217. “Are we broke…or just bad with money? (Part 1)

I feel like we're almost like one really big up away from just losing everything.

How much money do you have in your checking account right now at the moment?

In my checking account I have $64.18.

I'm kind of like depleting my savings, trying to pay for everything. I felt like I was doing it by myself, just trying to handle everything, all the bills. And at that point I'm like, I could just do this by myself. Just seeing it laid out, I'm just like, we have no money, we're screwed.

Tomorrow's not promised. So, you know, live in the moment, have fun while you got it. I mean, I feel like if you have it, do what you want with, if you look at it the right way, things will eventually work out for you. Just how uneducated we really are about money and how much we are just kind of, I don't want to say wasting, but wasting money in a sense and things that you don't really see until you kind of put it on paper or put it right in front of your face and you're like, holy.

Today I'm speaking with Dominique and Chris. They're 33 and 34, engaged and they have a two year old son. Here's what Dominique wrote in her application and I want you to really listen closely. She said, talking about money seems to end in an argument. Part of me feels like if we had more money, we would have more love for each other. At this rate, I feel like we'll be co parenting in the next year or so. And I always feel like we can lose everything at any moment. This is brutally honest. Do you hear what she's saying? She's saying she basically sees this relationship ending in about a year. This is one of the reasons I want to talk to them right now. So I just opened up their conscious spending plan. It shows us their four key numbers. Their fixed costs, savings, investments and guilt free spending. If you want to follow along or create your own CSP, you can go to iwt.com CSP their total assets come in just over a million bucks, which is very impressive for their age. Their Investments though are only 24,562, should probably be higher. Savings are at $13,198. Their debt is at $615,000, which puts their net worth at $425,000. Now they earn roughly 180k a year combined, which is a very strong income. But their fixed costs eat up skills, 69% of it, which is too high. Investments and savings are 13 and 18%. But the real red flag here is that their guilt free spending is listed at 0%. I don't believe that number. So let me find out what's going on. So who filled out the application to speak to me?

I did.

Okay, Dominique, do you remember where you were and can you walk me through what was going through your mind at that time?

I was in a bad place, straight up. I think that we have been arguing a lot. I don't remember specific details. I think we just couldn't catch a break. The baby was up every single night. It was just like really overwhelming. Maybe our air conditioning bill was super high. I don't even know.

I was off work a little.

That's right, he was off work. So it was. It was kind of me handling it. I really felt like alone in handling it. And I had saw that application roll through and I honestly, I was in my bed. Chris was knocked out snoring next to me. I'm filling this out just like, oh my God. And I kind of just laid everything out.

Chris, what was your reaction?

I'm still kind of in a shock, but I mean, I'm all for it. I'm ready to dig deep into it.

And Dominique, since you filled out the application, can you tell me what is going on here?

I think that we don't know what we're doing ever. You know, when we're talking about finances, I don't know everything. I don't know how to prepare for them. It's kind of overwhelming. I think we wing it a lot. I feel like we're almost like one really big couple away from just losing everything. You know, we have so much that is going out money wise. And I see nothing coming back or when it comes back, it's gone immediately. And then I'm like, what are we doing? We have nothing to show for it.

Can you describe the primary problem in one or two sentences?

I think we have a very expensive house that we're paying for in Arizona.

Okay. That's the problem. The house.

I mean, I can't say that it's not a huge problem. Right.

What's the primary problem?

Our house is expensive. Yeah. But I don't think we should get rid of it.

I think that the problem is we don't know what the other has, in a sense, and we don't really, like, communicate about it. And I think the problem is that we need to, in a sense, be more conscious of each other's finances and help each other.

Do you both think that you understand the Problem.

I think we have so many problems, we don't ever talk about them.

Yeah. It was notable when I asked what's going on, that both of you gave different problems and then both of you shifted into what you need to do, like solutions. It's kind of like me going to get my car fixed and there's like a pinging noise and I walk in, I go, well, the seat is loose and the glove compartment doesn't close. And. And also there's a pinging and. But what I really need to do is I need to change the type of gas I use. It's kind of what's going on, right?

Yeah.

What would be a different approach if you had a problem in your car and you took it to the car repair place, what would you do?

I mean, for me, if I have a problem in the car, I'm gonna take it to the mechanic. I'm gonna just tell them, fix it. I don't care how much it is, just fix it for me.

Okay, Chris, if you don't really know much about it, you ask questions of how to maybe someone else can figure out the problem or, you know, help with the solution to the problem.

All right, well, that's why we're here. We're going to figure out what's going on and then come up with some solutions. All right, Dominique, in your application, you wrote, quote, I need us to be on the same page before we can move forward and be the best parents to our two year old son. At this rate, I feel like we will be co parenting in the next year or so. Now those are pretty striking words. What do you mean by in a year or so? I feel like we will be co parenting.

I just felt like we could not communicate about anything. Chris mentioned that he was off of work for a while, so that was pretty tough on us. You know, I'm kind of like depleting my savings, trying to pay for everything. I needed him to figure out what his next move was going to be as far as work goes, you know, if you don't have work for X amount of days, figure it out quick. Because at that point it was like I. I felt like I was doing it by myself, just trying to handle everything, all the bills. And at that point I'm like, I could just do this by myself.

Can you walk me through a time where the two of you were not on the same financial page recently or not even recently?

I don't even know when it was, but we were arguing because he wanted to buy another car.

Okay. Let. Let's start there. So where were you when this conversation happened?

This conversation has been happening for a while, maybe like a month or two.

Okay, and what was the conversation?

Because I drive a car, and we only have two vehicles at the moment. We have our 4Runner that we have, and I drive a little car on the way to work and stuff like that. And I just thought that, for one, I want to get another vehicle to help take my stuff for work because I do construction, and sometimes I need to get longer material that I can fit inside of a car. And as well as. Since we do have the baby and the car is always filled up with, you know, all my tools and stuff for work, if there were to be in any type of emergency or any type of situation and she's gone with the car and I have the baby or vice versa, you know, I just always want to have some kind of way to have transportation for both of us.

Okay, can we recreate that conversation? Where were you? Paint the picture for me the last.

Time when this hell happened. I think we're on our way to Target.

And who was driving?

Chris?

I was.

Okay. All right, so, Chris, we're in the car. I'm just in the backseat listening like a creep like this. All right, so you two have the conversation as if you're in the car. Okay.

I think that we should get it. Look into getting another vehicle, because we need to have something in case something happens with Troy, something happens with, you know, the other car, and I'm out of a car, and we only have one car, and I can't get to work. So I was thinking about looking into a bank and seeing how much a loan would be.

And what bank did you look at and what was the APR and how are you going to pay for this? And is there anything that you could pay down before we have another bill?

No, I didn't look all into that.

Then I don't really want to mention the conversation. If you don't have the information, how did it end?

I kind of shut down because I didn't have all the information. And I know she's very like, give me this information. Have this. Have this all lined up and stuff like that. In a sense, I was just kind of mentioning it because it was a thought that I had and just wanted to look into it to be able to find more information. But she took it as if, like, I'm going to go tomorrow and go buy this car right off the lot for a $10,000 loan and things like that.

Okay, Chris, when you brought up the idea of getting another car and Dominique responded in the way that she did, what did it feel like to you?

I just felt like what I was saying doesn't matter. Like, attacked to where. Like, what are you saying is for, like, you don't have all this information, so what are you even bringing it to me?

And then I want to ask the same question of you, Dominique. What did it feel like when Chris brought up the idea of getting another car?

There are so many other things that are going on that adding a car to the list is just. It's just too much.

I noticed that when I asked you how did it feel, I get a lot of words that are not feelings, and I actually am very compassionate about that because I wasn't raised, like, talking about my feelings. So I have a tool that a therapist suggested to me. This is the wheel of emotions. I'd love for you to just take a second and look at it and see two or three feelings that come to mind. Can you see that?

Yeah.

Chris, I'm going to ask you first, and then I'm going to come to you. Dominique. Chris, what did you feel now, reflecting on that in that conversation?

I don't know, like, misunderstood. It just felt like what I was saying was just uncared for, in a sense.

Dominique, how about for you in that.

Conversation, overwhelmed and annoyed. And I want to point out too, that I just want Chris to know that his siblings are valid. I could understand how you feel unheard in that conversation 100%.

