroom demoing it by himself while I had an 18 month old and a foreign 4 and a half year old. Even come home and say I barely made a dent, and I'm like, oh, my gosh, how are we going to do this? So we started looking for contractors. Now, in my naivete, I did not do my due diligence. I wound up hiring a general contractor who wanted to charge me hourly. And my mom's like, what are you doing? It was a really bad mistake. Before you knew it, it snowballed so bad that the entire place, with a shell, it became a brand new house. Basically, there was so much going on at the time at the renovation that I wasn't on top of our finances and wondering why our credit card bill was getting higher and I didn't have the funds to pay it.

Here are two clues that I notice. First off, Kate is the money person in this relationship, but it's becoming clear that she is not especially skilled at managing money. And the second thing is that Kate has admitted to being impulsive. Earlier in their relationship, Kate overspent on credit cards. Then she overspent on their wedding by $30,000. Finally, it's a house where they overspent by $500,000. And of course, you'll notice that the rationale conveniently changes. Now it's for the kids. Meanwhile, Drew is checked out. You can see that this dynamic will become a bigger and bigger problem. How much of this is something that happened to you versus how much of this is something that you yourself chose?

We created this a hundred percent.

Okay.

I mean, the life happens, but I think we set up a very precarious situation. I can see how impulsive I've been with money, and I'll just follow a gut feeling. And I've been very lucky up until this point. Like, I was able to do those risky things and ride a thin line and always got away with it until now.

That's usually how it goes. I applaud that you take responsibility. I think that that's incredible. I always say we've got to be honest with ourselves, honest with the people around us, if. Especially if we want to make a change and we want to live a rich life. I'm curious, between the two of you, how do you apportion responsibility?

I think for the first one, I felt a lot. I felt very responsible because I pushed him into getting this house when he wasn't ready.

How much did the house end up costing?

It was like $355,000.

So just so the audience knows, can you just explain the concept of equity real quick? Is this how it works? 355 plus 500 means your house is worth $855,000. Is that the way it works?

Well, in this market, we're lucky that it kind of does.

It's totally my example. But that's not the point. If we take this irrational housing market, historically high, out of place. That's not how you do the math, people. But in this case, it actually was. All right, can we talk finances? Because I've heard some big numbers thrown around. I would like to know, in your own words, starting with Drew, what is the state of your finances today?

It feels like we're taking one step forward and two steps back.

Kate, how about you?

The first word that came to me was dire.

Dire. Wow. That's quite different, isn't it? Dire versus one step forward, two steps back.

When he turned 50, I had close to a panic attack where I realized something's gotta change. So all last year, I knew that we needed to be more mindful of our spending, so I restricted a lot all year. And then towards the end of the year, he said he was going to get a big check in January because he was going to work. He worked even during the winter break. I got a little excited and wound up going a little crazy for Christmas.

How much did you spend on Christmas? Just bottom line it for me, eight grand. Okay.

That freaked me out. So I. I felt out of control with money at that point and was having panics. What did I do? So, like, we have all this debt. That huge check could have gone to debt. What did I do?

Okay. And this is not unique. This is like tens of millions of Americans do exactly the same thing. And the funny thing is, they do it every single year. Would we. You would think we would learn. Oh, no. Because it's all episodic. So. Seems to me that I actually find it comforting when I discover that I am basically copying what other people like to do. Like, I find that really comforting because if millions of other people do the same thing I'm doing, then there's probably hope. If we know that, then we can begin to make a change. All right, what do you say we take a look at the numbers? Drew, can you read off the word in bold and then the full number next to it?

Assets, 743,300. Investments, 532,000. 210. Savings, 15,000. Debt, 480,548.

Total net worth.

Total net worth, 809,962.

All right, what do y' all think about those numbers?

The lack of savings is concerning, and the amount of debt is concerning.

I Agree.

I also feel like our investments should be higher, given our ages.

Let's clarify some of the details here. So you have a $715,000 house, and then investments are at $532,000. Savings at $15,000. By the way, I note that you wrote it's not emergency savings. This is for future monthly expenses. So you essentially have zero emergency savings. Okay. And debt is 350k is a mortgage, 130k is the home equity line of credit, and then $2,000 for a business credit card. Okay. Kate, can you read the gross monthly income to me?

Combined $16,667.

Yeah. So $200,000 a year. Correct. Okay. Did you all know that that's how much you make?

Yes. I track all of his paychecks because his income is variable.

Okay. Drew, did you know you make $200,000?

Yes.

Wow. All right, you know what? I got to start giving a round of applause for people who even know their own income. Okay. It's so rare. I'll take it. Take the win.

We'll take the win. We need one.

Can I ask you guys a question? So you sent in a csp, which had everything done on an annual basis. You know, the CSP is designed on a monthly basis.

Yeah.

And you told my producer that you were not going to do the monthly. Why?

I was like, how do I do this monthly? With the way that I, like, manage our money? It felt confusing and frustrating for my job.

My pay varies greatly as I teach fall and spring. I get a consistent paycheck when it comes summertime. Depending on how many places I teach, I make a huge chunk of money bi weekly. So it kind of throws off, I guess, the calculation of, you know, saving consistently month by month, because sometimes the amount is lower, but in the summer, the amounts are much higher.

