94. “We paid off all our debt. Why do I still feel so guilty about money?”

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You'Ve wondered how can I get Ramit to answer my specific money question? There are two ways to do it. Number one, you can apply to be on this podcast, although we are already full for the rest of the year. Number two, you can join my Money Coaching membership in this program. We do a ton of cool stuff I want to make sure you know about it. We do a monthly live call with me where I cover some of my favorite money topics that I can't go into publicly in as much detail as and I break down our members conscious spending plans. Plus I answer your questions live. We also have tons of virtual events coming up that cover every aspect of living a rich life. For example, our new event Money for Aging Parents is coming up at the end of October that is included for all Money Coaching members. You get access to our library of all past calls like how to Find an Extra Thousand Dollars a Month and how to Do a Rich Life annual review. Plus we have a Money Coaching community group where you can see inspiration how other people are spending their money and get your own questions answered if you want to get help. If you want to meet amazing other people in Money Coaching and you want to build your rich life faster and bigger, you should check out Money Coaching today. Go to iwt.commoneycoaching to join right now. That's iwt.com moneycoaching I just carry a.

Lot of stress worrying about the past and the future. Someday we're going to have to start paying off these student loans again or someday we're going to have to pay for preschool preemptively worrying about things like that. I think I spent a lot of years of my life anticipating that I was going to never do well financially. So I was like mentally prepared for that until I wasn't.

I don't think you should feel guilty for spending within our plan and I.

Wish we had a little extra over at the end of the month just in case of things going wrong. I don't know, I feel like I'm just always double checking to make sure I understand it all. Do we really have this much in our grocery budget or do we really have this much in our guilt free budget? I don't believe that it's real.

I was feeling like she's gonna hide money or hoard money from me and she was feeling like I was about to put us back in credit card debt.

I want to exude more confidence and competence in our financial relationship. I want to learn these things so That I can teach them to my son in ways that my parents did not teach me. I have the vision to not want him to go through the feelings that I went through.

Meet Kate and Christine. Kate's 28. Christine's 33, and they live in Michigan with their new baby. What's going on is that they both come from very different backgrounds with money, and they keep having the same conversations, which makes it feel like they're spinning and getting nowhere. As you listen, I want you to think about an area of life where you have felt stuck, that is Kate and Christine. By the way, I wanted to let you know that on each episode now we're highlighting each couple's numbers on screen for our YouTube viewers so it's easier to follow along. And people on the YouTube channel really love it. They like being able to see the numbers plus their faces and body language. So I would highly encourage you to check it out. Just go to YouTube and search for my name. You can also get a copy of my book, including the audiobook on Amazon and Audible. Let's get to it.

We've been having kind of the same conversation over and over for a long time. At least a year, I think.

A year? Yeah, since we got out of debt. When she thinks about money, it's. It's always a negative emotion for her. I mean, I wouldn't mind if she brought up money to me, if it was like, hey, I want to do something today. Let's more positive and less like, you know, guilty about the spending. I don't think you should feel guilty for standing within our plan.

And I wish we had a little extra over, like, at the end of the month, just in case of things going wrong.

Well, she'll tweak it every month.

Tweak what?

Yeah, I'm a tweaker. I'll like, tweak the categories of like, we should spend this much in grocery and this much on the dogs and.

Hey, wait, are you doing this on my conscious spending plan?

No, we actually have our own.

You have a budget, don't you? Yes, exactly. Because my CSP is not meant for tweaking and optimizing. It's meant for set it and forget it. Okay, now I'm. Now I'm starting to understand. You have your own little system which is causing you problems.

I don't know. I feel like I'm just always double checking to make sure I understand it all. Like, do we really have this much in our grocery budget or do we really have this much in our guilt free budget? Like I feel like I'm. I don't believe that it's real or something or that it's right.

Why is that?

I just always feel like I'm missing something. I don't know if it's because I can't wrap my mind fully around the math or I just, like, don't trust it.

And, Christine, what's it like being on the receiving end of the stream of consciousness?

It's frustrating because, I mean, I was in some credit card debt when Kate and I met, and now we're through that. And I feel like I've made a lot of behavioral and psychological changes towards my. How I deal with money. And it kind of. I kind of hope that, like, Kate would, you know, come with me on that. And I feel like maybe there's still some open wounds, you know, from that past that we've gotten through. Your past, our past together. Well, I guess it was. It was what I brought into the relationship. So, yeah, it would be, you know, my past and my best behaviors and the debt that I brought into the relationship. And so I feel like Kate doesn't necessarily trust that I'm not going to put us in that place again.

Okay, Kate, is that true?

I don't want it to be true, but, yeah, maybe a little.