You ever talk about how you feel?

Sometimes we talk about how we feel, especially when we get into really uncomfortable situations. I mean, we might get real quiet and it might take a second for us to get to that, but I think after we give ourselves a second, we do kind of come back and talk about how we feel in the moment.

Now that you recreated that conversation for me, which was really helpful, what did you notice about that conversation? With a little distance and perspective, that.

I could be nicer. I mean, I could hear him out, you know, and I. And I don't do that a lot. So from that conversation, I understand that I definitely could have heard you better, Chris.

I just could have had more information, but I didn't have all that information. So when I was kind of just saying something about it, I didn't expect it to get kind of where it ended up getting to.

How do you think other couples have conversations like this?

I don't really want to compare myself to anybody, but I feel like people have probably better communication I want Chris to come to me directly and confidently, and that makes me feel better about going into a conversation.

Okay, Chris, how do you think other couples have conversations like these?

Maybe the same as we do. You know, it really all depends on the people, the context, the way things are said or brought up.

Is everyone evading my question right now? What's happening? Dominique's answer to that question was what she wants Chris to do, and Chris's answer is, it all depends on the cosmos and the oceans. The question is simple. How do you think other couples have conversations like these better than us? Like what?

I don't know.

Okay. That's an honest answer.

They're like, hey, this is what we want. Yeah. I feel like people just have a better way. Maybe they start arguing. Maybe it's a worse way.

Okay, interesting. Who says I don't know in a conversation? Do either of you?

I mean, we both say I don't know a lot.

Really?

Yeah, we say it tons.

Okay.

We always say I don't know.

Interesting.

I think, to avoid everything that we know.

Do you have friends who you talk about money with?

Yeah.

No.

Dominique says yes. Chris, you said no.

I don't talk to really many people at all about money or my own money or things like that.

How about family?

Here and there, I guess, but not really.

Okay. Chris says not really. Dominique nodded her head like, yes. Okay, so not to stick on this point, but, Dominique, you talk to friends, you talk to family about money. How would they have a conversation like this?

The main person that I go to is my dad about money, but he just gives me advice. It's not really a question. I'm just listening at that point. When I talk to my friends about it, we just communicate way better than Chris and I.

Okay, if you were to buy another car, how would that affect your finances?

That's just going to add more money to our, I guess, overall debt.

Can you afford it?

If I'm working all the time and I have consistent work, then I believe we could afford it.

Chris, how do you know if you could afford something?

I feel like if I have the money to do it, I feel like I can afford it.

Meaning if you have the money where? In your checking account?

Yeah, if I'm making enough money and we're putting enough away, I feel like we could afford it.

Is a question about affordability? Is that about feelings or is that about numbers?

Birth numbers?

Yeah.

Oh, so where the numbers in your answer?

They weren't there.

Okay, well, the good news is that almost nobody in America knows How to answer the question, can you afford that? They give me these real funny answers, like, if it's on your feet or your back, then you can afford it. Because whatever's between your feet and the Lord or whatever that phrase is, you can afford it. I go, that was invented by a mattress salesman and a shoe salesman. That's not affordability. Affordability has a number. Yeah, but we'll get there. Dominique, same question to you. Now, how would another vehicle affect your personal finances?

I think immensely. I already think that we're cutting it close. So an extra 200. 300 for a vehicle is not working in what I see our finances doing right now.

Okay, how much money do you have in your checking account right now?

At the moment? In my checking account, I have $64.18.

But we went grocery shopping this morning.

Okay, is that your joint checking account?

No.

No, we don't. We don't have joint checking account.

Okay. You have separate accounts. So, Chris, you have $64 in your checking account, and, Dominique, how much do you have in Your checking account?

339.

$339. Okay, so can you afford another car? Dominique says, no.

Chris, no.

Are you just saying that because you think I want to hear it?

It's no at the moment. No, I. I don't think we can afford it. I really. I really don't.

The way Chris approaches purchasing a car is a huge clue. Did you catch it? He started out saying they could afford another car, but that confidence was not based on numbers. It was just a feeling. And he even said, if I have money coming in, I feel like I can afford it. That's it. That was the extent of his logic. Then I asked one question. How much is in your checking account? Two minutes later, his answer changed from yes, we can to no, we can't. This happens all the time. Most people treat affordability like a vibe. It's like, oh, I'm at a restaurant. Should I order the burger or the fettuccine Alfredo? No, that is not how you make affordability decisions. In fact, cars are one of the biggest financial decisions that people get wrong, and they get it wrong for years. You know how I always talk about running the numbers on a house? You got to do the same for a car. The real key here is that your feelings matter. But you also got to use some math when you make major financial decisions. How much can you afford? If you hear me saying that in your head, your answer better have a number, because that is how you answer that question. Now, you mentioned you have A son. How old is your son?

Two.

Two years old.

All right.

And are the two of you married?

No.

Okay, not married. But do you live together?

Yes.

Okay, Live together. You have a two year old son and you, it sounds like, have not combined finances. Is that accurate?

We have an account for bills that are combined.

Okay, you have a joint account where you both put money in. All right. And do you both have individual money as well?

Yeah.

Okay, cool. All right, just so I know, any plans to get married?

He knows when we'll get married.

I mean, the stipulation is she wants to get married in Italy because that's where I proposed to her, but at the moment we are.

I just don't see that we need to do it anytime soon.

You don't need to. Chris, what about you?

It's always kind of been something I wanted to do and I've never really found somebody. And then I found her and yeah, I would love to be married.

Got it. That's all I need to know. Look, I'm not judging. Married, not married, doesn't matter to me. I just want to know the situation so I can understand what's going on. One of my co workers recently started seeing a new eye doctor. And the first thing she said to me was not about the glasses or the exam or the cost. You know what she said? I can text them anytime. One phone number. I ask a question, reschedule an appointment. I text them, and someone always responds. When she had her last visit, she mentioned a recent text and the doctor goes, yep, I saw your message. Pulled it up right there on the computer. Even though it wasn't the doctor who replied to her text, she could tell the whole office was on the same page. That's a beautiful personal touch. That's exactly how OpenPhone, this video's sponsor, works. OpenPhone is the number one business phone system that streamlines and scales your customer communications. It runs through an app on your phone or your computer. No need to carry two phones or mess with a landline. Your team shares one number and handles calls and texts like a shared inbox. That means anyone can see the full conversation and step in without missing a beat. Keeps everything fast, clean and consistent. Even if five different people touch the same customer thread and after hours, their AI agent can actually step in and to handle calls, answer questions, and capture leads so you don't lose business when you are offline. OpenPhone is offering my listeners 20% off your first six months at openphone.com ramit that's O P E N P H O-N-E.com ramit and if you have existing numbers with another service, OpenPhone will port them over at no extra charge. Open phone. No missed calls, no missed customers. AI is supposed to make work easier, but now it seems like you have to hire an AI consultant just to figure out which tool handles what. Are you using AI for writing, or is there another one to use for meetings? What about one for project planning? And they actually don't talk to each other. That's when things start slowing you down instead of helping you move faster. But Notion, the sponsor of this episode, can help solve that. With Notion, everything is in one place. Clean, simple, easy to use. And now with Notion AI built right in, it's even more powerful. Enterprise search can pull answers from tools like email, Jira, even PDFs. Research mode. Writes full reports in minutes and meeting notes, captures and summarizes everything so key decisions don't get lost. No more bouncing between apps, no more guessing where things live. Just one system that keeps things moving. That's why more than half of Fortune 500 companies use Notion. Try Notion AI, the best AI tool for work by going to notion.com ramit that's all lowercase. N o t I o n.com r a m I t notion.com ramit now, you both created your conscious spending plan using my CSP template. What was that like?

I think it was eye openening. I didn't realize, first of all, subscriptions. Didn't realize that. And then just seeing it laid out, I'm just like, we have no money. Okay, we're screwed.

Oh, that was your reaction after seeing the numbers were screwed?

Yeah.

Okay, and what was it like for you, Chris?

It was nerve wracking just being able to put all the numbers on the table and see how far behind we are or we aren't.

Did you have any conversations about the numbers?

Not really.

Okay. He just looked at him and then Dominique said, I'm screwed. And that was it. Like, good night.

