“$350k in debt & no savings. Do I have to work until we die?”

How do you handle your finances in a relationship? How do they change when you combine them as a couple? I get this question all the time. Couples show up, the money is separate. Someone's got one account over here. They're not sure exactly how to combine their money. This month on November 21st, I'm hosting a live call. It's called Single versus Couple Finances. What stays the same and what changes? And you can only get access to this call if you're in my money coaching program. Every month I host a 90 minute group coaching call just for money coaching members. In these calls, I go deep on specific tactics, big wins and hidden psychology around taking control of your money. And of course, I do Q and A. So the only way to get your question answered is in these money coaching calls. To attend this live call, single versus couples finances. Join money coaching@iwt.com moneycoaching and I got to tell you, I love this program. I love being able to work with you every single month and keep you focused for at least 90 minutes a month on living your rich life. Iwt.com moneycoaching and I will see you on Thursday, November 21st.

30 years of barely nose above water. We can't imagine a rich life.

We've always been either living like paycheck to paycheck or actually on assistance to.

Donna's 50, Tana is 48. And they have struggled to make ends meet for their entire adult lives.

We've always had hustle side hustle and second side hustle.

I have always stressed about money. We're kind of always waiting for the other shoe to drop.

They have a lot of debt they never really saved. They never actually thought they'd be able to retire.

We just never thought we were actually gonna be able to retire.

Don and I had both sort of just given up. Just like assumed we were gonna work until we were dead.

Their income increased significantly and for the first time ever, they are starting to wonder how to handle the extra money.

I make more a month now than I made in entire years.

We're not used to this. We don't. This isn't our world. We don't know what to do.

Can Don and Tana set aside their scarcity mindset and make an actual plan for the money?

It was really hard for me to accept being paid what I'm worth.

We need a plan.

Let's see what we have here. Their assets are $200,000. Investments $11,000. Okay. Quite low for that age. Debt is 387,000. That debt includes $51,000 of credit card debt. 145,000 for the mortgage, 168,000 for student loans. That's at age 50. And a $10,000 personal loan, plus $12,000 for a lease. That's a lot of debt. Okay. Income is 21,500 per month. That's a lot. I think that's recent. That's $258,000 a year rent. Housing costs are quite low. Debt payments are $5,895 a month. Wow. They have a lot of margin to play with with this income. And they've chosen to put it towards debt. Makes sense. Investments at zero. And they have $0 in savings.

Okay.

Of course, their guilt free spending is working 20%.

$2,792.

This CSP tells me a lot. It tells me that one of them recently started making a lot of money. That part is good. The part that is problematic is how little they have for investments and how much debt they have. The great news is that if they can keep their expenses low, they can certainly shovel money towards that debt as they're doing. That's great. I think the more psychological problem here is this need to constantly work and being more worried now that they're making money than before when they weren't. That's quite interesting.

All right.

Sometimes when you can actually see a light at the end of the tunnel, you actually feel worse than when you were completely in the dark. We're going to talk about that today. I'm very eager to talk to them.

We've always been either living like paycheck to paycheck or actually on assistance. And all of a sudden we made a huge leap. We're not used to this. We don't, this isn't our world. We don't know what to do.

We've always had hustle side hustle, and second side hustle. Just the other day I was out and I was like, oh, I could probably do Uber eats and pick up a few extra bucks. And I'm like, wait, why? Why am I thinking that way? But that's just how we're, we're, we're so wired at this point.

Can we go to the moment where your financial lives changed? I suspect this happened pretty recently. Don, can you walk me through it?

We've always done consulting on the side, just trying to pick up a few extra bucks. And during COVID someone approached me and said, hey, I'm starting this new business. Would you mind, you know, taking a look? So I signed a small contract to Do a look at the end of it, they offered me the CEO role. And so I did that for a little over a year. Company had great success. So much so the investors flipped it and I lost my job. But a contact there remembered me. And so that opened a door for a consulting opportunity that with one client, and then I've added other clients since then.

How much did you make as CEO?

I never made above $35,000 a year until that job. When I left there, I think I was at 120.

Wow.

So you basically quadrupled, almost quadrupled your salary. How much did you both make as a household for most of your career?

We actually had some years where we were under 20,000, and then the. And then we got up to like 70 for a few years. So we were in and out of assistance.

And as of today, how much household income do you make?

Like 2:45, 2:50.

Wow.

So five to 10 times more than you used to make.

I make more a month now than I made in entire years.

