87. “We’re in $400,000 of debt, but we can’t say no to our kids”

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I lived in a very conflicting house. Money didn't grow on trees and also can't take it to the grave with you. So if you have it, you may as well spend it. I just thought I was going to be smarter than my mom, that I was going to do it better than her, that I had, you know, read the book or listened to the CD and that it was going to be different.

But you only have $50 in savings now.

Yeah, I'm a frivolous spender. I would just buy stuff. I'll break my back to buy my kids whatever they need because what does.

It mean to you?

Everything. It means that I'm providing for them. It means that I'm not gonna. I'm not gonna hit rock bottom. Like, I'm not gonna fail. I'm gonna do whatever I have to do. Like, how could you not grind so hard to get what you can for your kids? It's just like. It's just so annoying that we even allowed ourselves to get into this position.

Meet Kenna and Ryan. Kenna's 36.

Ryan is 45. They have two young daughters and recently Bought a house in the Denver area. Now they have an interesting money dynamic that recently flipped. Ryan used to work long hours while Kenna stayed home with the kids. Now, after getting her degree, Kenna is working, making about the same wage, and Ryan stays home. The problem is their numbers don't add up, and they have some serious money beliefs that are left over from their childhood. Today's episode is about money stories, and you're going to hear exactly what I mean. I'd like to encourage you to Watch this on YouTube where you can see the full episode, including their facial expressions and their reactions to some of my questions. And it's quite illuminating. I'm Ramit Sethi, and this is I Will Teach youh to Be Rich.

So who wants to go first and tell me the way that you view money in a sentence or two?

It's just a way for me to have fun while I'm living my life.

And I feel like I will never have enough for anything.

They seem kind of opposite, don't they?

Oh, yeah.

When did you discover that you had different views of money?

Very early on. Very early on. Like I said, she. Well, you were managing the finances prior to us even getting engaged, you know, because I'm a sloppy spender.

And what was the last time the two of you had a specific disagreement about money? Can you remember that?

I mean, all the time. Like Christmas time, she wants to have a budget, like 200 hard for each child. And I'm like, but what if I see something that I want to get them and we've already spent the 200, like, I should be able to go get that for them if I want, you know, Like, I'm more. I'm. I'm a spender. I'm a frivolous spender.

What does frivolous mean?

I would just buy stuff, like, just to buy it, you know, like whatever. Disc golf stuff. I already have everything I need for disc golf. Like, everything you could ever want. And I'll buy other stuff. And then it just sits around and I don't use it, but I have it, you know?

Okay. And like, with that Christmas example, 200 bucks per child. What ended up happening?

We went over the budget.

Ryan always wins. I have a hard time telling him no. And so I'll. I'll bet because he did work so hard for so long that I didn't feel that it was okay for me to say, you're working 60 plus hours a week, but, no, you can't spend $50 on disc golf or $50 on.

Christmas what was the budget for Christmas this year?

Well, I would say this last year, $200 per kid. And then Ryan and I didn't really get anything for each other just because we did overspend on the children.

Okay.

And so it was 200 bucks per kid. How many kids?

We have two kids.

Okay. And so 400 bucks was the budget. How much did you end up spending?

I would say close to 600.

Okay. Okay.

But that was, keep in mind, like, we had budgets for ourselves as well, you know, for me, for her, and for her for I. And we dipped into that and took away from our budget to make sure to make that extra for the kids.

How old are the kids?

7 and 4.

He used to work. I was a stay at home mom for six years. I've managed the finances ever since. We've combined finances when we got married and I.

Prior to getting married?

Yeah, even prior to getting married.

I've been out of the loop on the finances for a long time. I was just working, just making the money, and Kenna was handling everything.

Let's walk through that step by step. So you were both earning incomes back then, early on in your marriage. And how long were you married before you had your first?

Three years.

Three years.

Okay. And how much were you both making collectively in those first three years?

70,000, maybe.

All right, so you're making 70k. Seems like you could afford to go out and eat out and have fun. Fair enough.

Yeah.

Yeah.

Okay. So you got pregnant. When did you have a conversation, if at all that, Ooh, we might need to change the way that we manage our money.

I don't feel like we did.

Yeah, I don't feel like we did either. I feel like she just took the reins. It didn't need to be said. Like we had planned for one of us to stay home with a child, so we knew that was obviously gonna chop the one of our incomes right off the top. Okay. So we went with who was making more money at the time, and that was me. You know, simple. And she stayed home.

And. And that decision about one was going to stay home. Was that a financial decision or another.

Reason we didn't have children for other people to raise them?

Notice how quickly that response rolled off Ryan's tongue. Almost like he said it a million times before. File that clue away.

Okay, got it, Got it. All right, so you're at home at this point, Kenna, with your firstborn, and you're also managing the money. And when did you start to realize that you needed to tighten things up?

Immediately. So at the time, we lived in a different city, much lower cost of living, moved to a higher cost of living area when our daughter was almost one. And once we moved here, it was like, we're going paycheck to paycheck. Our house payment almost doubled. So, yeah, it was pretty about a year in.

Did you own or rent?

So when we lived in the low cost of living area, we were renting and then bought when we moved to high cost of living.

Okay, got it. And what was the reasoning behind the buying?

Because a mortgage was cheaper than rent.

Really?

Yeah.

Oh, yeah.

What. What's the general vicinity of where you're living?

Denver.

Denver. Okay, got it.

All right.

And still to this day, the cost. I mean, the cost of our mortgage is much cheaper than what we would rent our house for.

Really? Well, break it down for me, because I already have. Your mortgage here is $2,073 a month. What would you rent it for?

25, 26, 27. Hmm.

Okay. All right. Now, when I factor in utilities, it's 2073 plus $373.

Yeah.

So that's like 2400 right there. Yeah.

Do you see what just happened there? They made the biggest financial decision of their lives, and they doubled their expenses.

Why?

Because they believed it would be cheaper to buy rather than to rent. But in 10 seconds, I just ran some basic numbers with them. It happened so quickly, I don't even think they realized it. So let's just pause and go through those numbers again. For them to rent, it would cost about 2,500 bucks. Their mortgage is $2,073. So they still believe they're saving money even though they doubled their previous housing expenses. This is basically how most people think. They look at the sticker price and they go, well, it would cost more to rent, therefore, we are saving money. But once we factor in the utilities that they pay every month, their total housing costs, or TCO, total cost of ownership is $2,400. That's just $100 less than renting. Again, if you have a simple view of money, you go see, it's cheaper to own. But let's go deeper. What about all the phantom costs, including tax and interest on their loan? What about maintenance, including random light bulbs and a roof repair nine years from now? And even the value of their labor, if you factor in all those things, it is more expensive for them to own than to rent. But they don't know that. You have to remember this phrase. Rent is the maximum you will pay, and your mortgage is the minimum you will pay. Okay, the real clue here, besides even the housing, is that Cana and Ryan live their lives by telling themselves simple stories. Sometimes those stories might be true, other times they are obviously false. But without actually digging deeper into these simple stories, they will be unequipped to understand a very complex world.

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The weeks that we were sure we would get behind because we don't. We don't. We didn't at that time. We didn't have very much savings at all. And then on the weeks that we would get ahead, I. We would just spend all the money that we were ahead instead of saving it.

Okay, got it. And what would you tell yourselves at the time? What was the story you told yourselves.

That you can't take it to the grave with you?

Who said that? You or you? Right.

That's. That's like the, the what I heard growing up.

What a shot.