It can be really hard for people who've always felt behind with money to actually trust their plan. So when Kate says she doesn't really trust her numbers, when she constantly logs into her accounts and tweaks things, it's really another way of saying she doesn't trust the plan, which, deep down means she doesn't trust herself. The solution here is not to bust out a spreadsheet and show her how all the formulas work. This has very little to do with the numbers. What I want to encourage everybody here to do is to start trusting yourself with your money. You know, I see a lack of trust in so many different areas. It's when people tell themselves, yeah, I'm going to read that book, but in the back of their head, they know even as they say it, they're not going to read that book. I know I should probably open up an investment account. And they know they're not going to do it. I'd rather they just not say it, because once you get to the point where you cannot trust yourself, it's over. And so what I try to do on this episode and with other guests on other episodes is to help them shrink down the field of play, to really help them commit to something that they know they will be able to do and to start to rebuild the trust with their partner and oftentimes themselves.

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Let's start at the beginning. How'd you meet?

Well, we met basically right when I finished grad school. I had just moved home with my parents and I was going to take some time to figure out what I was doing with my life. But we met and it was a whirlwind and we fell in love and we ended up. I ended up moving out of my parents into her house pretty quickly.

How quickly?

What was it Christine?

Oh, my God. How many weeks?

Probably two weeks.

Oh, my God. Come on. This is like a stereotype.

I know. It is. Yeah.

We should get a trophy, honestly. Best lesbian.

All right, fine.

All right.

That's hilarious. Okay, so you. Okay, so you moved in and have you been together ever since? Yeah. Okay, fantastic. Congratulations. That's awesome. So, so what happened in terms of the credit card debt that I keep hearing about?

I feel like it was kind of a couple months into the relationship. We went on a vacation together and, you know, I was still only working a part time job, kind of getting back on my feet. And so Christine was paying for everything and she was making more money than I ever imagined I would ever make. Um, so I was just like, I don't understand those numbers. If you got it, you got it. I believe you.

Okay.

And then after that vacation, then she kind of told me the actual numbers of what she made and kind of revealed the beginnings of like the credit card debt. Felt like, oh, I've just been, you know, letting her treat me to these dinners and vacation. And I didn't even know that she was in debt and going into debt doing this stuff. And at the time I didn't have much to contribute financially.

It's a little worrying when I hear couples who just slide on into a relationship without conversations about money. That's because we come from totally different perspectives with money. Different socioeconomic backgrounds, parents, views of money. And so if you just slide on into a relationship without having a series of conversations, what does money mean to you? What'd your parents teach you? What's something you're working on? Here's what I'm working on. Setting expectations helps you avoid these blowups that often happen when couples never talk about money.

You said you had some credit card debt. How much did you have at the time?

I wanna say I had like 3,000.

How'd that feel to you?

Terrible. Okay. I wasn't really making much money when I was in grad school. I really, really struggled financially. Yeah, I had. I had like a full ride and I was teaching, so they were paying me to be there, but it was, like, simply not enough.

Yeah.

Christine, how much debt did you have on your credit card at the time?

I want to say 5k. It felt like a lot. It felt. Yeah. I, I, previous to that year, I hadn't carried any debt. Oh. So it was new to me.

Okay, so when you got married, did you both have credit card debt at the time?

I think mine was paid off by the time we got married.

Okay.

We got married. I think the debt at that time was probably closer to 10, maybe even 12.

I was going up. Okay.

Having credit card debt.

Why'd you get into debt?

I made some. I. Yeah, in retrospect, I made some. Just really bad financial choices all at the same time. Like, I bought a house, I got a brand new car, and my sister moved in with me at the same time.

What kind of car?

Brand new. Ford Escape, because that's where I worked.

You worked at Ford? Do you still work there?

I. I do work at Ford. I do.

Oh, my God.

Make those great trucks that you love so much.

Well.

Oh, my God. This is, you know, this is the ultimate irony, because every time someone comes on this show, they drive a Ford. I go, why? Okay, so you're an engineer at Ford?

Yes.

Oh, that's cool.

All right, so I. I went work at GM for a little while. So I sold it, and then I bought a GM car.

Okay.

And then after Kate and I bought this house and we were looking at the numbers when I was out of. Actually, I think we were selling credit card debt then. It was right when you, like, you know, cars were going. It was a good market to sell.

Yeah.

So I sold my Bolt then. And we were able to take some of that money and pay off credit cards.

Whoa. Okay, that's cool. So you sold your car at the peak. First of all, this is amazing. It's like, hasn't happened in decades where people are trading cars like commodities.

You made a profit, it sounds like.

And then you paid off your credit card debt with that money. Okay.

Some of it.

Some of it.

I'll take it.

Some of it. Some of it, yeah.

And what do you drive now?

No, we share a car. We have a Subaru.

A Subaru. I knew it. I knew it. I was waiting when you gave me that look. I Was like, come on. Okay, all right. It all makes sense now. All right.

One thing I want you to notice is that when people get large infusions of cash, they tend to pay off debt or save. This is very clearly shown in the research, and it applies to tax returns, stimulus payments, lots of different cash infusions. But interestingly, when people get money that's just slowly increased to their paycheck, they tend to spend it. And this is really important to know because you should know how most people, including you, behave with money. Also, if you listen to this show and you're in my money coaching group, you know how to take all types of money. Large infusions, small increases over time, everything, and redirect that money towards your rich life. I'll add a link to my money coaching program in the show notes.