Ah. The old question. What do I do if my income is variable? Honestly, I'm kind of sick of this question. I get it every single week, and I've Talked about it 500 times in my book, in prior videos, online, everywhere. How do you deal with irregular income if you're an Uber driver or a freelancer? What's really happening here is that the answer is available. You could literally search Ramit Sethi, Irregular Income and find the answer. But what's really happening here is that people are using this question as an excuse to not take action. Allow me to be direct. You are not a special snowflake. Just because you have one seemingly unique situation does not make you different than everybody else. Don't Use any scenario as an excuse not to take action with your money. My wish for you is to become aggressive, to become bold, to say, I'm not going to let anything get in my way. I'm going to knock it down and get to my rich life. Now, if you want help, if you want to learn how to deal with your money, specifically, join my money coaching program. I'll put the link right here. But it's time to stop using the same old question over and over as an excuse to not move forward. We're past that, and I don't want to hear this question anymore. One last thing. Kate says she wants to be precise. Yeah, me too. But if you're being precise, how are you overspending my $8,000? Remember that the point of a CSP is not precision. The point is to actually see the big picture. So I need them to zoom out and recognize the need for change. I'm going to ask you an honest question. Is the way that you have been managing your money working? No.

In the sense that it feels stressful. And I. The only vision we have is to pay off debt, which is not really the greatest vision.

44 and 50 years old in $480,000 of debt, which includes $130,000 HELOC. What I see, Kate, is you've done it your way for a long time. But what you have done, even though you may have positive intentions, has not gotten you the positive outcome you want. And even when you have the chance to speak to me, you struggle to adapt the way you think to a different approach to money. I've spoken to lots of couples. I don't think I've ever seen a couple put it in an annual format. What does that tell you?

I couldn't see it any other way. I am stuck in my own.

I created, and more importantly, your relationship dynamic around money is stuck in that. Just think of it. What kind of dynamics can we already identify? You said one already, Kate. Parent, child dynamic. That's the one where we have the, please, can I have some money for a treat? And the other partner says, no, you can't. And it is toxic to a sexual intimate relationship. It also disempowers one partner, both partners. It doesn't set you as financial equals. And on and on and on. Okay, there's so many dynamics at play here, but it all shows up in the csp. The CSP is going to tell us the four key numbers and help us see the big picture. Right now, I don't think the two of you Know the big picture. In fact, I'd be willing to bet that you are lost on the big picture. Fair. Okay. And yet the over need for precision, which you actually, genuinely believe you need to do, is actually what's causing part of these problems. And if you're really honest, does it even work? Like, you tried to be precise about how much your renovation was going to cost. You blew past that by hundreds of thousands. Try to be precise about the wedding costs. Blew past that. Try to be precise about these numbers. It's not working anyway. So my philosophy is, if we're going to choose between different ways, why don't we just do it my way?

So I agree with you that we need something new.

And it's scary, scary to give up control. I'm example number one, because I run a business, and every entrepreneur is a control freak. And they have to systematically learn or have control stripped from them, or they will go out of business. In your finances, you have a lot of one offs. Like this quarter, we do this, but in summer, for two months, we do that. And do you see why having all these one offs makes it very, very complicated to create a basic flowing system?

Yes. And it makes it hard for me to see what we actually can afford and what we can't sometimes correct.

So that is what the CSP is designed to help you do, is to standardize everything. It's almost like, look, when you drive to, I don't know, grandma's house, okay, at some points, you're going 20 miles an hour. At some points, you're going 65 miles an hour. But we can say it's going to take roughly 65 minutes per 60 miles. Ballpark fair. That's what we're looking to do here. Even if we're off by 5%, it's okay. All right, what's the lesson we've learned so far, Kate and then Drew?

That we should be operating.

Monthly.

I didn't intentionally jump to making changes. I actually wanted to slow down. I wanted to help them understand that, first, their system is way too complicated. And second, they're not working as a team in a relationship with money and with each other. You can't just have one person pulling everything and the other person just being the passenger. It's got to be both people. And when both people are committed to a rich life, it's actually amazing how fast you can make changes. We'll be right back after a quick break to support our sponsors. I know that some of us think better when we write our thoughts out, but for A lot of us, including me. I'm better when I can think out loud. If that's you, I recommend you check out Whisper Flow to save you tons of time to bring your ideas to the page. Whisper Flow turns your voice into clean final draft writing inside whatever app you're already using, Email, Slack Docs, even text messages. And it works on Mac, Windows and iPhone. So instead of spending all of your time responding to messages, especially while sitting at a computer, you can hit a hotkey, speak and the text appears. It's accurate, it's fast, it's all formatted so you can get back to work. Here's what my friend said about it. Whisper is amazing because it learns the way you speak. So you can send this rambling note as a text message and it kills all the filler words and it perfectly formats it for you. They said it's much better than using the Apple voice to text feature. The spelling is way better. If you want to buy your time back and get back to what matters, check out Whisper Flow. Try it for free at whisperflow AI/ramit. That's whisperflow AI/remit w I s p r flow flow AI ramit or click the link in the description below. 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. You Instead, you can use Gusto, this episode's sponsor. Gusto is online payroll and benefits software built for small businesses. It's all in one. It's remote, friendly and it's incredibly easy to use so you can pay, hire onboard and support your team from anywhere. They offer automatic payroll tax filing, simple direct deposits, health benefits, workers, comp 401k matches, you name it, they can help. Plus, it's quick and easy to switch to Gusto. Just transfer your existing data and get up and running fast with no hidden fees and no surprises. Try gusto today@gusto.com ramit and get three months free when you run your first payroll. That's three months of free payroll@gusto.com ramIt Once more gusto.com ramit now back to our conversation with Drew and Kate about their spending and savings habits.

When I have money, I want to do something with it right away. It's very uncomfortable for it to just sit there.

Are you impulsive in other parts of life?

Yeah, I think so. I mean, even when I. When we bought our first condo, I bought it. He didn't. We didn't plan that either. I just got tired of renting and said, I'm looking for a house. He didn't want to buy that. His house either. So I bought it myself.

Seems like a recurring pattern.

I know this.

