“Her socks have holes but she's too cheap to buy new ones”

I got to tell you something I'm really proud of with this show. In the last few months we've gone in studio, we've gone around the country and done live shows, we've added more and more diverse couples and we're doing longer and longer follow ups. This gets me pumped because we are making the show better every single week. If you like what we are doing, do me a favor and leave an Apple review. I read every single one of them and it helps our podcast grow. You can leave the review at Apple Co Ramit. It's going to help us get better guests, it helps us recruit better team members, and it helps us make this show better every single week. So go to Apple Co Ramit and leave that review. Yes, yes, yes. Spoiler alert. This is a wealthy couple you're about to hear from, and I'm going to tell you right up front, you might get frustrated while listening to today's episode. I know that I did, and honestly, at times I wish that I would have handled things differently. You'll be able to spot these moments very, very easily. But I think this conversation is important to highlight for a few reasons. First, how you feel about money is highly uncorrelated to the amount in your bank account, meaning many people think that when they finally get more money, they're going to feel good about it. That rarely happens. More money alone doesn't change your feelings. Next, whether you want to change the way you behave with money or you want to get in shape or you want to start a business, this is a fascinating look today into what it really takes to make a change. So I'm going to help this couple, but I want to take this opportunity to remind anyone listening that if you are truly struggling with money, for example, if you make 50 to $75,000 in your household and you are feeling stuck, I want to help. I'm not here to judge you. I'm not going to yell at anyone. I'm going to give you my honest thoughts and we'll work through it together. It's really important that I have the opportunity to work with couples from all parts of life. So if you are struggling financially, if you make less than $75,000, please apply@iwt.com apply on today's episode. Why don't you spend money on discretionary things?

You guys are both cheap.

Meet Matt and Eliza.

Spending money doesn't generally bring me joy.

If it's extraneous, I myself am afraid to spend money.

Matt is 34 years old. Eliza is 32. They've prioritized investments for years, which has put them on a comfortable path towards retirement. But now they struggle to spend money.

I'm very much in the dollar saved as a dollar earned category, regardless of how many dollars you already have.

Matt deprives himself when they go out to eat.

I did it last week. I wanted a can of soda at the restaurant and I decided not to do it.

Eliza would rather spend almost nothing so she can work towards her ultimate goal.

I'm constantly thinking, oh, how am I going to get there? If I cut a little bit here and cut a little bit there, I'm one step closer to that horse one day.

All right, so all you need is 8333 sprites per year. Sounds reasonable. Their penny pinching is causing them to live a smaller life than they have to, and that frustrates Matt.

We're missing out on experiences in life and experiences that are going to be harder to come by later because we are too afraid to spend. Part of me puts the blame on me and part of me puts it on Eliza.

Now, with their first baby on the way, can they get on the same financial page and change their money mindsets so they can actually enjoy spending money?

In my mind it's like, okay, maybe I could push past my own frugality, but to push past mine and her is like, that's just, that's just an uphill battle. That's a pain in the butt.

Lets meet Matt and Eliza. Before I talk to them. I'm going to open up Matt and Eliza's conscious spending plan which breaks down their net worth income and where they spend. You can download this free conscious spending plan template or csp@iwt.com CSP let's take a look.

Okay.

