79. “We’re worth $700,000+ but my wife took away my credit card”

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I hate talking about money. I fucking hate it. Can't stand talking about money because it all it brings up for me is I'm going to be by myself. I'm going to be gone. I don't feel like I'm at the point that I can control what's going on with the spend. So I know it's such a hot hard button issue. So for me it's easier to here's the card. It's no longer an issue.

Done.

I feel like a parent when taking away a kid's iPad or something and locking it up. I would much prefer to just have open communication and be able to each have our own card and monitor it.

Kirsten, when are you going to stop worrying about money?

Never.

Meet Kirsten and John. They're both 34. They have two young children. I think you're going to find their story interesting. Kirsten is an engineer and as you will hear, she is very analytical with numbers. John, on the other hand, admits that he has bad habits with money. He overspends. He avoids talking about money. He even gives up his credit card occasionally because he admits he Cannot control himself. Now, some really interesting things happen in today's conversation. I want you to keep listening for the children's role in this conversation. And of course, you can actually watch this couple and see these fascinating quirks of body language by finding this episode on YouTube. Just search for Ramit Sethi and subscribe to my feed. Let's get started. I am Ramit Sethi, and this is the I Will Teach youh To Be Rich podcast. Okay, let's rewind to three months ago. Tell me exactly what happened.

Well, no, John was there. I can't remember how I found out that you had a balance on credit card. How did I find out, John, that you still had an outstanding balance on your credit card and you were making minimum payments?

I had gone in and I had paid our joint credit card completely off. And the comment came out from yourself that I wasn't supposed to pay the complete credit card off and instead I was only supposed to pay the. I think they call it a statement balance for whatever was spent on that credit card for that past month. And then from there it went into you wondering what I had left on my credit card. And it turns out I had not paid the entire credit card completely off because of an error on my part being out of town for eight weeks in a row.

How much was on your credit card, John?

Like 2,100 and change.

Okay, is that a lot? Is that a little. How does that stack up to your normal spending?

That's on the high end. Average, I would say.

It freaked me out because I've never not paid a credit card off in full. And so knowing how expensive the interest is, I was just freaking out.

Freak out means what?

Getting angry and being like, what are we doing? Like, we can't. We shouldn't be paying the bank. Well, the bank, Yeah, I guess the bank. We shouldn't be paying these credit card fees. Like, if you couldn't have paid it off, you should have told me. We can use a line of credit. There's interest rates. And I just go into a whole spiel like that about what's going on.

And does that work?

No, because this is probably the third or fourth time that this is.

Really?

Well, actually, no, I think we've only had. We've only taken the card away twice. But hold on.

Who took. What's the. Take the card away.

I've voluntarily rescinded my access to my card.

Is that like when a police voluntarily puts me behind bars? Is that like that?

No.

Okay, so who offered?

I did.

You said you could have my card.

I put it in there, are safe here. I don't feel like I'm at the point that I can control what's going on with the spend. So I know it's such a hot, hard button issue. So for me it's easier to. Here's the card. It's no longer an issue. Done.

And how does that strike you, Kirsten?

For me, it's. The primary problem is just the spending in general, whether it's on the card or not, who's spending? I don't feel aligned on our spending. So whether. Whether it's the timing of the spending, I guess it's mostly John's because I can control myself and I know where our finances are all the time because I do them. So for me, the hardest thing is figuring out what John is spending on, when he's spending it, and how our finances can actually support that. I feel like a parent when, like taking away a kid's iPad or something and locking it up. I would much prefer to just have open communication and be able to each have our own cards, then monitor it.

All right, so, Kirsten, your problem is John spending. That's. Is that accurate?

I would say yes.

Okay, let's just call it out. All right. If that's what you think the problem is, great. John, do you agree that your spending is the primary problem?

I would agree that my spending is a large proportion of the primary problem. I believe there's another factor to it as well where the response to attempting to right a wrong or to figure out what's going on, the response to that is like yelling, screaming, taking the card away type of effect, type of thing. So it's kind of a twofold of I'll spend something, and all of a sudden I find out there's 900 other things that are going on that weren't communicated. And I am now the one at fault for spending the money, and then I'm getting in trouble for spending the money.

The taking away of the credit card strikes me as a little weird. I also find it interesting when someone openly admits they have a problem, but they haven't really been able to make the step to find a solution so far. It's a little too early to say what's going on here, but these are the things that I'm paying attention to right now. Okay, what changed four years ago when you started having financial disagreements?

For me, it was that I couldn't pay the bills, that. So I saw that John spending was going over our bills and. And then I Had to. We had to start having more serious discussions about it. Okay.

And the first time that it happened, do you remember that moment?

I do. I actually wrote about it in my journal. That's how I know it was four years ago. I think John had probably paid his credit card bill because that's usually how I would find out, because John would pay his credit card bill from our joint account. And what I did this in that point was I said, like, what is on your credit card? Show me your statement. Because then I start to think, like, what. What can you be spending again? It was a similar balance, like around $2,000 is what I wrote in my journal. So what can you be spending $2,000 on on your personal credit card? Because that's not groceries, that's not any joint. So then I have to do. So then I did a deep dive and found all of what he was spending on, and most of it was predictable. But there were a few things that surprised me. Like, at that time, it was phone games. Like, you know when you pay $20 for credits or $30. So how much he was spending in a month on phone games was very surprising to me.

John, which game was it?

There's a bunch of different games that I'll find to kill time. I used to work on the road, like, 90% of my time, 95% of the time. So I was either. So you sit in your hotel room for 12, 16 hours a day, or you're working.

Okay.

And you gotta kill the time somehow. So I don't do drugs. I don't go out. I don't drink really that much. I play games on my cell phone.

Usually what I do is I dip into the credit line and put something onto our credit line and then pay the bill. And then our. By the time our next paychecks come, I can pay the credit line off and then keep going on from there. And by that time, the card is in the. Has been confiscated and the spending gets back under control, that I don't have to dip into the credit line again. Okay.

Must be pretty stressful to put money on a line of credit and then to hope that everything works out the next month. How do you feel it when that happens, Kirsten?

