253. "I’m 53, exhausted, and still living paycheck to paycheck"

Calling couples from LA. I want to talk to you on the upcoming season of Money for Couples. I am excited to be recording episodes in person, live in studio. So if you are struggling with debt, retirement, supporting aging family members, overspending, or talking to your partner about money, apply to the podcast right now. I've done some podcast episodes in person before. Honestly, I love them. So if you are LA-based and you essentially want a free 3-hour coaching session with me, you can apply right now at iwt.com/apply. Again, to be on the podcast, it's iwt.com/apply.

I've just always lived paycheck to paycheck since I was in college, and it's not gotten any better. I just moved money from one place to another and put it in a spreadsheet. There's not a plan. There never has been a plan.

I'm guilty of coaxing her into buying stuff.

He knows exactly what to say to end up getting what he wants.

What is the emotional cost of living this way?

Gray hair, stress, anxiety, and less years on my life and a lot less sleep.

You are both spending like you make $1 million a year and you're in your 50s and you don't have enough retirement. Not nearly enough.

It's the same cycle. 20 years. We seem to dig ourselves out, and as soon as we dug out, we find a new hole.

I'm not good at not giving people what they want.

What happens if nothing changes?

We don't retire. We die working.

What would you do if you were stuck in a cycle of debt for over 20 years? Today I'm talking to Michael and Tanya. They're in their 50s, married for 21 years, and they earn over $225,000 a year. But they've been trapped in the same debt cycle for 2 decades. They've cashed out 401(k)s. They've borrowed money from family multiple times. And no matter how many times they dig themselves out, they seem to fall right back in. Some of the numbers you're going to hear today are truly shocking. I'm about to open up their conscious spending plan, their CSP. It shows their income, their fixed costs, investments, savings, and spending. If you want my help creating your own conscious spending plan, Join my money coaching program at iwt.com/moneycoaching. Here's what I see in their numbers. Assets, $65,000. Investments, $434,000. Savings, $22,000. Debt, $197,000. That gives them a total net worth of $325,000. But here's where the numbers become shocking. Fixed costs, 155%. That means they are spending way more than they make every single month. Savings, 0%. Guilt-free spending, -73%, which we know is impossible. So let's just talk about that 155% fixed cost number. That number means they're not just overspending, but every single month they are burning through way more than they make. Their investments are dangerously low for their age. They have barely 1 month's worth of savings, and any unexpected expense could push them over the edge. Candidly, if nothing changes, they will not be able to retire. But the good news is they have a high income, and that gives them a possibility at turning this around, but only if they're willing to make major changes and to do it together. Let's meet Michael and Tonya. You have been in a cycle of debt for over 20 years, getting in, getting out. You're here again. What happens if nothing changes?

We run out of money, and I would probably go back and ask my parents for help, which we've had to do in the past. We've also cashed out some retirement plans in the past, so Nothing that I want to do or look forward to. And that's why I think that we're just at the point where we have to figure it out.

Michael, we run out of money. We keep dipping into savings and taking that away. Like Connie said, we borrow money to help catch up. And you can only do that 7 or 8 times before you use those resources up.

How do you feel about the potential of what might happen?

Scared. I don't want that to happen. Tanya's worked hard her entire life and she needs to enjoy it. She almost works 24/7, so she needs to reap some of the rewards, and right now she's not able to.

I don't know if I'm more scared or it's just anxious and stressed about it. So, you know, and I've always been the one that does the bills and knows the balances and everything like that. So I also feel very much responsible for the financial situations we end up in, even though most of the time none of the money is getting spent on anything I want to do.

How often do you talk about money?

Before we started listening to your podcast, very rarely, because I will talk and he will sit. It's not a conversation. And I'm sure part of it is he's never been the greatest communicator, especially about money or feelings, but also because I get very upset about it. And so we don't talk about it as a good time. It'll be like, I balanced the checkbook. Now I know where all the money's gone. It's not a good time to have a conversation. I'll usually say something like, why did we spend the money on this? Why did we get this? What did you go do this for? And it's, you know, it's not one thing. There's a whole bunch of things and it's both of us doing it. But I know that's not how I come across.

That's pretty perceptive. Michael, how about you? How often would you say that you talk about money?

Not a lot, because usually she's like, all right, come sit down with me and do the bills. And I'll sit there and literally just sit there and she'll finish the bills. And then it's like, all right, we have to quit spending. Yeah, can't buy stuff. No more coffees, no more of this. And that's about the extent, because then we won't go in. I won't ask questions of what can we do. Why not?

Fear.

Afraid of having the argument, not knowing how to talk about it.

Like, have you been doing this since the beginning of the relationship?

Oh, yes.

Okay. Can we actually simulate one of these conversations? So when was the last time you had a conversation like this? Tanya, you come over, you're like, we got to talk about the bills.

A month or so before we applied to this, I was doing the bills, literally like going through and putting everything in. And I have a huge bill spreadsheet that's pages and lines long. And I go through and I pay everything. And then I look at the balance in the account and then I'm usually like, hey, we don't have money in this account anymore. What are we going to do? How are we going to fix this? How are we going to make extra money?

So then what happened?

I say, I don't know.

Oh, sorry. Where was the part where you each talked to each other about this?

That was it.

That was the whole part. That's the whole conversation.

Yeah. We don't have good conversations about it.

So Tanya, you pull up this, like, you bring your laptop. To Michael and do you go like, look at this, where's the money going to come from? Is that how it goes?

I usually don't even have the laptop. I've already done the bills and paid them because we get paid on the same day of the month and I will go through and I will pay them all and then I will see what the balance is. And that is very triggering for me, especially as I'm watching our savings account deplete. And so then I will be like, we need to make more money or figure out what we're doing with our money. What are we going to do? And that's pretty much where the conversation ends because the answer I will get is, I don't know, and there's no further questions, or I want to talk about it.

What does that feel like for you?

I feel responsible for our finances and every penny we spend. And a lot of times I feel like he doesn't care.

What's the feeling?

I don't know how to describe it other than like feeling, well, hopeless about our finances and us getting anywhere. And then it's, I feel hurt that I'm like, I don't understand why you don't care that we're in this position again.

Can I put something up on screen for you? Something that our therapist showed me, because I also struggle describing my feelings, like a lot of people, especially a lot of men. And I'd love to just put this up and see if it helps guide how you feel in one of those conversations. So we have feelings like angry, fearful, bad, surprised, happy, sad, disgusted. And then they go out and out. Tanya, when you look at those bills and you finish making the payment, right when you go up to Michael, what do you feel?

I would say I'm probably angry and I'm pretty hostile. Okay.

Michael, how about you?

I go with sad and depressed. Guilty.

Okay.

What else?

Inferior.

You feel powerless?

Yes.

Tanya, how about you? Anything else?

I'm fearful. It usually makes me feel very insecure and inadequate because I don't have what I need to give everybody around me what they need.

How did you find that looking at that wheel of emotions?

There's a lot more emotions than I thought there were. Um, but I mean, I think it helps like break it down to really where it's coming from.

If you two think about that conversation that you have surely had many, many times in your relationship, How would you describe the role that each of you is playing in that conversation?

Servant. How do we come up with more money? Yeah, I need to come up with more money to pay bills.

Okay. That's an interesting response. Tanya, what's yours?

Trying to be the fixer.

Fixer.

Fixer or director. Try to figure out how to get us out of what we're in. Even in my career, I do a lot of project things, project management type things. So I think I take on the bills as sort of like the finances are a project and we have to fix has the problem and it has to have a path to fixing it. But I think where it goes wrong is we don't find the right path.

Okay, so let's— let me take you both at face value. Fixer, to the fixer, is your fixing working?

No.

And to the person who called himself a servant, are you serving effectively?

No.

Okay, good. We've established that what we are doing is not working. Michael just called himself a servant. Tonya called herself the fixer. And when I asked if their approach is working for them, they both said no. In my newest book, Money for Couples, I talk about one of the most damaging patterns that couples fall into— the parent-child dynamic. In this case, Tonya is the parent. She manages everything alone. She feels angry, insecure, inadequate, like she has to fix every single problem by herself. Michael is the child. He feels sad, guilty, powerless, and inferior. He doesn't know how to engage, so he just doesn't. If you want to understand more about the money dynamics in your relationship, I want to encourage you to get a copy of my book, Money for Couples. I'll add a link in the description below. Now, neither of them actively chose these roles, but after 20 years, they're cemented, and those roles are making them miserable. Now, I need to help them understand something critical. Tanya cannot keep fixing things alone, and Michael can't keep waiting to be told what to do. If they want to get out of this precarious situation, they will both have to step into completely new roles. Let's keep going. Now, Michael, you told my producer that having those type of conversations is very difficult for you. Why is that?

I've never talked about feelings growing up, and we've never really had conversations. I don't know how to do them.

How long have you two been married?

Just over 21 years. 21 years and about 3 weeks. Wow.

Congratulations. Thank you. When you met, did you know this, Tanya, that Michael struggled to talk about his feelings?

Nope.

You didn't know? How's that possible?

Because he talked to me about everything.

Really? Okay, that's interesting. So Michael was more open back then. And what changed from your perspective over time?

We got married, and it was a total shift in where he was going with career. How much he talked to me, how we were planning things. And then I think we started following my career.

Mm-hmm.

And I don't know. I don't know if he resents that, but the conversations just stopped.

How soon after getting married?

Probably a year. I mean, I remember I would get letters, texts. He would leave cards on my pillow. I would give him cards. I would send stuff. And it just went away.

Are you both comfortable with us talking about this a bit?

Yeah.

Yeah. Okay. I ask because I think this is very, very related to money, and it would be challenging for me to go straight to the numbers right now without understanding this momentous change that happened 20 years ago. Michael, from what Tanya says, when you were dating, when you were early on, you were very vocal. A year after your marriage, something changed. Would you agree with that?

I don't know if it's a year or not, but I'll go along. I don't know when it truly was.

Okay. What happened?

I mean, the only thing I can come up with, like, a word-wise, is routine. Uh-huh. We started getting into a routine, and it just kind of settled in. And I don't know.

Did you grow up in the Northeast? Yes, sir, you did. Did your parents ever say I love you?

No. Okay. My dad said it for the very first time about 3 months ago.

What was the circumstance?

It was a text message.

What?

It blew me away. He texted me and said, I love you.

How did you respond to that?

I texted back, love you too. And that was it. That was the end of the conversation.

Never said it again? Nope. Okay. How did you feel hearing that from your dad?

Strange. It was just odd for him to say something like that.

And I assume your dad did not show a lot of feelings when you were growing up as well?

No.

Okay, so part of this is like, like father, like son. I get that. But I'm more interested in what happened after you got married. So you were in a routine, coming home every day, same thing. What else?

Money happened. We combined our finances and it became a, how are we gonna pay these bills? What are we gonna do with this? Let's work more shifts. So we worked all the time. I had kids and then we had a kid together and just, you're either at work or you're sleeping or you're with the kids. We were speaking words about money, but we were not having conversations about it, which I think led to Just not wanting to talk about certain things anymore.

I think we also, we purchased things to benefit our kids, benefit us, like, oh, let's go buy an RV. Let's go buy. I mean, I bought a motorcycle at one point and that was for me, obviously not for the kids. And we now have payments and now we got to pay those payments. So how do we do that? We just work.

When you think back to the early years of your marriage, what words would you use to describe those early years?

Fun.

Tanya, it was complicated. Not that it wasn't enjoyable, not that I don't love him to death, but our relationship was complicated because we still had to deal with other people that had been in our lives.

Let's go 5 years forward, 10 years forward. How would you describe your marriage then? Tanya?