This is, like, blowing my mind. Like, to me, it is inconceivable. It is inconceivable, like, to trip and fall and buy a house. And you would be so shocked how many couples, they literally say, we were out for brunch on a Saturday. We decided to walk past a couple open houses, and then things move so fast. And then suddenly we had a house. I'm like, dude, it takes me a month to decide if I should sign up for, like, Brit box on, you know, which is like $7 a month. It doesn't just happen once. It happens multiple times. Tell me if I'm correct or not. You two struggle saying no to your kids, right?

I feel like I say no a lot. That's why when they really do want something, I'm like, I'll figure out how I can make it happen. I think I say no a lot of the times. And then sometimes I think my old childhood wounds come in. Every now and then, they take a little peek, and it's like, I want.

Them to have everything I didn't have. I don't want them to miss out and on and on and on.

And other times, I'm like, I know they're going to be okay. They're more than blessed, you know?

Right, right. And then, Drew, you know, we should also acknowledge that the two of you are not on the same page. If Drew is not only saying yes most of the time, but then even like texting with the sad face with the kid, it's in a way undermining the financial values that the two of you are trying to set, which really says you don't have aligned financial values. Okay.

Yes.

Okay, let's look at the numbers. Your fixed costs. Read that number to me, please, Kate.

79%.

Okay. That's pretty. Investments. What does that say?

5%.

Drew, what do you got? You got any pre tax investments?

I have a 403B at work.

How much you put in?

I put in 5% and my employer matches it with 10%.

Your employer matches it 2 to 1. Yep. What the. You know how good that is, right? So they put it. You put in 10k, they put in 20k. So you're investing 30k a year pre tax. Your savings are at 9%. And you have like, what, you have like 10 sub savings accounts?

Well, they're not really savings accounts. This is where in the summer when we get those chunks of money, I put these things aside.

Conceptually, it's good to save for things you know are coming. Okay, great. And. And then your guilt free spending is all messed up. It says negative 14%. I know that's not true because you all went to a soccer game recently and we're trying to get extra pretzels. So how much do you think you're spending on guilt free spending per month? You're losing money.

Eight to a thousand. Eight hundred to a thousand.

So far from looking at the csp, my guess is that you are probably spending more than you make every single month. That's my guess. And the reason I say that is that you don't have anything under fixed costs for miscellaneous. So typically we add 15%, which in your case would be a lot. Okay, that would be like 1500 bucks. Yeah. You'd be at 91% fixed costs. That means you're broke. Now, what's interesting about this is you are still investing $30,000 a year, but you're effectively losing money every single month. I also want to acknowledge you have no emergency fund. You're simply saving for expenses that are going to come up. In other words, you are in trouble in several ways. I'm sharing all this not to bring you down, but rather just to level set expectations here. Kate, you used the word dire. Drew, what do you think about that word? In light of what we've just seen.

That'S a pretty strong word. It certainly grabs my attention. I never really get very nervous about money because like I said earlier, you know, Kate said, I'm more conservative. I won't, you know, go beyond what I think in my head a certain number would be. That's kind of like my limit point.

You're in $130,000 HELOC. You have a $350,000 mortgage and not enough money for retirement. So this thing about it's in my head and, you know, I'm not sure that's effective. And also you mentioned I never really get stressed out by money. Is that, is it possible you don't get stressed out because your wife is the one handling the money day to day.

When she tells me where we're at and I know bothers her, like how Much we're in debt, for instance, or how much we owe or some other cost has come up. And I can see the panic in her. And for me, I kind of take a step back because if I know that panic and if I know that number, it would really hurt me inside.

That hurt is being felt. It's just that Kate is taking that on instead of you taking care of.

Our money and having to decide what to do with it on my own feels lonely. That's something I'd rather us create together. Because even though it's really hard right now, us doing it together would make this hard time feel a lot better.

And when you say I take a step back, she's trying to take a step forward and talk about it. That's why she wrote in here. And you are taking a step back.

I don't know how to get out of that hole. It's something I've never experienced before. So having a plan to get out of it is non existent to me. Do I need to make more money? Do I need to get another job? Does Katie to get a job, I mean, keep going.

There's another option. Why is it that every couple who is in debt, specifically debt that they themselves put themselves into, why is it that 100% of the time their first solution is we got to earn more money?

You don't have to change your behavior with money. It's easier to go hustle to make more than it is to face the fact of, like, having to say no to things. Having to say no to your kids.

Correct. And to each other and to yourself. The fact is you make 200k, you make 300k. You think your life would considerably change.

I don't think anything would change because we're going to have the same behavior, the same patterns with money. I'm going to still be impulsive and have the same spending. Feeling guilty about it, restricting spending. And then when Andrew's gonna have the same, you know, not wanting to say no to me or the kids.

Your money psychology is not tight. It's not dialed in. Even from the fact that you can't simplify your numbers down to a monthly number that shows it's real slippery and loose. There's all these like mental accounting tricks that are being played. Oh, sometimes I use this card and that this thing comes in December. So we put money, da da da da. It's sloppy and it's actually more complicated than mine. Yours should be simple. So that is what we're going to start developing a set of principles for you with money. Out of curiosity, how often you talk about your money values with your kids?

Were very clear with the kids about debt and how, how we made mistakes that we don't want them to repeat it. Before that, I realized I wasn't talking at all. I wanted them to think that there was no problems because I grew up with a lot of stress around money and my. I vivid. Have vivid memories of my mom saying she didn't have the money. I didn't want my kids to feel that. And I now realize that I hurt them more than help them by repeating that.

Drew, what do you teach him about money saving?

I mean, I guess that would be my thing. I also, you know, do teach them, you know, with some money that you do make, you know, it's okay to spend it. I don't want them to, you know, be worried that, you know, they can't buy something and feel like they have to restrict themselves. Don't buy something you can't afford. Which I know sounds hypocritical, but kids love hypocritical parents.

They never make an example of that. They never say a thing. Right.

My son throws it in our face all the time. We could have this and this if you didn't have to go buy this house.