Yeah. I lived in a very conflicting house. Money didn't grow on trees. And also, you can't take it to the grave with you. So if you have it, you may as well spend it.

Lower middle class.

Yeah, I wouldn't even say middle. I would just say lower class.

Yeah, yeah, yeah. Tell me about it. Was it too two parents or one parent?

So two parents up until I was 12. My dad passed when I was 12, but my mom was a stay at home mom that whole time. And my dad worked construction.

He worked construction. Okay. And so he worked. What do you remember about the rituals of money in your household?

So there. I never remember any positive discussions about money. There were lots of fights about money. And I remember anytime I would ask for anything, it always seemed like they said no. That's. I started working when I was 14 so that nobody could tell me no.

Like, how dare you even ask? That's not the type of people we are, pretty much. What else do you remember about the rituals of money growing up?

So I remember lots of past due notices getting sent to our house. I remember cars being repossessed, borrowing, you know, having to call family and friends to borrow money. My mom asking me to borrow money like once I started working.

Wow.

Okay. And how did you feel about money between, let's say being a young child and 16, 18 years old? How were you feeling about it?

So when I was really young, it was, it wasn't fair. I was jealous of my friends who got to go do things, who got, you know, new pairs of sneakers. Like, in the middle of the school year, there was a lot of jealous. A lot of jealousy. And then once I was able to work for myself, I wanted more money. You know, I. I wanted to just work as much as I could because I wanted more money and also because I just didn't want to be at home. Yeah.

And you mentioned that your dad passed away when you were young.

Yeah.

What. What effect did that have on your relationship?

You know, I. I don't. I don't really know because my mom kind of went into, like, hiding, I guess. I had to. I have a younger brother and sister, and so I kind of had to step up and, like, do laundry and feed them dinner and, you know, make sure that they were up and ready for school. My mom didn't start working immediately after. I don't. I don't think it changed it. I definitely didn't have any more positive feelings about money after he passed.

But how did your family make do once your dad, who was the primary earner, passed away?

So she collected his Social Security.

And when she ended up going back to work, what were her feelings about having to go work?

I don't think she was happy.

You remember her saying anything?

No, not at the top of my head. She didn't start working again until after I was already out of the house.

Did your parents ever talk to you about investing?

No.

Saving?

Nope.

Choosing a partner? Like the role of finances in your relationships? Nope.

Okay.

Okay.

My mom doesn't even have a checking account. She doesn't have a checking account or a savings account. She cashes all of her checks at King Supers.

Still. Still. Wow. Have you told her that you listened to this show?

Oh, so. Well, unfortunately, her we haven't spoken for, like, about two years, but I got it.

Okay. Got it, got it. Okay.

Wow.

All right. So did you know that Ryan.

Yes.

Maybe not before, like, we got really into the thing.

Yeah, yeah. That's not first date conversation, you know, hey, the cars got repoed. Anyway, what do you want to have for a drink?

Like, oh, by the way, can we keep going to your house, please?

You can only order well drinks. That's how.

Well, can I. It's. It's. It's really interesting. What you said something really subtle, you know, that. That you felt jealous of your friends who got shoes in the middle of the year. That is very subtle. That the idea that if you're ever going to get new shoes, which, by the way, happens maybe once every four years when you absolutely know it's only going to be at the beginning of the year. And you better make sure those shoes stay. Yup, That's. That's life for a lot of people. And if you grew up where your mom or dad was, like, all right, your shoes look like they got a little thing on them. Let's go get something new. Doesn't matter what day it is. I don't matter what month it is. You're just like, what does that mean? Yeah. So I appreciate you sharing that.

Yeah.

Ryan, think back to when you were a kid. What was. What do you remember about money growing up as a kid?

Like, now that I'm older and looking back, I have a different view on it. But it was definitely acting like we have money and, you know, like, maybe the nice house, but, you know, not able to go do things. So it was like, a lot of, like, fakeness in association with money for me. Like watching my mom and her husband. Go ahead.

Your parents were divorced early on?

Oh, yeah. I never knew my dad. He was just not in the picture until I was already, what, 36 years old. Okay. And so it was just my mom, single mom, and then she got remarried when I was 5 and had my brother and sister. And then he was the primary money maker. She was stay at home mom. And like I said, they always acted like they never talked about money. I never heard them talk about money. They never talked to us about money. I never. If they struggled, I never knew it. But now looking back, it was like a lot of false fronts. Like what? You know, like. Like the nicer car and the nicer corner lot house that they were overpaying on rent for so that they could look like they had money, you know, because that was a big deal for my mom to. She's like, she wants to be rich. She hasn't. Wealthy, money wise.

How do you know that?

The way she carried herself, though, like, always, like, above, like, always pretending like, you know, like, it's no problem. I could. I could buy the Rolex, you know, or this, you know, or this car is paid for or whatever the case may be. But, like, the real version is what we're feeling living in the house with her and not having food in our refrigerator and, you know, not having cable TV because we couldn't afford the bill. And then, you know, it's just there. Like I said, there was a lot of a fakeness associated, like, yeah, just play pretend. Like, I only saw the struggle once they got divorced and we had to move back in with my grandmother.

Oh, when did that happen? What age Were you?

Oh, man. My sister was. I was probably 12.

Okay, so at 12, they get divorced and you have to move in with your grandmother, your mom's mother. And how did money start to play a role in your life then?

Well, I saw my mom not making money and just kind of kicking back. And, you know, I quickly realized my grandma was paying for all of our groceries, paying for our school clothes, buying us our Christmas presents, and my mom was just kind of kicking back, and I was just kind of like, I can't not have money. Like, I can't be a bum like that, like, and just live off somebody else and let them just pay for everything and not even feel remotely guilty. So at a young age, I was. I had a paper route. You know, I wanted a pair of Air Jordans. My mom told me, no, I got a paper route, I bought myself Air Jordans.

What'd you make on that paper route?

Oh, my goodness. Maybe like 13 bucks every two weeks.

Okay. All right. What were you, like, 12, 13 years old?

Yeah. Yeah. Right away. Right away.

That's a lot of money.

No, it was all right. It was all right. To think back. To think back on it is just kind of crazy.

Yeah. How come?

I mean, 12 years old and you're like, I'm gonna go get this for myself. Like, you won't tell me, you know?

Yeah.

But then that. I feel like that, like, encouraged a bunch of bad habits because I was like, I'm gonna get this money and I'm gonna spend it on whatever I want to spend it on. And if I don't have money on Thursday and I have to wait till Friday to get paid, then that's just what it. You know, and that kind of built up some bad habits.

So when you. When you think about going back to that 12 and 13 year old, and I see you getting emotional, what is it that you're feeling, thinking about your young self?

Just like, what a. How can my mom, like, fail me like that? Like, how could you not grind so hard to get what you can for your kids? Like, and then you're cool just kicking back and watching your kid go out there and do that? You know, Like, I'll. I'll break my back to buy my kids whatever they need, because what does.

It mean to you?

Everything. It means that I'm providing for them. It means that I'm not gonna. I'm not gonna hit rock bottom. Like, I'm not gonna fail. I'm gonna do whatever I have to.

Do.

You know, and that stems from me not having. And me having to do for myself. And I want my kids to learn the value of doing stuff for themselves and working hard and earning things. But I'm not gonna. I'm gonna tell them to be a kid. They don't have to work right now. When you're 12 years old, your dad's got you.

Okay.

Yeah. Sorry.

No need to apologize at all.

I don't. I haven't talked to my mom in probably six years just because of all of the traumas that I've had growing up and that I've been working through lately.