5 years forward, I thought things were better. I think we were on the same page with a lot of things, had settled into like how life was with kids. You know, I thought we had a really good family life.

And if you had to describe it today, how would you describe it?

Challenging, but good.

I think the challenge is the money now. It's not our relationship. I think work-wise and things, we're both in a good place. I think that we enjoy our company. We try to make time for ourselves. We try to do some fun things now. But I think that the money piece of it still hangs over the relationship.

Is money more stressful or less stressful than your first few years of marriage?

Right now?

More. More.

I think we pay attention to it more. We did not pay attention to it before.

Okay.

Can we take a look at the numbers so I understand the context here? So we're going to look at the CSP. Did you both do this together or not?

I did it myself the first time before we even like contacted you guys, and then we did it again after we talked to your people.

And how was that doing the conscious spending plan together?

It was good. It was informative, and we talked about things and tried to figure out where do we classify stuff? How do we put this in here? Where does it go? It was a lot of back and forth communication. Good.

Okay, cool. Let's pull it up. I'll take a look at it and we'll look at some numbers. Here we go. Tonya, I'm going to ask you to read the word in bold and then the number in full next to it for this entire first box. Go ahead.

Assets $65,236. Investments $434,524. Savings $22,638. Debt $197,380 for a total net worth of $325,018.

What do you think of those numbers?

Some are surprising and some are scary.

Okay.

I did not realize honestly that we had that much in retirement because we've cashed several out, but I've also been working very hard to put more money into our retirement. So like mine, increases automatically every 6 months.

And which part is scary?

Well, our assets. So because we moved into a multi-generational house, the house is not in our names.

Ah.

So I didn't count that as an asset, even though we're supposed to get the house and that's all like legalized, but it's not our house currently. And then our spending is, you know, obviously the problem that leads to not having a great net worth.

Well, we haven't looked at the spending yet, but I do see $197,000 of debt. Is that what you mean?

Mm-hmm.

Okay. We'll get to that. Michael, what do you think about those numbers?

I wish there was more savings. I know we don't have a lot in there.

All right. Net worth of $325,000. Let's take a look at the income. This time, Michael, I'm going to ask you to read off your combined gross monthly income. What is that number?

The combined is $19,027.

So collectively, the two of you make $19,000 per month, which is $228,328 per year. Who knew that's how much you make per year?

No, because she— I did not know how much she made.

Okay, so Michael says no. Tanya says yes. Okay, you didn't know how much she made. How much did you think she made?

I didn't have a clue. I knew it was over $100,000. How much over, I had no clue.

Did you care?

Not really.

Okay.

So hearing $228,000 a year, what does that number mean to you, Michael?

That we should be able to pay off our debts.

Because?

We're making pretty good money.

Got it. What do you each do for a living?

Organ donation.

Both of us. I do muscle skeletal recovery in the OR.

Ah. Okay.

And I do, I manage the team that does organ donors.

Oh, okay. Got it. Okay, cool. All right. So who's the, who's the one who makes $12,724 per month?

I do.

Okay. That's you, Tanya. And Michael, your gross salary, $6,304 per month.

Okay.

For a total of $19,027 per month. Got it. That's pretty high income.

I would agree with you.

Let's keep looking at the rest of the numbers. Now I'm curious. I'm going to put this up again. Here we go. Tanya, fixed costs— what is that number in blue?

155%.

Say it one more time.

155%.

This is a major, major problem. This is why you said early on you might run out of money. Everyone at this percentage would run out of money. It's just a question of time. I want you to understand what it means to have fixed costs at 155%. Remember, we like to see that number between 50 to 60%. They are more than double that. If your fixed costs are over 100%, you are spending more than you earn just to keep the lights on. So where's that money actually coming from? Well, sometimes it comes from savings. A lot of times it just builds up debt. So if your fixed costs are 100% or higher, you're basically eating into everything you've got, and then you are eating into your future. Every single month, it's like you're putting another arrow in your back. Michael and Tanya have been living this way for years, but I'm not sure they understand how dire their situation actually is. Like, there's no planning. Their entire approach is built around one question: how do we make it to the next paycheck? Anybody else here know people like this, that all they can think about is getting to to the next paycheck. And actually, I have to tell you that planning even a few months ahead is actually a highly advanced cognitive skill. A lot of people struggle with it. People can handle planning a week out, maybe next month, but thinking 3 months out or a year, that often feels impossible. And for a lot of people, it essentially is impossible. So when I talk about planning for retirement, like planning 10, 20, 30 years ahead, For someone who has been spending more than they make each month, I might as well be speaking a foreign language because the target for fixed costs is 50% to 60%. In order to fix this situation, they will need to cut their spending by more than half. Right now, they don't understand the enormity of what they're facing, but they're about to. We're going to get right back to the numbers right after this break. When I started my business 21 years ago from my college dorm, I did it because I love teaching people about money and it was just me. So I had to get good at a lot of other skills too. I had to get good at setting up a blog and copywriting and email marketing, and eventually I learned how to delegate. Now suddenly I had to think about HR and payroll and tax paperwork, and it would have been very easy to get caught up in the weeds and let that HR paperwork distract me from what I was good at. So I hired someone to do that. To help with that. If you have a small business, you can do the same thing by working with Gusto. Gusto is online payroll and benefits software built for small businesses. It's all-in-one. It's remote-friendly. It's incredibly easy to use so you can pay, hire, onboard, and support your team from anywhere. Whether you need automatic payroll tax filing, simple direct deposits, health benefits, commuter benefits, workers' comp, 401(k), you name it. Gusto makes it simple and they have options for nearly any amount of spending. It also helps you save time with automated tools built right in, like offer letters, onboarding materials, so you don't have to create everything from scratch. Plus, if you need help, you can get direct access to certified HR experts. Try Gusto today at gusto.com/Ramit and get 3 months free when you run your first payroll. That's 3 months of free payroll at gusto.com/ramit. One more time, gusto.com/ramit. I just returned from the gym with my trainer who offers credentialed expertise, a comprehensive annual training and nutrition plan, all for an hourly fee, not a percentage of my portfolio. Did you hear what I said? Why would I pay a percentage of my portfolio to my personal trainer? Or to a gardener? It would be absurd, right? How come we're so comfortable then paying a percentage of our portfolio to a financial advisor? Remember, I'm not against hiring a financial advisor. I've actually done it myself. But if you have a complex situation or you need extra help figuring out your specific options, then I suggest you use a flat membership fee planner instead, like our friends at Facet. Facet charges a flat membership fee for financial planning, never a percentage of your portfolio. You get access to a team of CFP professionals professionals, always a CFP, always a fiduciary, who help you create a personalized financial plan for your rich life goals. And they handle important things like investments, retirement planning, starting a family, becoming empty nesters, estate planning, all of it. Your financial plan needs to adapt as your life changes. Facet makes getting professional financial advice more accessible without charging hidden exorbitant fees. As of the date of this recording, Facet is waiving the enrollment fee for new annual members. And for my audience, Facet is offering $300 into your brokerage account if you invest and maintain $5,000 within your first 90 days. You can head to facet.com/ramit to learn more about which membership option is best for you. Facet is an SEC-registered investment advisor. I'm not a member of Facet, and I have an incentive to endorse Facet as I have an ongoing fee-based contract for cash compensation based on this endorsement. All opinions are my own and not a guarantee of a similar outcome. Let's continue. We're at 155%. We're going to come back and dig into those fixed costs, but let's keep moving. Investments are at 17%. Your savings is zero. So each month you are not saving any money.

No, we're not putting any money in the savings.

And just so we know, you have $22,000, which is about one month's worth of savings. Okay. So we're very, very tight here. And then finally, Your guilt-free spending indicates negative 73% or negative $9,302, which obviously cannot be right because when was the last time you ate out?

Yesterday.

Exactly. So we know that that's not being properly categorized. What do you make of these numbers?

They're too high and they can't keep going like that.

Yeah, I agree.

What would you say, like, a lot of people's spending leaves clues. It's almost like if you see somebody's driveway and you can see the types of cars they have, it leaves clues about what type of person they are. What are the clues you see in this conscious spending plan?

We don't really manage the money because we don't know where it's going.

Agreed. Are you hyper-frugal?

I guess I would say it depends.

No, it doesn't depend when you're spending 155% on fixed costs.

I'm hyper-frugal about me, but I am not good about saying no to anybody else.

Aren't we talking about household expenses and income here? And haven't you all been married over 20 years?

Mm-hmm.

We're talking about the two of you and your family. We'll get to the individuals for sure. But right now we're talking about the two of you. Michael, what would you say you notice about the clues from this conscious spending plan?

We're buying too many things on credit.

Okay.

And we are way overspending. We're not saving anything.

Agreed. Is there anything you see in this conscious spending plan that you have not had the courage to say to your spouse?

That I'm guilty of coaxing her into buying stuff.

Okay.

But I just don't really control the money. I just put numbers on a spreadsheet because I've never learned how to do it. It's sort of ironic that I've done it for other places like charities and businesses and they would never look like this, I guarantee you. But I think I just get frustrated and it's like, we don't do anything about it because it's, I don't know how to fix it myself. And even when I say, how are we going to do this? What can we do? There's no answers.

You're asking your husband who's never engaged with money for 20 years, how are we going to fix this?

And I just shut down.

History has been if he shuts down and I can't figure it out, we've gone to my parents because he won't talk to his parents about it.

You've gone to your parents and they help financially.

Mm-hmm.

How many times has that happened?

Too many.

At least 2 or 3. And we've paid them back for 2 of them. But the first one they just ended up saying was a gift.

What'd they write the check for? How much?

I think it was $15,000, but I can't swear to that.

And the next 2?

Probably around $10,000.

Can I just ask a question? Like, why not just go to them and ask them again? Why are you here? Why talk to me?

There were lots of circumstances of the different kind. I had gone through a divorce. I was laid off at work. There have been different reasons that I felt like, you know, okay, I'll ask them for help and we'll pay them back. And we did. But like, there is no reason other than we got ourselves into this.

Did you get yourself into this, Tanya?

Yeah, we both did, but I got myself into it because I've done the finances and people, as he knows exactly what to say to end up getting what he wants and then he'll get what he wants and we'll get another payment.

Which is what?

He'll just keep going on about something and he knows at some point I'm just going to be like, forget it, just go buy it because I can't. He thinks it's fun to window shop and stuff, but then it's every weekend. Let's go look at this. Let's go see this. Let's do this. I need one of these. We have to have one of these. I can't live without this. And I'm just done with it at some point.

What's a recent example?

We have a truck, a tractor, and attachments.

A truck, a tractor, and attachment. What's an attachment?

We got a rototiller and then we got a bucket loader.

Okay.

I don't know what any of these words mean.

Rototiller for making a garden, digging up the ground.

Okay.

Our house has 5 acres. We're going to make a big garden and try to support ourselves.

I have a lot of questions. But I don't— this is like how people must feel when they come on here sometimes, and I'm talking about some complicated investment thing, and they're just like, what's an investment? Okay, I have two questions. I'm going to try to keep it simple. First of all, how much does a tractor cost?

I think combined, or what, $23,000 we have?

Okay, $23,000 for the homestead small tractor. And then what about this attachments? How much did those—

that's including them.

Oh, All right.

Wow.

So you saw the tractor, you're like, we need the tractor. $23,000 all in. Do you buy cash? You finance it? How does it work?

Finance. I think we did 84 months, zero interest.

Okay.

For the tractor. But the implements we bought separately, and that is 36 months on that. And I think it's 2.9%.

So I want to understand more about how a purchase like this comes about. Because, Tanya, you mentioned that Michael will get excited and then he knows what to say to get you to basically agree. Walk me through that, Tanya.