Eliza and Matt, 32 and 34 years old. Let's take a look. Assets, $683,000. Investments, $536,000. At $32,000. Very impressive. Savings, $21,000. A little bit low relative to the investments, but we'll find out what that's about. Debt, $386,000 for a total net worth of $854,000. What am I doing here? All right, let me guess. Are they going to be complaining we can't spend money on a candy bar? Let's find out. Income is similar to each other. One is earning 6,250amonth. The other is earning 7,900amonth. Total income is $170,000 a year combined. It's a very good income, but wow. Their investments are even higher than I would have thought. Based on that, fixed costs at what, 78%. What the hell? How do you have 170k income, 78% fixed costs, and then over half a million dollars in investments in your early 30s. What's going on here? Hold on. Are they overpaying on their mortgage? No, it's not their mortgage, which is very reasonable. They have generic home maintenance. I like that. Ah, okay. IVF loan payment, $500 a month. Okay. Groceries are only 425. Okay. Why do they have, like, 50 lines? What's going on here? I'm literally down to line 29. You should not be in line 29 on your fixed costs. They have flood insurance, homeowners insurance. Why are they breaking all this stuff out? Just use the CSP the way I designed it, all right? They have health insurance. Health care parentheses, not insurance premiums. Their health care costs $1,000 a month. Okay? That's where some of it's coming from. Disability insurance term. I don't even know what to make of this freaking csp. What am I doing on this video? Oh, hey, there's a bunch of numbers. I don't know what any of this is. And then childcare is $1,500 a month. Okay. It says futures starting in roughly two months. Investments are at 15% of net. Pretty aggressive. That's good. That's nice. Savings are at zero. Okay, that explains why they don't have much in savings. Fine. And then everything else is at 7%. And they actually broke it out. They have betting. $83 a month. Betting. Okay. Horses, $150 a month. Is this like some rich white family from the 1880s, like, going to the horse track? We're going to bet what's happening right now. Vacation, $208 a month. Family travel, 133. Eating out, 120. Hair and beauty, $10 per month. Can anyone tell me what hair and beauty you're doing for $10 per month? And then clothing is $62.50 per month. I mean, I actually believe these numbers because they're so, like, type A control freak. I'm a little confused on what's going on. Oh, let's look at their application. We do not know how to grapple with having a healthy savings and investment account, but less ideal cash flow to expense ratio. First of all, if you're using the word ratio in your application, I can guarantee at least one person in this relationship is an optimizer. We struggle with small and large purchases. Well, I struggle reading your csp. We would love to understand how much flexibility we have in our spending saving ratio and how we should emotionally approach spending since we are probably both naturally geared towards savings. For example, we do not have Netflix, even though we make a combined income of $175,000. All right, let's see what happens in this conversation.

We tend to get very lost in the weeds on both big picture decisions and then also on some smaller decisions. There are a lot of questions that, you know, we kind of. We need help thinking through.

Okay, Eliza, can you think of a time in the last month or two where you were not on the same financial page with math?

We're in the midst of figuring out what we want to do for childcare because we're expecting our first child in about a month. So right now we're deciding between, you know, part time nanny and daycare and the amount of hour coverages that we would get with each option and the financial implications we take, like part time coverage for a nanny. It's only a few thousand more dollars per year than daycare, and hopefully we get somebody to help in the house, but it is still a few thousand more dollars and we don't have an amazingly strong cash flow. So that's definitely one item we're discussing.

How do you go about making that decision?

We discuss things probably ad nauseam. We probably go back and forth, back and forth, and we'll say we don't know what we're going to do. Three days later, we'll repeat the same conversation, we'll say we'll figure it out later, and then two days later we're back in the same place.

Do you like that?

I think it has a certain comfort, but no, I don't like it, Eliza.

No. Definitely easier to move on with life.

But you also tend to spin around decisions like that.

Probably.

How long do you think that you will be discussing the childcare option before you make a decision?

Until he really needs to be in a childcare situation.

Oh, okay. So basically until the decision needs to be made.

Yeah. So this is our first child. Both of us work from home. We've been told that they sleep a lot, but we are not experienced child caregivers. So if we find that he's sleeping a lot and we can both work from home comfortably, then we'll let the system keep going, I think. And if we find that he's disrupting our workday a lot, then we will figure out a solution. So figure we're probably about one to three months away from needing to really make that decision.

And how long have you been talking about this decision already?

At least two, three months at least.

Okay, so we're talking about, like, six months for a decision. And what's the dollar value for this daycare?

Could be between 19 and 22 for the year 1920 2000, and the nanny could probably be between 20 and 30.

Okay, so let's say it's a $8,000 difference and discussing it for six months. What do you think about that?

$8,000 to me is like, a decent amount. Like, it shouldn't take six to eight months. That's crazy. To me, the more crazy part is that we're not getting any new information. It's more like Albert Einstein insanity is doing the same thing over and over again, like, not getting anywhere.

So what are you getting out of it?

I think it makes us feel like hopefully when we do make a decision, it's been the right one.

Okay, and does that mean that the longer you spend deciding in your mind, the more correct of a decision you're making?

Not necessarily.

But he's nodding and you're saying, no, go ahead, tell me.

Yeah, I mean, I think we're both, like, we view ourselves as analytical people. And I think part of that is, like, we do research and we learn things and we figure out what's best. And so in our minds, like, oh, if I thought about it for so long and talked about it for so long, I'm more likely to come to the right conclusion, which, like, might be true on some basic level, but we're right past any practical value here.

And I think it does give us confidence in knowing that we've really thought about it and put together both, like, the qualitative and the quantitative components of a decision.