This kid is the best. Wow. He's like. You ever sat down and seriously considered all your phantom costs? I'm talking about all of it. Opportunity cost as well. Did you factor that in? Man, I never heard a 10 year old just rip their parents to shreds over a 30 year compound interest chart. From now on. This isn't the Ramit Sethi podcast anymore. I'm going to have a co host. Little does everybody know, my co host is 10 years old. But that co host is going to rip all you future guests to shreds. You thought I was mean? No, no, no. I'm the nice one now because the 10 year old is coming on to just let loose. Okay, all right. So when I asked what money principles do you have in your family?

We don't have strong values in place that we are teaching the kids. It's more like I don't want you to make the mistakes that I did. Energy, you know, and because my husband is not really involved in it, I don't feel like we're doing it together as this is our family values.

In order to change that energy, we got to come up with some core values, some principles that will help us cut through the million decisions we make on an annual basis. Anybody want to come up With a few core values with money. I'll give you one of mine just to kick things off.

Okay.

In our family, we fight for simplicity.

I actually love that because I tend to be more of a minimalist in general.

I want to feel proud of the money I make and be able to spend it in ways that I can enjoy it.

We spend money on high quality food because I value health.

Nice. Now that's a value. What I like about that is that fits your family. Awesome. Hey, Drew, how about the involvement in terms of both partners with money?

I want to work together, an equal partnership with building our financial goals together so that we're no longer on opposite pages and going in different directions. For us to work together, you would have to be equally responsible and trusting each other with, you know, we're not gonna make any decisions that would hurt the other.

It means you have to shoulder some of the financial load. Okay. And I think. I don't know if Kate has explicitly asked for your help. Kate, have you asked Drew to participate in the money?

I literally, like, begged him because I've said, this is so stressful for me. He's such a great listener, but he will continue the same pattern.

You know, I've given speeches to Google. I've had a show on Netflix. But the one thing I am too afraid to do is to speak to a group of kids. Because during COVID I got an invitation to speak to kids, and I pulled out the best of Ramit Sethi. My best stories, my best jokes. These kids just sat there, just blinking at me. No response. It looked like their face was carved out of stone. I tried everything. Zero response. And that's when I learned teenagers are ruthless, and I am afraid of them. Isn't it haunting that Kate and Drew's son is essentially roasting them for how they treat their finances? And isn't it also interesting that their response is to simply ignore it and keep doing what they've been doing? That's how so many of us are. Me included. When we have something that is wrong in our life, we ignore it. Maybe we know we need to go see the dentist or the physical therapist or we should take our partner out on a date because it's been years. Or certainly money. We put it in the back of our head because we don't like to feel bad. And that is human. And my wish for everyone is that we realize sometimes the best thing we can do with our problem is to turn around, feeling, face it head on, and then walk through the fire. Look, the answer is not about allowances. It's not about whether or not to buy fries. These are all whack a mole one off answers. The real challenge here is to develop values and a vision around money. Like in our household, we value simplicity. And once we know that and we truly believe it, then that answers a thousand questions about whether we should buy this or whether we should do that. But you actually have to have that vision and values and you have to believe it. That is what I want for Kate and Drew. But in order to reach Drew, I need to understand how he got here and where these patterns started. Drew, let's go back to childhood. What do you remember your parents saying about money as a kid?

The speeches my parents gave were very simple. You know, get a credit card. They always told me, make a purchase, make sure you have the money to pay it off by the end of the cycle so you're not paying interest and giving that money extra money away. So I disciplined myself to do that and I did a very good job at it.

Did they talk about money? Did you see them paying the bills?

My father handled the bills. He was, I guess to say, the breadwinner. My mom was a stay at home mom for myself and my sister. I never sold anything. I just knew everything was fine and it was okay. The financial picture never was brought to my attention.

Do you want to share about your dad and money? His dad used to make a lot of money and hide it in accounts for the kids.

Why?

My parents went through a divorce. The money that they both accumulated, they tried to, you know, my father wanted to keep it as they're going through the divorce, so he would put it into accounts for us so that way he hopefully could get that back later. So he was playing tricks during through the divorce proceedings. But they did make sure that we were still taken care of even though this other drama was going on.

Drew, you said that you have trouble saying no to your kids, correct?

Sophia?

Uh huh. Do you see the.

I'm generous just like my mom is with money. Even though we might not have a lot, we'll certainly spend it.

I've heard them both say the same phrase anytime I would like. Especially in Christmas when I would. When I come to my husband about, you know, saying about certain gifts, I just want them to be happy. And my mother in law says the same thing. I just. As long as the kids are happy.

What I do notice about my mom that has become different for me is my mom will not go to a point where she'll put herself in a hole. So I went overboard. And now trying to get out of that feels a lot different. And it's. It's uncharted territory for me.

I'm looking for you two to make connections. Connections between the past and your current behavior, and more importantly, connections between each other. What conclusions did you take away from the whole thing we talked about with your parents and you?

I took away that. Clearly, growing up, I knew nothing about money. And that most likely is translated today. And because of my knowledge of money and seeing how my parents handled the money through the dramatic divorce, you know, proceedings, I feel I never really took it upon myself to learn more about that for myself, for my family. I feel like I've neglected a big part of that in my life to be more responsible with finances.

I think that you had a pretty traumatic experience with money. I think that you see money as basically negative. The only thing that is really positive is when you spend it on people around you, which is primarily your kids. And that gives you joy and that makes them happy, which makes you the hero. And you will spend more than you have. In fact, it doesn't matter how much you have, because the way you see it, you'll just grind harder and get a second job. If it comes to money, you won't look at the numbers. You'll do anything except that. And in general, you have a love hate relationship with money.

I think you're pretty much on point with that, especially with the love hate relationship with money.