I. I mean, thankfully, I haven't had to worry that we're never going to recover again. But it definitely is stressful to me thinking that we're not. That it could get worse. Like, okay, this is. This is recoverable. But what about the next time? What if it's $4,000 next time? Or $6,000, and suddenly we're going to go more and more into debt. So I think I start to kind of get into that. Worst case scenario, then what if we can't buy food? And especially now that we have kids, it makes me even more stressed thinking about not being able to pay our bills with our regular salaries spin a little bit.

If this happens in that. Then that. That then we're homeless by the river.

Yes. Yeah, actually, I was just talking to a money coach about that, saying that they were. That. That's actually my biggest fear is that I will eventually be homeless someday. I will lose everything.

Let me see if I can paint a picture. Tell me if this sounds familiar. You'll be homeless out in the rain with just a bag and your kids, and you won't know what to do. Any of that sound familiar?

Yeah. Except in Canada it would be snow.

Okay, it's not funny, but that is okay. That is a little funny. You know, in America it's rain. In Canada it's snow. Okay, all right, fine. Worst case is a little different. It's geographically constrained. All right, so this happens, it sounds like multiple times over the course of years. Now, it's no surprise that John just goes, all right, take the credit card. Here you go. Because it seems like this has happened before.

Yeah.

All right. So is that card currently in purgatory right now?

Yeah.

All right. And how long is that going to go on for?

I currently have no repatriation date.

So it's just like, here you go. There's no discussion about when. Who decides when it comes out of the safe. That silence tells me it's Kirsten. Kirsten, is that you?

I guess so. I think maybe when I feel like we have enough savings again that I can afford to have surprise expenses, then I probably am like, okay, you can have it back again. So. Because I can't remember exactly how he got it back the last time, but I imagine it's once I start feeling comfortable that I. Because I kind of hide money in my personal savings accounts so that he doesn't know it's there.

What a surprise. Where'd you learn that from?

Just from the like, for risk tolerance. My personal risk tolerance of like. As he was surprising me with these expenses, I started to think that I needed to hide my savings.

You ever hear any phrases growing up about keeping a little bit of money aside?

Actually, no. And I think my parents might have most of their accounts separate, so I. I don't recall them ever talking about that.

Why do your parents have Their money separate?

Good question. I. I guess I'm not really sure. I haven't asked them before.

That's kind of interesting, right? What else did they do with money? What do you remember about growing up with money?

So I know they separated things like my dad paid the mortgage and my mom would pay the food and the utilities. They would. My mom was a real estate agent when we were young, so we would often kind of withhold spending until she sold a house. And then once she sold the house, we could spend because we had money so we could buy like things that we had been waiting on, like the new movie we wanted to buy or go somewhere special. I would say overall they sounded fairly positive. I don't recall a lot of times where we felt like there was a lack or scarcity or a big worry other than like I said, there were times where she would say like we can't buy this until I sell a house. But otherwise I kind of recall being. Being pretty good. And then as I got older we did learn more. My mom worked for a bank for a while, so she taught us about money. She brought home computer games for us to play about, like putting stuff in an ATM and saving up. And then my dad as, even as I got even older started talking about. So to him his hundred dollars is like $10 to me. Talking about sort of the flow of money, the energy of money coming in and out and it wants to be spent and brought in. So we've sort of progressed from sort of the basic here's how you count coins and save to now money likes to flow and this is how it looks like to different people. Wow.

It sounds like they were pretty adept at teaching you about money in different age appropriate ways.

I think they did a really good job. I think there were obviously things that they could have maybe taught us a little bit more about that I would have been more interested in. But overall I think like investing, I didn't learn a lot about investing from them. My dad's more of a do it yourself investor. My mom I think maybe went more with like a financial planner advisor way, but that I would have liked to learn a little bit more about but from the basics of finance. I think they did a really great job teaching me about the ins and outs and the different like RSPs and TFSAs. They, they did amazing job too. I should, I should not neglect to mention that they did things for me like getting me, filing me tax returns from when I was really young to give me a lot of space in my rrsp. Like as soon as I started making any money, they filed a tax return for me. So they did a lot of stuff to set me up for success.

You have to notice how different people on this podcast have different relationships with money. But very often, regardless of what their relationship is, it traces back to their parents. In almost every case of someone who comes on here and is highly sophisticated with money, their parents taught them about saving and investing and credit from a very young age. If you have children, this is a huge clue. It also means that you need to understand money first before you go and teach your kids. In many cases where someone on this podcast is totally lost with money, their parents almost always did not talk to them about money. So what are the key takeaways for you? As I said, if you're thinking about how to raise kids, you've got to master the basics of money for yourself first and only then can you teach your kids about money. If you don't know how, join my money coaching program. The link is in the show notes. Second, we have to account for where you started and where you are now. Like if you were taught about compound interest from the age of five, that's fantastic. You had a huge leg up. Some people never learned anything about money except bad habits from watching their parents. The fact is, we all start from a different place. I think what matters is that by listening to these conversations, you realize no matter where you started from, you can radically change your financial life by taking control of your money. And I don't mean 10 years from now, I mean in six months. Now of course it can be difficult if one partner was exposed to money from a young age and the other was not. And that is exactly what's happening here. Real question for you, do you know how often you're supposed to see your primary care physician? How about the dentist? How about a dermatologist? A lot of us just wait to get a text from the dental hygienist to know it's time to make an appointment. But your health is important and we talk about going from defense to offense with your money. What about with your health? Why not make your life easier and book this year's appointments today with zocdoc. Zocdoc is a free app and website where you can search and compare high quality in network doctors and click to instantly book an appointment. They have over a hundred thousand doctors across every specialty from mental health, dental, primary care, and more. Just filter for the doctors based on your insurance, your location, even ratings and find a doctor who's a Good fit for your needs. Plus Zocdoc appointments happen fast, usually within 24 to 72 hours. Instantly. Click through your options, book the appointment and you are good to go. If I needed to find a new doctor today, this is what I would use. Stop putting off these doctor's appointments and go to Zocdoc.com ramit to find and instantly book a top rated doctor today. That's z O C doc.com Ramit Zoc zocdoc.com Ramit what comes to mind when I share these specific moments? Renewing your passport. Scheduling a dentist appointment Replacing that light bulb that's been out for six months and you're not sure what's the right bulb. We all procrastinate on weird stuff and taxes are usually right at the top of that list. We wait until the last second, then we get overwhelmed, we gotta pull all this paperwork and we're panicked cause the deadline is approaching. That's why I recommend Gilt. Now that tax season's over, this is actually the best time to get ahead. If you run a business or you filed for a tax extension, one small move right now could save you thousands later. Ghelt is not just another CPA firm. They helped one of my colleagues rethink his entire tax setup. Now he's saving more than he spends on tax prep. With Gelt you get a proactive yield year round strategy, not just a one time filing, credits, deductions, business structure. It's handled and their tech platform makes it easy to stay organized. You'll also get access to G's full tax library with guides on retirement plans, QBI and more. So if you've got a business or you filed for an extension, this is the window to take control of your tax plan. Head to joingelt.com ramit to book a consultation and as a member of my community you get to skip the wait list. Again. That's join gelt.com ramit join g e l t.com ramit taxes don't have to be a task with Gilt. They can be a tool to build wealth.