When do you ever get to hear someone being so honest about their upbringing? You start listening to Kenna and Ryan, and I think it's easy to be annoyed at first.

Oh, boohoo.

You overspent. Just stop it. But as you listen to their background, if you're really honest, I think you admit that you have no idea how you would react if you grew up that way. For example, Ryan grew up in a divorced household, and the lack of money played a huge role in his upbringing. And now he's estranged from his mom. I may not agree with his spending habits, but I can totally understand how he got here and notice the simplicity of the story he's created for himself. He literally tells himself, my. My mom didn't grind. I'm going to grind for my kids, because if I give them everything, it means I love them. On the surface, it's a logically coherent story, but if you dig into even one layer, it all starts to fall apart.

What do you think you brought from your childhood into this relationship as it relates to money?

So I feel like I definitely brought motivation to earn money and to not ever be in a position where our lights are getting shut off or our cars are getting repossessed. And also an unrealistic. An unrealistic expectation that everything was just going to be easy.

Because it wasn't easy for you growing up.

It wasn't. And I guess I thought because we were both. I mean, when we were both working at one point so that that was. It seemed like our finances were very easy then. I guess I just thought I was going to be smarter than my mom, that I was going to do it better than her, that I had, you know, read the book or listened to the cd and that it was going to be different.

Okay, Is it different for you right now?

It is, because we've never gotten a shut off notice or our cars repossessed. And our, you know, we have. We carry car insurance and the things that you know, our license plates are up to date and all of those things that you do to be legal. But I don't think that the, the mindset has changed much. I thought that I would have like a half a million dollars in retirement. I thought that we would have, you know, be in our forever home, that it would be easy for one of us to not work. You know, right now one of us doesn't work, but Ryan still has to work part time. You know, it's not, it's not the luxury of just being able to stay home and just be a full time stay at home dad.

Okay, so you thought you would have more money, more stability, what else?

More vacations, the ability to, you know, put our kids in after school programs or dance or, you know, and not have to be quite so selective about what extracurricular activities they do. You know, if we need a new dresser, being able to just go buy it instead of having to like save for a month to go buy something for, you know, a couple hundred dollars or being able to just not have to look at my bank account every single day.

Yeah, okay.

Amen to that.

Ryan, what'd you bring from your upbringing?

Horrible spending habits.

Huh? And that, that started around age 12, 13 for you?

Yeah. Yeah, like I didn't really like, lack of caring towards money.

Wait, how can like I care.

I care about money to have stuff, but I don't care enough about money to. Or when I was Young, in my 20s and 30s, I didn't care enough about money to be wanting to aggressively put into a 401k. Like I cared more about material things. And you know, I didn't care if I had to put something on a credit card because I didn't have all the cash for it.

I don't mind. That's most kids. All right, look, I know I'm supposed to be uplifting and stuff, but like most kids are stupid when it comes to money. They don't know anything. Okay? So if some 18 year old comes to me and they're feeling all down because they spend all their money on whatever it is 18 year olds spend money on in app purchases or whatever, mine field, whatever, that don't write me. I don't want anyone writing me about these stupid kids games that I don't know. I don't have an 18 year old. I don't know anything about 18 year olds anymore, but I don't blame him. Now I will say you are 45.

Yeah.

Maybe it's time for us to make a change. What do you say we've come a long way.

We've been together what, 13 years?

Yeah.

And so I think we're both finally just like done fighting and want to like, create a, create a solid plan that we can just move forward with.

I was just kind of like, I'm over here working and I'll shut up and go work 60, 70 hours a week and do what I have to do. And you just take care of everything. Let me know. If I could spend some money, you know, I'd be like, kenna, I want to go out with my boys. I need $100.

This is a classic way of thinking for people who grew up without money. The idea is I'm just going to grind. And if we're struggling, I'll just grind harder. I will figure it out. The idea of long term planning is conceptualized totally differently if you grew up middle class or wealthy. As people who grew up poor try to replicate that idea of grinding, they often discover its limitations. Here's an excerpt from a book I love called the Power of the Past by Jessi Stribe. She writes, in general, those who were born into professional white collar families had sensibilities that I call managerial. They preferred to plan, deliberate, mull over, and organize their resources, their children, and their daily lives. Their partners with blue collar roots typically had different sensibilities. Those that I call laissez faire. They preferred to feel free from self constraint rather than wanting to analyze, plan, or meticulously organize their lives. They they preferred to go with the flow and live in the moment. These differences played out across multiple domains in their lives. Now, this book has a lot of complex ideas. Some you may agree with, some you may disagree with. But you will see these differences coming up time and time again across different couples that I speak to.

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 BILT 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 want 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. 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 that we get overwhelmed. We got to pull all this paperwork and we're panicked because the deadline is approaching. That's why I recommend Gilt. Now that tax season's over, this is actually the best tax time to get ahead. If you run a business or you filed for a tax extension, one small move right now could save you thousands later. Gelt is not just another CPA firm. They helped one of my colleagues rethink his entire tax setup. Now he's saving more than he spends on tax prep. With Gelt, you get a proactive year round strategy, not just a one time filing, credits, deductions, business structure. It's handled. And their tech platform makes it easy to stay organized. You'll also get access to Gilt's full tax library with guides on retirement plans, QBI and more. So if you've got a business or you filed for an extension, this is the window to take control of your tax plan. Head to joingelt.com ramit to book a consultation and as a member of my community, you get to skip the waitlist. Again, that's joingelt.com ramit join G-E-L-T.com ramit taxes don't have to be a task with Gelt. They can be a tool to build wealth.

Now that our roles are reversed and I'm the stay at home mom, I feel like I need to take some of that burden off of her. You know, I can't just be like make the dinner menu budget for the groceries, make sure all of our credit cards are paid on time you know, I need. I felt like she didn't ask me to do that when I was working and bringing in all the money, so I shouldn't be asking her to do that while she's working and bringing in all the money. Why not now? I mean, like, we've done enough damage already. We've racked up a credit card, sold a condo, used the proceeds to pay that off, only to rack up another credit card over frivolous spending. So, like, like, that aspect needs to go, and there's some changes that need to be made. So I think it's only fair.

So how does money come up in your relationship? Who talks about it?

Hannah brings it up to me as often as she can, as often as she thinks she can get away with before I get a little bit fed up.

Money has always been a topic that I want to talk about and that I want to be, you know, working on as a team, and I don't bring it up in the right way. I'm not inspiring Ryan to want to help because I always focus on the negatives, like how we're short or these are all of our debt payments.

Kenna, how often do you bring it up?

Probably at least four times a week. So I've been reading your book. I'm reading it the second time.

Hallelujah.

Yes. We are finally trying to automate our money. So Ryan is doing some side work. And so we have finally committed to his side work money going into his personal bank account and that he is going to. That all of the credit card bills are going to automatically be paid out of his bank account.

Okay.

And I am going to, you know, my paycheck. A portion of my paycheck is going to go into a checking account that we will pay our mortgage out of. A portion of that paycheck is going into a high yield savings account, which we just opened three weeks ago. And then the rest of it, like, I'll pay our due. Utilities with.

Okay.

So this is the most, like, automation we've ever had. Usually all the checks just went into our joint account and we paid the money, used it for fun money. You know, we paid everything.

I. I just got one question for you. How good does that automation feel?

I was telling Ryan. It. It. It's awesome. It finally feels like. Well, and because we're doing it together, I feel like because the credit cards are finally coming out of his account, he has. He's. He's invested. He has to, like, now he knows when the credit card bills are due and before he Never.