Love to earn money, love to spend money, but also hate money, hate money because it's a source of stress which you just ignore and hate it because you know that you co created this $130,000 of debt and you've been sitting on this debt for a decade, Drew. This is the level we got to get to then that I didn't learn about money. Nobody learns about money. This is the real. I love money. I love it, but I also hate it. This is. This is real life. This is how you treat money. And it shows up in your csp. You have to change your relationship with money or nothing here will change. And right now we can see that there is a lack of skill because of the situation that you're both in. And you've been in this for years, and not being able to say no to your kids with money is just a symptom of something much more deeper. What do you say we take a look at these numbers again and start working them? Feel like we're ready before we dig into the csp, let's take a Quick break to support our sponsors. 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 G, you get a proactive year round strategy. Not just a one time filing. Credits, deductions, business structure. It's handled. And their tech platform makes it easy to stay organized. You'll also get access to G's full tax library with guides on retirement plans, QBI and more. So if you've got a business or you filed for an extension, this is the window to take control of your tax plan. Head to joingelt.com ramit to book a consultation. And as a member of my community, you get to skip the waitlist. Again, that's joingelt.com ramit join G-E-L-T.com ramit taxes don't have to be a task with Gelt. They can be a tool to build wealth. Now back to the show. Just to set the stage, let's remind each other, you are currently losing money each month. At 50 years old, you have $532,000. We'll have roughly $2.2 million in retirement, which is about $91,000 a year in income.

Which would feel like a big downgrade.

Well, it's less than half of what you make right now, Right, Drew, how. What kind of lifestyle do you want from now until life ends for you?

I want to have some financial security. I want to have money, a lot of money, to the point where, you know, I can retire and not have to worry about debt. I want to be able to go on vacations with my wife. I want to be able to go to restaurants.

Is $91,000 enough for that?

I don't think so.

Okay.

I want to be able to share some of that money. Give back, you know, give some to.

My kids can't do that. What I'm trying to do is help you understand the severity of the situation you are in. Luckily, you have a high income. Luckily, you've been putting aside a very, very good match which allows you to invest $30,000 a year and for the next 15 years. That's powerful. The fact is you're 50 years old. In order to get where you need to go, you both need to be philosophically aligned. It can't be rowing in two opposite directions. You don't have time anymore. Time is up. You're not 25 years old. One of the things that I think Drew has not gotten involved with the money is there's never been reason for him to. You just bet as you put. Beg him, ask him, come back every few months. What. What does it cost him if he doesn't do it? Nothing. He actually just avoids it, kicks it back to you, and then he gets to go on his merry way. What is it costing him? Nothing. There's no real boundary. Until there is, there will probably be no change. It can't be one of you changing and the other not. Not with this time frame and these numbers. Okay. And Drew, you also should recognize that Kate needs help. Kate's not particularly skilled at managing these numbers either. This is basic stuff you learned about food. You can learn about this. All right, let's walk through the numbers. You're at 79% fixed costs. More like 91. But we'll just leave this here for now. That's too high. We need to bring that number down. We need to bring it down to a roughly 60%. Your savings were going to change and your guilt free spending. I just don't believe it. There's just. There's no way. So we're going to start with the fixed cost because that is where the problem is. So right now, I always want to ask couples, you want to make no changes, small changes or big changes?

How about big changes?

Oh, wow. Kate.

We need big changes. I'm scared, but we need big changes.

Never heard that before. All right, every couple says it. Only some couples truly mean it. Let's see. We see this in every episode where a couple says they want to make big changes. And then when it comes to making those changes, very few do. Here's a clue on what a couple says when they are actually not ready to make those changes. Sure, we should try to cut back on grocery spending. Try. We can't cut back on that subscription because we need it. Sure, we can cut back on Netflix, but $15 or $20 a month isn't going to do anything. Now, let me tell you what. A couple who is ready to make big changes sounds like it's going to be tough for the next 12 months, but we're setting ourselves up to live a rich life for the rest of our lives. Eating out every week. We don't need to do that right now. Once a month is enough for us right now. On Sundays at 10am we're going to talk about money, and we're going to look over our numbers together. Do you see the difference between a couple who's not ready to make big changes and one who actually is? Big changes means what in your mind?

The first thing that comes to mind is activities for the kids, which scares me because of their ages. And then we limit them to one sport, so I feel like if we take that away, they have nothing.

So you're saying kids activities you're going to cut, and that troubles you? Fine.

I didn't say I was going to cut it. It seems like I should cut it.

All right, Drew, what do you got? What's a big change for you?

A big change is working our hardest to get rid of the biggest monster, which is the biggest debt lingering over us, and that's the heloc. If I need to get another job.

Can we not do the earning money thing right now? Can we actually just talk about the way you're spending money? Kate, you want to say something before we look at the numbers? Yeah.

Because in our fixed expenses, it looks like one of them is fixed, but that's actually like 24, 2500amonth. Month that we're just allocating to paying it down, the debt repayment.

Let's look at what you mean. Here's an example. So your Debt repayments are 2,750 per month. You're paying $2,750 per month over the minimum. Let's just subtract that out to see what happens to your fixed costs. Okay, well, there we go. We fixed the whole thing. It's at 56%. What am I doing? What am I doing on this stupid show anyway? Let me explain what just happened here. They are paying $2,750 over the minimum, which makes their fixed costs appear artificially high. So just to see what would happen, I took that extra payment out, and it dropped their fixed cost to 56%. So their situation is not as dire as I had originally thought. However, they still have a lot of debt, and they still have problems overspending. The Lesson to be learned here is the cost of over complicating your finances. She's stressed about extra fries at a ball game, but we're actually over here talking about hundreds of thousands of dollars of debt. You know, this CSP can be fixed with a simple change, but they're not grasping the point of it. And it's starting to become really frustrating. I'm about to have a heart attack on this show. I swear to God, I'm going to. This is going to be. I hope this is in my obituary. Ramit Sethi finally bested by a couple when it comes to their csp. And then in the obituary, they're going to be like. Ramit Sethi's final words were, it's not a budget because budgets look backwards and a CSP looks forward.