Christine, I'm curious about your role in the relationship as it relates to money. You've mentioned debt, but I understand there's a story behind that. House and your sister, how did you end up with this house?

Yeah, so my parents, they had us when they were really young, and they've both struggle with addiction throughout our life. I have a sister who's intellectually disabled. So as soon as I felt like I was in a good place with money, I sought guardianship of my sister. My mom, she said that she was, like, okay with everything that's happening, but she's not a very trustworthy person and she's kind of chaotic. And I was told that, you know, a judge probably wouldn't grant it if I didn't have a home with, like, her own room and everything.

Who told you that?

A lawyer. Wow.

How old were you at the time?

I was 25, maybe 26.

25. 26 years old. You took guardianship of your sister. That means you were her legal guardian.

Yes.

Wow. And the court or the lawyer told you you got to buy a house.

So I did all this legwork, character letters about myself, figuring out what the living situation needed to be. And one of the things they said was, yeah, you're going to have a much stronger case if you buy a house.

And how did you react to that? I mean, did you say, okay, I'm going to do it, it's just a matter. It's what I need to do next. Or were you like, oh, my God.

So I think something that I is like a saying that is persistent in my life is if there's a will, there's a way.

Okay. Yep.

And. And so I think I. I ran the numbers initially, and I Was like, okay, this is gonna be. I'm gonna cut it real close. Like, I drained my savings.

Did you end up selling the house?

Yeah, we walked away with 12K after, you know, all the realtors fees, everything. So we use that for. As a down payment for this house.

Okay, got it. And what was the price you paid and sold, Just out of curiosity?

I bought my house at 142, and I sold it at. Was it 180k?

Yeah, I think 180. 185.

Yeah. Yeah. That's good. It's good for everybody to hear. You know, you think you walked away with $40,000, but actually, when you subtract out. Let's. Let's just go through the list. Your realtor fees. What else?

The down payment for the next house.

Yep.

Repairs, mortgage fees.

Repairs, mortgage fees. Right. Anything else?

I don't think so. Closing costs.

Closing costs on the new place. Yeah, totally. You end up. Instead of 40k, you end up with, like, 12k. Makes perfect sense. I think this is quite startling for people. Was it startling to you?

I knew that going in.

Okay, good.

And told the realtor, like, if I can't sell it for this much, it's not worth it. Like, we'll stay here, basically. Wow.

Okay. All right, good. All right. So you got the 12k, put it as a down payment for the new place, and that's where the two of you are right now.

Yes.

That was so important. Do you notice how many ways homeownership is explicitly and implicitly favored in America? Literally, the court telling Christine that she should own a house to show she's more stable. I find that absurd. Think about how that message would be received by young people, poor people, minorities, who have been systematically redlined out of homeownership. What a joke. Also notice that she bought her house for around 142,000, sold it for 185,000, but only walked away with around $12,000. I think that about 90 plus percent of people would simply take 185, subtract 142, and go. Yep, you walk away with $43,000. No, you have to account for all the phantom costs, including transaction fees. And now I will acknowledge that she did have more cash, but she took some of it for the next down payment. But that's what most people would do. The point I'm making is that if and when you buy, you must factor in all costs, because you cannot simply take a big number, subtract the smaller one, and go poof. Profit.

Great. All right, so do you still have the credit card debt, Christine?

No. So we paid that off about a year ago. All paid off.

How'd you pay it off?

Bonus tax returns?

Yeah, for a while, we. We decided no credit cards are allowed to be used. We were buying everything on debit cards, of course. Like, everyone keep things, like, really separate. And we were paying off the credit cards steadily.

And did you make progress that way? Yeah.

Good. Yeah, slowly.

Great. All right, so both of you have paid off credit cards. That's great. Did either of you ever celebrate?

We probably did something small, I don't know.

Like what?

Port a beer. Cheers.

Christine, do you remember that?

I do remember it. I think we were probably already going out. We just pulled that thing.

So someone's like, cheers. It's Friday. And the other one's like, oh, yeah, we paid off this debt that's been with us for years. Okay, that cheers to. All right, let's drink.

Exactly what.

So do you understand why I'm asking the question? Yes. Why?

Because it's a big deal.

It's a big deal. And creating these rituals around money, I think, is really helpful. And part of the reason that you may still be psychologically stuck in the past is that you haven't truly internalized.

That we are credit card debt free.

We did it. Do you believe that?

Yeah, a little bit.

Yeah.

I think it goes a little deeper.

A lot of people are able to grow their money faster than their money psychology. These are the people who have money in the bank but still agonize over buying cucumbers. Or they check their accounts multiple times per week, which is total overkill and is happening here. Or they simply still live in scarcity, in fear. Rather than embracing this new chapter of life, you don't just magically embrace a new chapter. You have to take a second to recognize it. And you have to do that over and over again. Think about it. In school, these rituals happen for us, like graduation, different grades, different teachers, even different buildings. But with money, we have to create these rituals ourselves. So ask yourself, what rituals have you created around money for yourself and for your family?

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So what seems to be the issue on a day to day basis?

I think I just carry a lot of stress worrying about the past and the future.