I couldn't, I couldn't tell you.

Yeah, he didn't know the login information. January is the first month that the credit card bills are coming out of Ryan's account. And so far it's been. It's been awesome.

Good. Ryan, how does that change feel to you?

It makes me feel more involved. It makes me feel like I have a stake in the game. You know where I didn't before.

If you spend more than an hour per month on your money, you are almost certainly wasting time. You can DIY the automation yourself. Get my book. I will teach you to be rich. I'll put a link in the show notes or if you want my help, join my money coaching program. I will answer your questions on our monthly call. You can get a link in the show notes and you can join for our next call.

So I understand that Ryan, you were working. Hannah, you were a stay at home mom. And then this flipped. When did that happen and why?

It happened in January of 2022 because Ryan's job was really overworking him and there were every day where he would leave before the girls would even wake up. And then most days he was getting home after they had already been put to bed. And it was really taxing on his physical health. His mental health.

Mental health?

Yeah, mental health. And so in 2017, I started a degree for a bachelor's degree program. And so when I graduated, we knew that that was going to be, you know, the plan that once I got my degree, hopefully I'd be able to, to match his earnings, you know, 60, 60 hour a week earnings and then he would get to stay home.

And were you able to do that?

So in theory, yes, but it wasn't enough.

How much were you making at the time, Ryan?

70. Okay, maybe a little more.

Okay. And Kenna, how much do you make now?

Well, Now I make 70, but when I took the first job that I took after college, it was 56.

Oh, wow.

So how. So you started making 56, Ryan, you said, okay, I'm going to be the stay at home dad now. And how'd you make that work? You know, the $14,000 difference?

Well, Ryan worked.

I got a part time. I just got like a brainless part time job just to facilitate that little bit of extra money.

Wow. Okay, that's cool. You two are working as a team.

It wasn't enough.

It wasn't enough. But there was no issue with one person working one. Not et cetera, et cetera.

No, like I said early on, like we didn't have our children for someone else to raise them. So it's super important that our values are the ones that they're main. Getting main, you know, their main course meals from, I guess.

Okay, great. All right, I get it. So right now, Kenna, you make 70?

Yep.

And Ryan, do you work a part time job now?

Yeah, I just do little Amazon deliveries.

Okay. How much do you make?

It's maybe like 1200amonth.

1200Amonth?

Yeah. And that's just enough to pay all of our credit cards, our personal loan, and fuel my car for the, for the deliveries.

Do you plan to continue this arrangement going forward?

Yeah, I mean.

I would eventually. I mean, I don't. I'm a very goal focused and eager person. And so I don't plan on staying at $70,000, not even until the end of this year. So hopefully, you know, we're hoping to get to a point where I, you know, am at under 100, just over a hundred. And then Ryan can just work like a fun job. He won't feel so. And also, once we get these credit cards paid off, that's like our main focus right now is just one by one knocking them off. And then as those get paid off and shut down, we can not have to work as much, essentially, so he won't have to work as much.

And then our relationship is totally predicated on like, oh, when this happens, then we'll be able to do this and then. But then that thing happens and we're just waiting for the next thing to happen, so.

And also sometimes when it happens, it doesn't work out the way you thought. Right. You. You mentioned you sold this condo, you paid off the debt, and now it's back. Are you worried about that happening again?

No.

Oh, okay. You're not Kenna, are you?

I am. Well, I told him just two days ago that we should cut the credit cards as they're being paid off. And he said, well, we don't have to do that.

You guys want to have that conversation right now? I'd love to hear it.

I think they need to be cut. I. I think they need to be caught. I think most of them need to be closed.

Yeah, I agree with most of them needing to be closed. And, but I just don't understand like the, the ceremonious act of cutting them and like, that doesn't do anything for me.

What do you do for your seven and your four year old? Is that two daughters?

Yes.

What do you do on their birthdays?

A little birthday party.

Cake, candles, presents.

What's with all those dumb ceremonies. Why would you do that?

Well, I mean, a birthday is a little more ceremonious than cutting a credit card. To me, at least.

What are you talking about? Hold on. How much do you have on your credit card?

Which one?

20. Yeah, which one?

All of them together.

30,000.

That's a lot of money, dude.

No shit.

So can we create a ceremony around that?

100%.

All right. Awesome. You know what? Let me put it this way. I learned a little secret from my wife. You can create as many ceremonies as you want. Nobody stops us. As adults, you could create a ceremony every Monday. But for the big things, it's like, we gotta do this.

Yeah, I agree. I don't even think. As we pay them off, can we just cut them all up right now?

I mean. Yeah, I don't. It's not like keeping them isn't, like, some super ceremonial thing for me either. It's like, I'm good either way.

You guys want to do it right now?

Either way.

Should we do it right now?

I can go get them right now.

Yeah, get them. This is cool.

This is so big. This is huge.

Is it huge? Okay, how many are there? Two.

Five.

All right, so where's the scissors?

No, we have a shredder.

Oh, well, I need to see it happen.

Yeah, Kenna will show you. It's right underneath there. It's at her knees. I'll walk these down to her. Right now?

Yeah, yeah. Hold the camera up, and let's get these things going.

Okay.

All right. This is a big moment. Are you guys gonna, like, do some kind of chant or song or something? What are we gonna do to make this theatrical?

What about a big hug and a smooch?

Yeah, that sounds great to me.

Sounds good to me too. Let's get it on camera. What would you.

What would you rather have?

No, no, that's.

Maybe some, like, pitchforks and, you know, go down there like.

I like it. It's meaningful to you. I am. I'm your happiest spectator.

I'll be right back.

All right.

I'm so proud of him, I might cry.

This is cool.

I'm trying to see if I can. The shredder doesn't have a very long cord.

Oh, it's fine.

Are you okay?

Yeah.

Are you sure this is something you want to do?

I don't want to use them anyway.

Okay. Okay. You hold that.

Oh, there we go. There we go.

Great, great, great.

Okay. Yes. Go ahead. Let us hear that sound. So satisfying. Is that thing shredding?

Yeah.

Okay. There we go. What does it feel like to see these things going down the tube?

Okay.

For me, it, like, signified that Ryan is really. Is really, like, on board, and that means it when he says that he's ready to, like, get out of debt.

I think that's so cool. Hey, round of applause. I will take the win. That was awesome.

Are you crying?

No.

I don't have emotional attachment to these things. I just never had anything, like, I think, like, really, like, what set the tone for, like, me liking the credit cards was we went to apply for a home loan, and they were like, dude, you're like a ghost. You don't have any credit. And I was like, boom, on top of my game. You know, I don't owe anybody anything. And they're like, no, that's not the way it works.

So, you know, we. We all do the best we can with what we're taught. You were never told anything about money. Okay. But now you're married, now we're here, so let's get it to the next level. No big deal.

Yep.

All right, so first of all, that was awesome. Today is Tuesday. I think we gotta name this day. This day will forever live in your family history. What do you want to call this thing? Yeah, what do you think? This thing that just happened. What do you want to call it?

It's Freedom.

Financial freedom fest. 2023.

There it is.

Sold. I love it.

Financial Freedom Fest. I'm putting it in my Google calendar as soon as we're done.

There you go. It's a recurring one. Every year you celebrate it. You know, the. You, you. You all do a cake for your kids, whatever it is, but you're creating a new culture for yourselves. Rituals are always exaggerated. They're always theatrical. Sometimes they're so exaggerated, people put on costumes, okay? They buy trinkets, and they are talked about when your daughter's. When it's coming up for their birthday.