He will just start talking about something he wants, and it will be brought up frequently. And we'll have to drive past the tractor store, and then we'll have to go to the tractor store. And then it's like, well, my life would be so much easier, and I could do all this on the homestead if I had the tractor. And the tractor's the answer to mowing the lawn, and the tractor's the answer to this. And I will just finally say, then buy the tractor and I'll figure it out.

Oh, I'll figure it out. Uh, famous last words. Tanya, do you figure it out most of the time? I don't think so. I'm looking at your numbers right now. You're in $197,000 of debt, you have 1 month's worth of savings, and you're spending 155% of fixed costs. I don't think you figure it out. First of all, is the premise of the question right? Are you the one who got both of you into this?

No.

All right. Michael says no. So who got both of you into this?

We did it together.

Okay.

Tanya, do you agree with that?

I would agree. I say yes. I wouldn't say we make the decisions together. I just decide I'm not going to make the decision because he's just going to keep going on about it. So then I'm just like, whatever. Buy it and I'll figure out how to get another job or make more money or work more hours or whatever to pay the bills each month.

Did you grow up poor, Tanya?

I was a military brat, so, you know, and my mother worked wherever we were stationed. So I wouldn't say we were poor. I always had food on the table and stuff. But the only stories I've ever heard are about my dad having to, like, be a bagger at the grocery store to get us Christmas presents besides their salary. 'cause the military is like set salary and stuff. But you know, I always had food on the table. We always had nice houses, nice clothes. But like our vacations were always when we moved and stuff like that. I, I guess it depends how you define poor. I mean, we live in Alabama and there's some rural places here that I would consider really poor and I wouldn't say I was that, but we also didn't have tons of money laying around by any means.

The reason I asked the question, uh, it sounds like you did not grow up poor. People who grew up poor, they know that they're poor. They have very, very specific, vivid moments from their childhood. They know that they are poor. I mean, we're talking about they count the number of slices of bread. Their shoes have holes in them. It doesn't sound like that was the case for you. One of the reasons I asked that, Tanya, was you mentioned, if I need to, I'll just work harder. I'll just get another job. I'll just grind more. Typically something that I hear from people who grew up poor, sometimes working class. The idea that I'll just, I'll just take the punishment on, I'll just work harder, more hours, second job, that kind of thing.

I think it's because my father did not grow up well. So we always grew up with a very, if you need something, we're going to figure out a way to earn the money.

How are you going to figure out the situation you're in right now?

Getting another job.

Can we play that out for a second? Because that's a common answer that a lot of people give. So you get another job right now, you make $12,724 a month gross. If you got another job, how much more would you make?

It depends what kind of job I can get. I don't know, a few thousand dollars a month.

Yeah. Is it, uh, income that's your problem?

No, it's, it's spending. That's the problem.

I agree with you that it's not an income problem. I think your income is outstanding. There's probably something else, probably something a lot deeper than that. So the tractor and the spending is an example. Tanya, you mentioned that he wants something new and he wears me down, and eventually I just say, do whatever. Right. Okay. Michael, I want to check in with you. Would you agree with that assessment?

Yes.

Why do you do that?

For entertainment. I like going window shopping and stuff. I like going to look at cars. I like going to look at toys. For me, that's fun. And I'll drag her along a couple of times, and eventually she's like, well, just get it.

Hold on. There's a difference between window shopping. The word means looking through a window. Window shopping versus telling your spouse, I want this, I want this. Wouldn't it be great? Wouldn't it improve our lives? On and on and on. There's a difference.

Mm-hmm.

Which one do you do?

Probably 80% window shop. But sometimes I'll just— if it's something that I really, really want or I think will benefit us, I will push more.

Okay.

And we've talked like the tractor, we talked about the rototiller. And ever since we got the tractor, we had talked about it. Mm-hmm. Well, now they're having a sale. Let's go get it.

Do you— when you are talking about these important things to you, do you consider if you can afford it?

No.

Who does that?

Tanya, if she does it. Or we just do it and then figure it out later.

Do you both see what's going on here?

I'm not good at saying no because if somebody needs something, I always find a way to give it to them or I give them what they want.

Mm-hmm.

You struggle to say no. You have credit card debt, right?

No.

No credit card debt?

No. I pay off my Amex card every month.

So you struggle to say no. And who's the one checking if your family unit can afford one of these major purchases?

I try to, but sometimes I just don't.

I don't think anybody's doing it. See the dynamic that's been built up here?

Mm-hmm.

Tanya trying to please and me taking advantage of that explains exactly the numbers that I see on the CSP. An extraordinarily high income, particularly for the area, and a high amount of debt and spending.

A part of that, that is our daughter's student loan.

Ah, let's talk about your kids. How many kids do you have? 3. 3 kids. How old?

31, 30, and 22.

Okay. And what's the student loan thing?

She just graduated for her undergraduate.

How much is her loans?

$70,000 and change.

Uh, what about the other two?

They don't have any loans. They were paid off when they went to school.

Did you tell your kids before, we will pay your student loans?

In a roundabout way. When I got divorced, it was written into the divorce decree by the court. So we had to pay for my boys as long as they were in college. And therefore, when Autumn went to school, we weren't going to tell her that we weren't going to pay for hers when we were paying for her brothers.

I see. Did you have a conversation about how much you would pay?

No, we told her we'd pay. I did. I had a conversation with her about we would pay for the in-state tuition in Alabama because I moved here and took a job that could get her in-state at several universities here.

So, so it's $70K over 4 years.

Actually, it was a little bit more, but I used some bonus checks and paid off her first 2 semesters in full. Okay.

$70,000 approximately of debt. I want to understand the debt a little bit more. Can we walk through it? So you have $197,000 of debt. What's underneath that number?

I got my truck.

How much?

$47,000.

What's next?

Uh, the tractor. I think we owe $16,800 or something like that. Okay. And then those implements for the tractor is another $6,000.

We have money left on our furniture that we bought when we moved into our old house that we still have. We have flooring that we put into this house when we bought it. A massage chair we bought.

How much is all that?

Two of them are probably $7,000 or $8,000.

Okay.

Tanya, didn't you mention you have a big old spreadsheet?

I do.

Are you looking at it?

No, but I can.

Can you share the screen with me? I'd love to take a look at it.

Yeah. Whoa.

Okay. First impressions right off the bat. Lots of numbers. And I see everything denominated there. It's broken down by month. So there's columns for every month. October, November, December all the way through the next December. Lots of green, which is a little confusing because I know that there's not a lot of green in the financial situation, but I assume it's just a color thing. On the left side, we have expenses. These are like Amex loan, MassMutual, GEICO, et cetera, Verizon. And then the entire spreadsheet is just number after number. Okay, now I'm looking at the credit card bill total. And per month, the credit card bill appears to be $14,000 a month, $11,000 a month, $11,000 a month, $19,000 a month, $18,000 a month, $13,000 a month. And the last few months have been $7,000 and $6,000 per month. What does this spreadsheet mean to you?

We owe a lot of money.

It means you owe a lot of money.

Okay.

And Tanya, what does it mean to you, the spreadsheet, when you look at it?

It's just trying to organize the money to make sure I don't miss any payments.

How long you been going through that type of relationship with money?

My entire life.

You like it?

No.

It's an attempt to control, to try to see where it goes and how to control so we know where the money's going versus just blatant spending.

There's a lot of stuff that's not on the spreadsheet. That is literally just the required bills. Groceries aren't there, gas isn't there, eating out isn't there, nothing else is there.

Why is that?

Never thought to put it on a spreadsheet until I did the conscious spending plan and then realized, well, that sort of makes sense as to why money doesn't add up. Because if you're not tracking anything else you're doing and you're making decisions based on a spreadsheet that makes it look like you have money, it sort of snowballs.

Tonya, what are you getting out of maintaining this spreadsheet for almost two decades?

I have no idea. Just a way for me to say I'm paid the bill.

What does that get you? That's quite profound.

Not in trouble with anybody, and we can get to live till the next paycheck.

I mean, right? Not in trouble. Can you explain that a little bit more?

Well, it's not like I'm not going to go into debt or have a collector at my doorstep or disappoint anybody that I didn't make a payment.

When you pay your bills every month, what do you feel at the end?

Disappointed, stressed, anxious.

I notice you're very passive. Unclear about who is causing the problems here. But then it comes down to, we need this, et cetera. Who's saying that?

I think it truly depends on what it is that, like, I, I'm trying to think of what I have spent a good chunk of money on. Recently we've done some trips that I wanted to do, so there was that. But on a regular basis, most of the stuff that we buy has not been just for me. It's been either because we needed something for the house. Or it's been something that Michael has wanted, so we've bought it.

It's definitely both of us. I mean, it's definitely stuff that I want. When we were trying to cut down on costs, we had 2 vehicles. We now have 1. And we traded in the 2 vehicles, and my rationale was that our monthly payment is less. And it is. I mean, her vehicle needed a couple thousand dollars worth of work. And it was easier to get rid of it than do the work. And I was trying to help bills that way. And I thought the truck would help with the property. And there's stuff that she'll do that's like, hey, go do it. And some stuff works, some stuff doesn't work. She'll ask, can I spend money?

On what?

Things that she wants to try. Right now, she's not really spending money on just random stuff.

How long you been doing that, Tanya?

Not long enough, evidently, but, um, I mean, I, I will get coffee out, which I probably shouldn't. Recently I did spend a significant amount of money joining a gym.

How did you decide if you could afford that or not?

I took $1,200 out of savings and decided I was going to do something to get less stress and get healthier because I had a shoulder injury. I can't lift. I couldn't do anything.

Yeah.

And the stress of this and my job. I decided it didn't matter. I was gonna do it.

Gotcha. Okay, I want to just put all the pieces together here. There was something about retirement. You mentioned you cashed out retirement once or multiple times in the past. Can you tell me about that?

I had cashed out part of mine to pay off credit card debt, so we thought it was smarter to cash it out and pay off the debt instead of paying the interest rates.

Cash out my retirement so we could buy, pay off debt and move. And then we bought a deli. That's a whole nother story.

So you did it. And, and what was the result?

We paid off all of our bills except for, I think, one or two. And we moved across the country and we opened a deli.

Leading to more debt. Mm-hmm.

Mm-hmm.

I paid cash for the deli. Unfortunately, it did not make the money we expected it to make. She went back to the OPO world working, and that was like an hour and a half away. So she did lots of driving, and then she got an apartment down there because it was too much driving.

Was that where the debt began to rebuild?

Probably the fourth time.

Oh, that was the fourth time you had rebuilt debt. It started to rebuild again. I see. Did you realize that like there's a pattern here?

Not until recently. Yeah, I just don't think we paid attention to it. And it was like, okay, well, we'll figure this out or we'll find a way to pay this off and then we'll move on again. And then just recently paying bills and looking at everything before we applied to the show, I was like, there, we sound worse than the people that are on the show half the time. It can't keep going the way it's going.

Okay. I think I understand some of what's going on. My question to you both is, what are you willing to do? To make a change?

Whenever I can.

It needs to stop, so we got to do something.

What are you willing to do to make a change?

You have to cut off the spending.

Who's spending?

Both of us.

Why, why even bother changing? I mean, you all have, I'm sure, is a very nice house, and you got all the gadgets, and, uh, because we're gonna run out of money. You always found a rabbit in a hat somewhere. You got some retirement you can pull out of there. You did it before. You can ask the parents for help. You did it before.

I want a different life. I mean, and I know that I want to have a future where I can say, I want to go do this and be able to do it. And I don't want to work forever. So I want to have retirement. And I know that going down the path we're doing right now, it's not going to happen. So I'm going to do whatever it takes to make it happen.