The past being credit card debt.

Yeah, just kind of like not wanting to get back there and also carrying probably some very unhealthy messages and just feelings about money.

Okay, and then what's the future? What's that worry?

The future is like, are we gonna like someday we might have to have two cars someday we're gonna have to start paying off these student Loans again. Or someday we're gonna have to pay for preschool. And just like, preemptively worrying about things like that.

Ah, you love to worry.

You could say that.

Is that fair enough?

Yeah.

What do you. What do you like about worrying?

It makes me feel like I could be prepared for things.

That's a good answer. Anything else?

I know the classic answer is control.

Control. Would you agree with that? Okay. All right. Christine's over here, grinning. What do you think, Christine? Anything else you want to add?

No. Yeah, I think Kate, like, I. Kate's account, every dollar person, and she, like she said in the beginning, she. If she could save it all, she would. Like if, you know, if we didn't have gfs and it all went to savings, I think that would be her preference to make her feel better.

You like that, Kate? You want to save everything?

I would like to save more aggressively, yes.

You want to create a blanket made out of $1 bills, keep you warm?

Yeah, maybe.

I mean, we can do it. It's not that expensive, you know. Give me 100 bucks and some yarn, we could probably make it happen.

True. This is going to sound really off course, but I went to music school for classical music, and, you know, that's not exactly a lucrative field. And I think I spent a lot of years of my life sacrificing for this thing and also anticipating that I was going to never do well financially.

Ah.

So I was, like, mentally prepared for that until I wasn't.

What changed?

I realized that I wanted things like a family and a home and a comfortable life and the opportunity to participate in society the way normal people do. Yeah. I was definitely operating on that mindset for a long time. And I. So I think in order to exit that mind, that area mentally, I. I kind of decided that I was going to put music aside as a viable career path. It's something I still do, but I basically decided I'm not going to try and make money at this anymore.

Fine. So you made money at other stuff?

Yeah, I have a different job.

Great. How do you feel about that?

I feel good about my job, but I think that there's a little bit, like, there's a part of me that associates the abundance of money with, like, a failure as a musician.

That's deep.

Yeah. Because it's like, part of being a musician and making it as a musician is, like, really extreme sacrifices.

Yeah. Do you hate money?

I used to think I did, but no.

Do you love it?

No.

How do you feel towards it?

We are hoarding.

Wow. Tell Me, more.

Like we're kind of. I'm still building trust for it, like, building the belief that it's worth pursuing, like, instead of this other thing that I was dedicating my life to.

Yeah.

And I think that there's some hurt and sadness over the structural issues that led me to that breaking point, that decision point.

I can understand that. I mean, you spend your whole life becoming really good at this. You internalize a set of beliefs that are reinforced by the structures around you.

Right.

People making jokes about, well, you know, that's why we went into music and all that kind of stuff. And this sort of. Artists are meant to be poor and starving, and it's everywhere, and you decided to set it aside consciously, and here you are. That comes with grief. Yeah. Even though I see those instruments in the back, I can see that you're still active as a musician in some form. It's not the same as going the path you originally thought for yourself, but this path you chose now, the one where you make more money, what does that give you that music did?

Not.

So much.

Tell me.

Friends, good mental health. A sense of, like, direct material feedback, that I am doing something that other people value in the world.

Yeah. And how about with your family?

I feel like I am bringing something to the table for them. It feels like when I was dedicating, you know, hours of my day to just saxophone, it really felt selfish.

That's got to be a weird feeling. It feels selfish. But you're also not making any money.

Right.

But then it's kind of like, well, I've just been doing this for so long. What else am I supposed to do? And if I were to give up that, it makes me feel even worse than I feel. This nice little box that you kind of ended up in.

Yeah. There's a lot of entangled, bad thoughts and beliefs. Voices.

Well, I think it's very courageous that you were able to decide the next chapter of your life. One thing that I'm really hoping is that as you really start to internalize this new chapter, the one that you yourself chose, that you can get really specific and vivid with what your choice has gotten you.

Yeah, it's true. And I'm just wrapping my mind around the, you know, future stability that I'm going to have as a result. Like, I. I started a retirement account, which I never planned on. Yes. So it's those kinds of things that have been enabled by this choice that was really interesting.

On this podcast, we talk about how you grew up around money a lot, but I haven't had the chance to dive into the professions people choose and their effect on your money psychology. If you know artists, you know they have some seriously messed up beliefs about money. And it's not just artists themselves, though I do think the entire industry does attract certain types of people. It's the culture that's been created and systematically reinforced. It's the unlimited supply of musicians who want to be famous, which allows a pyramid like structure, structure of poorly paid people at the bottom, and a few stars who everyone wants to be. You see this dynamic with actors and actresses, rappers, concert pianists. It's everywhere. One thing I love about this show is that we can be deeply intimate with two people, but we can also get the opportunity to zoom out and talk about the structures around us and how we are products of our environment. Kate recognized her environment wasn't serving her, and she made a conscious choice to change it. That takes real courage, but it also comes with a basket of emotions. Grief, shame, confusion, but also excitement and curiosity.