You know, honestly, No, I think it was like we just looked at him. We're like, okay, here's our starting point. Oh, you know, like, we see it now, you know, So I. That was the eye opener. And yeah, I said other choice words.

But yeah, what words?

We're so.

Oh, yeah. So, Chris, when you heard Dominique say that, what was your reaction?

I said, well, this is why we're doing this. And, you know, hopefully we can get out better on the other side after we go through this whole process.

All right, cool. Let's take a Look at the numbers. So just so we know, you are both in your early 30s, and, Dominique, why don't you read off the word in bold and then the number in full next to it for the entire box.

Okay, so assets, we have 1,003,100. We have investments, $24,526. Savings, 13,198. And debt is 615,339. Total net worth is $425,485.

What do you think about those numbers?

I just see, like, a huge debt.

You. You just see debt?

Yeah.

You don't see the total net worth number?

It's hard for me to see that because I feel like if we miss a payment or something goes wrong, we can lose that quickly.

You hate debt. Like, you hate it.

I don't want to say that I hate it. I feel it scares me. Debt scares me.

Debt scares you? Okay.

Yeah.

If. If you had a choice of paying off debt or investing it, what would you prefer to do?

I mean, I would prefer to invest, but I just don't know how. Okay, so now I just. Paying off debt.

Okay, Gotcha. All right. And what about you, Chris? What do you think about those numbers?

They're kind of what I thought, in a sense, of, like, the debt, because we do have two houses. But I think that the numbers could be better. I think that, you know, they're. They're okay, but I think that we definitely could be better.

Like what? What would be better?

Just a higher. A higher net worth.

I want bigger savings.

Okay. Can I ask a little bit about what these numbers are? So the assets. One million bucks. What are those assets?

Both houses.

Two houses.

The car.

How many cars?

We have the Celica, which I went high on that one and said it was worth 5,000 because it's my baby. But the Forerunner is like 30 or 40. Arizona house is about 400,000. The California house is about 600.

Okay, so that's it. Those. Those four things. Two houses, two cars. Okay, great. And then what's the debt?

Both houses, the. The car. I think I put my school loans in there.

How much are your student loans?

Between 10 and 14. I. I forget.

And then also our credit card. I have 7,000, and I think mine.

Was, like, 8 or something.

Okay.

Maybe less.

All right, can you tell me about these two houses? How, like, you own one and you rent another one out?

So the. Our California house is ours. We use the money from our family home to pay off most of the mortgage. So we only owe about 200 on this one.

Okay.

The Arizona house, I feel like we definitely purchased at, like, the wrong time. And we have people renting that house.

Out, so covering the mortgage?

No, no, not fully.

How much are you losing every single month?

Anywhere from 800 to 900.

Okay, 900 bucks a month. And what about maintenance?

Maintenance. If anything comes up, we pay for it.

So in my estimation, you know, without looking at exact property or anything like that, if it were me calculating it, I would probably assume instead of 900amonth, I'm losing more like 1600amonth, maybe even more. More. I'm always conservative. I would probably just make it 2,000amonth just to be super safe. So, like, you're down 2,000amonth. Okay. I don't know if that's good or bad. We can figure it out. But, yeah, you're losing every month on that. Okay, fine. And the California house, do you own it in full or you still have a mortgage on it?

No, we still have the mortgage on it. So 200 on this one.

All right, and then how did you get the Arizona house?

We got it in 2022. Basically, the market was really high. So it was either rent and put our money towards nothing or buy, in a sense, is what we thought. So.

Wait, what?

Unfortunately.

What do you mean, rent and put your money towards when we were.

So when we were in Arizona, they were going to raise our rent so high in the apartment.

Okay. I didn't want to do this, but we're going to do it.

Okay. Yeah.

All right, let's do the numbers. Okay, hold on. I need to get my game face on.

Yeah.

Okay, I'm ready. How much was your rent before they tried to raise it?

When we first moved out there, it was 13.

And.

And then they raised it to about 18 something. And then they wanted to raise it again to about 24 or 20523 or something like that.

Okay, fine. So you're paying 1,800, and they want to raise it to, let's say, 2,400. Okay, fine. And how much is your mortgage plus HOA, plus maintenance, all of it included.

We haven't had much maintenance to have to take care of, but our mortgage and HOA is about 26, 2700.

Okay, so let me. So the thing you were so afraid of, you're actually paying more than that every single month, and you haven't even included maintenance in, which is probably another 5 to 500 to $1,000 a month. Do you guys see.

Yeah.

How this sounds? I just have to disabuse us all of this idea that if we rent, we're throwing money away, and sometimes even rent increases. Like, Americans hate the idea of some landlord raising rent on them. So they will literally cut their own nose off to spite their face. They'll be like, you're gonna raise my rent to 2,400? Mother you. I'll pay 27. And they don't understand because they just say equity. But if you all looked at the amortization table, you basically have no equity. You know, you have very little equity in the last few years. And right now, you're lucky. You haven't had maintenance. But once your air conditioning breaks in Arizona, yeah, that is thousands of bucks. So this idea, which is so strong in America, these landlords raising our rent, Remember that old story of a scorpion going on like a turtle's back or something? And the scorpion stings to whatever the. That animal was, and the. The animal goes, why'd you sting me? And the scorpion goes, I'm a scorpion. That's what landlords do. They literally raise or drop the rent based on the market. That's what they are. So I'm not getting mad at you. This is not directed to you. This is directed towards the millions of people listening to this who think rent is throwing money away. It's not. It's simply a financial and lifestyle decision. You know, I find it fascinating how little curiosity we bring to major life decisions. You know, people will spend hours picking the perfect kid's toy or researching the perfect frying pan, but when it comes to a $400,000 house, they don't even Google anything. They just go, ah, yep, sounds about right. No second opinion, no math. That's exactly what happened here. They bought a second house out of fear. Fear that the rent might go up. They didn't run any numbers. They didn't ask for any advice. They just did it. Now, listen, I don't care if you buy the wrong phone charger for your phone. Okay, big deal. But a house, that can literally affect your finances for decades. And ironically, in this case, the rent increase they were trying to avoid would have been less than the mortgage they ended up with. Now they're losing $2,000 a month on that rental. This is what happens when people use these simplistic terms like, I'm throwing money away on rent. But what they don't understand is you can be throwing money away on interest. You can be throwing more money away than you have just so that you can say, I own I'm part of the American dream. You're going to see a pattern in how lots of people talk about major purchases. They talk about money in terms of monthly payments instead of total cost. I'm going to tell you straight up, that is not how people who are savvy with money talk about their purchases. Okay? I never talk about how much I pay per month for a major purchase. The problem with monthly payments is that you don't account for the total cost of ownership. And for a house or a car, the total cost can actually be double what the sticker price is. That's what happens when you properly factor in property taxes, insurance, maintenance, HOA fees, opportunity costs, all of it. This is just another example of making major purchases based on vibes. It works until it doesn't. And when it doesn't, you can be in big trouble. So if you're thinking about buying a house, you want some help to run your numbers, Check out my free three step guide to buying a house@iwt.com House cool. Your net worth is $425,000. Your savings are 13,000. Investments are $24.5K. Let's talk income. Now, Chris, I'm going to ask you for this one. I'd like you to read me your gross combined monthly income.

14,949.

All right. So the two of you make $179,000 a year combined. Did you know that?

I knew how much I made, but I didn't know that together we made that much.

Okay, so neither of you knew. That's, that's quite common. 50% of people I talk to don't know how much money they make. How much did you think you made together? Yeah. Or did you not think about it ever?

No, I don't think that we think about it together because we don't join that together.

Yeah. And so is it just like monthly? Do we have enough to cover the car payment and the mortgage? Is that the kind of approach?

We just make sure that there's enough money in our bills account for everything to be paid and that's it?

Chris, same for you?

Yeah. We put most our money into that bills to make sure all those are going to be paid and then just kind of with our own money that we have left over. We do what? Whatever we do with it.

Can I ask a question? Do you think that you would ever get out of this month to month thinking with your money?

I would hope so. But how I feel now, I feel like we're never going to get out of it. This is why we're here.

Yeah.

Yeah. I feel like sometimes I feel like I'm going check to check, in a sense.

And it's like, check to check on $180,000 a year. What does that tell you?

We're doing something wrong.