We were supposed to go visit a friend next month and we decided it's too expensive that we're not going to go do the trip. I want to be able to say, let's go visit. We can do that. It's not going to break the bank. We're not going to look and say, what do I have to cut out to go do it this month?

What is the emotional cost of living this way?

Gray hair, stress, stress, anxiety, and less years on my life and a lot less sleep.

Do you know other couples like this?

No, not that I know of.

There's a lot of them. Very common couples earning above average incomes trapped in a debt of their own making. They have these habits and patterns that they don't even realize they are exhibiting. And their instinctive reaction is, we need to earn more. They don't know what to do. They know it's true that if they made more money, they wouldn't do anything with it. It would simply get racked up into more debt, but they don't know what to do.

And we've proven that.

Yeah, yeah, we've paid off all our debt and then rebuilt it all back up.

I've made more money. I mean, I make more money now than I've made previously.

So what do you think's going on?

We don't talk about money, so we just end up spending money. We don't even know where we're spending it at.

As we dig into Michael and Tonya's finances, there's a pattern that's becoming impossible to ignore. For 20 years, they've been trapped in the same cycle, which is to get into debt, dig themselves out, then get right back into it. They've cashed out their retirement accounts multiple times, borrowed from family multiple times, and every time they think they've solved the problem, they end up right back where they started. Here's what I'm seeing. Michael and Tonya are dreamers. Remember the concept of dreamers from Money for Couples, the book? They keep believing that the next thing will fix everything. A deli was supposed to generate income, a pasta business, a tractor that would make life easier. And when the debt piles up, they tell themselves, once this payment ends, once we pay off this loan, then we'll be fine. But they never are, because they're not actually addressing the real problem. They've basically built a pyramid of financial dreams, each one designed to solve the mess from the last one, but the foundation itself was never solid. And now they're running out of time. They're in their 50s with $434,000 in retirement accounts, which might sound like a lot to some people, but at their current spending level, it won't last them through retirement. Not even close. If they don't fundamentally change the way they approach money, they will not be able to retire. Now, if you are watching this and you're thinking, once I get that raise, I'll be fine once this car payment ends, then I will start saving money. That is very likely dreamer thinking, and it doesn't work. It works for a while until you hit a brick wall, and it is incredible pain. If you want to fix this, do not wait. Join my money coaching program. I will show you how. I will help you make a plan to get your numbers in order fast. Go to iwt.com/moneycoaching. And sign up right now. 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Part of the reason for applying for the show and coming on is because I can't figure out how to plan things, which to me is even worse because that's what I do. I can plan things strategically. I can get it to a goal. I can put all the steps in place and 95% of the time I'm pretty successful at it, but I can't even get close to successful here.

Michael, what's going on in your financial situation?

It just goes round. We build up debt and we say we're going to figure it out. And a lot of times we do, but we, we never look at the root cause.

Tell me what the root cause is.

Reckless spending. Not analyzing, can we truly afford this? How does this affect our bills?

Who's we? We don't do that. Who would we be?

Me.

I do it. I'll push for something. A lot of times I think it's beneficial and Taya's like, okay, we'll figure out how to pay for it. And we don't figure it out first. It's okay, let's go do it. Okay.

What would it look like in a healthy dynamic?

We would sit down and go over our bills and see where this would fit and be able to either say no, we can't right now, or adjust where we're putting money.

And that doesn't happen because?

It doesn't turn into a conversation. I'm either the bad guy or he's just not going to say anything.

I don't know how to say, let's talk.

Want to do it right now?

Okay, go ahead.

I'll listen in.

I don't know how to sit down and really go over the bills. I don't understand it and I don't feel comfortable with it, so I tend to just shut down. I want to. I don't know how to ask questions and I don't know how to talk about it. I don't know how to say, okay, if I want this, what do we have to do?

Tonya, ask him why.

Why can't you talk to me about money?

Just talking about money scares me.

Why does talking about money scare you?

I don't know.

I don't feel like I have money. I don't feel like I have any control over money. It just scares me because I don't know how to do it. I've always just had someone else take care of it for me. I mean, you, you've always done it and I've never done it. You guys tried involving me, but I don't get involved. So I tend to stay away from it.

How would you want to be involved?

I want to do it with you so we can do it together.

I guess I need to understand what that means though, because previously us doing it together means you sit there, I do the bills, and there's Still no conversation. And if I say we can't get something, it keeps getting brought up over and over again until I finally say, just get it.

I don't want it to happen anymore. I don't want to be in a situation where you have to feel like you're the bad guy telling me no. I don't want it to be that type of relationship.

So how do you want us to sit down and discuss the bills and how do you want to be involved?

I don't need paying them. Makes a difference or not, but maybe me putting in the computer as you're doing it so I can be more part of it instead of just sitting there listening to you about it.

I'm not sure that us sitting down and putting the actual bills in is the solution though. I guess I want to figure out how to do that together because otherwise we're just sitting here going over the same thing month after month, which I've already been doing for years and it doesn't get anywhere.

Something subtle just happened. Tanya, you were doing a great job of pressing Michael gently. How would you want that to look? Why?

How?

And then in that last response, Tanya, you just took it all back on yourself. I want us to figure out how to do it. No, this is not about you right now, Tanya. It's about Michael. So stay on him.

Specifically, how are we going to handle the bills and have conversations about money?

I think looking at more of the future, where we're going with it and like where we want to do stuff and how are we going to pay for it and actually sit there and talk about it. And we talk about doing stuff, but we talk about, oh, it's going to cost us so much. And that's the end of the conversation. Talk more about where we're going to get the money from to do that and figure that out together.

Can we pause right here? Great job having this conversation. That was difficult, but it was very illuminating to watch. How do both of you feel right now about that conversation? Michael?

Insecure.

Uh-huh.

Why?

I don't know how to come up with the answers. She's looking for answers.

Okay, so you're insecure because of your lack of knowledge about money and the bills. What else do you feel?

Helpless. I don't know how to do any of it and I don't know how to make it better. And I don't know truly how to talk about it.

How about you, Tanya?

I'm glad he says he wants to engage and I think it would be helpful, but at the same time, I don't really know how we're going to have a conversation that's going to solve the problems or that's going to be effective because that's not been the history of the conversations we've had. I'm skeptical that we would be able to make it work. Because it usually does not end up going well.

Yeah, I can, I can hear that. Any other feelings you have?

I hope that, you know, we can have conversations and do what he says, but also I worry then it's going to come like I'm going to feel guilty about it, so I'm just going to end up saying let's do it. I'm not good at not giving people what they want.

Why don't you give yourself what you want?

Because I've never done that.

Why not?

I have no idea, Tanya.

I think you know. Why have you not given yourself what you want?

Because I can't give other people what they need or want. I'm not gonna spend money on me if somebody else needs something.

I need a new sweater. So why are you going to spend your money when you could just send it to me so I could go buy that new sweater?

You asked me for it, I probably would.

I mean, How many timeshares do you own? Just tell me the answer. None.

We got rid of it.

We had one.

How did I know? I knew it. So, Tanya, your belief is by giving yourself something that you want, that means you cannot give somebody else close to you what they want financially.

Yes.

And that means that putting yourself first would make you bad. You don't want to be bad.

It's not a matter of bad. It's there's not enough resources, so I'm not going to use the resources on me if my kids or my husband or our family needs something.

Does that strategy work? Because you're in over $100,000 of debt.

No, I don't have a better strategy.

What I heard beyond the surface level conversation, which I thought was pretty good, Michael, I heard you being really vulnerable, talking about, I don't know where to start. I don't know what to ask. You've handled money for a long time. I don't even know what these bills mean. I appreciated that, Tonya. I heard you asking how and why. I thought that was great. Beneath it, I heard two things, Michael. I heard the implicit assumption that conversations about money are really conversations about things you want to buy. I don't necessarily think that's true. I think that's part of what's gotten you into this predicament with your debt. That's not what money is about. Money is not about talking between spouses as if one of them is a child and we need to talk about you wanting an ice cream cone or a tractor. That's not talking about money. Talking about money is what's our rich life vision? What do we want to accomplish? What is our culture of money in our family. That's talking about money. Just saying, I want to buy this thing, that's childlike. So I heard that beneath the surface. It's a total deep, invisible script that you have, a deeply held belief that if you're going to talk about money, it's really primarily designed for you to get something cool that you want. Tanya, I heard you basically taking on the burden yourself. And that is part of what's gotten you to this situation. You take the burden on yourself and you're not particularly skilled at managing the money. So you just take on the burden and you end up being not a money manager, but a money transcriptionist. You're basically just typing numbers into a spreadsheet and doing nothing with it. That's not effective money management. How do each of those comments strike you?

I don't know how to talk about it, so I'm using stuff I know I'm comfortable with. That's usually either buy something for me, something for somebody else. And I know how to sometimes just push buttons.

That's the game you're playing of like, I want to get a treat, I want to get a thing. You could probably win because Tanya has admitted she's not good at saying no. So you can win at that game.

Don't want it.

Look at the cost.

I don't want that game. I want us to be comfortable and be able to do what we want when we want. And we're nowhere close to that.

Tonya, how did my comment strike you?

I mean, it's true. I just move money from one place to another and put it in a spreadsheet, but it, there's not a plan. There never has been a plan. I don't think that's been effective. I mean, I was showed how to balance a checkbook, but otherwise I've never been told anything about money. I've just, always lived paycheck to paycheck since I was in college, and it's not gotten any better. And I guess that's— of all the different classes I've taken and things I've done, probably the one I haven't done is anything financial.

When you became a project manager in organ donation, did you know how to be a project manager?

Well, it's not my official title, but I learned from different people how to, how to do what I needed to do.

What's the difference between that and money?

I'm not scared of what I do at work, and I'm scared of money.

Why?

Because it's just never been something that I know how to control or deal with.

You didn't know how to do the technicalities of your job before you had it.

But I had other people to teach me. I've never had anybody to teach me about money.

I hear you.

You were in a job where those people were there, so you sort of showed up and they just started to teach you, right?

I went, well, and I asked, and I went out and did other things. To make sure I was good at my job.

Oh, did you do the same with money?

No.

Why?

I guess I just didn't even know where to turn because I turned to a couple different things and it sort of just blew up in my face. So then I'm like, okay, let me just try to figure this out myself. I've gotten more bad advice than any good advice.

So what's the bad advice you got?

Cash out retirements. You can afford this or that, another, when it wasn't. You know, going through college, you know, go to this big university here, you'll get all this, and then ending up with hundreds of thousands of dollars of student debt, but no actual return on it for the degrees I got.

Let me understand a little bit more about the debt that you've been in. You mentioned this debt cycle has been ongoing. When was the first time that you got into substantial debt?

After college. I mean, I had all my student loans to pay.

How much?

At least $130,000. Okay.

How'd you pay them off?

Loan forgiveness plan. Because I work for nonprofit.

And once that was paid off, what then?

Cars, houses. We put a lot on 0% things and that we need or want, and then it'll end up— we have those payments for X amounts of months and one gets done and we'll come up with something else we need or have to buy.

Why do you do that?

So I can put things that we feel or I feel or the family feels we need in our house.

Can I take a look around your house?

Mm-hmm. Go ahead.

Pick up the laptop or the phone.

Okay. Let's see.