First time I really recall anything about money. With my parents' we have the Royal bank of Canada. Being in Canada, it's one of our major five banks or whatever. I've been with them for my entire life. I got myself a LEO account which is super young kid savings account and then that's pretty much the extent of how much money stuff I've got. My dad in the last year or two has talked a little bit about investing with me because he's just retired and he's looking into doing more personal direct investing type of stuff just because he's got time on his hands now. But other than that, my mom did accounting in the books and whatnot for various youth organizations that we were part of. And she's worked at various different medical clinics and stuff where she's run the books and stuff like that, but none of that was passed to me.

Got it, Got it.

Nothing.

Okay. And in your parents household, who managed the money?

Speaking for certain? I have no idea. I don't actually know. I have a hunch that it was my mom.

I know your parents may not have formally taught you certain lessons about money. Can you think of any lessons that you may have picked up informally from watching them or hearing them?

It's going to be funny that I say this, considering why we're talking to you. Or at least I think it's funny because I've got a weird sense of humor that way. But talking about big purchases that they make, I remember they've done that quite a bit and especially recently. My mom retired a couple years ago. My dad just retired this past summer. So they talked about retirement and the money outlook after retirement and kind of like, hey, can we afford to get an rv or can we go to Nevada or can we go. There's snowboard birds too, right? So we come south, it's warmer. That's about it.

So you find that that's funny because they talk about it but you don't. Is that what you mean?

Yeah. And the funny part is that my biggest takeaway from them is the fact that they talk about money and I don't.

Any, any of you have any surprises hearing this from your partner? Oh, Kirsten. Oh, no surprises.

No.

You both knew this. Everything's been out on the table about this before. You both know how you're both raised with money.

Yeah, we have talked about it. And I've even said to Kirsten before, like you asked her, having grown up the way she did, do you feel confident being able to teach our boys about money? And my answer is yes, I think Kirsten can teach her. Yes, I think Kirsten can teach me. And yes, I want to teach the boys the way that Kirsten learned as opposed to the way I learned.

Okay, so you had this conversation. Heated conversation. The credit card went away for a while. How long did was the credit card gone for?

Well, I think it's been increasing over time that it's been gone for. But at the beginning it was probably Only like a week or a shift of time when I was at home. So I was on the road for eight days and home for six. And those transition days are transition days. But.

So, John, you're not on the road anymore, but the spending issue seems to still be happening. Is that fair to say?

Yes.

Okay.

Why is it still happening?

Oh.

Best guess I've got for it is I've got slightly addicting personality.

All right, so the addictive personality thing is interesting. John, have you talked to a therapist about that?

Several times.

Okay. Still ongoing?

Oh, yeah.

I've been in therapy for like, seven years.

Great, great. Okay, good. I'm glad to hear that. Do you talk about money when. When you discuss the other issues?

We broach it, but it's not the key focus of the discussions.

That's what today is about for you?

Yeah.

Okay, cool.

Can I interject a bit?

Of course.

We also attend couples counseling or couples therapy, and we have talked about money there because of it being a pain point for me in the relationship. And so that was one of the reasons we created a budget, was that was a homework that our therapist gave us. And actually, in the end, although we didn't really finalize it and decide on it, what she wanted us to come back with as our homework was, what should each of us have as sort of a free spending money that we don't have to talk to each other about every month? And our numbers were, like, within $50 of what we decided. Yeah.

First of all, if that therapist is listening, great exercise, very good. And second, that's really cool that the two of you were pretty aligned. Did it feel good to discover that? Yeah, that's cool. Sometimes when you have this big cloud hanging over you like money, it just feels so foreboding and so heavy that even if you can find a little sliver of light, I take the win. I go, okay, at least we can hold on to that and we'll work our way out of the rest of it over time. It sounds like you found that little sliver of light. Great. So I'm curious, what happens if nothing changes? You've got little kids, you've been married 10 years, took this great trip. You know, there's a little overspending, but it's not just once, it's several times over the course of several years. What happens if nothing changes? Let's start with John.

Pretty much I can. I essentially can see myself getting, essentially, Kirsten's worst case scenario, but reversed. And so effectively it'll be I'm kicked out I'm on the street down by the river or whatever it was, in the snow with like a light jacket on because that's all I had the money left for and my boys don't want to see me at that point in time. My ex wife Kirsten wouldn't want to see me and I'd literally have nothing.

Do you ever think about that?

Practically every day. That's why I've been in therapy for seven years.

Really? Kirsten, did you know that.

I. I do know that John's. One of his biggest fears is that I will leave. Yeah. Okay. And that somehow I will come up with a way to take away the boys. Yeah, I do know that that's his biggest fear.

And would you say that on a scale of 1 to 10, how big is money as an issue between the two of you?

For me, I think maybe it's about a six right now.

John?

Based on the reactions that are given by Kirsten, I'd say it's probably like an 8 or 9.

Okay.

What's up with the misalignment? 6 versus 9 is a pretty big difference.

It just. To me, anyways, the response that's garnered from it.

Is.

Very strong. Like, it's. It's essentially like it, like you say, it's an entire class. Like, I hate talking about money. I hate it. Sorry. You swore earlier, so I assumed I could have.

Okay, you're welcome to.

Like, I, I honestly, I can't stand talking about money because.

It.