Yes. What a great answer. Because so many times in life, I. I learned this in math class, like, seventh grade. The hell was I taking pre calculus or algebra or something? And like, you know, you have to work those problems. They take a lot of calculations and stuff, and then, you know, you're five, 10 minutes into it, 15 minutes, and you're like, oh, like, I'm stuck. I basically took a wrong turn. And our math teacher taught us, if you take a wrong turn, don't just keep brute forcing it. You got to go back and take a different approach. And I think that is true of money too. So I love your answer. It's like, hey, we're doing something wrong. I don't know what.

Yeah.

But only focusing month to month on 180k, something's not working out here.

Correct.

All right, let's. Let's go down the numbers. I want to read off the four key numbers from the conscious spending plan. Your fixed costs, 69%, your investments, 13%. Savings, 18%. And guilt free spending is at 0%. All right.

I don't remember seeing when we were filling it out, the guilt free spending part.

That's because it automatically calculates how much you actually have for guilt free spending. But I know, and you know, you're not only spending $37 a month. Come on. When was the last time you guys ate out? Tell the truth.

The other day.

Recently.

Yeah, exactly. And just out of curiosity, what'd you get when you ate out Mexican food?

They gave us free tacos.

Hold on. This is bringing up some very sad memories for me. I also love Mexican food. I used to live across the street from a Mexican place in New York. I went there, like three times a week. Okay. I went there so much. And then I met my now wife, and she started, you know, hanging out around my apartment. And she. One time she went there, and she comes over after and she goes, hey, do you want, like, a free burrito? And I was like, excuse me. She goes, yeah, they're so nice there. They just gave me a free burrito. I'm like, I have spent $10,000 at Dos Toros, and they have never given me one. Free chips and salsa. Not one. And she goes in there, just walks in with her big smile, and they just hand her a free Burrito. What the.

I feel you.

All right, so definitely the CSP is not quite accurate. We know that, but that's okay.

Yeah.

The point is not the first draft to be totally accurate. It's just to get a sense. What do you think of the fact that your fixed costs are 69?

I thought they would be way higher.

Okay.

It sounds about right, to be honest with you.

What's it supposed to be? Ideally, way less.

Less.

50 to 60% is typically what I recommend.

Okay.

So if it's 69, I can already tell what's going on in the house without even talking to you. If I just look at that number, I go, oh, they're probably stressed out about money. They're probably fighting about some random expense, who's buying this or that, and they're probably not saving or investing a lot. And I think I got one of those things right, but not all of them. So I think you probably are fighting about random expenses. I think you've told me that. However, what's really interesting to me is that your investments are quite high. Combined, they are 13%. Now, one of you is investing 28% and the other is investing zero. Who's the one investing 28% of take home pay?

I'm pretty sure that's me.

You make $5,709 a month.

I mean, I. Maybe I answered the question wrong because. Are we talking about my investments, like my stock? Yeah, that's just kind of in there.

Who makes more, Chris?

I do.

Okay, let's take it from the top. So, Chris, you make 9,000 bucks a month gross. And Dominique, you make $5,700 a month gross. What's interesting is your net is Almost the same 5200 versus 4700. Why is that?

The union takes taxes like crazy. I work in the. The carpenter's union, and some of the money that gets taken on my taxes goes towards a vacation fund that I receive every six months.

Huh, what's that? How's that work?

So I guess for the union, they take out. It's like $5 an hour on every check, and it goes towards a vacation fund. And then every six months in July and in December, you get like a lump sum amount of whatever you've developed over that time.

Why don't they just give it to you?

That's just the way the union works. Because there's times that you could take it out if, like, say something happened and you need to take it out early, you can do that. It's like a savings account that you don't have control of. And then every six months, you're like, oh, let me take some out.

You know, I would go in there after three months and I'd go to my union leader and I'd be like, something came up. It's an emergency. And they're like, oh, I'm sorry, Ramit, what's wrong? Like, I found a extra large suite available in Tokyo. I really need early access to this vacation. Listen, I never heard about this, but okay, cool. So you get a certain amount back every six months. How much is that?

When I was in Arizona, it'd be a whole year and I'd only get 1300. But they were only taking a $75 an hour. Out here, they take $5 an hour. So basically $200 a check. So within six months, it's anywhere from, I don't know, like four to $5,000.

And can I just ask, is that included in your net or did you not put that in your net?

No, I didn't include that in the net because I don't get that in my check.

Okay, I get you. So you're going to get an extra roughly 4,000 bucks every six months. Yeah.

Like in.

Good to know that. That will certainly help. You're equally paying your mortgage with that.

I think we kind of did it a little bit wrong in a sense, because I do get paid every week, and since I do make more, I do put more into our bills account. So I. It's not like exactly 50, 50 in a sense.

So you're paying a little bit more IC towards insurance. I can see that. Like an extra 100 bucks a month, you're paying a little bit more towards a car. You probably have a more expensive car.

I mean, we. We try to make it 50, 50 in a sense.

It is tricky because on a gross level, you're both making. One of you is making almost double the other. Chris, you're making more.

Yeah.

Then on a net level, it's quite different.

Yeah.

And we can work through it. I just want to hear your logic on it. Anyway, going back down to the investments, Chris is investing 20 bucks a month into investments. But are you getting a pension, Chris?

Yeah, I just don't like. That's something I wasn't really too sure of, like, how to kind of look up. And I called the union to see how that worked, and they say I have pension credits, but they didn't really kind of break down, like, how much each credit is worth or things like that. So I'm not really exactly sure. Of how much money is in that pension.

Yeah.

But I do know that I have like five or six credits.

Okay. You're going to want to find out. I do appreciate that you called them. That's great.

Yeah, yeah.

You know, this stuff can be very confusing. Like what's a pension credit? Who the hell knows? But yeah, exactly. That's their job, to explain it to you. And trust me, they will. And then in addition, if you're not sure, you can Google it or put it into chat, GPT, upload all those docs and they'll tell you exactly what it means.

Yeah, okay.

That'll be good to know. One of my favorite phrases to use in my company is check the box and move on. Just think about all the things that are on your to do list and they've been sitting there for months, sometimes years. Now imagine instead of thinking you need time to get it perfect, you just get it done. It's handled now so you can check the box and move on. A great example of this is estate planning. A lot of people put this off. What's a trust? Do I need a will? I don't know where to go. But once this is done, there is total peace of mind in knowing that it's handled. That's why I recommend trust and will. There's no scheduling appointments, there's no digging through legal forms. You go online, answer a few questions, and it walks you through everything in less than an hour. My co worker actually recently created a will for her and her family on trust and will. Here's what she told me. Getting started was incredibly easy. I just followed their prompts, provided the info they needed about my beneficiaries, my assets and my preferences. In less than an hour, I had a will, power of attorney, documents, last will and testament, and HIPAA authorizations, all of which I easily downloaded. And I could have them executed or checked by an attorney if I wanted to. Now, I personally used an attorney for my own estate plan, but not everyone has access to a great estate attorney. So if that's you, trust and will is a great option because they make estate planning accessible and affordable. With trust and will, you can create and manage a custom estate plan starting at $199. Let trust and will uncomplicate the process for you. Protect what matters most in minutes@trustandwill.com ramit and get 10% off plus free shipping. That's 10% off and free shipping. At trustandwill.com/ramit. A lot of people tell me they Read my book or listen to this podcast. But they haven't gotten around to filling out the conscious spending plan, which is a very important part of living your rich life. I get it. It can feel overwhelming to log into all your accounts and have to pull up spending from the last month or two or three. If you've been dragging your feet on your csp, here's what I suggest. Sign up for Rocket Money, this episode's sponsor, link your accounts and in minutes you can see exactly where your money has gone for the last few months. Now you've got everything you need to get your CSP together. Rocket Money is a personal finance app that helps you find and cancel your unwanted subscriptions, monitors your spending, and helps you lower your bills so you can grow your savings. And you can see everything in one place. Your subscriptions, your bill due dates, your paydays. The dashboard makes it really easy to understand. If you see a subscription you don't want anymore, you Rocket Money can even help you cancel it. And if you've got a goal you want to save for, Rocket Money can look at all your accounts and figure out the best time each month to put extra Money aside. Rocket Money's 5 million members have saved a total of $500 million in canceled subscriptions, with members saving up to $740 a year when they use all the app's premium features. So cancel your unwanted subscriptions and reach your financial goals faster with with Rocket Money, go to RocketMoney.comit today. That's RocketMoney.comit RocketMoney.com. okay, and then Dominique, you're, you're investing quite aggressively for making $5,700 a month. So you're putting 28% of take home pay into investments.