So let me try to understand where these feelings are coming from. All right. When you think about the money messages you received growing up, what do you remember hearing from your family?

I remember it just being arguments.

Your family, middle class, what were they?

It's honestly hard to gauge, like, probably upper middle class. But during my time growing up, it was very tumultuous in terms of, like, my mom would work and then she would be not working because she was having babies and raising babies.

How many kids?

Three. And I'm the oldest.

Okay.

My dad lost his job in 2008 and never really went back to working full time after that. So then it kind of all fell on back on my mom.

I mean, Kate's parents have a very nice house on the lake. And when I met her, I was, you know, I thought, you know, she didn't want for anything, you know.

Yeah, okay, great. So upper middle class at a minimum. And what were your professions of your parents, Kate?

My mom's an attorney and my dad is an engineer.

When they talked about money when you were a kid, what was the context of that? They fight. Did they smile? What?

They fought like one. They would fight about. My mom would be mad at my dad for not working harder, and my dad would be mad at my mom for spending too much, just back and forth like that. But they had totally separate finances, which was always very confusing.

Why?

Because they don't trust each other. They just don't agree on things. They don't. They're not really collaborative with each other.

They still married?

Yes.

You. You laugh like, is that a laugh? Like, I'm not quite sure how they're still married.

Yeah, okay.

Kind of.

Even Christine's like, yeah, okay, got it. Understood. So they don't see eye to eye on money. They kept their money separate. They're still married, like decades later.

Yep.

Still going at it. Fighting, arguing.

I probably, I bet they don't fight much anymore. But that's because they, they're so separate now that they just probably don't even really talk about it. They share a house and that's pretty much the extent of it.

Gotcha. How do you feel about that relationship now that you have your own family?

Very perplexed. Because I feel like Christine and I have found so much power in collaboration and communication.

Yeah.

Like we are. All of our plans for the future are joint and I feel like that makes things much simpler and more fruitful.

Yeah, I love that.

And I just see my parents now approaching retirement age and they're both like, stressed out that they're not going to have enough for retirement. And I'm like, now that I'm married, I'm like, you could have just been working this out together all along and you'd be better off.

You see that stress in your own life anywhere?

Well, yeah, I'm obviously stressed. Probably unnecessarily. I, I don't know. I mean, I inherited my mom's stress genes.

She loves to be worried too. What? She's worried? When you were a kid, she was worried about what, what you ate or do you have a raincoat on? She get your grades up? What else?

Yeah, just always be careful. Be careful. Right. Oh, be careful, Mom.

And can you complete that sentence? Be careful. Because what, you don't want to get.

Hurt or you don't want to poke your eye out, or you don't want to break your sister's nose?

Love that. Okay, great. Now this is real. And so you, as the oldest and the recipient of all of that, be careful. Be careful. What if this happens? How did you receive that as, let's.

Say, a 10 year old and older, responsibility and burden?

How would you say that that's manifested in your life as you became 15, 20, 25, et cetera?

I think I feel like I have to always have the safety net in place, like that's my role, kind of. If I do that, it means I'm fulfilling my basic inherited duties. And if I don't do that, then I am failing everyone around me.

And, and what's going to happen if you don't tell everybody. Be careful what's going to happen.

Everything's going to go wrong.

There you go. There you go. Kind of like how your mom felt. Probably. Right. All right, so your mom was sort of anxious about money, anxious about everything. You internalized that.

Yeah.

Is there an area of your life where you are confident, comfortable, intuitive?

I feel that way about being a mom.

I love it.

Tell me about that.

I just, I feel like with my son, I kind of have the vision to not want him to go through the feelings that I went through. And I feel like I have a good handle on how to go about that.

He's only nine months old.

Yeah.

I love hearing you say this. How did you arrive at that feeling already at nine months as a mom?

Well, I did a lot of therapy and self reflection, like during the months that I was pregnant and just kind of mentally preparing myself and knowing my own tendencies and having tools in place to deal with them.

Highly sophisticated, like a plus. You're not saying that you know everything. You're not saying you're perfect. Nobody expects that. But I love hearing you use the word vision. I have a vision. We have a vision. I think your son is very lucky.

Yeah. I want to exude more confidence and competence in our financial relationship and just our financial life. I want to learn these things so that I can teach them to my son in ways that my parents did not teach me.

What a profoundly important moment. Kate didn't miss a beat when I asked her what area of life she's comfortable and confident and intuitive in. If you are listening or watching this, what's your answer? For me, it's this. I love talking to people. I love hearing from you. You can see me when I'm talking to these couples. I'm here 100%. And it's fascinating to hear Kate talk about where she's intuitive because it tells me she's not an overthinker. In every part of life with her son, she has a vision. Such an important word. Something bigger than the day to day worries that usually consume us. But did you catch how she developed that vision? It didn't just come naturally. She worked hard at it. She did therapy and she worked on herself about what she wanted to pass on and not pass on and how she wanted to show up as a mom. To me, this is actually amazing because it means that all of us can do the same thing with our money. You're not bad with money. Reframe that. I haven't always been great with money, but now I'm learning how to take control of it.