Wow. Yes, that's true.

Well, first of all, amazing job. That's incredible. How do you feel about that, Don?

It's a mixed bag, right? Because first of all, it was really hard for me to accept being paid what I'm worth. Tana has been my biggest champion. Get paid what you're worth. But there's a part of me that has some bitterness because I spent so much of my life doing activism and justice work. And so now when I stop doing that, now all of a sudden I'm benefiting. So it kind of feels a little backwards to me. And there's quite a bit of psychology there that I need to work through.

It's not often I get to talk to a couple who has 5x to 10x their previous income, especially at the age of 48 and 50. It's quite extraordinary. What has changed?

I have some, like, survivor's guilt because, you know, I started a nonprofit that worked with homeless and food insecurity folks. And so we're now the people I would approach, hoping they might consider to care for folks in our community. I never imagined in my life that, you know, having money would actually be nearly as complicated mentally, psychologically, for me as it is when you're in nonprofits. When you're in justice work, there's. There's a sense of, like, it's a call, and therefore, you shouldn't be in it for the money and, you know, make all the sacrifices, you know, and so to then all of a sudden, everything change and it's, that's been, it's been really hard. It's also been really great. We actually went out to dinner tonight before the show and the person said, are you here for, you know, a special occasion? We're like, no, just dinner. And I looked at Tana, I was like, what a fun thing to be able to say. No, we're, we're actually just here to eat. It's a Monday night and we're eating.

I love that you have the appreciation for that. You know, to be able to go out to a restaurant, so many of us take it for granted. And to be able to step back and say, oh, that's not normal. Tana, how has it felt for your household income to increase like this?

I have always stressed about money. It's a huge relief to no longer have to worry about paying our basic bills. To no longer have to worry about our. Do we have enough money in our checking account before the next paycheck comes so that we don't overdraw? So I think that's the biggest change is that sense of, sense of relief. There, there's been some, some anxiety along with it because I think Don and I had both sort of just given up and, and just like assumed we were going to work until we were dead.

Did you make jokes to people like we're going to work till the day we die?

Oh, sure, yeah, I'm a 50 year old guy.

Of course I made that joke.

Like that's, that's a very common joke among people who don't have money or, and, or people who have a lot of student debt. They frequently make that and it's not really a joke, it's a half joke. They do it with a bit of a laugh, but also they kind of believe it and they say it enough times and it starts to become a self fulfilling prophecy. And just to see if that's true. Tana, after your household income has increased by 5, 10x, has your money stress vanished?

I wouldn't say it's completely vanished. It's changed, it's gotten better. That's good. So the stress now is more so about not screwing it up. We've had a lot of stuff happen to us throughout the years and so we're kind of always waiting for the other shoe to drop. And so it took several months for me to kind of get past that, that this, like, like, oh, this is just a flash in the pan. And so I'm feeling that a little bit less now. But now the stress is like, oh man, we Actually be able to retire. So how do we not screw that up?

Would you say you love money or hate money?

It's straddling that fence, right? Because it's a mystery in some ways. And because, you know, I don't know what to do with it.

Tana, what about you? Love money or hate money?

I definitely feel like I have a love hate relationship with money. Uh, just because it's been so difficult to come by for most of our lives. And then I love when I can make life easier because of money. Uh, that's. That's a big thing. That would always frustrate me. In the past, it'd be like, oh, we broke our whisk. We can't afford to buy a new one.

A whisk? Like for pancakes?

Yeah. So it's like, well, I guess I'm using a fork now, you know? And now. Now it's like, oh, I broke the whisk. Let's go buy a new whisk.

One of the first things we bought was we replaced our measuring cups.

That's exactly right. Cause you couldn't read them. You couldn't read the numbers anymore in our old ones.

Amazing. I appreciate that.

Here we have a couple who truly struggled for many, many years. And then suddenly their financial life changed. How do you grapple with those changes? Remember that money is not simply numbers in your bank account. Money is a core part of your identity. It's where you live, it's what you eat. It's what you can do. Try to imagine how you would handle going from being on public assistance to Suddenly in your 50s, earning hundreds of thousands of dollars a year. Would you know how to handle the money? Imagine the money is like driving a fast car. Sure, if you've gotten your driver's license and you've practiced on slower cars, you might feel confident driving this fast car. But what if you've never driven this fast ever, and suddenly your only car is a supercar? Would you know what to do or how to think? Or even how to feel? I think it's quietly beautiful that the first thing they bought was measuring cups. See, if you've struggled for this long, you can probably relate. The first thing you'd buy is probably not some luxury vacation. It's something simple like the expensive bread at a grocery store. I gotta tell you, I love hearing my guest stories.