All it brings up for me is I'm going to be by myself. I'm going to be gone. And the way the response is that in my mind, using a line of credit for 10 days, who the fuck cares? That's what it's there for.

You ever said that to Kirsten?

I just did.

And we're misaligned on that. In my opinion, the line of credit is not to make up for issues with overspending when we don't have the money in our accounts. Like, for me, a line of credit is when you need to borrow because something really bad happened. Like, for me, we spend what we make. So we have a misalignment there.

Well, I'm misaligned with both of you because, like, why are you even talking about a line of credit? That's my question. Like, line of credits are not used for $2,000. It doesn't make any sense. It shouldn't even be in the conversation. That's like me saying I have a cockroach on my wall. Hold on, let me call the Pentagon and get a nuclear weapon ready to go. Like, it makes no sense. So we'll get to all of our misalignments. Trust me, we got them. But, John, back to you for a second. You hate talking about money. Do you ever bring up money on your own?

I think I have once or twice. And it comes back to the. I'm coming in thinking I'm doing the right thing talking about money, and then it just blowing up in my face. Kirsten talks about money almost constantly when.

She talks about it. What do you feel?

I just. I leave.

Like, physically?

Yeah, physically leave. I don't understand it for the most part, so. Because they're talking concepts in, like, the investing side of things and whatnot. And I'm like, I know fairly little about that.

And so your answer is leave? Well, do you like coming on this conversation? Actually, do you like this conversation right now?

It's. It's going a lot better than I thought it would.

What? What did you think would happen before?

So Kirsten said, hey, I. I signed up for the chance to get to talk with you, and my first thought is, okay, well, I'm gonna get shit on because I don't know anything about money.

That's kind of interesting, though, considering you actually did know about cash flow and lines of credit. So that's interesting that you don't think you know anything about money. You believe that?

I do.

Yeah.

You want to learn more about it?

I do, but I also don't want to get yelled at about it.

So tell me about that.

It's one of the reasons why I've been in therapy for seven years. So I have a big problem with trying stuff, trying anything without being an expert.

And is the belief that you want to jump from zero to being an expert and you hate that introductory phase where you don't know a lot.

That's the problem for me.

Yeah.

Is I can't get through that.

John mentions that he thinks about money all the time, that he worries about being alone by a river with his kids taken away from him. That goes pretty deep. And I have to say I'm glad that John has been seeing a therapist. You can tell that this is not just about money. Even though that's our focus today, it goes much deeper. For anyone listening, I'm always supportive of seeing a therapist for deeper issues like this. I know that some of us think better when we write our thoughts out, but for a lot of us, including me, I'm better when I can think out loud. If that's you, I recommend you check out Whisper Flow to save you tons of time to bring your ideas to to the page. Whisper Flow turns your voice into clean final draft writing inside whatever app you're already using, Email, Slack Docs, even text messages. And it works on Mac, Windows and iPhone. So instead of spending all of your time responding to messages, especially while sitting at a computer, you can hit a hotkey, speak and the text appears. It's accurate, it's fast, it's all formatted so you can get back to work. Here's what my friend said about it. Whisper is amazing because it learns the way you speak. So you can send this rambling note as a text message and it kills all the filler words and it perfectly formats it for you. They said it's much better than using the Apple voice to text feature. The spelling is way better. If you want to buy your time back and get back to what matters, check out Whisper Flow. Try it for free at whisperflow AI ramit that's whisperflow AI/ramit w I s p r flow AI/ramit or click the link in the description below. There's this myth that if you rent, it means you haven't made it. I don't really believe that I rent and I want you to know that you are not a failure if you choose to rent. In fact, I want more freedom right now than buying a 30 year mortgage. But if I'm spending thousands of dollars a month, I want to get some of the perks that homeowners get. And that is where BILT comes in. BILT is a loyalty program for renters. You pay your rent through BILT and you can earn points for it. Think about it. You're earning points for your biggest expense every single month and you can redeem those built points towards flights, hotels, Lyft rides or even future rent payments. BILT has evolved into a complete rewards ecosystem where you get rewarded for the first time as a renter. And it's easy. Almost any payment method is compatible so you can start earning right now. I wish I had had this when I first started living in New York. Plus, BILT recently announced that homeowners will be able to get rewarded the same way on their mortgage in 2026. So stay tuned. Join the loyalty program for renters@joinbuilt.com Ramit that's J-O-I N B I L T.com Ramit and make sure you use our URL so they know that we sent you. Kirsten, what do you think is the real issue here?

My I Think the real issue is that we don't do this together. So it's just me trying to figure it all out, and I. I don't feel like we're approaching it as a team.

Yeah, that's interesting. And you mentioned earlier that you feel like what to John, when it comes to money?

A parent.

Yeah, parent who takes away the credit card, who says, why did you do this? That kind of thing.

Yep, exactly.

There's so many other things that are going on, especially now for the past almost three years, there's at least been one fairly active now toddler running around. Now there's two. So that takes up, like I say, an exceptional amount of time. Like we get five minutes a day, if that. And most of the time what we do is we pass each other running from room to room or whatever. So we don't. There's so much going on that I. I haven't put the priority on money.

And what's the cost of that? Because candidly, it seems like you could honestly get by for a long time without really focusing on money. Like, take me, an outside observer. You don't talk about money. Okay. Once in a while, you overspend. Once in a while from that, it turns into an issue. You fight a little bit. The credit card gets taken away now, voluntarily given away, and a week or a month later it's kind of smoothed over and you go back to the way it was. You have kids, you have food, you have a roof. Isn't it possible you could basically go the rest of your life and just keep this up?

I'm okay with making the decisions, but now with so much going on in the household and raising children and stuff, I don't feel comfortable being the only one making all these financial decisions. Including, like John said, now we're talking about what do we want to do to prepare ourselves for retirement? How much do we want to put away for the kids, for school? How much do we want to be able to have for their extracurriculars? And so there's a lot of questions that need to be answered that I could do on my own, but I don't feel comfortable doing that.

Do you want his help?

Yes.

How do you think he takes it when you say that you want his help with money? What do you think's going through his head?

I think he probably is thinking that I just want to do 90% of it and get his 10% input.

I'm not so sure about that. Try it again. Try really putting yourself inside his head. All those things he Just told us about how he feels about money. And now he's hearing, just close your eyes and I'll. I'll share with you. He told you that he doesn't like talking about money.