Did you grow up poor?

Yeah.

Yeah.

Where there's a will, there's a way, there's a strong connection. Right. And. And is that a recurring theme in your life?

You know, when it came to college and all that, I remember asking my dad, like, how are we going to pay for it? And he was like, it's. It's simple. We're going to stay poor.

He said that?

As in, like, oh, that then you'll get financial aid and it'll be, you know. So hold on.

What is your conclusion from that?

It today or then.

Then.

I didn't really understand how that college was expensive. I didn't. I mean, I. I guess I asked the question, so I knew that it was something people worried about.

Yeah.

But I was really kind of asking, like, do you have money set aside for me? You know what I mean? Or like, and now ideas how this is going to happen.

When you look back at his answer.

See it as, like, lack of ambition. Like, I was. I was younger than. It kind of felt like, oh, so you don't have any hopes beyond this? Like, this is the life that you see for us.

Got it. So you're saying, looking back now with your wisdom, you see your dad's comment that the only way we're going to pay for your college is for us to stay poor. As dad keeping himself small, limiting himself, playing small so that that was the only way that you could afford to go to college. Is that how you see it?

Yeah, that or he, like, he didn't see anything better for himself either.

I see. Did he go to college?

No.

Okay. And how about your mom?

No.

Are you the first to go to college?

Yeah. Wow.

Congratulations.

Thank you.

That's quite amazing. You went. You went to college, you took care of your sister, you're an engineer. Have you celebrated this?

When I started making, you know, like, good money, I made. I didn't know what I was doing. I had no idea what to do with that amount of money. And I think because I handled it so poorly, and I think that's what, you know, that's where the frustration is between Kate and I is like, I want to celebrate and feel like I worked really hard and, you know, buy whatever I want or whatever it is. But I know that those behaviors sent us down, like, a wrong path. So it's difficult.

And so what would you say you do instead?

Instead of celebrating?

Yeah.

Like in, I guess in the past year, it felt like, you know, we restricted ourselves. I mean, there was a Lot going on with Kate not working and all that, but it. Yeah, it feels like restriction.

Kate, when you hear Christine share her story about how she grew up and any of that a surprise to you?

No.

Okay. Anything strike you as you hear that last part where I asked her if she has celebrated her accomplishments?

Yeah, I. I don't think necessarily that we've celebrated explicitly, but I don't know, I'm. I'm inclined to feel like our whole life is kind of a celebration.

Not.

I know not.

It doesn't count.

It doesn't count.

That's like telling your son when he turns five and you know, he goes, hey, where's my birthday cake? And you go. Every day is a celebration when you're breathing oxygen. Sounds like I hate you. And gosh, from hearing what I'm hearing. Christine, honestly, the journey you've been on, it's worthy of celebrating.

You know what's funny? Professionally, I'm very happy and proud of my business and my co workers and my Netflix show and this podcast. But I'm really proud of two things. First, my relationship with my wife, because we love each other and we spend a lot of time working on getting better together. Second, the fact that I got physically fit because I was a skinny Indian guy and that's what I used to call myself. And it took a lot of work, not just physically, but mentally. And those things don't come naturally to me. On the fitness side, I should be wearing an extra large Cisco shirt and working in tech, but it took an immense amount of different decisions and embarrassments and humbling myself to learn how to change my body. The lesson here is about what you are proud of. If you're in a relationship, you cannot compliment someone too much. You cannot celebrate too much. How many couples have you heard on this podcast who've paid off $50,000 of debt, but they never even celebrated? This is such an easy win that I want all of you to go for it. Pick the areas of life that you are proud of and celebrate it. You will get a lot out of it.

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Her to feel trusted and loved and supported.

Good. And how do you want to show up? When it comes to money.

With.

Peace, how are you showing up Today.

With anxiety, scarcity? Yeah. Yeah, I think so.

I think so.

Maybe a lack of self trust.

Self trust. A lack of self. Okay. All right. So now tell us and tell her what you want to show up with when it comes to money.

I want to show up with a solid foundation that we can build on together. I want to show up with excitement and happiness.

Abundance.

Yeah.

Possibility, maybe, instead of worry.

Yeah.

Fair enough. Do you want to go wild? You want to, like, spend all your money tomorrow and just go blow it in Vegas?

No, definitely not.

I don't think so. I don't think anybody wants to do it or expects to do that. I think you're going to be prudent. You want to go back into credit card debt?

No.

Okay, good. It's good to get that out there. So how can you show up with abundance and possibility but also not go into credit card debt? Are those things reconcilable?

I think that's what I'm not sure about. I'm still really transitioning out of, like, kind of an old frame of mind and trying to really let go of the past and live in the current circumstances.

Okay, so take all the idealized things that we just discussed for a moment. Just give me two minutes of your time. Now, what would it look like if you lived your life like that? What would be different about the way you talk to your wife? Here's a hint. Would you be doing that stream of consciousness thing?

No.

Hell no.

Why?

Because it's not fun for anybody.

Correct. What else?

It's not productive.