What do you remember your parents or your family saying about money when you were young?

I got the money doesn't grow on trees, you know. But other than that, there weren't a Lot of conversations about money. My parents were both self employed, so the income went up and down, and I could tell where we were at based on what we were eating for dinner. When things were good, there'd be the occasional like, oh, we're having filet mignon tonight, you know, and where things were not great, it was meatloaf and, you know, spaghetti meatball calls.

Okay. Who did you see dealing with money in your family?

My mother.

Mom? Okay.

Yeah.

What about dad?

My mom did the bookkeeping for his business in addition to the bookkeeping for her business. And so then she did all the budgeting. So any money negotiations went through. Mom.

Don, can we go back to your childhood? I'm curious.

Sure.

What do you remember about your family or parents, what they said about money when you were a kid?

I grew up in a really poor, abusive household. It was like if you finished the last of something in the cereal box, like you finished the last little bit of cereal, you got in trouble. Everything was scarcity to the nth degree. If I wanted to buy something, then I was going to have to go out and make money and buy it myself, which I started doing at 14. At 14, I found some pottery place that let me fold boxes for a nickel a box. And I would fold it and then I would buy all the kids all the Swedish fish they wanted at the. At the swimming pool.

Why'd you do that?

I think it's probably because at my house there wasn't anything and there was no generosity. You know, I think some people, the response goes one direction, and for me it went the other, which was, then I'm going to give everything away. Which, Tana can tell you, is an unfortunate theme of our life that relate.

To the activism, to the nonprofit world, et cetera.

Yeah, yeah. Yep, yep.

Do you ever have a discussion that Tana said something like, you are so busy giving to everyone else that you don't focus on this family?

Yes. Not necessarily in those words. I received it as I'm making choices to give things away or care for someone, and our nose are barely above water, and why would we do that? And I want to be very clear all reasonable questions to ask me 100%.

Did you have any values in your relationship? Looking back from the beginning, I think.

One of the big values was that we always had people in our home. We were kind of a hub for young people, college age students that were displaced from families. So we would host big Easter meals and have everyone over, which then led us to feeding them. And we didn't have Any money to feed them.

How did you pay for that?

Credit cards.

Credit cards.

Tana, what about you? What values did you have in the relationship from the beginning?

We both value social justice. We both value giving back. My jobs have almost all been in non profits as well. I just earned more than Don did. And we. We definitely value creating a community. I think you and I just also have a sense of responsibility to the world, of wanting to leave it a better place than it was when we entered it.

After hearing about your values, a lot of which I love, like, I. I understand community. That's how my family was raised. But it strikes me, and I'm wondering, do either of you have trouble saying no?

No. Yes. Yes.

Yes, I do. And Don?

It depends on the circumstance. If it's. If it's. Someone is in need, then I. I really struggle saying no.

You know why I asked that question? No, Tana, No. Hosting community, paying for it when you didn't have the money. At some points, feeling obligated, real or perceived difficulty saying no is the undercurrent of all those things. Do you see that? Where else did the inability to say no show up specifically in your financial life?

I've mostly been the one who's done the finances. We didn't have a lot of money conversations. At some point during our marriage, we kind of just stopped having them. But Don would be like, well, I need this. Can we afford it? And I. Even though I'm like, well, not. No, not really, I would still, you know, be like, yeah, okay, not for everything, but.

And what was your magical phrase that you said? How would you say it to him?

I don't know how I would say. I guess like, yeah, you can get that. Or I don't know.

I think it was stuff around. It'd be. It's gonna be hard, but we can. We can figure it out.

Figure it out. Thank you very much. I was looking for the F word. It never fails. We'll figure it out. That's code for, I have no idea how to do this, but I don't want to say no. We'll figure it out.

Yeah.

So, Tana, how many times you think that happened?

Oh, a lot.

Lot, right? Dozens, Hundreds, et cetera.

Probably hundreds. Yeah.

It's pretty interesting that a deeply held worldview, like, I struggle to say no can come up in 10,000 different permutations in our life. And we can chase after him and try to play whack a mole, but it's this. It's here and it's here, and we have to change this. We have to acknowledge what we believe, but to trace it back to why. And then we have to decide if we want to change it. We could change a lot. We can't change everything. We could change a lot, but we have to have a reason to change it.