I'm going to go out on a.

Limb, and I'm going to guess.

You say, what do you want to do for your birthday? For your birthday, we're going to go here.

It's a thing, right?

Absolutely.

Well, guess what? You do the same thing for this ritual that imbues it with the importance that it rightfully holds in your family.

I love that.

Beautiful. So the two of you will do that. And guess who else you're gonna bring in on that ritual.

You.

Not me. I mean, you can invite me. You can send me a calendar invite. I'd love to come But I'm not talking about me. Who else is really important in your day to day lives?

Our children.

Yes. So shouldn't they be brought in on it next?

Absolutely.

Yeah.

100%. 100%.

Get them so excited that they go, what are we doing for financial freedom? That is when you know that you've created real culture in your family.

Oh, I love that. I'm so excited.

I'm excited. Okay, this is so cool. Let's go through your numbers, because I want to talk about some of these numbers and what I saw here. Who created the conscious spending plan?

We did it together.

We did it together.

Cool. How. What was the experience like?

Good. Yeah, it felt good.

It felt good. Why did it feel good?

Because we haven't been on the same page a lot with. With finances, and I. I get really excited about my.

She gets pumped over numbers.

Yeah. My spreadsheet. And, like, how we can make it, you know, how. How this is going to work out. We're going to be able to pay extra here and there. And Ryan is just kind of like, as long as the bills are paid, I don't care. Or at least in the past, Ryan has always said, as long as the bills are paid, I don't care. What's happening where I'm like, wanting to do the celebration. You've crossed over. You've crossed over, Ryan.

Well, it makes me happy to see you happy, Ryan.

Let's go through the net worth section. What do you see first? How much?

Oh, assets. 500,000.

Okay. What is that?

That is our cars, our home, and that's it.

How much is the house worth?

Almost all of it. Probably like $460,000.

Okay, got it. And your investments?

$1,000.

Okay. Your savings?

50 bucks.

Okay. And your debt?

$400,000.

Okay. What is that? $400,000?

Our house, our credit cards, and our personal loan.

The personal loan was to make improvements to the condo that they sold.

And the condo is the one that.

They claimed to make a $78,000 profit on, which obviously is not true because they didn't really calculate the phantom costs. They then used that profit to put a down payment on the next house and to pay off a card or two and Kenna's car. But they elected not to pay off the loan itself. I'm going to skip over this because there are a lot of bunch of details, and frankly, there are some much more startling numbers in this conscious spending plan.

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Oh, 86%.

86%. So you're spending 86% of your take home pay on your fixed costs. What does that number tell you?

That's too high.

That's correct. What number should it be theoretically?

50 to 60.

Yeah, that's what I like to see. You know, we can all argue if I'm right or wrong, but 50 to 60 is a really healthy range. So let's go down the list. Your mortgage is $2,073 and your utilities are 373. If I add those together, that's about 30% of your gross income. Little higher than 28%, but okay, not a big deal. It's. I'll tell you, let me add a little nuance to that. It's not a big deal to exceed 28%. For if one, you have very low amount of debt. Two, if you live in a high cost of living area, it's basically impossible to do 28%. Three, if your incomes are going up, et cetera, it's not going to break you to go 1 to even 3 or 4% above. But it becomes riskier. It's less money to save, spend, invest. And we're kind of seeing that as we go down the list. All right. Your Debt payments are $1,000 a month. Okay, that's a lot. Now, now I have a question for you. Is that the minimum?

Yep.

Yes.

Oh, that sucks.

It does.

What happens if you're paying the minimum on your debt?

You never pay it off?

Yeah, years and years and years. Okay, good. It's good that you understand that. Let's see what we can do about that. Your groceries are 600amonth. How do you feel about that?

Pretty low. Especially in like today's market where groceries are so expensive.

Yeah.

You know, we could probably. I would like to have a little bit more.

Yeah. Who does the grocery shopping?

Both of us now.

Okay, well, we usually go over that. Sometimes by 20, sometimes by a hundred dollars every month. Just depends. But that's the number we try to. That's our, our budget, I guess.

Let's not do this. Let's not do fake numbers. If anything, let's do numbers that are above what you spend. Because the worst thing in the world is to make a number here on your conscious spending plan that you keep failing and then you just go, fuck this csp. We don't even really take it seriously.

Well, and that's how it was when I tried the budget a long time ago. So I'll Change this to 700.

Yeah, yeah, yeah. I'd rather you be realistic, and then we can actually work with reality.

Okay. Yeah. 700 is pro. Is more realistic, for sure.

So nothing here stands out as crazy spending, but you only have $50 in savings now.

Yes.

What do you think?

It's embarrassing, huh?

Kenneth, what do you think? What's the word that comes to mind for you?

It makes me angry.

Why?

Because I know better.

Okay. When did you buy this house?

2019. July of 2019.

All right, so.

And we probably had $0 in savings at that point.

Okay. So over four years, you saved up $50. It's going to take you quite a while to build that savings account up. If we're going at this rate, what do you say? I say we gotta increase the savings rate.

So I will say, though, I mean, there. We. We have struggled with putting adding money into our savings account, but then being short, so then having to take money away from the savings account to pay for our bills. So, I mean, we've had, at one point, you know, $2,000 is probably the most we've ever had, but it hasn't always just been between 0 and 50.

Yeah, I get that. All jokes aside, I really like to think of a savings account as primarily going in. Yes. Rarely coming out. Okay.

All right.

All right.

Let's look at the income. Kenna, walk me through the income.

So my monthly income gross right now is 5833.

Okay.

And then we were conservative with ryan's and put 1000.

Okay.

Nice job being conservative.

I like that.

Very good sign. Good habits. That's awesome. So Collectively, you make 82,000 gross. Yes. What do you think about that?

It'll be a bit higher.

Yeah. I mean, once we add the, you know, 2,400 from yours. Okay, 82, 84,000. Any feelings about that? Can you make it on $82,000 a year with two kids?

Yep. We are making it. Like, we're not. Like, we're not struggling to put food on the table. We're not telling our kids they can't go to the water park for their birthday. Like, you know what I mean? We are making it.

However, some of those purchases, though, were made on credit cards. And that's why we. And that's what I was going to say. We're. We make enough money to pay all of our bills, but if we didn't have credit card bills, we would have a lot more.

Yeah. Things would be a lot. We would be able to.

I'm not sure I can buy the Thing, like, we're making it, but we have over $30,000 in credit card debt.

Yeah.

So, I mean, that's not making it.

No, I totally agree with you.

What does making it mean to each of you? Ryan, what does making it mean?

I could go to that restaurant without even thinking about it. Just walk right in and get my meal.

Okay. Kenna, what does making it mean to you?

Being able to save enough that I can retire early.

Okay, Ryan, hearing your definition versus Kenna's definition, what do you notice?

My definition is very small. Yeah, Like. Yeah, yeah.

Like, it's so small that it's like a speck in the landscape of a rich life to be able to go out to a restaurant. Yes. I can see why it's important. When I was in my early 20s, I wanted to be able to go and order appetizers, because when I was a kid, we couldn't do it. So I totally get what you're saying. I totally, deeply understand it. But I also think now, especially at the age of 45 with two kids, there's got to be more to a rich life or more to making it than just to be able to go to a restaurant.