I asked Tonya if I could take a look at their house because after hearing about 20 years of debt and nearly $200,000 that they still owe, I was curious. Where did all the money go? Now, as she walks me through this, I'm seeing a nice house, cozy living room, comfortable bedrooms. They've got a nice concrete patio with outdoor furniture and a walk-in pantry where Tanya runs her pasta business. It's a lovely home. Nothing excessive. A normal, comfortable place to live. And I had to wonder, where'd all the money go? I wonder because for a couple that's been in debt for 2 decades, I was expecting to see something that maybe explained it. Not even a Ferrari, but a bigger house or multiple expensive vehicles or something. But I'm not really seeing that. There's no really expensive sports car in the driveway. There's no bespoke furniture, no massive renovation. So where did all the money go? Here's what I think happened. It went to things that seemed small at the time. A floor that they financed. Furniture on a payment plan, a massage chair, football tickets, weekend trips to get away from the stress, and picking up the tab when they went out with friends. None of those things feels huge in the moment, but over 20 years, especially with no financial controls, that added up to nearly $200,000 in debt. This is extremely common for Americans. If you ask someone in debt, where did all the money go? Their response will usually be one of deep shame and embarrassment because a lot of people know that they don't often have a lot to show for it. What I find most interesting is that a lot of the spending was just trying to feel better, to escape the constant financial anxiety, even though the spending itself was creating that anxiety. So after two decades, what do they have to show for it? A nice house, but no peace, no financial security, and this overwhelming sense that they are running out of time. You'll notice that I pay very close attention to the language that my guests use on this podcast. A lot of times they're using words like protect, security, safety. You'll hear parents say, I want to give my kids the childhood we never had. Okay, that's nice, I guess. But what's interesting is that the people who are often most worried about safety and security usually have not put in specific measures to actually protect their kids. We need to protect our family not just by giving them gifts and toys, but actually by using specific financial mechanisms to make sure that they are taken care of. Let's talk about term life insurance by today's sponsor, Fabric by Gerber Life. Fabric by Gerber Life is term life insurance you can get done today. It's made for busy parents like you. It's all online, on your schedule, right from your couch. You could be covered in under 10 minutes with no health exam required. If you've got kids, especially if you're young and healthy, now is the best time to lock in rates. And even if you have life insurance through your employer, it may not be enough to protect your family, especially if you leave your job or get let go. Join the thousands of parents who trust Fabric to help protect their family. You can apply today in just minutes at meetfabric.com/Ramit. Meetfabric.com/Ramit. Policies issued by Western Southern Life Insurance Company, not available in certain states. Prices subject to underwriting and health questions. Tanya, what do you think I noticed?

You were looking for some extravagant things, you said. And where are they? And they don't exist. There's really— There's nothing that really costs more than a couple hundred dollars or like the normal price of a living room set we got on sale. It's—

Here's my question for you. Where'd all your money go?

Just things we've bought. We really don't have that much to show for it.

Michael, what do you think?

Nothing. I mean, we have a place to live.

I don't mind if you have a normal house. I don't even mind if someone has a tiny one-bedroom apartment and they tell me, like, Ramit, we love food and we eat out every night and we love it, or we travel 5 months a year and that's what we have to show for it. You're not going to see it in our big old house, but that's what we have. I don't even mind that. I'm asking you, what do you have to show for all of your spending for 20 years? The spending that has kept you in a cycle of debt, that has trapped you, made you feel stuck. Created a massive wedge between the two of you and put you in significant debt. What do you have to show for it?

Stress. I mean, poor communication.

Tonya?

There is nothing really to show for it because we just spend one thing and then we keep it for a while and we get rid of it and spend more on something else to replace that thing with.

How do you think other people live?

I don't think everybody else lives like this. I mean, my parents have what they need and they've always had what they want, pretty much. So I think they know how to control their money. I just never learned it.

I feel of two minds when you say that. On one hand, I feel a lot of compassion because there are a lot of things in life that I didn't learn, and I always felt like everybody else learned it, and I was the odd person out who was just behind. On the other hand, I think at 50 years old, and the fact that you have been, quote, managing the family money for 20 years, That doesn't really ring true for me. At what point do we start to say, like, wow, I have unlimited resources available to me, most of them for free. I can avail myself of those resources.

I don't think it ever got in my mind or into a schedule that I could figure out because I was either— we were always working or we were moving. We have never stayed in a place for more than 3 years since we've been married.

Let me understand a little bit about how you grew up, Tonya. What do you remember your family saying about money when you were young?

I don't remember us sitting down and talking about money. I'm first generation American, so my mother grew up in Europe, so it was very different. She came over here when she met my dad.

Got it. Did she work?

She did banking. She was a paralegal's assistant or law office assistant. But she always worked.

How much do you think they made at the peak of their income?

I would say well over $100,000, but I've never asked and they've never told me. My dad retired at the top rank you can get in the military and then went on to take a federal job. So he had the retirement from one and another job. But I've honestly never asked and I never would.

You never would.

Okay.

Got it. Is it like money? You don't talk about money with parents. That's for adults. That kind of thing.

We talk about our money, so we don't talk about their money.

Ah, and when you talk about your money, what do you say?

I mean, we usually, the only time we've talked about money, them honestly, is when I said, hey, I need some money. We can't do something I need to do. And they've always helped me, but I don't think they have any idea what our money situation looks like.

Do you think they'll listen to this episode?

Not unless I tell them it's there.

Out of curiosity, what do you think would happen?

They would probably sit down and say, what do we need to do to help? And how do we help you? Wow.

They sound like great parents. Oh, looking back on your childhood as it relates to money, what lessons do you think you took away?

If you work hard, you can earn money or earn more money. I mean, I started babysitting when I was 10, maybe, and had jobs around the basins and had 2 jobs while I was in college and 2 or 3 jobs while I was in high school.

And you have multiple jobs right now.

Yeah, that's a side sort of thing.

But did you learn anything about, um, investing when you were a kid?

No.

Got it. And last question on, I don't know, like things like self-care, whatever that means to you. Some people it refers to nails or hair or fitness. You mentioned a gym, whatever. Do you spend money on that? Is it a priority for you? And if you could spend, what would you spend it on?

I do get my hair done, but I have extended the time period between getting it done because it is very expensive to get your hair done nowadays, even in Birmingham. I get my nails done.

Is it important to you?

It's important to me because I do a lot that I'm— I try to be out in the public or out doing things, so I try to look nice. Because I think it makes a difference in how you engage with people.

Okay, that's helpful. Thank you for walking me through that. Michael, I'm curious to hear about what your family said about money when you were growing up.

Not a thing.

Nothing?

Nothing. My parents had very little money most of my childhood. My parents would cry themselves to sleep because they couldn't figure out how to put food on the table. My dad had his own business. And that started doing very well when I was a teenager, to the point where he withdrew money to buy one of the first Lexuses that came out and he paid cash for it.

Is that a point of pride? Like, they paid cash for it.

It was for them, yes.

Are they both still alive?

Yes.

Still married?

Oh yeah.

Okay. And how are they with money now?

Concerned. My dad retired at 52. Mm-hmm. And he just turned 80 in April. They don't do as many trips. They don't throw as many parties. They don't actually throw parties anymore like they used to. They're a lot more reserved with it.

You talk to them about money?

No.

No feelings, no money. This sounds like a lot of people I know. Actually, maybe most Americans, now that I think about it. Did they ever teach you about investing? No.

They have an investor now. I always wanted to ask them. I was always afraid to ask if he's paying a percentage or not.

He's definitely paying a percentage. I'm sure.

The guy takes him out to a racetrack once a year.

Goddammit, I knew it. I was going to say they take him out to a baseball game. They take him out to the most bullshit thing. The ticket costs $20 for that. I'm like, you paid $800,000 in fees and they gave you a $20 ticket.

Oh yeah, they put millions into that fund.

God.

All right. I'm with you on that one.

I can't work miracles on this call. Okay. I'm just here with you two today. Let's just focus on you two. All right. What patterns do you see from your childhood with money that each of you is now bringing to this relationship?

We don't know what the other one does with money or where money goes, and we don't know how to invest money.

Mm-hmm.

Not talking about money.

What else?

Believing there's not enough money.

Yep. Were you worried about money as a kid? It's a source of anxiety for you?

No.

Okay. How about you, Tanya?

I guess it depends on how you define kid, but yes. Not when I was really little. I don't remember talking about it, you know, and, you know, but once we started like, hey, I want to get this. How do we earn money to do this? How am I going to be able to get Christmas presents for my parents? How am I going to be able to do this? It was just always a, I need to find a way to make money.

Does anybody see any patterns that you're directly repeating right now? Tanya, worrying about money, also saying, like, how do I earn more? Let me start this business. Let me buy that thing. Let me do this thing. Michael saying, like, doesn't affect me. I'm good. Things always kind of work out somehow. Magic. I don't know why, but they always just work out. Can you see another dimension where the two of you do not behave this way with money. Like, you ever watch Star Trek or something where they open the door and they go through the holodeck into another dimension? Whatever. All these Trekkies are going to come after me like I don't know. I know every episode of Star Trek: The Next Generation encyclopedically. Do not come after me. I know all about all the different dimensions, and I know you don't go through the holodeck to get to a different dimension. I'm just trying to use a metaphor that everyone gets. Take me through this example, Tanya. I'm so mad at myself right now. Tanya and Michael, there's another dimension right now. You can see these, this couple, they look like you. They just happen to be mirror images. They behave differently with money. How do they behave differently?

They discuss spending.

Sort of like come up with goals and plan for the goals. Plan for investing.

Nice. Great. What else?

I guess money is a positive thing and not a source of frustration.

Yes.

Because if you've planned for it, it'll be there.

Yes.

Do they do 0% purchases?

No.

No way. Do you know the last time I did a 0% purchase? Never. Why would I? It makes no sense. I don't even put myself in that room. Why would I do that? So your other dimension, alternative dimension person, they never do 0% purchase. They don't do it. It's not Why would they? What else did this couple do? They talk to their kids about money?

Mm-hmm.

What'd they say to them?

It's a good thing if you use it this way.

Nice.

Talk to them about how to plan, how to create goals.

Tanya, your alter image is called Tamia. Okay. Isn't that a singer from the '90s? And does Tamia have the ability to say no?

Yes.

What does she say no to?

Anything that we can't afford or that isn't useful.

And is she always the no, like the naysayer?

No, not always, but when it's appropriate.

Okay. And what does the alternate, uh, uh, Mikkel, what does he say? Is he always asking for, um, like, I want to buy some type of toy?

No.

What is he doing, Mikkel?

He is looking at the finances and realizing that it's not worth asking because you know the answer.

Nice. He's not even bringing it up because he knows, like, according to our numbers right now, we can't do it. So I'm not even going to put Tamia in that place of having to say no. Why would I do that and make her the bad person? But every 6 to 12 months when they sit down and really talk about big picture stuff, he goes, you know what? I do have my eye on this thing that I would like to get. Based on our numbers, it's going to take us a couple of years to save for it, but I'd like to start putting a little bit of money aside. Here's my plan. What do you think?

I like that.

Yeah, sometimes you can get what you want, but the way you bring it up and the amount of time and planning is different. Anything else you both want to point out about your alter egos, what they do differently?

I think we would just Enjoy life more and not spend so much time stressing over it.

How would I know that you were enjoying life more?

They're smiling.

Wow.

Just spending time together outside of the house. Ah, maybe going on a real vacation.

What does it feel like going through that exercise of alter egos?

Kind of fun, actually.

Tell me.

Because you can see there is a positive side. There is a way to do things right. There's a way to make things work for us.

It opens a window to thinking, well, they could be different than it is now. But then, you know, my automatic kickback response to it at the same time is, but how do I get it there?