I think that that's totally wrong. That's just the number in how much is in my stocks because I'm not adding anything to those stocks whatsoever.

Oh, where did this come from? Look at these two numbers.

That 200 for me, honestly, whatever I have left over in my checking account goes straight to savings, so. Yeah, but that number could fluctuate as far as the stocks go. That's just the total amount that I have in my stocks right now, but I'm not actually adding anything additional to them.

You have 1,000, 123 in stocks. Okay, then what's this number up here? 24,000, 526.

That's my 401k.

Can I ask a question? When you think of retirement accounts, what do you think of 401ks okay.

Or the pension. A Roth IRA.

Great. And when you think of investing, what do you think of stocks? Are they the same or different than retirement?

I think that they're different, but I don't know. I don't have that much knowledge about it. So, you know, of course, these are just the things that have been told to me for 1k is what you retire with. Stocks are just like, if you have some extra money, you can put it in there and see what happens. Okay.

I never mind if somebody doesn't know something. And what you're saying, Dominique, is so common, not knowing the relationship between stocks and retirement. It's not obvious, actually. So I can definitely walk you through how to think about it differently. And, you know, you can read it in both of these two books as well. But I'm just trying to gauge how you think about this. Looking now back at the CSP, what I can see is that you don't put $1,123 a month into investments. Correct?

Correct.

All right, so I'm going to zero that out. And by the way, I don't mind that this is a little messy. You know, I see some comments online. They go, oh, Ramit should check their CSP before they come on. Why would I? I want to see how you did it. Yeah, because then I can understand the logic. My goal is not to get this pristine csp. It's to get the real information, the real way that you talk and think and write about money, and then we'll work through it together. All right, so let's fix this. 1123. I'm zeroing that out. Is there 200 bucks a month going consistently towards investments?

That is actually the low number. It's anywhere from 200 to 500.

All right, we'll just keep it at 200 then. Looks like you all are very diligent about putting aside $550 a month for vacation.

So this is where it got a little bit muddy for us, Right? Because we see goals. We see savings goals, what we would like. So that's how we thought of what we would like to be putting away. What the.

Oh, hold on. Excuse me. I would like a 15 micron vicuna top coat.

I thought those were our dreams at first.

It was a lot more than that. It was like $10,000.

10,000Amonth for vacation. First of all, we're going to stop using the word goals. I hate that word. Because nobody uses the word goals unless they are talking to some financial professional. Our financial goals are no one talks like that. It's a made up word. And then it causes all kinds of perverse behavior. Like you all are not saving $550 a month for vacations. But someday I'd like to. But I'm talking about today. That's what the CSP is. What is actually going on. So nice to know you'd like to save $550 a month. That's charming. Can we talk about what you're actually doing in savings today?

Sure. Zero.

All right. Wow. How do I zero the whole thing out at once? Let me see. I never had to do this. 000. Wow. Okay.

Ah.

That's more realistic that the two of you have $2,910 a month on guilt free spending. And I bet that's what you spend.

Possibly.

Probably.

What do you spend it on? Because I know it's not just one Mexican meal.

The last couple months I've been spending a lot of money. Chiropractic appointments. Doing massage because my injury. So we have been eating out a lot. I haven't been able to cook. It's been harder. So we've been. I've been spending a lot of money on that.

What else?

Going to. Going to target. Just grabbing random things. Anything that we don't have. We're just buying it really expensive dog food. I don't know where it all goes. You know. But it's going somewhere. I guess we don't know because I don't really think about it. We just go buy whatever we need whenever we need it.

I think this is more than just what you need. Can we get past the functional stuff like feeding the dog? Y' all are not spending $3,000 a month on dogs.

Yeah.

What else is it?

So I'm at least spending $120 a week at the chiropractor.

Okay. So first of all we never talk weekly.

Okay.

Monthly we talk annually. And at a certain point you'll talk on a decade long basis. So 120 a week is how much per month?

Like 480.

Great.

Yeah. So about 480 for that.

What else?

Call it 600amonth for massage.

Okay.

Food wise. That's. That's been tough. This has definitely been tougher for us month wise. So I'd say food wise maybe 500amonth on eating out.

How often you think you eat out per week?

Maybe once or twice a week.

Are you guys ready to tell the truth? All right. Let's do this. Let's do Ramitz. Ramitz. Eating out. Constant. We're gonna do the exercise. All right, we're gonna start at Sunday. This is a given week on Sunday. Do you eat out?

I mean, usually we make breakfast at home.

Great. Do you go out for brunch, Coffee, lunch, anything like that on Sundays?

I mean, of course it's not a consistent thing, but yeah, of course we do that.

Okay, great. So what would that be? What, brunch?

Yeah, I guess you can call it brunch.

Yeah. Okay. And, like, how much would you spend at brunch?

I mean, we could spend a hundred dollars at brunch together.

All right, so what about dinner?

I don't really do dinner a lot.

Cool, let's go to Monday. Anybody eating out, buying coffee, any kind of drink or anything in the morning?

I'm definitely buying Starbucks.

Okay, great. How much does that cost?

575.

575.

Every single day.

That's every single day or five days a week?

We'll call it five days.

Five days a week. Chris, do you do Starbucks or anything in the morning?

No, normally I make coffee in the morning because I wake up very early to go to work.

Stop anywhere on the way to work the mornings on weekdays?

No, not. I don't stop in the morning, but on lunch I might go get a drink and a snack or something. Like the 7 11.

How many days a week would you say?

Probably every day.

All right, cool. And then what about for you, Dominique, Coming back to you on lunch on weekdays, I eat at home. Any dinners out on weekdays?

Yeah, like maybe one to three.

Let's say three. Chris, is that accurate?

At the moment, yes.

Okay, great. How about Saturday?

I'd say Saturday is more of a day that we would go to brunch or go to dinner.

Okay.

There's a little number I invented called Ramit's Eating Out Constant. And it goes like this. Whatever somebody thinks they eat out, multiply it by three to get the accurate number. Now, do you recall how much you told me you eat out per week?

Three times.

You said one to two times, so I say two. Two times three would be six. But in actuality, if we add it all up, and remember, I'm considering each of you eating a meal separately, just for simplicity's sake. My math might be a little off, but it's something like 17 times a week.

That's a scary number.

What does that tell you?

That we should never be doing by that?

Before we jump to solutions, just tell me what that number tells you. Just money being wasted without making a moral judgment on it. Just like a scientist. What does that number tell you without.

Judgment, it's just too much.

Chris, what does that number tell you without judgment?

That we need to eat out less.

What's going on right now? Like, to me, I just go, oh, that number is higher than they thought. It doesn't mean you're bad people. What's with the jumping to immediately blaming yourselves and wallowing in guilt? You notice you do that a lot.

I feel like it's our. Our fault where we are financially because we do these 17 outings.

Hey, maybe it is. But beating yourselves up is obviously not going to work. It doesn't work. Look at where you are financially. So maybe instead of like beating yourselves up and then beating each other up and doing all this judgment, we just start looking at it like a scientist. Hey, we're actually eating out five times more than we thought. Actually almost ten times more than we thought. Wow, that's a lot. I wonder if we could make a change. What's the difference?

That's the more accurate solution. Yeah.

It's also more kind to yourself. Like your son, right? How old is he? Two years old. What if he starts to paint or color or something and then kids are horrible at painting and you're like, Jesus Christ, you use red when it should have been green. Yeah, that's not good, right?

No, no.

Nobody wants to talk to a little kid like that. So how come you talk to yourselves like that?

I feel like that's just how I've always been.

I don't know who taught you that.

I mean, I don't think that it was taught. I don't think that there was any other way that I've learned. I didn't see it any other way.

I don't think it was taught. There was no other way that I saw. What do you see right there?

I just feel like I see a lot of things in between there. Tell me when we're talking about my son, this is exactly why I want to make changes so that I can be better, to teach him better and to be kinder.

And, you know, I like that. If you want to be kinder to him, do you think that you need to make changes for yourself in order to be kinder to him?