That would be amazing. You know, So I, like. And the retiring, like, early, I don't know. I've been pretty sloppy, so I'm already 45. Probably gonna have to work this one out. And. I don't know. I mean, just, like, not having a whole lot when I'm a kid. Like, I'm super satisfied. Like, if we could sell this house and buy a nicer house than this one and just be chilling on the rocking chairs, like, that would be enough for me. Like, I don't. So I don't. I mean, I would feel rich at that point. And, I mean, I know it's a different definition than a lot of people's rich, but, you know, I would feel rich having the same house for our kids to come back to in college, which Kenna and I do not have. Like, we can't go back for the holidays to our house and go to our old rooms. You know, I'd like to have that for our girls. That would be. That would make me feel like I'm living a rich life.

The honest truth is that right now, Kenna and Ryan will not be able to live much of a rich life. It will take decades to pay off that house. And that's. If everything goes right. If the roof breaks, they're done for. And even if they eventually pay off the house, they have almost nothing to live off of in retirement. There's no pension. Social Security pays a modest amount. They are in trouble. What's really surprising here is how small Ryan's definition of a rich life is. We've heard throughout today's conversation that Kenna and Ryan both tell themselves a lot of stories. Well, after a while, you start to believe those stories. Soon you even create other stories that end up shaping your life. For Ryan, he looks at his numbers and says, hey, we're actually doing okay. Better than I grew up. That's a story. One that allows himself to sit back and make no changes, because after all, according to his own definition, he's doing okay. But what if I looked at his numbers and I said, wait a second. We have tens of thousands of dollars in debt on this conscious spending plan, and you've saved $50 in four years. You need to make a change. That's another story, but it's one that would necessitate change. So the question for you to ask yourself is, what stories are you telling yourself about money? Which of them might be true and which of them might not be? Now, if you grew up not being taught the skills of planning ahead, like we've heard on today's conversation, this can be very hard, but it can be done.

What do you think you spent on in the last month that was above and beyond your fixed costs?

Well, in the last month we had Christmas, but if you just count, like, maybe a month where we didn't have Christmas, most of our.

No, no, no. I want to count Christmas.

Oh, most of our.

600 bucks for Christmas. What else?

Just Kenna's birthday. So we went. We went out for the day, spent about 300 bucks. Landon's birthday was December 10, so we had her birthday party.

How much?

I think it was like two something. 250.

Okay. What else?

Her presents were a hundred dollars. And. Yeah, beyond that.

That's about it.

Eating out. Anything else?

Oh, yeah.

Oh. How much is eating out.

On a high month? $300.

Okay, so that's 75 bucks a week. That's like one meal per week.

We usually don't even. There's a lot of times we don't eat out in a week.

Yeah.

Okay. All right, so that's $1550 on guilt free spending. So that is an example where you're in the red.

Yeah.

You spent more money than you made, and I would be willing to bet that you're spending a comparable amount most months. Even though Christmas was in December, there's probably something that happens in July et CETERA et cetera, et cetera. And sometimes there's a big expense that blows up and we have to amortize or spread that out. So you're probably spending around a thousand to fifteen hundred bucks extra per month than you even reflect here.

I could see that.

What do you think about that, Ryan? I see you just staring off into space right now.

I'm not staring off into space. It's just like, it's just so annoying that we even allowed ourselves to get into this position.

Yeah.

It's like we both, like, I think we both consider ourselves semi intelligent people. And it's like you can see yourself going down the path and you just don't stop it. You know, you just let it go and then, oh, whatever, we'll deal with it at some point. I mean, I've even told her before, I'm like, well, you just make the minimum payments and then when we sell this house, we'll just use the equity from this house to pay off the credit card debt and then we'll be at zero again. And then her next answer, or next statement is, yeah, until we get another credit card and then do this whole thing over again. And I tell her, no, like, we don't do this over again. Like, we dig ourselves out this time and that's it.

Okay.

And then instead of $1,000 going towards our credit card debt, $1,000, not even about $700 could go to a retirement account. And $300 a month can be for us to eat out and. Right. If we don't, you know, like, just foolish in my younger years.

Okay.

Still being foolish today.

Well, that's, that's what I want to talk about. It's one thing to focus on what happened in the past, what happened in the past happened. But what is more concerning is the beliefs and behaviors that you're bringing to today's money. Okay, we can't change that you have thirty plus thousand dollars in debt. But we can change the way that you think about money, talk about money, and behave with money. So think about money as an example. The idea that, like, we can just sell this house and roll over the equity and cash out and blah, blah, blah. You don't even really know how much you made from your last house. In fact, you made a lot less than you think. So we're not going to play that game because we already know where that one ends up. It ends up with you back in debt. That's a gimmick. If you really get honest with yourselves, we're going to like Magically cash out our house atm, and then all our problems will vanish one day. That's not happening. So that's. Think we're going to change that. Talk about money. Like, it's not so bad if we just eat out. We need to get Christmas gifts. I need to provide for my children in this way. You can provide yourself right into the ground. Yeah, that's. Talking and behaving is everything from how do the two of you talk about money? Who brings it up? And most importantly, what about your spending? Where are you swiping your card? What are you buying? What is around you physically in this room that you're in, in your closet, in your garage, even your house itself. That is all a reflection of your behavior, behaving. So think, talk and behave. We've got to change all of it. The bad news is this is really hard. It's hard because it's been part of you Both for over 13 years, and it's now part of your dynamic.

It's woven in.

But the good news is I believe you can change it. And if you do, and if you really both get on the same page and you're rowing in the same direction, you can make rapid changes to your finances. Like, you will make rapid changes within six months, you will start to see huge changes. How do you feel hearing that?

So excited.

I feel like if in six months that's happening, I'll be. Or super, like, you know, just happy and impressed.

Awesome.

You know, because it's a. It's a huge move for us.

Yeah.

Like, we've been. We've been okay living paycheck to paycheck, and we've been okay doing what we've been doing.

Yeah.

You know, at least we've been able to justify it to ourselves.

Yeah.

You know, as well, it could be wrong. You know, we're. You know, I'm not saying we were right, but it's just. Enough is enough.

Yeah. Enough is enough. A rich life has got to be about your children. It's got to be about the two of you. It's got to be about who you are, your actual identity. Not the fake identity that you mentioned, Brian, the one that you said you consider foolish. Remember that? It's the one that you really are. So reconnect with that and tell me what. What is going through your mind, your rich life.

I don't ever have to worry about any of our bills being paid for. There's always positive money left over at the end of the month, you know, and we're putting that Positive money into the right places. We're not just, oh, we have positive money. Let's go out to sushi. We're actually like, hey, we have positive money. Let's do this with it to help make this happen.

And. And what is the role of your daughters in this rich life? What are they observing?

Good. Excellent spending habits. I guess, like, we're pretty open with our kids, so I guess we would bring them in for a conversation about it. So, you know, there would be the. The vocal part of it, of us teaching them, like, hey, we're doing this. This is why we're doing it. You know, these are the reasons. And then. And then, you know, when they see the fruits of our labor and they see us sitting on that rocking chair in the front porch at the same house we've been in for 30 years. Yeah, that's rich.

That's beautiful. All right. You get the privilege of taking them on a journey with you, and the journey for the two of you is going to be tough. But as far as your kids are concerned, they don't know seven years old. Everything's exciting. So you get to create whatever story of that journey you want, and they experience it. Like, that's the magic of childhood.

Yep. Okay.

Kenna, what about you? What's your rich life?

Like I said before, you know, the bills are paid automatically. I don't have to worry about if one has gone up $10 that month. There's just always enough that I'm able to save way more aggressively for retirement, that our kids can participate in extracurricular activities with no questions asked. That we are able to donate to charities and volunteer our time with our children, that we're able to give them an allowance. I could literally go on and on.