Okay, well, it's pretty clear Matt and Eliza are not decisive. They're stuck in this cycle of agonizing over small decisions, which adds tons of unnecessary stress to their life. For example, yes, childcare is a massive decision. It's worth deliberating over. But this isn't the only money issue that they struggle with. There's also an issue concerning how much they're comfortable spending on household items.

We got married about six years ago. We got a fancy coffee maker off the registry. It broke. And so we're debating what to do next. And Eliza bought a Mr. Coffee, you know, something you might see, you know, in, like, a Motel 6, for example, to which I said, you know, we have coffee every day, and we could do a little better. And so I went out and got nothing too crazy, but not super cheap either. About a hundred dollars on an espresso machine to make lattes.

That sounds pretty decisive. You saw the thing, you didn't like it, so you went out and bought something else. Right.

I think he feels frustrated that I would have been completely satisfied with the $20 Mr. Coffee, even though, you know, upping it to a $50 other coffee maker might have felt more in line with what we could theoretically spend on something we use every day. But I like the value of Mr. Coffee.

So is that the primary disagreement between the two of you is that, Matt, you prefer to spend a little bit more on things, and Eliza, you prefer to be economical or spend less on most things? Would that be a fair characterization?

I'm probably very much in the dollar saved as a dollar earned category, regardless of how many dollars you already have. And I think Matt feels like we have enough dollars sometimes, or maybe we have enough dollars, and if we spend a few extra dollars to get something that we'll enjoy a little bit more, maybe that's worth it. Whereas I look at it and say, no, we could put all of that away.

Matt, is that fair?

Yeah, I think in a generic sense, that that is the main issue. I think there are also times when I myself am afraid to spend money, and I think I'm too cheap or frugal. So I don't think it's just on Eliza. I think it's on both of us some of the time. And other times I think it's more on her end that I get frustrated.

But what's the problem today? Why are we here?

My big hobby that I like to do is sports gambling. And we have an agreement that every year I get a thousand dollars to gamble on sports. If it grows, it grows, and if I lose it, I lose it. And so we've had that since we got married. And overall, I've done pretty well, and I've about doubled the money that I've had. And so comes football season, and I want to take some stuff out of the bank. And Eliza says, whoa, whoa, whoa, you can't do that. You didn't have a job for a few months, which was true. Our cash flow isn't where it needs to be. Our savings, our high yield savings aren't where they need to be. And I say, well, what do you mean? Like, a, we have this agreement. B, you know, this is, like, something that I really enjoy and, like, has a time component. Like, if I don't do it now, then, like, I kind of miss out on what I want to do. And I also look at her and say, it's only a few thousand dollars we know we have in the bank. It's not even 1% of what we have. It's totally fine. At that point, I just started a job, but was starting to bring in income and said, very obvious it's going to replenish itself in our bank accounts over the next few months. And I would say it took a long time of bothering her and pestering her and kind of making compromises and figuring out where to get a few hundred here and a few hundred there to kind of get her to allow me to do some of it. And, you know, I think it was frustrating for her not to recognize the big picture that we were going to be fine. I characterize it as the circumstances changed somewhat and so she didn't think the agreement applied in the same sense.

And do you see her perspective?

I see it. I just think it's shortsighted. She's thinking way too much about our literal cash flow right now.

Okay, Eliza, what's your take on that scenario?

We shouldn't have to touch our savings to make it month to month. That's my perspective. And with him not having had a job for a few months, it was getting dangerously close. And I didn't think we needed to be taking money out of savings vehicles to go to gambling.

Okay, this is actually quite interesting. I could see both perspectives. Right. What would you two do? If you were listening to my wife and me and we were in this same scenario and I like to gamble and same thing, what would you tell us?

I would tell you that if gambling is your preset guilt free spending and it's not going to kill the budget, it's okay.

Okay, Eliza, I would have said we're.

Not doing so much guilt free spending period this last period of time. So why is this so different?

Ah, Matt, when you lost your job, did you all have a discussion about how that was going to affect the family finances?

Yeah, we talked about that. We were going to cut back in a lot of areas or certain areas.

Okay. Did you?

I think so.

We basically cut all discretionary spending.

Okay.

Part of. I think our issue is that we look at what we spend on and we don't see a lot of fat, we don't see lots of extraneous purchases. So we have trouble figuring out, like, where else to cut.

Okay, why is that? Why don't you spend money on discretionary things?

Because we're both cheap and I don't think we feel like we have a ton of extra cash flow to just go spending extra.

Can we go to the cheap thing for a second, Matt? You're cheap, both of you.

Yeah. To different degrees. Yeah.