Yeah, I think I need to be the better version of myself to be the best version for him.

Chris, how about you?

I feel like I need to be more positive for myself and not beat myself up about certain things as well so that I could show him how to be able to manage certain situations and have more self care.

What Dominique and Chris are Experiencing right now, wanting to make financial changes for their son, not necessarily for themselves, is incredibly common. I hear it all the time from young parents. What they basically are saying is, I know I messed up with my money, but I'm not gonna let the same thing happen to my son. It's a beautiful sentiment, but it's also wrong. I know. I'm sorry. I'm gonna pre apologize for all the parents out there that are about to hear a non parent tell you you're wrong, but you are being selfless. So sounds great, feels good. But when it comes to money is an extremely bad move. Remember this, your children have time. You have far less. There are so many things they can do. What are you going to do if you run out of money in retirement? That's why one of the best things you can do for your children is not just to blindly start socking money away for them, but actually to model a healthy relationship with money. Another thing that I noticed, especially with Dominique, is that she spins. She gets stuck on the problem and loops on how bad it is. She beats herself up, but what she doesn't do is zoom out and look for solutions. This happens a lot, especially around smart people. Smart people have a specific set of problems that inside of my company we call too smart for their own good. You know, smart people, they love to overthink everything. They like to see all the angles. Well, what about this? What about that? Option three. Oh, what about this? Risk mitigation. But sometimes they need to basically tell themselves, shut the hell up, stop using my overthinking as a crutch, and actually start taking action. This is one of the things that we are seeing with Dominique, which is this incessant spinning. And we're going to get into how they both think about money right after the break. You know, I love spending time in New York, but every time I'm there in the summer, I forget how hot it really is. You step off the subway, it's like walking into a freaking oven. Your shirt is sticking to you. I don't know about you, I got sweat dripping down my back. And if you sweat like that, a great way to stay hydrated is with this episode's sponsor, Element. Element is a zero sugar electrolyte drink mix. No sugar, no food dyes, no junk. It's used by Navy SEAL teams, Olympic athletes, and a bunch of pro sports teams. People keep using it because it works. You stay hydrated, you feel better, it tastes good. Perfect for hot days, travel days, or anytime you just want something that hits without A sugar crash. Get a free 8 count sample pack of elements Most popular drink Mix flavors with any purchase@drinklmnt.com ramit find your favorite element, flavor or share it with a friend. And it's totally risk free. If you don't like it, they'll refund you, no questions asked. This deal is only available through the link in my description below. Or go to drinklmnt.com ramit that's drinklmnt.com ramIt Can I ask how each of you grew up with money? Chris, what do you remember your family saying about money when you were young?

Some things were just too expensive to have or too expensive to buy. I did a board where it's a lot of money and my parents put everything they could to it. So we kind of got by with what we had. I didn't have the best things. We lost our house eventually, you know, so I've seen my parents struggle and there wasn't a lot of money. I saw my parents do everything they could to see me try to succeed in a sport that I was going after. And when that didn't happen, it just. You just kind of figure it out on your own in a sense.

What did your parents do for a living?

My mom worked for Safeway for a long good while, and my dad, he had his own heating and air conditioning company.

All right, and how would you describe socioeconomically? Would you say poor middle class? What would you say?

We didn't grow up, like, having all this stuff, you know, but I'd say, I guess middle class.

Okay. What was the sport that was expensive?

I raced motocross.

Oh, okay.

Yeah.

All right. So when you say they, they gave up a lot or they sacrificed a lot, is that so that you could have the vehicle, the equipment, that kind of stuff?

We just kind of did what we could with what we had. But me and my dad were traveling a lot. It's cost a lot to get new parts for the bikes, like oils, gear, just all the different ins and outs of it, you know. So I know they were putting me first in a sense of this is what we want you to do or this is what you want to do. So we're going to do everything we possibly can for you. It didn't put them in the best place because they were helping me chase my dream.

Did you hear them talking about money? Worried about money at home?

Yeah, all the time. And even like once they got to the later part of my racing and stuff like that, when I got to a professional skill level and things were getting even worse. And my dad's business at the time wasn't doing that great, and my mom was trying to help with the business, and it just caused a lot of friction at home. And, you know, they almost had to separate, you know, because of just, like, different situations. So it was all just a combination of money things going on. You know, like I said, we lost our house at one point.

Can you tell me about that? What happened with the house and how old were you?

My parents were just kind of getting by with the finances as far as paying for the house and all that good stuff. But close to the end of my time when I was racing and we didn't really have the money to keep going and doing it because I didn't have sponsors and support my dad, his business wasn't doing too great. So my grandma used was living in Oregon and she had some stuff going on up there, and my dad and mom weren't having the greatest time, so he moved away. And it was just me and my mom in the house. You know, they were still together, but they just kind of had to separate. And it was just me and my mom together until, I think, 2014 or so, and they finally, the house just kind of foreclosed.

Wow. When you look back on money in your family, what are the lessons that you takeaway as an adult now?

I don't know. I just kind of live in the moment, in a sense. Like, if I got it, I spend it.

Can you tell me why that is?

Tomorrow's not promised, so, you know, live in the moment, have fun while you got it. I mean, I feel like if you have it, do what you want with it, and if you look at it the right way, things will eventually work out for you.

What lessons have you brought from your. Your upbringing with money, your parents relationship with money, into this relationship with Dominique?

To be honest, as much as we're in a relationship, I feel like I'm still kind of just worried about my own money in a sense, you know, and we need to be worried about each other together. I live check to check is how I feel, you know, and I don't want to be in that situation or I feel like I'm in a struggle like my parents were, and I want to be better, but I can't really figure out the way to do that.

Yeah, well, that's why I'm glad you're here. You know, there's lots of different options you have, but in order to go forward, sometimes it's helpful to look back, see where you came from what messages you grew up with. I think that one you told me was really honest. You said, look, if I learned that, if you have it, spend it. Because tomorrow's never promised, by the way. Feel free. We can take a break. We can pause. I know this stuff is difficult to talk about. Seems like it's bringing up a lot for you.

You okay, B?

It's all good. I'll get better.

If you don't mind my asking, what's difficult about talking about this?

Just the fear of not having anything. We have something more to live for than myself, like my son. I just want him to be able to do whatever he possibly wants, like what my parents did for me, no matter how struggling they were or anything like that, I just want to be able to have him be able to do whatever he wants in his life and be unafraid and unapologetic for the way he goes about it. You know, I just want him to be better than I was and not like, I was bad kid or did bad or doing things. But of course, we all want for our kids to be better than we are.

It's kind of a beautiful vision, honestly. You know, one day your son is going to be able to watch this. It's kind of beautiful to be able to see their young parents talking about this stuff dishonestly. Who gets that chance? We didn't have it.

Yeah.

Imagine being able to see your young parents talking about being honest, saying, like, I don't know what this number is, or, I. I'm not sure what to do. I don't know what a gift. You mentioned your son. Let's say that your son gets good at some sport. Maybe it's baseball, maybe it's soccer, maybe it's motocross. What would you want his experience to be as a kid?

He really loves motorcycles and motocross. And if it comes to, like, that's what he wants to do, then I just want him to be able to put 100% into it and feel confident that he can do that. My dad taught me the most important thing is that you go and have fun and you love it. You know, if you're not having fun, then why do it? Because once the fun gets out of it, then you know it's time to move on.

So you want to. You want to keep showing him how to have fun. And what about when the practical realities of money come into it, he gets better? He starts to become really good boy, that's pricey. And you know how pricey it can be. It's getting more and more expensive.

Yeah.

What do you want his experience to be? Do you want it to be the same as when you grew up?

No, I want him to have no worries. I want him to feel like he's not bringing us down.

Like he's a burden. Yeah. Were you a burden to your parents?

I don't think I was a burden, but if I look at how much they put towards it, especially because it didn't work out in the end, because my ultimate career to where I could take care of them the way that I would want to.

You're pretty young. I'm not sure I would write that off yet.

I mean that in that sport, I'm definitely old.