Yeah, I like, I like both of your answers. I think they're very candid. I think, Michael, you're right. It sometimes it helps to just see, oh my gosh, there's a different way of looking at this. I think that comes easier to you, Michael, because you have basically given up the responsibilities of money. It's like when I used to go to the pizza place as a kid and I would put my hand out to my dad and he would give me 2 quarters and I would go play the video games. That's basically your role in the family finances. Of course you earn money. Yes. Not downplaying that at all. You earn money. Great. But when it comes to spending, it's like, I want this. Give me 2 quarters. And, um, Tonya, your role with the money is worrying, agonizing, um, saying no the first couple of times, but then giving in. And the only way to retake control is moving numbers on this spreadsheet. It's a challenge to redo the way you look at money. Because you've been entrenched in this for 20+ years. So Michael's like, it's all going to be good because the load usually just falls to Tanya. Tanya is like, I hate money. Money is a never-ending source of stress and guilt, and I don't see a way out. It's kind of a negative. It's really negative, actually. And Tanya, I understand why, but I'm also going to be really honest that in order to move forward, both of you have to be able to change that. Do you see that there's even another dimension where it could be different?

I mean, I know it's got to be possible because tons of people do it, so it's not like it's not out there. We just have not done a good job of it, and that comes down to us having to change. But I think it's figuring out how we change, which is the whole reason we wanted to do this, is because it's the psychology and not necessarily the dollars.

Yeah, I agree. The how is actually the least of it. I know most people come on here thinking it's the first thing and what they deep down, they want me to wave some magic wand. Abracadabra, here's your money fix. I'm not fixing anything. You are fixing it. I will help you look at yourself differently. I will help you see invisible scripts that you didn't know existed. I'll help you radically reconceptualize your invisible scripts, but I can't fix it. For you. You can though. So we'll get to the how. What is the vision of where you want to go? What is your rich life?

I would like to be able to, without thinking about it, go to a coffee shop, brewery, or winery once or twice a week and be able to sit there and write. I would like to plan some vacations that are vacations I really want.

Great. Keep going. What else would you like to do in your rich life?

I joined a group and have a certification to be able to do speaking and coaching, and I really want to do that. And I'd probably like to work a little less. And then I'd like to have a plan for retirement because I don't want to work forever.

Okay, cool. Thank you. Michael, what's your rich life?

Well, you know, like she said, going out to having a drink and not worrying about it, doing some trips, being able to spend time with family, going to visit them more. Not having to worry about if I went and bought something small, do I say something or not say something? Not to worry about it. It's a small item.

Do you think that your rich lives are aligned? Like, can you make them both work together?

Oh yeah.

Yeah, yeah, I agree. Have you talked about when you want to retire? No. No, you're 53 and 55 years old. Well, usually this comes up around age 58. What's the thinking?

It's not going to be anytime soon.

I would like to retire definitely before I'm 69, but I don't know if that can happen.

So I ran some numbers on where you are currently on track for. We're going to pull up my investment calculator. You have $434,000 today. Monthly you're putting in $2,214. That's $2,214. How many years are you going to keep investing? Let's say 10. Right, for Michael to be 65. Okay, so that's $1.25 million you would have then.

Does that sound like a lot?

Yeah. So let's— let me tell you what that means. So at 4% withdrawal rate, you would take home about $50K per year. You know, we're not factoring in things like Social Security, but that's what we're talking about. How do you think you would do on $50K a year?

Well, we don't do good on $225,000, so $50K seems almost impossible.

Yeah. So what happens if nothing changes?

We don't retire. We die working.

What a tragedy to die working after making over about a quarter million dollars a year. What do you think you need to do to change things?

We need to cut off the spending. The 0% interest buys, the big purchases we're making. We need to stop doing those and doing them as loans and budget for them first.

Can we be specific? What purchases are we talking about? Name them.

My truck's going to last 10 years before we get another car. Because then it'll be paid off and we'll save up money to be able to put down on another car.

Okay. What else?

At the moment, we need to curb more of the Food spending.

How much you want to cut?

I can't believe we're doing $1,400 in groceries. I think that's way too much.

Who does the grocery shopping? Oh God, this is about to happen again.

Yes, you know the answer.

She does it. And you're incredulous. You do it?

He will go to the grocery store and buy 10 items and then he'll come home and then he'll go to the grocery store and he'll buy something else and add a couple items. And then there's not a plan for groceries. It's—

now this is Michael, you're going to the grocery store basically every day?

It's mainly me. She goes sometimes, but it's probably 95% me.

So what are you spending there?

Uh, whatever's on our shopping list.

And the rest of it is just things. We go in and somebody wants a veg— specific vegetable or a specific this, or let's have a charcuterie board today and we'll go buy the stuff to make that, or—

Oh, that's— now we're getting somewhere. Hey guys, in my opinion, somebody who has $197,000 of debt doesn't have a charcuterie board. Maybe it's just me, little crazy old Ramit, but that just doesn't happen. And I want to inform you that I've spoken to a lot of people about their spending. Almost nobody goes to the grocery store as often as you do. So my suggestion is you just cut that down, going once a week. And this right here is a good example of being planful, of building a plan. If you don't get it, You got to wait till next Sunday to go get it. Guarantee that's going to cut down on discretionary purchases. I don't think there's a lot of household planning going on at all. Planning is actually high value. Planning is sitting down and it's got to be two people. Sure, one person can be the grocery planner. That's fine. But having a culture of planning in the house. Has got to be two people. And it's like everything from what's going on this week, then it's bigger things. We got to plan for retirement or saving for kids' college or taking this vacation. Planning. I don't think that's happening in this household. Am I right or wrong?

You're right.

You're right.

You're right.

Okay. And do you know why you're not planning?

Because it's one-sided conversations.

I was going to say we're not talking. Yeah.

So, Tanya, you come, you probably tried to bring it up a few times, you got nothing back. So you're like, all right, forget it, just I'll do it on my own. You do it in your own kind of like homegrown way with the spreadsheet and stuff. But the thing is, it's not just the money. It's planning vacations, it's planning groceries, it's planning all of this stuff.

And so you live life totally reactively, which is why those savings Fields are all blank.

Exactly. And, and Michael, what is your role in this?

Not talking, complacency.

Mm-hmm.

Uh, not saying no, asking for too much.

Who needs to make the bigger changes in this relationship? I'm curious. Me.

I don't necessarily agree with that. I mean, I, it's, I feel it's just as much my fault because I don't say no and I don't say, no, we're not going to do anything else till we sit down and fix this.

Okay, so I don't know who needs to do more work, but I know a good approach is like both of you saying, I probably need to do more work. That's actually a really healthy approach to making big changes in the relationship. I think that, that's actually really cool to hear that from. So here's what I'm going to do. I'm going to put the conscious spending plan up on screen in a minute, and I'm going to ask you to take control. Michael, you first. Here's the way that I would encourage you to think about it. First of all, the fixed cost number should be 50 to 60%. You need to dramatically bring down those numbers. Right now we know that you're on track to have not nearly enough money in retirement. We're going to have to figure out a way for you two to dramatically contribute way more to your investments. If you want to make big changes, you will make bigger changes than you ever thought possible. And I can help you. Okay. I will encourage you to be creative. I'll encourage you to think about things in a way you've never thought about it. But because of your income, even though your retirement investments are not enough right now, you have the ability to be able to contribute massive amounts, but it depends on the two of you. Are you ready?

Yes.

Here we go. I'd like to start at the fixed cost, Michael. You tell me what changes you would like to make.

The biggest one in there is $10,000 in debt payment. That's a huge number.

What is that for?

It's the furniture, the flooring, the tractor, the attachments. It's life insurance policies. It's student loans.

So what do you all want to do about that, Michael?

I don't know how to get rid of all that. Groceries, $1,400 a month seems extremely high.

What do you want to bring it to?

Maybe right down to $800 would be a huge difference.

Can you both agree on that? $800 a month?

Yeah.

Great. I'm changing it to $800. Take a look at the numbers and watch what happens to the fixed cost number. We're at 155%. What number just happened?

It dropped 5%.

Yeah, we're at 150% now. Keep going.

Eating out.

Where is that? That's not even shown on this.

I think it's under the miscellaneous.

Oh, okay. That's okay. How often do you eat out?

According to that number, a lot.

We probably eat out enough to make it about $800 a month. Okay, I lied. In May it was $1,900.

1, 2, 3. Uh, yep, almost hit my magical number. Multiply it by 3. So $1,900 a month. What'd you eat out at?

Oyster bar.

A lot of it is coffee, Starbucks. Part of this is meals because we went to see my daughter's new college. We went to Chicago and we ate out every meal for 3 or 4 days. Okay, all right.

So, um, on a normal week you eat at an oyster bar. How much would you spend at a nice restaurant out like that for the two of you?

If it was just him and I, we wouldn't go out. We would stay home or go out and get something nicer to cook that night. But we go out with friends and then I'll pick up the tab.

Oh, what's that about?

She always picks up the tab.

Wow, that Coke can suddenly got very, very important to Tanya. She can't stop sipping it. Oh, gotta finish this thing. What's that about, Tanya?

Goes back to always doing things for other people.

How much was the tab at a restaurant where you go out with friends?

$250.

$250. Tanya, do you see how your inability to say no is literally affecting your finances? You cannot afford $250 for the two of you, not even for your kids, much less for some friends. I'm not— all jokes aside, this is actually a crippling affliction to not be able to say no. You can't say no to your husband. It's cost you tens of thousands of dollars. And paying $250 for friends out to eat. What do you feel as you pull out your credit card? Because you know you're about to pay for everybody. What do you feel?

I guess I feel happy I'm giving other people something.

Yes. And then they see it. And what do they say when everyone's about to pull their credit card out, but you pull it out? What do they say?

I have no idea.

They don't say thank you.

Oh, yeah, usually.

Tanya, that's the whole point. When they say, oh, thank you, Tanya. So generous. So you didn't have to do that. What's that feeling you get at that very moment?

I guess I'm happy about it. I don't know. I've never thought about it.

I'm the hero. I'm the hero when I say yes to my friends. I'm the hero when I say yes to Michael. I'll figure out how to deal with all the inevitable stress, but that's my problem. Right now, I'm the hero. How much of that rings true?

I guess it does. I've just never thought about it.

My family comes to know me as generous. She always says yes. My friends come to know me as generous. She picks up the— she didn't even have to do that. Oh my God, can you believe that? She's so nice. I, Tonya, am the hero. And Michael, where are you in this? How are you letting Tonya pay $250 for friends' meals when you guys have $200,000 of debt?

She just is fast. The check will come, she'll immediately throw a card on it and give it back to the person, right? Person a lot of times doesn't even put the check down.

Is everybody trying to bullsh— on this call? Like, I love being lied to. I love it. Trust me. But that can't be your answer. Come on.

She does it. I don't say anything. She's paying for me, her, and a lot of times there's one other person and she just pays for it.

You know, caricaturists, like, you go to a state fair or something and they draw. If I could draw, this is what I see in my head right now. And this would typify the relationship of money between you two. I would see Tanya, like, sweating. One hand is out with her credit card. I'll pick up the check. The other hand is full of money, saying, Michael, get the tractor. And inside, she's got this thought bubble saying, I'll figure it out later. That's Tanya. And you know what Michael's doing? La la la. He's looking away up at the sky, seeing a nice plane and saying, oh, nice plane. Totally unbothered. And in his head, he's going, she'll take care of this. It's not a nice caricature. I'm not trying to insult the two of you. I have a lot of respect for the two of you. I'm sharing it because sometimes we need somebody else from the outside to give us a perspective we don't see of our own life, our own dynamic. What do you think about my description of that caricature?

It's probably true.

Would you be willing to not pick up the check?

Yeah, I mean, we don't have much of a choice at this point, but—

What do you mean? You can still pick up the check. You've done it when you still had $200K of debt.

That's not where I want to live. That's not how I want to be.

And Michael, what about you? How would you change what happened at that restaurant? I find that to be a major red alert.