Yes. What else?

And we deserve better. A better use of our time.

Yeah. It's not actually getting you where you want to go, and it's costing you a lot. You see the costs of doing that? Just that one little thing.

Yeah. I mean, it snowballs into arguments sometimes or just general. More general stress than is even warranted.

And by doing that, what would you be able to do instead?

We could enjoy time together playing with our baby or watching a movie.

You guys ever laugh when. When you're doing the conscious spending plan and talking about money?

Probably not.

But it's fun, right? Like I'm laughing right now, joking around.

With the two of you.

You know, your car and all this money can be funny, don't you think? But what is it about when the two of you talk about money that it suddenly becomes so serious? What is that?

I think we're trying to defend our own positions. Yeah, we go into it defensively.

Yeah, I'm trying to convince her that.

This is why we should do this.

Or we shouldn't use the credit card for that. I agree. You can't be funny when you're making a court case. Okay. But yet here we all, all three.

Of us are, and we're joking around.

And everybody's teasing each other, and, you know, it's quite fun. I. I feel like we're all learning something. Is there a way that when you talk about money, you could bring in some of that humor, some of that teasing, some of that love that you have in other parts of life into the money discussions? Christine, I'm seeing a smile on your face, so I want to start with you.

Yeah, I think we could. I was feeling like she's going to hide money or hoard money from me because I, you know, I believe the money was there, and she was feeling like I was about to put us back in credit card debt.

Right.

We go into these conversations with these beliefs about each other, and they're kind.

Of the worst beliefs, aren't they?

Yeah.

Like, she's hoarding. She's gonna put us back into credit.

I mean, that's serious stuff. Meanwhile, I talked to you. The two of you are laughing.

You've paid off credit card debt. You've had a son. You've made career choices.

Like, 98% of what we have talked about is positive. Do you realize that?

Yeah.

So why is it that in your conversations with each other on these money topics, that seems like 98% of the time is super serious and potentially even negative?

I think that's why we came to apply for the podcast. We were like, why is everything so good? But we're still struggling to talk about it.

Yeah, we've been wondering that. Like, we have a good life. We have a great relationship.

Yeah.

And then all it takes is one conversation about a purchase or whatever.

Right.

So what do you say we take.

A look at some of the numbers? Because I'm really curious. All right, let me pop this up. So your assets. Let's go. Kate, can you read me off your assets here and give me the full numbers.

$348,000.

Okay. And what is that?

That's mostly our house and our car.

Right.

And then we included some of my instruments in it.

Cool. All right, investments. What do you see?

109,000. 202.

Okay, great. Savings?

10,000.

All right. And debt?

293,281.

And what's that?

That's our mortgage and student loans.

Okay. How much is student loans?

Mine are about 34,000. I think Christine's are about 8,000. Is that right?

Okay.

Yes.

Okay, great. Total net worth?

173,921.

Okay. How do you feel about that?

Good.

Cool. Christine, how do you feel about that?

I don't know. I guess I'm neutral.

That's it. Is it good or bad?

I think it's not bad.

Okay. I don't think it's bad. You got a net worth in the six figures. Pretty good to me. Let's go. Christine. This time, can you read me off your gross monthly income for each of you?

So I'm bringing in $8,408 a month, and Kate is bringing in $1,200 a month.

So total, you're making $115,000 a year gross. How do you feel about that? Good.

I feel good about it. Great.

I feel good about that, too. All right, so you're netting $7,000 a month and your fixed costs. What's that big number right next to the fixed costs?

54%.

Whoa. How do you feel about that number?

Great.

Great. I feel great about it too.

Right in the middle.

50 to 60%. I took a look at your housing. I added up these two numbers. You're at 27, 28%. Right on the money. You live in a. What's the general area you live in?

We live in Detroit.

Detroit, okay.

Got it.

Yeah.

I was going to say it's hard these days to get on 28%. You know, we talk about 28%. It used to be possible. It's very difficult, especially for young people and especially in high cost of living areas. You've done it. That's great. Don't move. You got a good thing going with your housing.

And this, by the way, is on Kate.

I understand that. Are you making like part time income right now? What do you think you might make ballpark if and when you go full time?

Probably like 40 to 50,000 a year.

Whoa.

Let me remind you that Kate and Christine are 28 and 33. And most importantly, they recently had a baby boy. And they have a loving dynamic. It's very obvious a little bit about their numbers. Their net worth is about $350,000, and they have just over $100,000 invested. $10,000 in their emergency fund, $93,000 in debt, which is a mostly paid off house and two relatively small student loan balances. Christine makes $8,400 a month as an engineer, a number that's likely to go up given her age. And Kate is making $1,200 a month as an event planner, she's also their son's primary caregiver right now, so. So if and when she switches back to full time work, her income will go up. Even their conscious spending plan metrics are very good. 54% fixed costs, 27% on housing. This is all great. So where's the celebration? Where's the pride?

Okay, so so far in our discussion, what has surprised you about what we've talked about?

I think I've been surprised at how hard it is to think about celebrating.