He.

He told you that he doesn't understand a lot of the concepts about money. He voluntarily handed over his credit card after he admittedly overspent. And now he hears his wife, who's much more experienced with money, who's pointed out, oh, look at this number, and that number. And his wife says to him, I need your help. What's going through his head?

I'm not able to help you, or I'm not capable of helping you?

Yeah, yeah. John, is that accurate?

Very much so. I don't even know where to start.

So when she says, I want your help, what is your reaction to that?

Why would, like, I. What do I have to offer? Like, I literally have nothing that can help you other than I can throw. I can throw random numbers at you. Could be a random number generator for you, but that's about it. And you're an engineer. You know how to find those online. So.

Kirsten, are you hearing John's reaction? Does it connect with you?

Yes, it does. And I can understand where he's coming from for sure, that it would be very challenging. I can imagine someone who I view as sort of an expert on the topic asking me for my help and thinking, what? Yeah. What do I have to offer you?

Kirsten, when was the last time you told John, I don't know the answer to that.

I don't think I ever have.

John, why are you laughing? Why you got that big smile on your face?

She's an engineer, man. They never don't know the answer.

Any engineering jokes on this podcast always get aired. Always. That. That will never get cut. I can guarantee that. Anyone want to come on the show and make jokes about engineers?

You.

Come on. Oh, you could sail right past the line. All right, so, I mean. Okay, listen, Kirsten, I know it's a bit of a joke, because if he's not asking you questions, how are you going to say, I don't know? I get that. But sometimes it's actually really empowering to say, you know what? I'm actually not sure. John, can we look into that together? Because I actually don't know the answer to that, and I'd really love for us to figure it out together. John, how would that strike you if you heard that?

I would. Sounds corny, but I would definitely fall deeper in love just based on the fact I Literally do this every fucking day at work. My. My job is to not know the answer and figure it out. That's what my job is.

So you're saying that if Kirsten were to say that, that, that she doesn't know something, which of course nobody can know everything, if she were to admit that there's some part of finance she doesn't understand, that that would bond you two closer together, connect you two more.

Because then we can do something together and look it up and figure it out together.

Kirsten, are you hearing that?

Yes.

Okay, good. That's a big clue. That's good. That's great. I love that. Love the honesty. Thank you, John. Kirsten, I know she's filing that away. That's fantastic. Now, at the same time, John, I would like to ask you to close your eyes and to put yourself in Kirsten's shoes because she has some really valid points to make. Kirsten is saying we've been mostly aligned for years, but in the last four years, there have been problems with money. My husband has overspent not once, not twice, multiple times. And it only comes up when I bring it up and there's a fight. And now I feel like I'm the parent, I have to take away his credit card. It's not the kind of partnership I want. I need help. I need a partner in making some of these financial decisions. John, what do you think she's saying there and how does it strike you?

I think, I think all Those points are 100% valid. Like, how can she go through and run an entire household financially and by herself? Like, it's. She, she's attempting to wade through like waist deep snow uphill by herself?

Yeah. Does it reach you, does it connect with you when you hear her say something like that?

Yeah.

In what way?

It tells me I need to step in more to with what she needs help with. Like, I need to take it upon myself to try and whatever she's asking for, try and learn about and try and help as opposed to running away from it.

Kirsten, was that accurate the way I articulated what you've been feeling recently?

Yes, definitely.

I have to say that hearing both of you really be able to step into each other's shoes, that's a really hard skill. But you both did it. I could also hear the kids running around. I mean, let's call that out too.

It's real.

How old are the kids?

One's almost three at the end of the month here and the other one's going on 11 months.

Okay, so one in three years old. That's a handful. A lot of people, they have this idea that money should be this absolutely dialed in, perfect system. In fact, a lot of parents, I tell them, look, yes, have your savings goal, have your conscious spending plan, but if you have to ease off the gas for a couple of years while the kids are young, it's okay. You've got these young kids. They're proving our point right now for us by running around and making a bunch of noise. That's what young kids do. So my proposal is that we find a way for the two of you to connect on money, but also make it so that it doesn't feel so tense, especially in these early years where the kids are going to take way more of your time than they may take later on. How would that sound to everybody?

That would be phenomenal.

All right.

Yeah.

Kirsten. Okay.

All right.

All right. Do these kids know how long their parents waited to be on this podcast? Couldn't they stay quiet for two or three hours? Do they not understand logistics? Just kidding. Kids don't know anything. And I actually loved that they were running around making noise while we recorded this. You see, our lives are not lived in perfectly manicured offices with perfect lighting and this single, solitary cup of jasmine tea steaming on the desk. Real life is messy. This couple has kids running around. That's life. Our finances have to take place embedded in our messy lives. The truth is, there's never going to be a day when we have nothing to do and a perfectly clean house and. And peace and quiet. My takeaway is we might as well start making our money work for us today, mess and all. When I talk to new business owners, I hear a lot of the same motivations. I want to make extra money. I want more freedom. I want flexibility. But I will tell you something that I've never heard. I want to start a business so I can fill out a bunch of tax forms. That sounds like my hell. The good news is you don't need to be a tax expert to start your own business. Instead, you can use Gusto, this episode's sponsor. Gusto is online payroll and benefits software built for small businesses. It's all in one. It's remote, friendly, and it's incredibly easy to use, so you can pay, hire onboard, and support your team from anywhere. They offer automatic payroll tax filing, simple direct deposits and health benefits, workers comp 401k matches, you name it, they can help. Plus, it's quick and easy to switch to Gusto. Just transfer your existing data and get up and running fast with no hidden fees and no surprises. Try gusto today@gusto.com ramit and get three months free when you run your first payroll. That's three months of free payroll@gusto.com ramIt once more. Go gusto.com ramit when you start a business, it can feel like you are a one person army. You got to build the website, figure out taxes, write the copy, design the logo, make sure you're actually getting customers. Oh, and don't mess it up. Otherwise the IRS will come knocking. No, just because you're the founder doesn't mean you have to be doing everything yourself. That's why services like Doula are so valuable. Doula handles the back end of your business so you don't have to learn everything yourself. They'll form your llc, manage your bookkeeping, handle your taxes and sales tax and reseller certificates. They'll do all of that. They'll even help you get a US bank account if you need one. And if you don't know what you need yet, they offer free consultations to walk you through the whole process. Go to doula.com ramit that's doula.com ramit and use code ramit for 10% off LLC formation and bookkeeping. Or if you still have questions, just schedule a free consultation with their team. That's doula.com d o o l a.com ramit and don't forget to use code ramit for 10% off. Was the budget fun to make for me?