Your CSP was such a gift to me because when I plugged in all the numbers, I was able to really clearly see. Oh, when we effed up with this, getting this heloc, that's what messed up all our numbers. We need to get rid of this ASAP and our numbers will fall into the 50 to 60% range.

Have you read my book?

Part of it. I watched almost every podcast episode though. Does that count?

No. This podcast is like, learn some cool stuff from couples. The book is the nuts and bolts. What the. The right approach for a variable income is to build up a book buffer. So what that means is you want to. Let's just say we want a six month buffer, okay, For a variable income. So we want to eventually have $30,000 in this buffer. Let's say anytime he makes more than 5,000amonth, you're putting the extra in the buffer fund. In the months where he makes less, you're pulling from the buffer fund. Okay? But eventually it gets to six months and then you basically are simulating a totally stable income. Okay, this is covered in, I think chapter four of the book Conscious Spending plan is how to deal with an irregular income. And that will really help you stabilize what's going on here with this highly variable income you have. Okay, it's like a bucket. You want to fill it up. If it drops below the number it needs to be at, you just fill it up more. If you have extra, put it in there. In general, you look ahead for the major expenses. Those would be things like a holiday trip, summer camp for kids, et cetera. But other than that, you don't need to be saving for every little one off thing. You're never going to account for every single thing. You need to zoom up, factor in all the things you've spent in the last year. If you want to go backwards, add an extra 15% on top, and then set the money aside. And if you find yourself spending more than that, guess what the favorite word of this new relationship is? No. Y' all never said no to this stuff. That's why you've bending over backwards, contorting yourself instead of just doing the easiest thing in the world, which is just to say no. We haven't planned for that.

How do I have money sitting in there when I have debt that I want to, like, just throw it at?

Having money in a savings account for an emergency fund is a good thing. Spending money on stuff when you have an 8.5% interest rate on $130,000 loan makes zero sense to me. Like, the problem is not saving money for this stuff. The problem is spending it in the first place. That's the difficult thing that the two of you have not really accepted.

I'm having a hard time because I already feel really guilty about the decisions we made. So then it's like, my kids have nothing.

Well, this is the crux of it. If you feel like cutting expenses in your household means you're a bad parent, then you're never going to do it. One thing I'm not going to do is just go through this and have you tell me all the reasons you can't change anything. You have no emergency fund. If Drew loses his job or becomes injured or something happens, how long can you last? Not very long. You don't have enough for retirement. You're not setting an example of saving for your kids. You have no trade offs, no modeling of what it means to actually say no when it comes to money. I'm not talking about no to some pretzel. I'm talking about no because we have a bigger mission, a bigger vision. Isn't it important for your family to actually feel the consequences and understand that we actually have to say no to certain things in order for us to pay this debt off?

I've said no to the kids about a lot of things already. That's why this feels hard. I'm very clear. Like, we're. I'm saying no because we're paying off debt.

I think this is where the two of you not having a joint vision comes in. I would never get a message from my wife saying, like, hey, let's spend $150,000 and go into debt. On XYZ, we have a unified vision. We talk about money all the time. Sometimes we disagree. We talk about that, we wait. We're patient. Trying to create a culture of healthy relationships with money, with each other. So right now, as it stands, your HELOC just paying the minimum would take you, like, 30 years to pay off. Okay. But you're adding an extra 2750amonth. So you're going to pay it off in three years and four months, which is good. It's quite aggressive. I like that. I need money going to an emergency fund. Okay. And I sure would like to have money going towards retirement. So you have options. Your options are your expenses and redirect that money towards an emergency fund. You can take some of the money you are spending towards paying off that debt, that 2750, put some of that money towards an emergency fund. You can earn more money and put some of that money towards an emergency fund.

Like the second with the. Cutting some of that in half for the extra money for the HELOC and put that in the emergency fund. Just so we know we're building that up.

It's something that I. I'm open to it, especially if Drew. That's what you want. I'm excited to have something that we are both united on. I was just. I guess this is more of, like, a security thing because we're losing so much in interest.

I don't think I want to pay them back first. I'd rather have some stuff that helps us rather than gives back to them.

I'm going to interrupt right here. I haven't really heard anyone make any tough decisions today. Not one. I feel like it's basically like, oh, okay, we're gonna, like, change this and change that and cut this by 500 bucks and put it towards an emergency fund, and that's that. Okay, that's it.

We could get real drastic and just cut all that fun spending right off the grid. It sounds pretty extreme. If we take all that money, let's say, for example, and we use that into the emergency savings, we cut off all the savings for the kids stuff and what's in that section. So now we have to deal with that and the kids. And how are we going to say our no to them? What's that going to look like?

I'm not even a parent. And I'm like, do you know how many times I was told no as a kid? What is it?

There's times when I don't want my kids to feel the same pain that I did. Money was painful when I was younger for something that they love. You know, when, like, soccer is the Only thing they do, and that's like their love, that's, that's hard.