What does that mean?

Classic examples. Ever since I was little, I can remember looking at a menu and like, being like, well, you know, the burger is like 16.99, but, like, the chicken burger is only 13.99. So I'm just gonna get that, even though I wasn't even paying.

And you still do that today?

Yeah, I mean, I did it last week. I wanted a can of soda at the restaurant and I decided not to do it.

What do you feel when you make that decision not to get the thing that you want? What do you feel?

A little sad.

What else?

Sometimes I feel good about it. Like I'm strong and I now saved $3. That could go to something else that I really care more about. For me, it's not the cannesota, but whatever my equivalent is.

Right. That's common. The idea that I am strong enough to stand up to the worldly consumer engineering that has been levied against me. I don't need it. I'm strong. Right. Almost feel a little righteous. I did it. I don't need that Coke. Sure, I could have it, but I don't need it. And what do you end up doing with the money, Eliza? You said you could save the money for something you'd rather spend it on. What do you spend it on?

Hopefully the Amex savings account.

Wow, that's romantic.

I think part of it is that the things that I really want that would really bring me the most joy are more expensive than $100. It's not an $100 purchase that I'm interested in. I love riding horses, but we go from a $3 purchase to like a $25,000 purchase really quickly.

Yeah.

So that would be where, you know, I'm constantly thinking, oh, how am I going to get there? If I cut a little bit here and I cut a little bit there, I. I'm one step closer to that horse one day.

Okay. Is that true that you can cut $3 here and there to a horse?

Probably. It would take a very long time to get there.

Okay.

You know horse owners. Yeah. Okay. Do they uniformly cut back on Sprite?

I don't know.

Okay.

What's more common about horse owners?

They're high net worth individuals to begin with.

Yeah. What do y' all think about this?

Yeah, I mean, I think that the amount of money will. Amount of sprites it would take to save for a horse would be tremendous. Like, maybe you have like one shoe on one horse so far saved up.

Did you say a horse cost $25,000? Is that true?

So it's the horse maintenance that's really the issue. The horse you could get for, like, somewhere between free and a million dollars, depending on what you're looking for, but they all cost the same amount to.

Maintain 25,000 per year?

Yeah, roughly.

All right, so all you need is 8333 sprites per year. Sounds reasonable. Every couple of days, I get a bunch of emails from people with the subject line cheap person story. I think in one of my books years ago, I must have written, hey, I love cheap people stories. So if you have one, just email it to me. I don't even remember doing this, but every couple of days I get these emails from people sending me the most insane stories about cheap people, which I love. So if you have cheap people stories, send them my way. Just know that I'm going to share them publicly because I love them anyway. The reason I bring this up is I can help a lot of people change a lot of things, but I can't fix cheap. And I am curious with Matt and Eliza to know how they feel about being cheap. We'll find out after this short break. You know, my rich life really is. It's not sweating everywhere. I go where it's above 68 degrees. Look at my arms. I can't stop sweating. Of course, I told my wife this. She just looked at me like I'm crazy. She goes, why don't you just inject Botox? I was like, I'm so uncomfortable. Anyway, when it comes to being outside, especially in the summer, I sweat everywhere, including my freaking nose. Which means when I'm wearing sunglasses and it's hot, they are slipping down, and it's hard to find sunglasses. I don't mind getting sweaty that actually stay on when I'm outside. Now, listen, I don't want to wear those sports sunglasses that look like I'm an insurrectionist on January 6th. However, enter Goodr sunglasses that are stylish and you would wear them outside. And they are made of a lightweight material that doesn't slip or bounce around. My coworker discovered them a few years ago and she told me I got a pair to play tennis in. I loved them. They are super affordable at $25 a pair. So I got a bunch to have everywhere. I would need my workout bag, my pool bag, my car, kitchen drawer, and more Gooder Sunglasses come in a bunch of cool colors and different styles and you can use them whenever you need to move around and be outside and not worry about your sunglasses falling out. Look at all these different sunglasses. They have different colors, different shades, different styles. Get one for your spouse, get two for your kids. The name unicorns, Calamity. I think I saw one called Vanguard something. That's always a good sign for me. Gooder sunglasses are lightweight, comfortable, and they're made not to slip or bounce. You're hiking, running, or traveling. Plus, they offer a 30 day money back guarantee on all orders and a one year warranty on every pair. If you're looking for new sunglasses, Goodr is giving money for couples listeners. Free shipping. Go to goodr.com ramit and use code RAMIT for free shipping on your first pair of goodr sunglasses. That's goodr.com ramit g o o d r.com/ramit and use code RAMIT for free shipping. As you know, I'm in the education business. Not only do I teach, but I also learn. And I like to spend money to keep learning in different ways. Courses, coaches, tutors, all of it. In fact, I believe that so much that one of my 10 personal money rules is I don't limit myself when spending on education. And I gotta tell you, I love finding new ways to learn from people who are at the top of the game. Which is exactly why I love using Masterclass, the sponsor of this week's episode. With Masterclass, you can learn from the best to become your best. Masterclass is the only streaming platform where you can learn and grow with 200 plus of the world's best for just $10 a month. An annual subscription with Masterclass gets you unlimited access to to every instructor. For example, one Masterclass that I loved was a screenwriting class from Aaron Sorkin, who created one of my favorite shows, West Wing. And every membership comes with a 30 day money back guarantee. One of my favorite parts of Masterclass is all the variety. They have chefs, screenwriters, designers, everything you can imagine in Masterclass. Right now, our listeners get an additional 4. 15% off any annual membership@masterclass.com Ramit that's 15% off@masterclass.com Ramit masterclass.com Ramit okay, welcome back. Let's keep going. Okay, so Matt, you said you're cheap. Do you like being cheap?