No.

Kirsten. Kirsten's like, I loved it. I fucking loved every category in there. No, I'm just kidding. Was it fun?

Kirsten, to be fair, I am an engineer, so I like looking at numbers as much as I can.

Okay. Okay. Actually you found some joy in it.

I. I didn't mind it.

You didn't mind it. Okay, that's good. I actually like if one person enjoys the mechanics of it. Oftentimes one person is a little bit more aligned with that. Kirsten, you said something earlier about I give the credit card back when I feel that we have enough saved up. What amount do you need to have saved up in order to feel safer?

I like to have about $10,000 in our like what I call my spendings savings. So my E savings account.

What's a spending savings account? What is that?

That's just our regular bank savings account, but it has a higher interest rate in that one. And I don't mind spending out of that account. It doesn't involve any like selling of investments or anything like that. It's just a cash. A little cash account that we have that I call spending savings.

Hold on a second. You may not mind spending out of that savings account, but I mind you spending out of that savings account. A savings account is not meant to be spent out of. It's meant. It's literally called a savings account. Let me ask you this. How often does money flow from that savings account into your checking account?

Monthly for the bills?

No, we got to change.

I'd argue it's on the side of weekly, if not even more frequently than that.

All right, well.

But okay. To be fair, though, I'm using it like a checking account, but because it earns more interest. It's a high interest savings account. So I like the extra dollar of interest I get by putting it.

Oh, you love that. Really surprise. That $1 of interest. Okay. And okay. And is that serving you at the macro level to be transferring money back and forth to. To not have a savings account that's consistently growing because you're constantly drawing from it?

Well, it used to be consistently growing, but not anymore. Yeah. Well, and then also, I guess. I guess it's not really that big of a difference, but I do like having the little bit of interest. The banks take so much from us.

Yes, they do. They take our souls, don't they?

And to be fair, you can pay bills out of that account. So, like, I. I do directly pay credit card bills right out of that savings account.

I have a question for you, Kirsten. You have an interesting approach to your accounts. I'll tell you my approach. Well, you know, I also wrote a book on it, so. Have you read that book?

I knew you were going to ask me because I watched your Instagram story about how people you interview haven't read it. I have not read it.

What a surprise. And, John, I'm not even going to bother asking you because I know you didn't read that book, did you? No. Yeah. All right, Kirsten, I assume you created the conscious spending plan. John, did you have any part of this?

I think I looked at it for, like, a couple minutes.

Kirsten, how many episodes of this podcast have you listened to? All of them.

Well, I was doing better before the baby was born, but I think I've probably listened to at least. Least a dozen, maybe two dozen.

And do you notice any patterns about the CSP and which partner creates it? What's that pattern?

You notice that the money person in the relationship does the work?

Yes. Even though I know my colleague Said both of you should create this conscious spending plan together. You got that message, didn't you?

Yes, we did. And I even knew you were going to call us out on this. But I wanted it done, so I did it.

Let me see if I have this right. Basically, nobody who comes on this show reads my book. Why would they? It's only that they have an existential crisis that warrants them applying to an international podcast, being screened, and sharing every single financial number in their lives in front of millions of people. Read a book on this stuff. No, thanks. Then we send specific instructions to do the CSP together. I think maybe 60% of people follow this advice. It's become a running joke on this podcast. Now, even more importantly than this running joke, I want you to notice the convoluted system that Kirsten came up with to maximize interest for what, an extra $5 a month? You know how many questions I get about this every single week, Ramit? Should I switch savings accounts? That other bank is paying 0.25% more when they actually stop spinning and stop trying to optimize everything in their life and, and they run the numbers, they discover we're talking about like a $2 per month difference. Don't ever write me an email like this. And more importantly, stop focusing on $3 questions. Start focusing on $30,000 ones. Can I just say this is one of the weirdest conscious spending plans I've ever seen. Why did you edit my template, Kirsten? Why are you messing with my template?

Because it didn't fit our life, so I made it fit my life.

Sometimes I just want to tell people, if your financial situation doesn't fit my template, then you need to change your situation to fit my system. I know that's wrong. Don't say it, Ramit. You shouldn't say that. But sometimes it's also right, because sometimes people overcomplicate shit way too much, as has happened in this conscious spending plan where I'm sitting here looking at it and I'm like, I invented this shit and I can't even figure out what's going on in this document. So I'm sitting here calculating stuff on my own. I'm like, did the money flow? What happened? So I'm glad to be able to talk to the co inventor of this adapted csp, Kirsten. John, tell me when you get that document open.

It's open. And it also doesn't surprise me that she edited it.

I purposely put formulas in all of these cells so people could see what I was doing.

Damn These formulas. Listen, I hate formulas. John, when was the last time you analyzed an Excel formula?

Financially? Never.

Exactly. Thank you. All right, Kirsten, the point of this is not to over engineer the template. What's the point of this conscious spending plan, which, you know, you both got an F on it because you didn't even do it, but what is the point of this fucking thing?

To make your finances simple.

Yes.

Together.

See, my hands together.

But. Okay, But I knew you might ask more detailed questions, which is why I put formulas in. Because now if John clicks on the gross monthly income, he will see that we can actually see our salaries in there and everything.

That's really cool. That's amazing. And when do you think that he's going to click that cell? He's not going to click any. Sell any stupid spreadsheet. I don't even want to click a cell.

I know, and I've heard this in your podcast before, that there's the spreadsheet lever and the non spreadsheet lever. And I know I fell into the.

Trap, but it's not even a trap. I tell people openly. Just fill up the template. Literally, just fill it. I made it for you. All right, so, John, I would like for you to walk us through the conscious spending plan. Let's start on that current money tab. And just read me off what you see and take a second to let it register. I'd like to get your reaction to each of these numbers. Let's start with that. GROSS Monthly income.