But you're not teaching them any great lessons about money by taking on all the pain yourself and costing your family a healthy relationship with money. I don't, I don't understand. You guys are 40s and 50. What are you going to do for retirement? Like, time's ticking. Your kids don't have any understanding of money because their parents have no understanding of money. You have no emergency fund. You're not even willing to talk about, you know, any of this. You're not willing to enlist your kids for help. I haven't heard anything about the guilt free spending. None of it. Listen up and listen closely. One of the biggest mistakes that couples make is thinking that spending money equals love. When I grew up, we couldn't spend a lot of money because we didn't have it. My dad worked, my mom stayed home with us, and that was that. When I look back, I think about the ways in which we spent quality time together. The ways that my parents showed us love. For example, my mom took us to the public library on Saturdays. Why? Because we loved reading, which they taught us to. And it had air conditioning so we didn't have to run the air conditioner at home. Just think about that. I had a happy childhood, full of experiences that did not require a lot of money. And I'm not telling you this to tell you how to raise your kids. That's not my place. What I am encouraging you to do is to think about the lessons that you are teaching when you say yes blindly to everything. You're not teaching resilience. You're not teaching how to handle the word no. And most of all, you don't actually know about money yourself. And if you don't know about money, if you can't impart that wisdom through what you say, and more importantly what you do, then how can you ever expect your kids to learn it? I'm going to show you something. I'm going to recategorize something to make it easier for us to look at. I took everything from your savings. The kids soccer, kids clothes. I put it all into guilt free spending. So you're spending $1,865 a month. It's actually reasonable. Okay? For a family of four, that's super reasonable. It's 16%. However, I can tell you that a couple that's in $130,000 of debt typically does not spend 16% guilt free spending. They typically would be spending like 10%.

So that 35,000 that I have going towards debt we talked about before, Drew, you said you wanted to put some of that towards savings instead.

Yes. How much? Here's the number. 2750amonth.

Let's do half.

What's the implication of doing half?

Well, that means, like, our HELOC is not going to be paid off for, like, if it's. I'm thinking, like, at least six years.

Over seven, it's going to take you six years to pay it off.

That feels too long.

Well, what about hypothetically, in two years, when you graduate, I'm assuming you'll start working and there'll be extra income that can go to one of these places.

Great call, Drew. I like that. Now you're starting to make rules, money rules about what happens to things like unexpected income. I love that. If the two of you were, like, totally united, unified, and said, we have a huge debt problem, want to pay this off? I want to build our emergency fund, and we want to invest, we're going to need to make some changes together. I think you could do it, and you could get the family on board. But the thing is, right now, you don't. Neither of you are on the same page. Neither of you are unified or actually even really willing to make substantial changes. So any one person in the household basically has a veto. Like, that's it. They can be like, oh, that makes me uncomfortable. Okay, never mind. And that's why you stay stuck. What are we going to do about this?

So we go the way we're going, and we commit to paying off the HELOC in three years, four months. We're basically in a very volatile position for that time because we don't have an emergency fund.

That is correct. That's part one. That's the most obvious one. Yes. Two, you are not on track to necessarily have enough for retirement right now, but that would change after the HELOC is paid. That's number two. But three, and I think most serious and most subtle is that you, too, are sending signals to yourselves in this relationship at every given moment. Right. And for the longest time, it has been. Kate handles the finances, even though she doesn't quite. She has done the technical knowledge of it. Drew's not interested in the finances, and, like, he's happy that she handles it. And really, the biggest risk is that the two of you just carry on the way you've been carrying on. You'll get into more debt. Somehow you don't build the skills of saying no, of building a vision together of Being aligned.

Clearly, what we need to do is work together and connect and tackle this financial problem together and not apart anymore. What we're doing right now, as you said, it's very clear it's not working.

It's funny because I've watched so many of your podcasts that I'm like, I thought we were going to be the ones ending on, like, this positive note.

The point is, you came here with a goal. Your goal, you told me, was you want. You would feel lightness. Right now, there's tension. You want to feel connected on money. You want to have a joint goal. Do you feel that you achieve that today?

I definitely still, I feel, like, really tense. This was a big hole that we dug ourselves into. And so in order for it to be sustainable, it really needs to be more baby steps than, like, you were talking about me wanting to be more black and white and just, like, truly try to clean it all up really fast because I feel such difficult, negative emotions that I want to try to put the bad decisions behind me as quick as possible.

Yeah, there's a lot of positive things that I see. You have a high income. Fixed costs in general are quite manageable. Once we took out the extra payment, you could pay off your debt in roughly three and a half years. You could get lucky and not need an emergency fund. You could then take that money and start reallocating it towards investments and emergency fund, and things could work out pretty good. Kate, you're way in the weeds, and you've created this overly complicated system which gives you a sense of control. It's not achieving the goals that you want to. Okay. More importantly, the impulsivity and the lack of education around money has led into several huge mistakes with money. And it's not just on you. These were joint decisions the two of you made. House renovation, etc. And you've gotten to 43 and 50 years old, and you've gotten lucky in a lot of ways. I don't like people to build their financial lives based on luck. It's just too risky for me, especially as you get older. That really concerns me. Drew, I think that you've been super avoidant with money, and there's been no reason for you to change even on today's call. It's unclear to me that there's really a reason for you to engage, and I don't think Kate has set any clear boundaries. You see making any constraints for your kids, financially speaking, as taking away from them. I see it as adding to them. When you. When you say I'm sorry, I wish we could do that. But here's, here's what we've discovered. Here's the plan we've put together. We need to all contribute. And what that means is that I won't be able to do this, dad won't be able to do that, and we as a family are not going to be able to do this for the next two years. That gets everyone on board. But there's none of that. If you see cutting spending on certain things as losing, that's the ball game. You will never do it.

I thought, in my opinion, that the HELOC was the problem and that would have been the end of it, but clearly it's not. Aside from our connection needing to be strong and to work together towards a vision, but seeing that the lack of an emergency fund, there's a lot of ill free spending that needs to be looked at and cut and we need to make those dresses decisions and we're not. I see the flaws that you are pointing out now and there's a lot of them and you seem very discouraged as to, I guess, where we're going.