Love it.

You have.

I have my journal in front of me from your book, like, about what a rich life means to me. I'm trying not to read it, but, yeah, I have a very extensive, very thorough, very vivid list.

Beautiful. All right, stay there. What we want to do is we want to find a way for you, not me. You're going to do it to give yourself some breathing room, because right now you're wound too tight. There's no extra money. You're actually spending way more than you even realize here, and it's tough. We gotta get out of this cycle. So how do you think that you can do that? As a good guideline, your fixed cost should be 50 to 60% of your take home. That's just a general guideline. How do you think you can give yourself some breathing room here.

I'll be asking for a raise shortly.

I'm currently, like, trying to explore some options where I could bring just a little bit. Like, I don't want to overextend myself and take myself away from my kids and not be able to provide for them in the manner that they need. But I'm exploring options of trying to bring in maybe just 2, 3, 400 more dollars a month and then using that money to start chopping down some of the credit cards that I'm responsible for.

So, Kenna, you said you're gonna ask for a raise?

Yeah.

Let's just assume you get it, and if you don't get it, you switch jobs and find a place where you do get it.

Yeah.

How much is your take home income going to be then?

$6,666.66.

So right now, your fixed costs represent 88% of your take home. Go ahead and make that change to your income.

And then Ryan. Ryan's also.

Before we go on, let's take a second. That was pretty cool. That number was at 88% of fixed costs. What is it now?

81.

Wow. Okay, round of applause. I'll take the win. That's a big move in the right direction.

Yes.

So that raise is pretty important.

Yes. Oh, yeah.

How likely are you to get it?

Pretty darn likely, Ryan.

So you mentioned you want to pick up an extra 4. 400 bucks a month.

Yeah.

All right, so let's go ahead and model that in. Ryan, why don't you type that into the CSP?

He's 1099, so I take more. I with withhold more federal and state taxes because he's a 1099 employee.

Perfect.

So what. What should we put for his take home then?

Well, if I have 1400, I'm taking home 1400.

All right, another round of applause. We're down to 76%. Well done. We're going in the right direction.

Nice.

All right, so what this tells me is it's really important that both of you increase your income. So while I do appreciate and I support that each of you has modeled in making more, I don't think it's realistic.

Well, for.

For.

For. For me, it's realistic because I. I don't take on very much right now.

Yeah.

As far as, like, hours go, so I can definitely, like, increase my income. Like, like, it's. That would be no problem.

But you're already. Hold on. You're already making a thousand dollars a month. Even 1200. You said you want to increase that to 1400. Great. Can it go higher than that?

It would just. Really? Yeah, I mean, yeah, I mean it could. It just gets stressful because I take care of the kids. So then I feel like I'm short changing my children on like time and you know, energy that they need. Like right now I could, I just can't overextend myself. Like I already tried that and.

Yeah.

Just not being able to give my kids what they needed as far as energy levels go because I needed to sleep because I was working late. It just felt like I was just short changing them and that wasn't fair.

I totally get you. So let's, let's be intellectually honest in our csp. Like, you're not going to earn way more for the next year. No, you're not. That's okay. Let's not say that you're going to. And let's recall that even in this we, you're, you know, you're still spending way more in guilt free spending. I put the 1550 down there. So what is the biggest area of guilt free spending right now?

Earth Day celebrations, Celebrations, Ceremonial celebrations.

Yeah, I think generally speaking, it's the kids.

Yeah, I never thought of it like that. Just like that. Simply, really. It's the kids.

Let's get rid of them. I'm just. I love my kids. If you ever want.

Holy. Now that, that is good. Now that's a funny mom right there. Let's sell them. We could probably make a pretty good profit. We invest seven years, we could pay.

Off all of our debt.

Oh my God. I might get in trouble for airing this myself. That was good though. That was good.

I think we're going to be okay.

So. So that's really interesting, Ryan. You never thought of kids as your most expensive discretionary expense. Why is that?

Because they just get everything I never had and I couldn't care less. Like, I know I need to care. I know, obviously. But like, like I said, like it fills something inside of me being able to like even give them something material because I didn't have that when I was growing up.

What else didn't you have?

Love.

Your dad wasn't around financ.

No, I didn't have financial guidance. I didn't. Yeah.

Do your daughters have their dad around?

Yeah, yeah, yeah.

They have love from their parents currently present. What do you think they would choose? Water park or having dad around?

Having me, no doubt. I am the best. At least the best of them.

I think you're right. But from you Looking back at your childhood, you had a really different perspective as an adult on what you saw. If we stopped right now and I came back 20 years from now and I interviewed your daughters and I said, what do you remember about growing up as it relates to money? What would they tell me?

Oh, they would say we're messy.

Keep going. What would they say they've learned from.

Their parents that were irresponsible with money?

Huh? What else?

We've abused credit and put ourselves in a hole that's going to be hella hard to dig out of.

But you, Ryan, give them everything you want. Isn't that love?

No, it's just. It's just a feeling that I get from doing it. It's not the love, though.

What is love? What would love be? To show them love with money in a respectful way.

I don't even know how to answer that.

Have you ever seen that done?

No.

That's an honest answer. Kenna, have you ever seen money treated respectfully in a family?

No.

Did you know it about yourselves?

I mean, some things you just don't. Like, I never thought about. You know, I never thought in those terms. So, I mean, now looking back, hearing the question, like, I never saw any responsible, you know, people with money. I never had anybody trying to teach me. Yeah, the ins and outs.

Yeah.

But up until hearing the question, like, I really never thought about it.

So you two are trying to do the best you can with what you know. And part of that is, hey, we have some money, because I went out and I made 400 bucks last month. Of course I'm going to get you this gift. Of course I'm going to take you to dinner. Of course I'm going to get you these toys.

Price.

It's really simple. It's a simple way of looking at money. The problem is you're not living in a simple world. You have credit card interest rates that are probably above 20%. You have a mortgage with tons of phantom costs that you're not actually counting. You have debt you're paying the minimum for, which, because of the nature of interest, you're not able to escape from that. So a simple mentality works in a simple world, but that's not the world you're actually living in. But what do you want to do about it?

Change it.

We gotta stop spending so much.

Yeah. I mean, that's very simple. Yeah.

So the way that I see it, there are two big things that are affecting your financial spending. Two. Do you know what they are? Well, we're looking at Them right here. It's on a. On the page. What are the big numbers here? One of them is very obvious. Guilt free spending that we already talked about. We didn't even really factor it in because I'm just like, you guys are spending so much on that we can't even really count it. But yes, we fixed your guilt free spending. But there are two big things that are causing the financial stress. One of them is in your fixed costs. What's the biggest number there?

Our mortgage.

Correct.

That's number one. And number two is your income. And why is your income what it is? Because you've both said this multiple times today. You agreed you don't want to have somebody else raise your kids.

Yep.

Fair enough. That's a value. I'm not here to tell you what's right or wrong, but it is causing you to not be able to make as much as you ordinarily would.

Yep.

And guess what? Back in the day, that was actually perfectly fine. Didn't both of you grow up with one primary earner and the other person stayed at home?

Yep.

And do you think maybe that affected the way that you see how you raise kids and make money?

Absolutely. Absolutely.

100%.

And yet you live in Denver. It's not cheap. No. Housing is expensive, food is expensive. All these expenses. If you were to go back and talk to your parents, they'd be like, are you kidding me? There's no way.

Yeah.