I don't know how to say, why don't we split it? I guess we do 2 divided by 3 and we pay 2/3 and the other person pays their third.

Better yet, have the conversation before you get to the restaurant. Michael, what this really requires is for you to be an active participant in the money.

Okay.

The reason that you have not is you're just like, ah, she's got it. Money doesn't even occur to you when you go to a restaurant. You know she's going to pick up the check or pull out the credit card or whatever. Maybe if it's the two of you, maybe you pull out the credit card. But in general, she's the one managing all the emotional financial load. And it's actually not working. No. So you have to step up as an active participant, and you have to be willing to have these conversations before you get to the restaurant. Hey, How are we going to think about paying for tonight's meal?

Okay.

And Tanya, you're going to come up with a plan for eating out. You come up with a plan for groceries. You come up with a plan for all of this before you ever get there. What do you think?

We shouldn't go out.

I agree. I actually think that's the best solution of all. Can we get back to the CSP, please? So we're taking the miscellaneous. We're going to drop this down. I'm going to change this number from $2,217 to $500 because I know you're still going to have a little bit of Okay, what's that number at?

137.

137%. Guys, we need to do something big here. Look at the numbers. What's the biggest number on this sheet?

That debt.

I've never seen another couple paying $10,000 a month in debt payments. To refresh, here's what you told me you have on your debt. You have a truck, tractor, accessories, student loan, flooring and furniture, and some other stuff.

So the flooring we just made a final payment on.

Should we drop the CSP?

So I'll drop $400 off.

All right. I'll change that. What's next?

The massage chair has 2 months left, so that's going to be gone. It's $100 a month. The furniture is $500 a month and it has 1 month left and that's gone.

Okay. So that's going to come down by $600.

Mm-hmm.

And then another $403 is going to come off every month starting this month because We have football tickets.

All right, fine.

I'm going to drop $400 a month off of that. All right, you're at 126%. Your debt payments are now $9,100. It's better, not nearly where it needs to be.

No, it needs to drop another 60%.

The invisible script that both of you have here right now is we got some of these payments and they're going to end and that's going to make it all okay. Once this payment ends or that payment ends, then it's all going to fix itself. You have believed this for over 20 years. It doesn't work.

I don't know how to get rid of those that are fixed like that.

How do other people do it?

Other people would do it by selling the truck, but we can't afford to sell the truck. We would actually lose money off it.

Here's what Michael and Tanya are about to face, and it's going to be very difficult. They're in their 50s. They've been handling money the same way for over 20 years. Now they have to completely rewire how they think about money, talk about money, behave around money, and feel about money. At their age, this is incredibly difficult. When you're in your 20s, you're used to trying new things. You fail, you adjust, you're more flexible. Habits are not as set yet. By 50, you have been doing things a certain way, often for decades. and those patterns can run deep. Now, of course, it's possible to change. It is never too late. But changing— the longer things go on, the more they become concretized. It requires a discomfort that a lot of people are not willing to face. Michael, for example, has been disengaged from money his entire adult life. Now he has to learn the mechanics and the emotional work of actually showing up and he has to execute at a very high level every day starting right now. Tanya has been the family hero for 20 years, saying yes to everyone, putting herself last. Now she has to learn how to set boundaries, and she has to execute at a very high level every day starting now. It's gonna be hard. I can't do it for 'em. Nobody can. And if you are expecting them to walk away from this conversation with their fixed cost magically below 60%, That's not how this show works. I'm not a magician. This is going to take time, probably years. They have to be willing to feel uncomfortable and to admit what they have built is not working. And then they have to make changes, even though in the moment it might not feel like they can do it. But I think they can. They say they want to change. I think they can. My experience with other people provides a bit of a sobering perspective, because in my experience, most people in this situation Don't. They say they want to change, but when it's time to sell the truck or stop picking up the check or close the pasta business, they find a reason not to. I'm wondering if they are really willing to change. What else? Why don't you sell that recliner? Why don't you sell those tickets?

We could sell the tickets. I mean, they're in demand tickets and there's good games, so it wouldn't be a problem to sell them.

How much are you going to get for that?

I really don't know where the tickets— it fluctuates so much.

Can we be conservative? Can we say $2,000? Okay, $2,000 for those tickets. What else can we sell? That recliner sure looked nice. It would look nicer being trucked out.

I can hit Marketplace, see if there's any on there now.

Yes, this is the kind of action I'm talking about. What else? While Michael's looking that up, what else you got, Tanya?

I mean, we can close the pasta business and sell the pasta machine.

Yes. How much would you get for it?

What do you think, Michael? $1,000?

Maybe $800.

$1,000 for that. What'd you find, Michael?

Anywhere between $300 and about $800.

Let's say $300. I like to be conservative. I hope you get more. What else you got that could be sold? Tractor accessories. We got to get into the big stuff.

We saw that. We have to buy something else and take care of the yard. It's 5 acres we got to mow.

How much you pay a little 14-year-old kid to come and mow it?

It probably about $200 to $400 each mow.

Holy shit.

I mean, we can sell it and get a mower that's not a tractor.

When I mow it with the tractor, it takes me about 4 hours.

What do other people do in this situation?

Our neighbor has a tractor like ours.

Uh-huh. I mean, I wonder if there's a way to team up or something. 2 tractors sitting empty 99% of the time seems kind of wasteful. I don't know, what do you think?

It is.

I, I could see the wheels turning, Michael. I, I think the point here is like, holy, we're sitting on like tens of thousands of dollars of tractor here. Even if you sold it, you would take a loss, but whatever, you would get some money coming in, pay off whatever loan is remaining. So I wonder how else you, Michael, could become more active and find out the solution to this. Surely there's got to be other people who have found this. I know everybody doesn't buy a $32,000 tractor. Yeah. All right. That's homework. So the tractor, we're going to figure that out. Guys, I'm not seeing a lot brought down here. I'm seeing you made $3,300 in sales. It's not going to cut it. I need you to truly grasp how much overspending you have been doing. You are both spending like you make about $800,000 to $1 million a year. And you don't. And you're in your 50s and you don't have enough retirement, not nearly enough. If you had no debt and you had your low housing expenses, I would say, okay, yeah, sounds great. You have a high income in a low cost of living area. Okay, great, do it. But you don't. You made purchases 6 months ago, a year ago, 10 years ago, and on and on, and they have cascaded, and now here you are. So you can't spend the way that you might think someone making $228,000 a year does. You can't. Your spending has to be much more like someone making, I don't know, $65,000 a year. How does that strike you?

Accurate.

It's accurate, but it's also sort of upsetting that we've done this to ourselves because I've always made decent money at least, and we just never did anything with it. And I think we go through a cycle of, okay, so we have some money, so let's try to go do something so we can enjoy ourselves because we worked work so much, but then we end up just having to work more because we've spent more money, and it, it just never gets anywhere.

You've done that since you first started managing money, and I noticed how hard it is for you to both change it. Even right now, we're like, there's, there's so many, uh, things that are like off-limits for us to even talk about. Have you noticed? What are the things that are off-limits for us to talk about?

To me, there's nothing off-limits.

So we can sell your truck? That's not off limits.

We could, but we don't have the cash to pay the difference.

We could stop paying your daughter's student loans.

Well, they haven't started yet, so we're putting $25 a month on that right now.

And you owe $70K on that. What's the plan with that?

It's just on deferment because we haven't— because she's been in school.

So there's no plan.

There's no plan.

I think that you have been making impulsive decisions when it comes to money since you were married. I think that you have both taken on roles. You know, Tonya, you manage the money, which really just involves moving numbers around a spreadsheet, and you can't say no. You've admitted both to me. Michael, you are oblivious to money. The way you treat the family finances is you earn it and you go, give me this money to buy this treat that I want. And both of you have built a habit of overspending dramatically, and you're at a point where it becomes extremely difficult to make the changes you need to make. You can, but it would involve some very difficult changes. Some of this is multiple layers deep. I don't think you could live in the place you live because it requires a tractor, which you can't afford. And if you don't have a tractor, then you have to hire somebody to come and do the lawn mowing for $500 a month, which you can't afford. So that would involve dramatically downsizing.

That is probably the one thing that is off limits, is moving this house. We just made my parents sell their house to move in with us so we could take care of them. There is no way in heck I can ask my parents to move.

Finally, I hear one thing that you're not willing to do. First time this call.

All right.

Tell me what you want to do. I'm gonna put it back up on screen. You tell me how you get this number down by half. Fixed costs are at 126% right now.

Debt payment. Find a way to get rid of that. It just goes down by more than half.

Yeah. Let me show you what happens. Let's say that we drop it by $5,000 a month. You're down to 87%. Better. Still too high. The pasta business, how much were you earning from that?

Why not?

Why do you do it?

And now what? Something for her to do, chance to make some money.

Do you see that this is part of the problem? It's a recurring pattern, by the way. The deli, the pasta business, all this stuff. It's a distraction from the actual place that you were earning money, which is your job. Tonya, what are you realizing right now?

I was just actually looking at all the places that we spend money that was on this Rocket Money thing, and we should be easily able to cut $6,600 out.

Tell me how.

Well, because according to the month we used to do this, we spent $1,900 on dining out, $1,200 on travel, $1,000 on home and garden, $1,000 on shopping, $500 on entertainment. $516 on health and wellness, which is not medical stuff, that's just nails, whatever. And $381 on my pasta business. That all adds up to over $6,000.

What do you make of that?

That we're just not putting money in the right places. We're just spending the money.

What do you have to show for it? $6,600 in a month?

Nothing.

Debt.

We went on a trip, we got more debt.

Do you know why you went on that trip? Getaway. It's an interesting word you use, getaway. Get away from what?

I want to get away from the stress of being here.

Yes. Think about it. You've created almost a tautology. Like, it's like a— those snakes eating themselves. You spend a bunch of money, you put it on all these weird recurring payments, 0%. You got to track all this It's like, it's like so insanely complex and it never really adds up. It's just always putting you in the red. You're spending way more than you make. So you go, oh, I got to escape this. So what do I do? Let's spend more money to physically and mentally escape this place, which then causes more problems. It's not just about the travel. It's about the pasta business. It's about all these other— it's about buying this random thing here and there. Either one of you. It happens a lot. When I hear people tell me they love to travel, I'm all for it. Or they love to buy a nice car. Great, if you can afford it. What I don't like to hear is, oh, I bought this thing because I need a getaway, I need a stress relief. That to me tells me there's probably something deeper going on. So $6,600 a month, Tanya, that is just the most recent cost of not being able to say no for you, and Michael, for you being passive with the family money.

Mm-hmm.

Okay, this is what I want to have happen. You two have some homework to do. One, I want you to redo your conscious spending plan with accurate numbers. So we talked about the groceries. I actually want you to put the number down and then run this for a week. So like, Michael's in charge of groceries. Hit the number. $800. Don't exceed it. Same thing for this other stuff. And also, I'm like looking at stuff like your cell phone, $420. What's that?

That's us, our daughter's cell phone, our son's cell phone, and our daughter's tablet.

Can't do it. Are you guys willing to tell her you'll have to find another way to pay for your own phone?

We could. I mean, our son's married. He can pay for his own phone.

How about your daughter?

We can ask. I don't know where she'll get the money right now. She literally does not have a job because she's moving to go to grad school. So I don't know how she would pay for it.

The reason I'm asking this is not to put your daughter in hardship. That's not the case. I have spoken to several couples who are older, who have adult children, and they're paying for some or all of their kids' expenses. But they themselves are in extremely dangerous financial shape. And the $100 is not going to dramatically change your life or hers, but the ability to actually say no is.