I think I know where that comes from. For me, for a long, long part of my life, very low self esteem and being like a people pleaser. And so I felt like, I always felt like I had to prove my worth. And so giving to people, saying yes to Don when he wanted things. I always felt like I had to be giving more than I was receiving in order to feel okay about it.

Because if you're taking more than you're giving, you are what, in my mind.

Holding myself too highly.

Right.

And I, I don't deserve to be up here. Yeah, right. So to prove my worth, I need to give more. I need to be adding value all the time.

Yes.

And Don, similar dynamic exists for you, right?

Yeah, a hundred percent. I had the advantage of my job was giving and caring and, you know, helping people. But the number of times that we, we said yes to things that we didn't have any business saying yes to, but we just trusted it would work out. And you know, the hard part, Ramit, is it worked out because now we're earning. And that lie plays in my head of like, you know, see, it did work out.

I love that Don and Tana are service minded, but their relationship to giving reveals something pretty interesting. Generosity to others can be a good thing, but taken too far, it can become very harmful. In Don's case, he's generous, but he's gone into debt to help other people. He and Tana struggle to say no, and that shows up in lots of places in their lives. When they had little money, they were generous and they went into debt to help others. If they continue that same behavior of giving, but now they make hundreds of thousands of dollars, how long do you think the money will last? This is why I love the phrase money changes you. Most people say it with a sneer, but money should change you. It's made me more adventurous, more spontaneous, more generous. In their cases, money should change them. And one of the things it should help them do is to set boundaries so they can prioritize their own rich life. Real quick, if you enjoy these videos, you want to be the first to know when we drop a new one, make sure you hit that subscribe button now. It helps me and it helps my team grow.

Did it work out, you two are earning a high income. I agree. But your financial status still pretty tumultuous and problematic, right?

A hundred percent.

Yeah. The. The Washington Post came out with this thing like, are you rich?

What? They didn't contact me for that. Washington Post, literally. Who are you going to call if the headline has the word rich and there's only one person to call? I didn't get a call. All right, go on.

So it's a. It's a thing where you fill out your net worth and your income, and it tells you how you compare to other Americans. And we are literally in the bottom percent for net worth and then, like, top 6% for anything.

Yeah, your income is quite high and your net worth is quite low. My take from that Don and Tana is it hasn't worked out.

Agreed.

You've gotten very lucky in many different ways, and you have a chance to change your trajectory, but you have to make several intentional changes.

Yes.

I'm not just talking about where money goes. We'll talk about that, too.

But it's this.

Who are we if we have money? What changes do we need to make in the way we approach the world, the way we approach each other, the way we approach our money? It's basically in a way like, you won the lottery. You all heard stories about lottery winners, and they all, you know, a lot of them go broke. Why? Because money alone isn't going to change a lot, but changing money and your approach to the world will, Right?

Yeah. All right.

What do you say we take a look at the numbers? Don, can you read off the word in bold and then the number in full next to it?

Assets, $202,824. Investments, $11,043. Savings, 0 debt, $387,990. Total net worth, negative $174,123.

It's scary to hear those actual numbers read out loud, right?

Yes.

I think one of the things a lot of people don't get about money, about fitness, about relationships, about these big things in life, is when things are not going well, we don't want to talk about them or think about them. That's why I have a lot of compassion for people who are in a bad financial state and they ignore it.

It's because you have to have a.

Real pressing reason to want to engage with. Negative $174,000 at the age of 48 and 50.

Yeah.

I want to break down your assets for a second. $202,000. Is that a house?

Yeah.

Yes.

Okay.

And your debt. Let's work through this for a second. So we have $145,000 mortgage, we have $168,000 of student loans, $51,000 of credit card debt, $12,000 lease, and $10,000 personal loan.

Yes.

Okay, have to ask a few questions. $51,000 of credit card debt, what's that for?

That has built up over time.

I think it came from like 30 years of barely keeping our nose above water and just $2,000 underwater one year, 3,000 under the next year, and we.

Went up like 20, 25,000 during the time of unemployment, just buying groceries and.

Because we had no safety net, paying medical bills.

When that happened afterwards, did you take any lessons away from that sort of.

I, I mean, I think yes, but it's the conflicting information you get online, right. Of like, do you pay off your high debt credit cards? And that's what we did when, with our first go round of getting good, getting healthy financially was we just put everything towards our debt, but that meant nothing to catch us when we both lost our job.