So you are playing a one earner game in a two earner world.

We know that. And we're trying to fight tooth and nail to not be part of. We're not the norm.

I got you. You're not the norm in the sense that one of you is staying home. I mean, and it's stay at home, dad. Quite unusual.

That's what I mean. Like a lot of people we know, they're just like resigned to the fact that their kids are going to be in daycare and they're going to be both working and they have the extra money to do all this stuff and we're not willing to sacrifice that. Like, these girls are too important to us.

Okay. Okay, so then how do you want to get on financial track?

Oh, man. I guess I have to take on a little bit more for work. I guess instead of $400, I need to like get myself a 30 hour a week job so I can increase that to $1,000 a week.

Okay, and what would happen to that? A fixed cost number.

Ryan, what do you say it went down to 56%.

Okay.

Wow.

Whether or not you agree to do that, I would like everyone to give everyone a round of applause because, wow, that was a breakthrough. At least, you know, it's an option. Not saying you got to do it, but you just created one path towards relief.

Well, and I. I think in my mind, like, yes, it's. It's. It's a lot now, but if we did that, we would have way more money to put towards the debt, and the debt would be paid off sooner, so then you wouldn't have to work 30 hours a week for that long.

So if my income went up, there is no reason for that income to go to your side for things that you've already gotten control of. I can just.

Well, and we could put those.

I mean, even. Even if it was, like, conservative, that I made $1,000 extra a month, that's still $1,000 in payments a month. And then we're talking in four months, one of the credit cards is gone. Before that, four months later, another credit card is gone. But it sucks. It sucks. In the meantime for me, because I have worked so much and missed out on so much with the girls that I'm really, like, relishing in what I have right now.

Okay. Can you connect with what your rich life is and what Kenna's rich life is, and also how you want to raise your girls, what lessons you want to teach them? Would this help that vision, or would this decision hurt that vision?

That's something I would need to think on. I mean, I lean towards help.

Okay. If you decided to do this, Ryan, to work a little bit more, what would you tell your daughters? Visualize it.

I would just tell them you already know what this is because you've seen this life before, and I'm just doing this in a short term.

I don't want that. You know, I don't want that. I don't want anything.

You don't want to. But you ask me what I would.

That's the old Ryan. I want the new Ryan. Who's thinking, what are my daughters going to say when Ramit interviews them in 20 years? You have the chance to create their experience for them. And if you say, you know this, you've seen this, it's just. There's no magic to that. Yeah, it's no magic. It's just so perfunctory. Ah, you've seen this.

Blah, blah, blah.

This is a chance to create magic. Okay. It's like the first time you took them on an airplane.

Oh, my God.

There's going to be the pilot, then they're going to give you peanuts. It's like as an adult, who really gives a shit, but as a kid, it's like, oh, my God, this is crazy.

Mind blowing.

Yeah. So do that again. Let's assume you work more. Maybe it's 20, maybe it's 30 hours. What would you tell them?

We've put ourselves in a bad spot financially and we're going to dig ourselves out and I'm going to sacrifice a little bit of time so that I can make sure we're in a better place, that we're not in the same place next year, that I don't have to come and talk to her, meet, get all emotional and, you know, like, we can talk and be happy for all the steps that we've made. Okay. Okay.

Okay. Kenna, what do you think about that?

I love it.

Yeah, what do you love about it?

I just feel like he's, he's invested. Like he believes that there's a way out and he sees the light, even if it's really, really small, that he sees the light.

Yeah.

Because I, I, the way that I was expressing it, you know, our. It just wasn't, it wasn't resonating with him. It wasn't hitting what it's hitting right now.

Okay. Ryan, you could do the thing that you just said with your daughters. It's heartfelt. It's a little depressing. I mean, if my dad starts crying as a seven year old girl, I'm going to start crying. Okay. Now maybe that's going to happen, but maybe I can give you another tool, another way. You say, you know what? Mom and I are going to make some changes. And we sat down and we started reading a book on money. And we like money. We use money to pay for our beautiful house. We use money to send you to play soccer. Money is important to us, but the only thing more important to us is our family. So we sat down and mom and I talked about how we want to spend our money. And we know that we overspent. It's like if you have a hundred dollars and you go to the sport and we spent $120, it's not good, but we realized it. We logged into our bank account, we caught it, and so we are going to work a little extra so that we can pay off all of our debt and we can start fresh. We're going to be able to spend more time together. But for a little while, I'm going to have to work a little bit more. How do you feel about that.

They. They're pretty. They're pretty intelligent kids. So they'll understand right away.

They'll get it.

Yeah, they.

And what do you think they'll feel?

They'll feel that feeling that we're willing to do whatever we have to do. Whatever we have to do. We're trying to set them up for success.

Yes, Ryan, you. You get the chance to teach them an incredibly valuable lesson.

Incredibly valuable, which is that one that we weren't taught.

Exactly. Parents make mistakes sometimes, but only a very small amount of them actually admit that. And hardly any of them ever talk about it with their kids. What do you think your kids will remember 20 years from now about that lesson? When I talk to them 20 years from now, what lesson are they going to remember?

Don't overspend.

Don't overspend. And if you do, how do you get out of it?

You work a little harder.

Work a little harder.

You admit it. You admit it and you work harder.

Now that is a lesson.

Here's what Kenneth and Ryan had to say after our call. Hi, Ramit. Thank you so much for speaking with us. It was fun, informative, and a bonding experience that we truly needed. We listened to your recommendation and didn't talk about money after the interview, even though Ryan kept bringing it up, which is not typical. But he was excited. Ryan was excited to talk about money. What did you do to my husband? We are really running with the Financial Freedom Fest and are scheduling Financial Freedom Fest updates at the end of every month so we can track our debt payoff progress. Our first monthly meeting went well. It feels so good to be working towards this as a team for the first time in our lives together. They also told me that Ryan is actively looking for a job that pays more and will offer more hours. Here's their quote. We will have the tough conversations with our girls once he lands something, but even that doesn't feel terrible anymore. The example you gave us made light bulbs go off in both of our minds. We are broke because of our kids, but we can live our richest lives because of them too. Then I got a more recent update. I want to share it with you. Kenna said Ryan started working three days a week delivering for Amazon. This will likely double his income each month. We have plans to pay off our smallest credit cards with his first two paychecks and then continue to snowball the debt after that. We are also looking into all of our fixed costs and seeing where we can make big changes. I requested a review with my boss next week to talk about a timeline for a raise. I've made a list of tasks I've taken on and projects I've completed to make asking for that raise easier. It feels like a new chapter has started in our lives and we have you to thank.

Be ready for that calendar.

Invite to celebrate our one year anniversary of the Financial Freedom Fest Ken and Ryan, well done. Thank you for sharing your story here on the I Will Teach youh to Be Rich podcast. For everybody listening, I want to invite you to take control of your money. Two ways that you can do it. 1. DIY get my book from the library or any bookstore. It's called I Will Teach youh to be Rich and within a few weeks your money will be completely automated and you will learn things about investing that will absolutely blow your mind. That's the nuts and bolts DIY version for your money. Second, if you want help, if you want to get results faster and if you want to get better results, join my coaching program, iwt.com money coaching. In that program you will join hundreds of other people. You can share your money wins. You can ask your questions. You'll see people talking about credit card perks that you didn't even know about. And I I answer questions live every single month. That's iwt.com moneycoaching regardless of what you choose, remember that you can take control of designing and living your rich life. Thanks for watching.

Thanks 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 you 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 you to be rich system into your personal finances.