No. When I like Pass on the $3 item, I feel like it's more like I have a rule in my head. But I'm not a rule breaker. So, like, I'm not going to do that.

Okay, and then, Eliza, are you cheap?

Probably.

What does it mean to you, by the way? Matt's nodding, like, a lot.

If I. If I'm cheap. She is definitely. Oh, wow.

Okay, tell me, Eliza, spending money doesn't.

Generally bring me joy if it's extraneous.

What does that mean? Extraneous? I'm learning new words today, like clothing.

Like, why do we need to spend a lot of money on clothing? We need to look professional and good, and then that's sort of it.

Eliza, some socks that have, like, holes, like, the size of, like, a mouse.

Hold on. Can we see these? Eliza, get the socks. Let's see.

No, I can't have to go digging. He made me throw out a bunch of them already.

All right. I do love seeing, like, old. Big old hole in them, you know? And you're just like, yeah, I still wear it. Okay, so you don't care about clothes too much. Fine. What else is extraneous for you?

Close is definitely the big example where there's, like, a sense potentially in society of, like, keeping up with the Joneses that we just don't care about. But I think that's, like, the biggest example. Or like Netflix right now. We both enjoy watching TV at the end of the workday and hanging out together. And we've gotten kicked off of the family Netflix plans by Netflix. But the $8 a month that Netflix costs we've decided is not in our budget. And so we've been going without and continuing on with whatever we have access to.

If you don't think it's valuable enough, what's the big deal?

I think we both enjoy Netflix.

If you enjoyed it, then wouldn't you sign up? People often display what they value by what they purchase or what they do. Maybe it's just not that important to you.

I would say if it was just me making the decision, we'd probably have Netflix.

Okay, how did you have that discussion about not paying?

I think at first it was like, whatever. Like, we have other streaming services. And then as time went and we kind of running low on things, interesting us on those services. We were in our spending freeze when I didn't have a job, and therefore I wasn't going to bring it up because didn't feel comfortable in that scenario. Obviously, I knew that our cash flow issue was more on my side, so just kind of let it ride. And now we're here today.

Okay, and when you got a job, did you have another subsequent conversation about changing your spending the same way you had had that discussion when you. Your job?

Yeah. Not as in depth, but yeah, we did.

Okay. What did you decide in that second conversation?

We would loosen up a little bit. Like, there's one or two items around the house that we put off purchasing that we've since decided we could purchase. But also, by the time he got a job, I was seven months pregnant. So now we're focused on future child expenses and needing to save for that again. Whereas when he lost his job, I was not even pregnant, so it was not as much of a concern.

Okay, so what happens if, like, nothing changes? Like, you have a high net worth, you're about to have a kid? It sounds like it's going to be fine.

Honestly, I think we'll feel stressed. I think that this child will inherit probably some money scripts. I think that there's certain things in our life that we think maybe could change, but, like, don't know how to change and don't know how to approach thinking about changing. One other example is like a second car or trading in our current car. Because this year, with Matt having not had a job, we qualify for the used EV tax credit. And I've always wanted an ev and we have until the end of the calendar year to make that decision. But we look at that and go, eh, you know, like 20, $21,000, $18,000 plus having to install a charger. Is that worth it? Like, we don't have the cash flow, but we have the savings. And so we've been. This is another item where we've been circling for months, like, do we buy this EV or not?