18,000. Almost $18,300 roughly.

Okay, your reaction?

Monthly income. That to me, I think that's quite a bit of change.

Yeah, that's a lot. All right, net is 11. Whatever. Let's go to net worth. Okay, what do you see?

So assets are $245,000.

Great. Investments.

Just shy of $450,000. I know I'm making a big jump.

There, but your reaction?

That's not quite as high as I thought it was, considering how much money I thought we were putting away. But also a part of me has a thought that it might have something to do with this market right now, which I don't know anything about other than people tell me it's going down.

All right. All right, fine.

Your savings, $10,000, which seems like a ridiculously round number for savings.

All right, Your debt is zero. So what's your total net worth?

Just over $700,000.

All right, nice work. So $700,000. You're in your 30s. Great. All right, Kirsten, how do you feel about those Numbers. Now you put them in here. I want to take a second to check in with you.

I feel good. The investments line hurt me a little bit because like John said, the markets are down right now. So that definitely was higher a year ago. But I think we're on a good track. I do have sort of a idea of a future net worth goal that I would like to hit, and I think we can hit it, hopefully.

What is it?

Well, my original goal was 3 million, but talking to a financial planner, I think, I think we might be able to hit 5 million by the time you retire.

And what does that mean to you?

For me, it means that we can have a comfortable retirement, do some fun stuff while we're there, and pass on some generational wealth, which is important to me.

All right, Kirsten, when are you going to stop worrying about money?

Never.

That's the honest answer.

All right.

More of my podcast guest needs to listen to you.

They.

They go, well, I think it's when I have 1.25 million plus this much in equity and this much. All jokes aside, do you want to stop worrying about money?

I would like to. I. I still think I will spiral into that fear of homelessness unless I really work on my mindset. But I always keep going into, what if one of us loses our job? What if we become disabled? What if something bad happens? What if our house burns down? What if I just go down that road? But I would like to be able to.

Do you like playing defense?

I was stuck playing defense a lot when I played soccer.

Do you like playing defense in your life?

No, I don't. Maybe just feeling. Maybe just feeling alive because I have like all this stress and things to worry about, so I feel stuff. It's more exciting. Yeah, drama.

It's true. Some people watch Netflix, some people worry about stuff. What other parts of life do you worry in?

Most parts? I would say my relationships, my parenting, my personal development.

Everywhere, we become addicted to playing defense, to wondering what can go wrong. Now, you might see this in certain professions like lawyers. They are paid to worry about what can go wrong. But I think we also see it in our personal lives as well. Take a lot of parents. A lot of them are always worrying, worrying what can go wrong. If you ask them for just one day, you're not allowed to mention a single thing that you are worried about. When it comes to your kids, would they know what to say? Think about other parts of your life where you may have become addicted to playing defense, addicted to wondering what can go wrong. How Powerful would it be for just one day to flip that and say, what if I only talk about all the things that could go right? Can I just point something out? So I don't mind that you were busy. Everybody gets busy. I'm not here to beat you up about it, all right? At least I got the numbers.

Really.

I'm here to help you. But I, I do want to potentially shine a light on something that the two of you have really internalized this idea that we are so busy we don't have time to manage our money. Okay, you are busy. You've got two young kids. Nobody can tell you that you're not busy. I accept it. But I also want to say that by not prioritizing time for your money that you end up getting into a rhythm where one person, in this case you, Kirsten, take over and John, you're spending without knowing how it's affecting your finances. And then it turns into a blow up. And finally, I just want to point out that I see a lot of zeros in your conscious spending plan. A lot. Okay. Is it possible for you to buy some of your time back?

I'm sitting here listening to my boys run around upstairs with their babysitter thinking why can't we buy some of our time back with a babysitter for an hour or two a month or every two weeks or whatever it comes down to. I don't, I don't see how 20 bucks or 30 bucks or I don't even know how much gets paid. That's how. That's how little I do.

Well, you're about to know in a second. Trust me. I see Kirsten's eyes. That gleam, that vindictive gleam. I know that look very well, Kirsten, because I have it deep in my eyes as well. You're about to know quickly. But Kirsten, do you think that it'd be possible for you to buy your time back? It sounds like John's on board.

Yes, it is. 100 possible. It's something I've been working on for probably one to two years. My issue, I find.

How could you be working on it.

For two years every time? This is my issue with. This is the mental load of buying the time back. So I'm the one who books the babysitters. I'm the one who. I book a house cleaner and then they show up once and never again. So I have to find another one.

So let's fix it.

I do the next thing. So anyways, I like buying my time back, but it's Work to buy my time back.

I, I, first of all, I hear that there's a lot of emotional labor done. John, I hope you're hearing this because it's not as simple as like, hey, let's throw some money in the air and then our problems disappear. That takes work. Kirsten, you shouldn't have to do this alone. All right, so we're going to figure out a way that if the two of you can do something to get an hour a month for the two of you to just connect on anything, that would be amazing. Okay? And if you can get an extra hour for you to, for the two of you to talk about money and end that meeting with a smile.

Wow.

How far do you think that that would go in helping with the financial part of your relationship?

I think that would actually end up helping not only on the financial side, but on all aspects.

Yeah, I don't think it would take much. Like you said, an hour, a month, maybe or two.

Guys, this is a no brainer. If you have the money and it's important to you to afford buying back your time, do it, especially with young kids. I'm not trying to tell you that everybody should adopt my money values. Yes, one of my money dials is convenience, but that's not the point. You don't need to have the same money dials as I do. My point is, look at Kirsten and John. They cannot connect on money. They have children, their time is short. They already have a babysitter and they can more than afford to hire this babysitter for an extra hour or so. Why not use that extra money to get back their time? I think the answer is they just haven't thought about it. The answer is that they are more focused. At least Kirsten is on fire on retirement on this goal 20 years from now than to actually make living a rich life today a priority. But think about it. Think of all the difference that even one or two hours a week could do for them. Maybe they could use it to reconnect about money. Maybe they could just go sit somewhere in silence and have dinner. That might be pure bliss for these parents. In short, why not use money to help you live a rich life? That's what it's for.

For me, it would mean having really positive conversations and discussions around money, getting excited when I see the numbers. And I think part of that too is the planning and the vision of what we're doing with our money and where we're going with it. And that rich life vision that you talk about.