Well, okay, fair enough on that. Maybe it's not going to work out in that sport, but in your financial life, yeah, definitely. You're quite young, so to be able to take care of your parents can come in lots of different ways. You know, sometimes I get the very rare privilege of speaking to somebody or a couple, and sometimes I can see things in them that they can't even see in themselves. It's a gift because I have received that gift when I had mentors and professors and friends who said just these very offhand phrases. Why don't you do that? You could do that. You should give it a shot. Just a simple little phrase. And sometimes I just. I heard it and I just thought about it later, like, wait, I actually could do that. I could write a book. I could do a TV show. Who knows? I could help my parents. And so when I hear you say, like, oh, that didn't work out. Okay, maybe your professional career didn't work out, but if the goal is to help your parents, you still got plenty of time.

Yeah.

Dominique, as you heard Chris talking about his childhood, what were you noticing and what were you feeling?

I don't ever want Chris to feel less than. And I know it was. I know it was a lot for him. And so I can. I can hear it in his voice. And I know that that was a tough time for him. So it. It hurt to me to know that. That he's hurting.

I appreciate that. Dominique, do you think that Chris brings any money messages from his childhood into this relationship?

I mean, I think he already said it. You know, tomorrow's not promised, so if he has it, he's going to spend it, and that's what he's working for. And so, I mean, that's exactly what it is.

And what's an example of that?

Like the car he thinks if he makes money, then he could just spend it.

One of the things that's so valuable about understanding where we came from with our money messages is childhood is formative for our relationship with money. For example, parents saying we can't afford it, or they fight about money. And if you really think about it, we don't really learn about money much after we leave our parents house. Maybe you have some friends, you talk about it, maybe you read a book, most don't. Maybe you watch how to Get Rich on Netflix. But the point is, like, we don't really learn about except from what our parents taught us. And inevitably we bring those messages into our adult, adult relationships. We can see that every single one of us on this call does it. I do it, you both do it. There's nothing to be ashamed of. It's just something we want to be conscious of. And then, especially as young parents, you can decide which messages you like and you want to pass on and which you don't. You choose. All right, Dominique, I'm curious about your childhood. What conversations, what phrases do you remember your family saying about money as you grew up?

We're broke. Even if we had it, not going to say that we were just super well off. But I never went for anything. My dad took really good care of me and my mom. But yeah, for him it was kind of secret. He's taking care of everything and he.

Just does it on his own.

But, you know, he definitely instilled into me like, we're broke.

Why did he say that if you were not broke?

I think that that's his way of teaching me the value of a dollar, make the connection. For me, he had nothing. He's. He's the youngest of 13 and he built his way all the way up. And he, at a very young age, bought a house and took care of me and my mom and he did everything. And he wanted to put me in a position where I didn't have to want for anything and I didn't have to worry, which he did. And I'm grateful, but I think he wanted me to know that there's another side, that people live completely different. And he didn't want me to know that we had the money. We did.

So he said we're broke.

That's just kind of how he was. Just super old school. We don't need to buy the fancy car. Even though he could do it, we don't do it. We drive the same car for. Until the wheels fall off.

I don't mind that. I could buy a Fancy car or fancy whatever, but. And maybe I don't. Maybe I do. But do you guys say, we're broke?

I think. I think I feel like I say it like, we don't have money.

Oh, you said wow.

I. I say a version of it.

Yeah, there we go.

I think I said it. I think I said, I'm broke the other day. Actually today or the other day.

So.

Wow. Here we have generational messages being cast right in front of our eyes. Hey, how long till your son starts saying we're broke and we don't have any money?

Tomorrow. He's already saying everything that we say anyway.

What does he say?

I mean, he started saying oh recently. So.

Yo. Yeah, yeah, so, yeah, listen, I have nothing to add on this topic, but. Except that I hope I run into a two year old who says some of this stuff. I will be dying. All right, so your dad said, we're broke. He was not broke. You were not broke. Correct. Okay. And would you agree that you say a variation of that same phrase now?

Yeah. Like, we're screwed.

Are you screwed? You have a net worth of over $400,000 in your 30s.

In comparison to my dad, I feel like I haven't done enough.

Oh, how interesting. Because just a few minutes ago you said, I don't want to compare us to any other couple. Now you're comparing yourself.

I put my dad pretty high, and I feel like I didn't reach what he reached at his age. And so that's why I feel like we're screwed.

First of all, you're not screwed. And how can you be screwed with a $400,000 net worth in your 30s? That's actually absurd to say. It's actually offensive to the people who truly are in financial trouble. You realize that right now that you're.

Saying that I never want to come off that way whatsoever.

You make $180,000 a year household income. You're not screwed. You're rich. You just eat out 17 times a week. Guys, come on, let's get real. 180k, two houses. Who are we kidding? You make choices that you probably need to change. Yeah, sometimes we got to, like, take off these glasses you're wearing and clean them off and go, oh, it's actually a beautiful world. We just been living with this grease on our lenses for too long. All right, so what else happened as you were growing up with money, I.

Feel like, because money was never a conversation in our house whatsoever.

Did you talk to your dad about money as you got older in the.

Past I'd say probably five to seven years. Yes. I ask him absolutely everything. When we were doing the csp, I called him and I said, what does this mean? Post. Post tax savings? What are we talking about?

Okay.

Yeah.

And did your dad teach you about savings, investing, those kinds of things? What do you teach you?

I don't want to say nothing because he's taught me everything, but money wise, like, nothing. So now I'm here, and. And then it's like, okay, now I have a house. This is where my mind starts running. This is why I'm asking questions.

Okay.

When it came to buying your house, how did you guys decide to buy this house? Just the rent thing in Arizona. That was it.

The big thing was the rent thing. Chris's grandma had passed away prior to that, and of course, that was one of her goals for him. I think buying a house was one of the goals that my dad had for me too. So I feel like it would have been an accomplishment to do that.

And for whom?

For us, I guess.

The two of you. How come if you not only accomplished buying one house, but two. It sounds like somebody just died in here.

We're fortunate that we're here in this house because of her. Dad helped us get this house.

How much did he give you to help with the house?

Well, he put down 400,000 on this one.

He. He put down 400,000?

Yeah.

The California house. How much did it cost total?

600, 1,000.

Oh, so he put 400k out of 600k down.

Mm.

Okay.

What do you think about that?

That I'm extremely fortunate.

Yeah. That's cool. All right. It's interesting that your dad has been such a role model. It sounds like he accomplished a lot. He helped tremendously with a 400 out of 600k payment, which is life changing. And yet I'm struck that you didn't learn about savings, investing the basics of money. What do you make of that?

That's just something that we never talked about. And so that's why I feel like I'm behind, because I'm. I'm trying to figure it out.

You all talk about savings and investing in your relationship.

We definitely talk about savings because Dominique likes to tell me that I need to save more. As far as investments, I mean, I don't really feel like we, either one of us have enough information about investments or, like, how to kind of go about the investments.

What do you say? You're in the carpenters union? Yeah. What do you do?

Acoustical ceilings.

So. Hey, Chris, I'm thinking of joining the union as well. California Carpenters Union. Did you know that?

No, I didn't.

Yeah. The only problem is I don't think I can do it because I don't have enough information about framing. So therefore I'm going to stay unemployed for the next eight years. What's your response to that?

Well, you could start by going to the union hall and asking them about how the whole union side of things works and.

Yeah, I just, I just don't know where I would start though.

Well, you look up the union hall by where you're located in your county, you can go there, give them a call and they could give you a little more information on how if you are interested in going for a certain trade, they have classes. You start off as a, an apprentice one and you learn from there over the years to get higher up.

Okay, first of all, I really enjoyed that. Chris, what did you notice about my responses?

You were still not getting it.

Yes, yes, I was not getting it. Totally like what you were saying all factually correct. And you could see from my body language. Right. I was like, this sounds pretty hard. Union hall sounds like a bit of a drive, right? Just like this guy doesn't get it. What was your like emotional reaction to that as you kept talking and giving me valuable information?

Maybe he's just not as interested as he came off about being interested.

Yeah, yeah. Like you're like, dude, information. What the. I just told you exactly what to do. Not that hard, right? Take one step and then one step more. Do you see why I don't really buy your answer about I don't have information about investing. Yeah, it's literally right here. Or you can get it for free or you can Google how to invest. Every. It's on my Instagram account, right. It's everywhere. So what is it really? Because like with me it was probably just that I'm lazy or I wasn't actually interested in a union job or I want someone to do it for me or whatever. What is it for you when it comes to investing?