Right. And we've done that recently. Like, I did not pay— she needs furniture and a washer and dryer, and I told her we can't afford it. She needed somebody to co-sign her. Lease, and I told her I wouldn't do it. I told her we wouldn't pay for grad school. I've told her we can't help her buy stuff for the house.

I'm glad to hear that. Would you be willing to do that with the cell phone?

I will if she can afford to, if she says she can pay for it, but I won't let her not have a cell phone because that's a security thing for me.

Mm-hmm.

I respect that. It's, of course, it's your call. It's your daughter. It's your money. I can't tell you what to do. Would you be willing to do something like, we can pay for your phone for 6 more months, after that it's up to you? I think that gives your daughter a long buffer notice well ahead of time, and it also gives you an extra $100 a month, which can make a dent towards this debt. A small dent, but these are important. They start to add up with all the debt that you have. I think they actually need to know, Mom and Dad, we're gonna have to make some changes. We have been spending irresponsibly. And we have to make some changes. It's going to be hard for us. It's going to be hard for our parents. It's going to be hard for you. But this is what we need to do in order to make these changes, to be in a healthy financial spot.

Yeah, we told them because they know we're coming on the show and they're more likely to see it than my parents are.

So what would they say about money?

Autumn is pretty darn responsible because we've had a lot of conversations about what she can and can't afford to do, like apartments and stuff at school and how you don't always get the luxury one you want. Sometimes you just have to have a one bedroom that's what you get.

Such great advice. I wonder if the two people in front of me could take their own advice. What do you think?

You do wonderful.

Do as I say, not as I do. I get it. I get it. It's okay. I've broken my own rules a couple of times too. Fine. But let's figure out how to fix this. So you've started talking to them about money. That's great. The best thing that you can do as parents is to actually show them the dramatic changes that you are making. Talking is blah, blah, blah. Kids don't even care. Oh, mom and dad, blah, blah, blah. Show them through your own spending and sometimes through spending on them as well. Next time they come home, oh, let's go to this restaurant. You know what? That's not part of our plan right now. We're going to stay home. We'll have a great dinner at home. Oh, mom, you're eating leftovers? You never eat leftovers. I do now because it's important to the financial health of our family. So it's actually a gift that you get to give to them to be able to show them the changes you're about to make. That's going to be amazing. It's going to be hard, but it's going to be amazing in the long term. Let's go back to the CSP for a second. I have a question for you. Did you double count your mortgage payment? Did you count your mortgage payment in your debt payment?

I can't figure out how I got to that debt payment number now unless I just used the bottom number and not realizing that included the mortgage.

Okay, this is why I want you to do a little bit of homework. Clean up the CSP. Both of you will talk about the numbers, go through, talk about it together. There's a lot of work to do here, but as you can see, you're becoming more and more conversant about this stuff, which I love to see. A few things that I'm gonna highlight for your homework. Your utilities and your insurance. I would like for you two to split the labor on this and call all these places and see if you can get any reductions in cost. Some of them can cut $100 a month off of it. That's actually a lot of money. That money's going to go either towards savings, investing, or debt payments. Your groceries, we already talked about that. Debt payments, this number, there's something wrong with it. I want you to go through it line by line. I want you to figure out what's going on with it, and I want you to get rid of as much stuff as you can. We're going to figure out how to pay it off aggressively using the extra $6,600 a month. Speaking of that, you're going to create a debt payoff plan. You can search debt payoff calculator, debt payoff calculator Ramit Sethi. That will also help you. And you create a plan of what you're going to pay off when, in what order. With the amount of income you have, you can start to make some big changes fast. Finally, I would not put all of the money towards debt. I would put some of it towards savings, which you need right now, because if one of you loses your job, you're in a terrible financial situation. So we need to build up that emergency fund. It's going to take time. It's going to take years to get there. We need to be putting money aside in that, like, a considerable amount of money. Let me pause there. How does that strike you, Tonya?

At the moment, it's a little overwhelming, but it's doable and something I want to do.

Good.

Michael?

It sounds like a plan, which is something we haven't had. So that's a good thing.

We need it. The biggest part of this entire plan is that it can't be done by one person.

Yeah, it's got to be together.

Yes. The biggest risk is that, Tanya, you take this, the same old approach, which is like, I'm going to go on my own laptop over here in the corner. I'm going to get super frustrated and then be like, Michael, sit down with me. He's not going to do it. Of course, Michael's going to avoid it, be passive. Wait for the thing to be over, and then you're both going to go back in your own corners. We cannot succeed if that—

we're going to schedule a day of time every day and sit down.

It's all about planning. Planning is something that has been lacking for a long time. I think deep down, maybe one or both of you think planning is like bad, boring, somebody's going to get in trouble. No, I actually find planning to be fun. It allows me to do the kind of things I want to do. Yeah, it takes a little work to get it going, but it actually allows my life to be easy. I don't have to track spreadsheet after spreadsheet. We know where we can play. We know the bounds of play, and within those bounds, we can do whatever we want. So it actually makes my life so much clearer. How does that sound to you? Would you be willing to take the homework, work on it, put it into practice?

Yeah.

Awesome. Tanya, is there any question that I can answer for you right now?

What do we do with unexpected things or things that come up? What do we do with those costs?

It's a good question. It's a really good question. Things are gonna come up. I get it. Cars break down, things like that. My suggestion is, um, you're gonna have some money set aside in fixed costs for miscellaneous. Most people, I have them do 15% of fixed costs for miscellaneous. You can't afford that. And you have to be so tight that you actually cannot allow 15% to be unknown. You could put 5%, keep that aside. Really, the truth is, Tanya, you're going to have to become a lot better at saying no. No, we can't go out. No, we can't go out to eat. No, we can't get this extra steak.

No.

And it's just that simple. You got a beautiful house, beautiful property, and that's going to be where you spend time right now. Michael, any question I can answer for you?

No, I think you answered it. And big thing is just communicating.

Yeah, especially you. Yeah. What surprised you most in this conversation, Michael?

I thought we were talking mainly about the money, and we did not. We talked about us.

Numbers are always a reflection of the couple that I'm speaking to. If it were me, I would take a freaking machete to some of these numbers. But it's not my finances, it's not my life. And that's why it's so important for me to actually understand you, both of you, and the dynamic here. As much as people think they want me to come on here and do some razzle-dazzle, if I did that, the minute we stopped talking, you would Just be like, fuck that. You have to be the ones to come up with it, not me, because you're going to be the ones who make it stick. So it's a great comment, Michael. I appreciate it. Tanya, what surprised you?

Just how even though I thought I knew where we were spending or what we're spending on, truly I didn't. And there's a lot of money that just should be going other places.

I want you to rethink of yourself not as a transcriptionist. You are way too valuable. To just be transcribing stuff. And candidly, a computer can do that better than you or I can. The two of you have to be able to make meaning out of money. And that comes from talking. That comes from learning the basics. Read my book together. That comes from having healthy conversations. Sometimes, you know, you might butt heads. That's okay. But healthy conversations probably also means being able to get some help, Tanya, speaking up and saying no. I would highly encourage you to do that, whether it's a therapist, a coach, whatever you decide to get help on. You will have to be able to get comfortable saying no and setting boundaries if you want to achieve the kind of life that you want. Tanya, how do you feel now versus how when we started talking?

Slightly overwhelmed. But I think that at least we can come up with a plan that'll make a future that we want.

Do you feel a little, um, unsatisfied?

No, because I knew there wasn't going to be a magic button that you were going to go, hey, here we go, this is how you can fix it, it's all good. I mean, I can look at a number and tell you that's not going to work.

Uh, Michael, final question for you, um, how do you feel now versus when we first started talking?

I can talk more, that I'm not going to be as scared to do so. I can't just shy away.

I'm happy to hear that. That's awesome. That is the next chapter.

I agree.

Is you speaking up, getting more in touch. I would also encourage you to get some help, whether it's a coach, therapist, et cetera. I think a couples therapist would actually be awesome to be able to allow these normal conversations to happen proactively, planfully. I think that would be amazing.

That's an extra cost we can't afford.

You can find the money for that. I guarantee that. I feel cautiously optimistic about Michael and Tanya. I think Tanya finally understands that she can't keep white-knuckling her way through this alone. And I think Michael realizes, maybe for the first time, that his passive approach has had real negative consequences. But I'm also realistic. What they're about to go through will be one of the hardest things they've ever experienced. Just understanding the full scope of their financial situation is going to take time. They've made their financial lives incredibly complicated. And when they finally see everything laid out, the debt, the spending, the years of habits that have compounded, it's going to be depressing. But as I say, sometimes if you need to make a big change, the only thing you can do is walk through the fire. There is no gimmick. There's no way around it. You've just got to walk through the fire. Here's what gives me hope. Their income gives them a real shot at turning this around. If they can stay aligned, if they can keep planning together, if they can develop that skill of setting boundaries, they do have a chance. And the next few months will tell us everything. Now let's listen to their follow-ups.

Hi, Ramit Sethi, it's Tanya, and I was just doing my follow-up video. Um, so I think the things that I wanna say is my biggest surprise in the conversation is how much, uh, we didn't spend time talking about money, but when you learn how your psychology around money is, which I think you did a great job of guiding us and giving us a lot of insight into. You can learn how to, how the conversations can go and be smooth and not be a constant battle to talk about money. And we've had several money conversations since then and they've been very positive. So that was a great win and a big surprise. My greatest takeaways are, first of all, that I Didn't do the CSP correctly. So we've redone it since then and gotten it right. But still, it was amazing that we spend a lot of money that we don't need to spend and how much we need to focus on savings, not only for an emergency fund, but investing in for retirement. So we're doing that and we're changing things to make that happen. We decided to redo our conscious spending plan and put limits to areas of our budget and eliminate some areas that we had been spending in before. So we can then put money into savings and into retirement.

Hi, Ramit. This is Michael. The biggest surprise I had from the conversation was how much time— not time, really, but money was just spent that, oh, we got a little bit of money, we'll go buy this. And yes, that was me a lot of times. I did not have any concept of where we were financially. Didn't realize what scenarios it was in. So for me, it was learning to have the conversation. By far, my biggest takeaway was actually having conversations that we could talk and discuss money and not have it be a one-way negative conversation. Some changes is controlling spending, talking with Tanya, making a plan. If we want to get something, putting it in a budget saying, all right, I want to get this. It's going to cost this amount of money and we need to plan for it. We did do a revised conscious spending plan and that made a huge difference as far as numbers. And we are putting a budget in the app saying this is a limit on each category and having it say, hey, you're close to your limit. You can't spend anything else in that category for the rest of the month.

Thank you.

Hey, Ramit and team, it's Tanya and Michael, and we wanted to give you the update. So we have put our Walk Up Money budget into effect. Um, we have done some really good adjusting of it. Um, we were able to pay all of our bills this month without dipping into any sort of savings. So we're starting to build that emergency fund. I also was able to increase my, um, retirement by 1%. So that's, I'm gonna keep doing that every 6 months. Um, we have opened some retirement, a separate retirement account that we're going to see about starting to fund next month. We'll see how that goes. We have sold some stuff that's been sitting around the house that we don't need. Um, so I think that we've been doing a good job of trying to implement everything that Ramit has asked us to do. Um, I think there are some things that we're still working on trying to figure out how to balance, but our new budget has been extremely helpful. And we do have our regular meetings, um, and we enjoy those meetings. Uh, it's gotten to where we talk about finances, what we're doing and when we're doing it and why, and we're starting to plan out the future. So now I'll let you— Michael give you his opinion.

I agree. We actually just did our financial meeting. We went over bills and how things went and then compared it to our budget we put in and how we were doing on that budget. And it was fun, actually. I enjoyed doing it with her, so It was good. We were both involved.

Well, thank you very much.

Bye.

See ya.

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