Yeah, I mean, I think we just, we don't prioritize the just doing stuff, the two of us, or just as a family. And the vacation we just took was great. We went with friends and it was awesome. But yeah, I do wonder if we need to do more celebrating, just the two of us, to celebrate kind of what we've accomplished.

Yeah, I agree. And you have accomplished a lot, individually and together.

In some ways, I'm more proud of.

You than the two of you are of yourselves. It's unbelievable, really.

Like, it's.

I'm sitting here like, oh my God, what you've accomplished, making decisions about leaving music or at least putting it to the side for your primary career. And of course, Christine, how you grew up and what you do now is incredible. So, yes, we are going to structurally change the way that you spend money on celebrating for the two of you. It's like a blank canvas. You two can choose what you want to do there.

Yeah, I think I've been holding off on having this conversation with Christine. She, you know, has accused me of saving too much.

So all you needed to do to have this conversation was apply, get screen, fill out all kinds of releases, get selected out of thousands of applicants, and then schedule it to appear with me on this podcast.

Well, here we are.

Go ahead, please. Have the conversation. I'm listening. We're all listening.

Well, yeah, Christine, I think that we are unique in that we have a lot of large purchases that we have in our goals for the future. But I think that the only way we can make those happen is if we save a little more than the recommended percentage to get there and to really be able to achieve those goals.

Pause, pause. Can I. Before we get Christine's reaction, Kate, can I give you a slight reframe? A little different way to say that in same content, just a little differently. Okay. Christine, I'm so proud of how far we've come. We've each paid off credit card debt, we've joined our finances, we've built a beautiful life. We have our son, we have our dog. We have this house. I'm happy and I'm excited to do this with you. So would it be okay if we talk about adding some savings? Not just for the sake of saving, but so that we can start to experience the next level of our rich life? The honeymoon, the instruments, the night out with the four course meal. That's what I want to do. That's the kind of life that I want to do with you.

You sound a lot nicer and more positive about what we could be doing and the possibilities rather than, why aren't we doing this?

I agree. I agree. How did I start my whole thing? Do you remember what I said?

Yeah. You talked about how proud you are of us and how great we're doing, that we deserve better.

You can never say that enough. You'll notice there was one key difference. I mean, yes, I started with appreciation and yes, I explained the why.

When.

You said, but I went like this, Like, I grimaced because you're equating.

Like.

Hey, we're doing okay, but I think we need to save more. It almost reminds me of, you know, going back in time and your mom telling you all her worries and things, be careful. And I wondered if you could just reframe that to and we're doing great and I want us to do even greater together. So that is what my impetus was. What do you think?

Yeah, that sounds right.

Okay, now let's get Christine's take. What do you say?

Well, I think one thing that I should remember is at the end of Kate's vows to me, we got married. She promised that our life would never stop getting better. That's exactly what she said. And I feel like I haven't heard that since and have it backed up with actual action. So I'm really excited for it.

Thank you for seeing where I'm coming from and for seeing that I'm not trying to hoard money or sandbag us. I just want us to live our best possible life.

The numbers come second, the rich life comes first.

A very interesting conversation with Kate and Christine today. I'd like to share their follow ups that they sent me after we talked. What surprised us, we were most surprised to realize that we actually don't celebrate our wins. We often look at our life as one big ongoing series of rewards for our hard work, which is true. But we see now that that perspective doesn't give us the space to relish and celebrate what has already been accomplished. It seems like a subtle mindset shift, but it's actually important to distinguish between daily gratitude and special celebrations of big moments. Number two how we have been showing up about money versus how we would like to show up about money, Kate said. In the past I've been showing up to our money conversations with anxiety, defensiveness and restriction. I would like to instead show up to our money conversations with openness, abundance, possibility, kindness, trust and curiosity. In order to do this, I need to let go of the parts of my past that hold us back, such as my learned impulse to control and the guilt and shame I harbor about leaving music behind as a viable career path. I want to fully dive into this new chapter of our life and allow us to enjoy and celebrate our successes and to think bigger about the possibilities for our life because I know that Christine and I are so powerful and and full of potential as a team, Christine said. I feel like in our money conversations now I'm being very defensive. I avoid dreaming about a richer life because I don't want to stress Kate out in the future. I want to prioritize being open to having a richer life and I want to be vulnerable enough to create that rich life with Kate by dreaming with abandon. They also said we changed our CSP to factor in a new savings category which we are calling New Zealand. After discussing it further, we decided that we want to save up for 10 years then take our son with us on an amazing, super memorable international family trip 10 years from now because we want their son to be old enough to fully remember the trip. As for our honeymoon, we decided we will take it within the next year or two. We will go somewhere cozy in the mountains where we can hike during the days and enjoy a private hot tub in the evenings. I want to to thank Kate and Christine for coming on the show and sharing their story and their finances with all of us. Every time guests come on the show, it shows huge amounts of courage to open up their lives for all of us. So thank you very much. Thanks for listening to I Will Teach youh To Be Rich. I'm Ramit Sethi. Please follow the show on Apple, Spotify or we 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.

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Build the I will teach you to be Rich system into your personal finances.