Okay. Love it, love it, love it. Great. John, hearing this, how do you feel just hearing Kirsten describe feeling more alive with money?

It's exciting. There's. It's a side that doesn't get shown.

Currently.

Because currently there's kind of the doldrums low everything's wrong type of mentality with it. But hearing the possibility on the other side of the coin or the other side of the fence is exciting. It's like, I hate feeling bad. I don't. I'm pretty sure everybody hates feeling bad. Unless you're one of those weird people that like feeling bad, but. Sorry, yeah, like why, why not get excited about it? Like if, if somebody has. It's like when you walk into a room and it's a bunch of people just standing, looking at their feet. How do you feel? Like shit. But if you walk in, everybody's partying, dancing and having fun, you collect that energy and you start partying, dancing and having fun.

What do you need to specifically do that I, as a anthropologist sitting there with a clipboard, would be able to observe you doing.

To actually join the conversation?

Thank you. How would you do that?

While we've talked about setting some time aside for a monthly or bi weekly meeting and facilitating that in some way of reaching out to our babysitter and actually setting it up and taking something off her plate so that she can feel the positive.

I like that. Can we just decide on that right now? Your babysitter's upstairs, right?

Yeah.

So after this conversation, you can go up and confirm with him or her.

Right?

All right, so let's just pick a time right now. John, you take the lead. How would you like to decide or facilitate you and Kirsten setting aside an hour every month to discuss money? Go ahead.

Well, actually, I have a slightly different proposal since I need some. Some lessons in basic money to start things off. If we go with maybe two hours a month for the first little bit until I'm up to speed, after this, I can go upstairs. We have revolving appointments for pretty much everything else in our life, so why not this? We have a family calendar. We'll figure time. We've already got an hour set aside on Sundays or not an hour, but we already have a discussion set aside on Sundays for how our week's gone. So why don't we put a section in there for say, I know we have date night Fridays, so why don't we throw one Friday a month as fun money Date Night night instead of. Because you've told me before, you would have had A lovely time looking at spreadsheets.

Yeah. I think I could agree to having one Friday a month where maybe, like you said, we have two hours and we spend one hour talking about finances, and then we can have one hour of time together doing something more fun.

All right, I like that. I'm gonna give you a round of applause for that. That was pretty cool. How'd you feel about that, Kirsten?

It felt really good to hear, having a plan.

Yeah, I like that. How about you, John? How'd that feel?

Proposing that the reaction on the other side is what counts.

Yeah, I think. I think that what I'm just seeing is the two of you are building a bond now with money going forward. And in the past, it hasn't been a top priority and it only comes up when something bad is going on. And I want to change that dynamic. The fact that you two are going to set up time once or twice a month, that's a huge win. Now it's going into the nuances. How do I want to feel about this conversation? Do I need to get everything out in this one hour? No, I. Honestly, all I want for the two of you is to talk about a couple things and end on a smile and a kiss, and I love you. That is a successful money conversation because you got the rest of your life to iron out the details.

I think we're on the same page that by overcomplicating this, we're not really adding any value to our lives. It's. And for John's feelings of, you know, not being competent in it, it's just complicating things and very good. Could feel more competent if we just left it simple.

There you go. Okay, great. Okay. Actually, that was a really fantastic. All right, round of applause for Kirsten. Absolutely crushed that answer. That was awesome.

Kirsten, I think this is a perfect topic for one of our discussions, which, by the way, Ramit, I've already scheduled for the first Friday of every month just so those following along. It's already been done. But, Kirsten, I think this is a perfect opportunity for us to learn more of, like, what we have. And then it gives us an opportunity. We can sit down and we can dream together.

That felt really good to watch. I want to offer a suggestion to John. John, because Kirsten has been carrying so much of the load for so long, I think if I were in your position when I come to that meeting, I would have done my homework. I would come having understood this conscious spending plan ahead of time. And if I had questions, I would ask Kirsten. I'm sure she would love to answer any questions you have. And I would come with my own plan. Look at that smile on Kirsten's face. She's trying to hold it in right now. Kirsten, if he came with a plan, even if it was 50% wrong, how would that feel?

Like I had a partner.

No shame, no guilt. Just two partners realigning. How you two talk about money together, how does it feel?

Exciting.

It's almost like you do this for a living.

Awesome.

You know, 10 years together, two kids saved hundreds of thousands of dollars. Income is quite high. Lot of great things here. A lot. I actually loved hearing the kids playing above. I loved it. That's real. You have kids running around, making noise. We have to deal with life. It doesn't exist in this perfect spreadsheet. So if we can use the spreadsheet to give ourselves a little bit of room, thank gosh. It makes it so much easier for us to be able to connect, to smile, to go out on a Friday night and just have fun. Kirsten and John's fixed costs were a Little High at 67%. I spent some time working with them on uncomplicating their financial accounts. I wanted them to stop using investment accounts as piggy banks. That's not the purpose. And mostly I wanted to help them realize that money can be something that brings them to together. Here's what they wrote me as a follow up message. Kirsten said, John created a live your rich life coloring book and we decorated it. As discussed, her biggest takeaways were moving money around between accounts for a 1.4% interest is taking a lot of time and adding stress for the $11.66 that we earn every month. It isn't inviting to John to ask him for help with financial decisions when he doesn't feel confident. Inviting John to help me answer questions I don't know the answer to is more effective. And she wrote, I need to make sure that my more aggressive plan to retire early at age 55 still allows for us to live our rich life now. Awesome. John writes, we should be aggressively saving for actual things as opposed to just moving money around, which is causing an unneeded amount of stress. And I want to bring a positive attitude into the conversation and add some fun to it, which can change the entire dynamic of our conversation. I think these are great takeaways. I want to thank Kirsten and John for coming on this podcast. I have a lot of confidence in them making the changes that we discussed. Thank you for listening. Thanks for listening to I Will Teach youh To Be Rich. I'm Ramit Sethi. Please follow the show on Apple, Spotify or wherever you listen to podcasts. If you haven't read I Will Teach youh To Be Rich my book. Pick up a copy. You can get it at any bookstore or any library and it will show you the specific tactics for how to build the I Will Teach youh to Be Rich system into your personal finances.