I actually think the two of you could knock it out. You could pay the debt off, build up an emergency fund, have fun with the family. You could do all these things. We never got there. We never got there because neither of you, at least as far as I can tell today, want to talk about teamwork. Let me just cut in right here. This is one of the rare times on this podcast where when speaking to a couple of. I was basically starting to check out because I'd been speaking to them for hours at this point. We'd been talking about the dire financial circumstances they're in, the effect on their children and their own retirement. But neither of them were really willing to talk about making serious changes. And notice how I said we never got there past tense. I was essentially resigned to this conversation going nowhere and I was basically ready to end it. But keep listening to see what happened.

I guess my perception of this was being honest, that you were going to, I guess, provide some guidance, some insight into how to fix the financial mess that we are in.

I'm not going to teach you my book on a four hour call and I think if this were serious to you, you would have read the book before you came here. The fact is, and I think the most important part is that right now you haven't had any really compelling reason to get involved with the money. It only changes if both. If one partner, the one who's Doing the work sets a boundary, and then the other one actually lives up to it. Very rarely do people suddenly just decide to get healthy. Very rarely, especially at age 50, do people just decide, I'm going to get involved in the money. That's why I asked you, Drew, what's in it for you? Because right now you have it really good. Both Kate and you, both of you need to get educated. And actually part of that education is doing it together. You have to educate yourself about money. Nobody is coming to do it for you. I am double thumbs up. Huge supporter of the two of you doing this together.

Think I'm feeling that energy from you that we could do that if we're doing this together? I think. I think the whole call, I was doing it from the mindset of I'm alone still, and it felt harder.

Do you feel about that, Drew?

I feel like towards the end of this conversation, it just seemed like it was going downhill and I was getting more depressed listening to what you were saying. And I'll be honest, I just starting to get a little angry.

Angry because. Angry. Why? I like that honesty.

Well, because what you're saying is. It's not positive. It's. I didn't expect.

And.

And listen, I appreciate your analysis, which is why I feel this way. I'm not. I have nothing personal against you. I just. I hate hearing what you're telling me.

Honestly, Drew, I'm really happy to hear you say that because is dead. And screw being stuck and making the same decisions as you've been making for 20 plus years. No, that's. I don't want that for you. Trust me. I'm getting mad. I got mad looking at this the first time. So I like that you're angry. I like. I especially like that you're honest about it. You're like, yeah, I was getting kind of pissed at you. I respect that. All right, now we're getting honest here. How the hell did it take us four hours to get here? Four and a half.

I'm on the slow boat.

It's the longest foreplay I ever had in my life. Money cannot only feel bad. Money also has to feel good. And you can feel good about money even if you have debt. Okay. Money can feel good even if you have debt. Second, the kids can be brought on board. Don't play defense with your kids. In order for money to become part of your rich life, you have to go on offense. And I mean that in every possible way. You have to go on offense with yourself. That means you have to start Interrogating, why do I feel this way? Why do I talk about money? Why do I avoid money? Or why do I complicate money? You need to interrogate your dynamics together. Why is it that we never talk about money except when some things go wrong or we don't have enough, etc. You have to start to create a vision together. Hey, what do we want to feel like? How often should we talk about it? Gosh, I'm really glad. I'm really glad we talked in these last few minutes.

Just ready to go cry in a corner and now I'm like, we got this.

You absolutely can do it. I like the positive energy. Money. Money should be fun. It should. Also, in your situation, it should be hard. There should be tough decisions to be made that shows you you're on the right path. If everything feels easy and you didn't have to make any tough decisions, you made a mistake way back there. This is one of my joys in life. I love speaking to couples, and I speak to couples who have applied and they've gone through a lot to speak to me. That's why it is so frustrating when they come to me with a real problem and I see a solution for them to get on top of it, but they're unable to stop replaying the same stories that got them into this situation. And that's what I was feeling with Kate and Drew. And it was hard, but I think towards the end, there was a little bit of a breakthrough because we all talked openly about the elephant in the room, how frustrated we felt. There is power in calling out the elephant in the room. Sometimes the best thing you can do if you're frustrated is just to say, I'm feeling really frustrated. But the question is, can they make a change? I challenged Kate and Drew to read my book together and to hold weekly meetings to discuss their finances. Now it sounds good right now. Ultimately, what matters is what happens once this conversation ends. So let's take a listen to their follow ups.

Since we last spoke, we have been meeting weekly to discuss the book and talk about our finances. And we just wrapped up our fourth meeting. We automated our credit cards to be paid in full every month. So no more playing games with the credit cards. My business credit card will be paid off two months earlier than we planned for. We have a solid plan in place to fund an emergency fund with $6,000 by January 2025. We know that this is not near barely enough, but we wanted some kind of a cushion in there. And then we're going to aggressively pay off the HELOC in three years max. We are also having conversations about skiing and soccer for next year. Since this year's already paid off, we have some time to really evaluate all of our expenses through the lens of our money values. We've already been doing that with little things, and the best part is that we're doing it together.

Hi Ramit, this is Drew. I have some good news to report. From the statement I made last time that I was not going to be sitting on the sidelines anymore, that I would be actively participating with our financial picture. And I have done that for the last four weeks. Kate and I have not been working apart, but together. We've been using your book. We've been having our meetings every Sunday night. We take a chapter a week. We've gone over our credit card issues, and we've even just a couple hours ago, started tweaking our conscious spending plan. Seeing the numbers up close has been quite refreshing. As you can see, I'm very happy about doing this versus just sitting on the sidelines. I do regret that I've done that. A lot of time has gone by and was wasted because of that. But now I feel regenerated. This is a new journey, and Kate and I are doing this together.

Wow. I have to say, I'm pretty impressed with Kate and Drew's follow up. I love that they went through the book, I love that they did it together, and I love that they are talking about money. One of the lessons of this podcast is you will be amazed how quickly you can turn your financial life around when you do it together. So, to Kate and Drew, thank you. That conversation was tough, no doubt about it. But I am thankful that we had the chance to talk and to do it together.

Sam.