Just kind of where to start.

That's the equivalent of me going to the union hall. Do you see yourself as somebody who invests money?

No, I don't know what I'm investing money into or kind of what exactly an investment is, in a sense. Like what's considered an investment.

Okay. And what type of person invests? What do they look like?

Normal, human, Someone that has money.

Okay, so what do they, what do they look like?

I don't know, high end clothes.

Okay.

Showing off, you know, where their money's going in a sense. Like what? They have their. Their cars, their assets, things like that.

Okay, so they got a nice car, maybe they're wearing some nice clothes, that type of thing.

Unless they're faking it till they're making it.

Are they wearing a baseball cap and gold chain?

They might.

They might. I agree.

Chain can be 5, $10, or it can be thousands. Who knows, you know?

Hell, yeah. That's a cool answer. My point, Chris, is that, yes, I agree, you don't know what to invest in. Fair enough. But I don't think your parents probably talked a lot about investing. Right. Were they sitting around discussing the finer points of diversification? I. I don't think so. And I would suspect that you don't see yourself as the kind of person who invests.

I. Maybe not. I don't see myself as the kind of person, but I'm just. I'm not doing it, so I don't know what the person looks like that invests.

Could it be you?

It could be.

Okay, great. Looking back on Dominique sharing her upbringing with money, what money messages that she grew up with, do you think she brings to your relationship?

I don't really know if she really brings those money messages.

How about money habits?

I don't really know because I don't know what she kind of puts most of her money towards.

As far as money habits, what do you think, Dominique? What messages or behaviors do you bring from your childhood to this relationship?

I think that I always just say we don't have it. And I think that that makes Chris feel less confident as well about what he does or does not have, because my initial instinct is we don't got it.

Right. I agree. You say that. And in what other ways of your money does that belief show up?

Investment is definitely one. I feel like if we don't have it, then we're not putting anything towards investments, but in other ways. We are just spending the money how we'd like to because we feel like we don't have it.

Yes. Very perceptive. So you tell yourself you have this deeply held belief, we don't have it, and therefore you spend, like, thousands of dollars every month, which obviously, like, you literally are eating it or drinking it or consuming it in some way, but that belief is so strong that it actually blinds you to. To consuming these things on a daily basis. That's how powerful our beliefs can be. It's quite shocking, right?

Yeah.

But for me, it's. It's a great opportunity because if we can change our beliefs, then sometimes we can change our realities.

Facts.

Okay, let's take a look at the CSP again. I have some questions for you. Where is child care on this?

This. To be honest with you, I don't think that we put it in there.

I think we put it in debt.

Yeah, I think we might have.

Okay, fine. So how much is your child care per month?

It's $120 a month.

120Amonth. How are you only paying $120 a month for childcare?

So it's about to change, but it's because I'm, you know, a single mother, and that's just the rate that we got based off of the county that we live in, it's going to go up to $120 a week in two weeks.

Oh, it's going to quadruple.

Yeah.

How are you going to handle that?

That's a big concern of ours. Of mine at this point. His daycare is coming out of my savings account.

Yeah.

So I guess we're just going to keep doing that.

Do you find that when it comes to money, you both are pretty reactive? Like, we'll figure it out when it happens.

I feel like there is no other option but figuring it out. We have to.

I'll take that as a yes. Do you know there is other options? If I was in the same situation, do you think, and you asked me, hey, how are you going to pay for quadrupling your child care? Do you think that I would ever say, like, oh, gosh, I don't know. I guess, like, we're just gonna have to figure it out?

No, probably not.

What would I say?

I don't know, because I don't even know how I'm gonna figure it out myself.

Let's play a hypothetical. What would I say?

I'm going to put a little bit extra away each month towards that so that when the time comes, I know that I'm in a better position financially.

Nice. So I would have seen this coming down the road, say, six months early, maybe. I would have started putting some money aside. Love that. Yes. That's great. That's being proactive. I love that. And then the next question, of course, is like, well, where would the money be coming from?

I mean, I think that the money is definitely coming from the savings that I've been putting away and preparation for this.

The savings of $13,198.

Yeah, it's already coming out of my savings. And so I knew that we were going to Be paying more anyway, so that's good.

How long will that savings last you?

Not long.

You know, how long.

Honestly, I'm just waiting for something to happen in any one of the houses and it's gone.

That's called being reactive. I'm waiting for something bad to happen so that I can react, respond to disaster.

I mean, realistically, if we're thinking about everything that we're paying for, maybe it'll last us a month or two.

Two months? That's it. Two months and you have a little two year old?

Yeah.

What do you think about that?

We're screwed.

I don't think saying the same words is probably the right move to get you to make a change.

Yeah, I agree.

I'm kind of struck that sometimes one of the ways that I can help people unlock from their habits and being stuck is to ask them a hypothetical. Hey, what would a guy like me do? Or what would somebody else do? And sometimes people are game to play with the hypothetical, sometimes they're not. I feel like this one is a tough one. I, it's tough for you to engage in a hypothetical. Have you noticed that?

I think it's just overwhelming.

Okay, I agree there's a lot of things, variables here. Part of what is helpful about this is that you can stop thinking and put yourself in my hands.

Okay. I think that's hard for me. I think I am definitely a thinker. I, I, I think too much about it and then that's what gets overwhelming. When really it could be simple.

What do you get out of overthinking things?

Nothing. It just takes me into a big dark hole.

That's not true. If you didn't get something out of it, you wouldn't do it. What positive rewards do you get out of overthinking?

Oh gosh, a positive from overthinking? Maybe I think that if I overthink it, then it makes sense not to do something or to do something or, I don't know, I don't, I don't feel like I get any positives out of my overthinking.

You want to try one more time.

Like, what's the right answer? I, I genuinely, I don't, I don't know.

When you overthink something, when I'm asking you a question or you're looking at some number, take the childcare example, and you're thinking, okay, well we could do this, we could do that, we could do this. I don't know about that. But then if we do this is cut and cause this thing down the road in retirement. This is what's going through your head, right?

Yeah.

What are you feeling? What positive emotion are you feeling?

Maybe that I'm thinking about everything.

Yes. Think about everything. What does that make you?

I don't know. I feel like because I'm thinking about everything, that I'm handling it.

Yes.

You feel like you're in control because you've thought of all the angles.

Yeah. Which is also the bad.

You feel like you are smart because you've looked around every corner. Any of these sound familiar?

I mean, yeah, I feel like certain things, if I think enough about it, then I make the better decision. Maybe it's not true.

You have two months of savings you're not investing. You're spending 10 times what you thought on eating out. You feel like you're running a marathon in your head and you're sweating and exhausted, but you actually haven't taken a single step. And, Chris, where are you in these discussions about quadrupling childcare?

I know that it's happening, but isn't.

It kind of important? You make twice as much as she does.

I also put twice as much towards our bills and our things like that as well.

I don't see that. Look at this. She puts a higher percentage towards your fixed costs than you do.

I don't think we did it correctly because I actually put anywhere from 50 to 60% of my check each week into our bills account.

You guys are kind of missing the point. You're sitting here talking about weekly basis. I don't care. I'm never going to talk about weekly. I'm trying to get you to elevate. And look at how you're thinking about money and you're talking about weekly basis. We're not speaking the right language at all. Yeah, okay. I'm getting frustrated. This kind of thinking is exactly why Dominique and Chris feel like they have zero money. They are playing small. They made major financial decisions using shallow thinking, monthly thinking. And when you're only looking at what you can afford next month, you are missing the big picture. I got to tell you, this is actually really common. Most Americans, in my experience, do not plan long term. They've never been taught how. Take the everyday person. They live thinking about what's happening today, maybe next week, maybe up to the month. But if you ask somebody, hey, if you take this vacation, how is it going to affect your finances three months from now? They'd be like, what, three years from now? 30 years from now? They look at me like I asked them to solve a physics equation. This is not part of how most people think. But that's my job. That's why I'm doing what I'm doing. My job is to get you to zoom out. And that is exactly what I'm going to do with Dominique and Chris next week when I shift the burden back onto them and make them take control of their money. In part two of our conversation, we'll talk about how to handle rising childcare costs, how to actually build a plan and to think long term. And most importantly, how to avoid passing these same money messages onto their son. Stay tuned. That's coming next week.