Ramit Sethi coaches a client living paycheck to paycheck who faces $960 monthly daycare costs that will double when a new baby arrives. The client has no plan to cover it. Without one, Ramit warns, they'll cycle through earning, borrowing, paying off debt, and repeating until they're in serious financial trouble.
You have.
No money.
Left over at all?
It feels like I live paycheck to paycheck. I don't feel like I'm making any money.
Daycare is $960 a month. Is that going to go up with the new baby? Yes. Double. How are you going to pay for that? We haven't thought about that yet. This baby's coming. This baby's knocking on the door. Hello, world, where's my daycare? If you are not planning for what to do about childcare, that, to me is a big clue that you probably don't think about money down the road. If we end this call right now, I suspect you will go the rest of your life getting into debt, making a little bit of money over here, paying it off, going into debt, doing it over and over, until one day it's like you're in the ocean and it just engulfs you.