I guess it doesn't really answer my question. Like, nothing changes. You're just gonna circle the same way you circled about this and that. And it actually doesn't seem like it's harming you that much. It seems like you actually like the stress. Like, it feels comfortable, as Matt put it. So what's the problem?

Yeah, I think that it is comfortable on some levels, especially to Eliza. I think it makes her feel like she is doing what she is supposed to do, which is making sure she crosses every T and dots every I.

And saves every dollar.

Right? And saves every dollar.

Okay.

Yeah. And we'll probably go in a lot of circles and have a lot of similar conversations and probably at times get a little more frustrated than others and probably honestly, on some level, just not enjoy ourselves. Just be one of those people who can never get over, you know, buying the soda or can never get over getting the Netflix, even if they Understand that?

Why are you talking in third person? You yourself don't order the soda or the hamburger. I don't understand.

I guess part of me puts the blame on me, and part of me puts it on Eliza. In my mind, it's like, okay, maybe I could push past my own frugality, but to push past mine and hers, like, that's just. That's just an uphill battle. That's a pain in the butt.

Before we get back to the interview, my goal is to provide the best financial material on YouTube without berating guests, without shaming people for eating avocado toast. So if you appreciate that and you want to learn more about money psychology, please hit that subscribe button. It really helps us grow. Now, when it comes to Matt and Eliza, do you notice that when they talk about saving money on small things like foregoing netflix for 8 bucks a month or having water with lunch instead of soda, do you notice how they take a lot of pride in their frugality? It almost seems like they came on this podcast to brag about it or to get my approval and a high five for their frugal choices, which I'm not going to do. I think being frugal can be beneficial, but I think that often people who are cheap and they have admitted they are cheap, they take pride in living a smaller life than they have to. I don't find that impressive. If anything, I find it depressing and uncreative. And this is a red flag for me because it tells me that they've gotten comfortable living this way. They actually enjoy it and take pride in it. But if that were really true, why would they be here? The real question is, do they want to change? Let's find out. Listening to the two of you, I am looking for a reason that the two of you would want to change. I'm not sure I hear it. I'm open to it. Maybe I'm missing something, but both of you take a sort of pleasure or comfort in not spending money. It's become part of your identity. I can't change that. If you want to, I could help you, but it's not really clear what you're looking for from me. At least to me. The two of you have a lot of money. You have these questions about cash flow, but really, that's not the real question here. It's not that you know that because you know how to read the numbers. So what is it that you really want?

I mean, permission to spend money sounds so simplistic, but maybe it's like Help understanding our money psychology and how we could get over our frugality.

You'll never get over it. I'll give you an example. What's the type of food you like to eat?

Pizza.

Okay, me too. What if I told you you need to get over liking pizza? What would you say to that?

Well, that's impossible.

Yeah. You legitimately believe that not only would you not get over it, it's part of you. You actually don't want to get over it. You like it. So why would I tell you that you can get over frugality. It's part of you. You actually like it. How am I gonna come and tell you? Time to get over the very thing that makes you who you are and you actually like it. Can't do it.

Well, to go with the pizza analogy, if somebody likes pizza and they eat it every day, I guess as a dietitian would be like, it's great that you like pizza. We probably shouldn't have it every day.

Okay. And then what would they say?

They would say, okay, how do we moderate you so that you can have what you enjoy but still keep your body in shape?

How would they do that with food?

Maybe they'd set a plan. You could have pizza every Tuesday.

Great. And what would you be eating the other days?

Salads and vegetables.

Great. Veggies, bread, whatever. Lots of other stuff. Right. I can't make you get over a taste that you love. I could certainly introduce you to a new way of thinking, but I can't make you get over something that is who you are and what you like. So you tell me, what would it look like if you were to add a new taste to your palette? What would it look like, Eliza?

Maybe being more comfortable going out to, like, dinners. Our Sunday afternoons have become Matt's. He said he's a very big football person, so we gotta watch some football. But then after some football time, we'll go out for ice cream and call it a day and come back. But maybe we could elevate that to a dinner instead of just an ice cream would be.

Is that what the two of you would want to do?

Well, I think that there are times when I feel like we pass up doing things like going to concerts, going to sporting events. And I think that right now we're missing out on experiences in life and experiences that are going to be harder to come by later because we are too afraid to spend.

What do you tell yourself when you pass those experiences by?

I can't afford that right now.

Do you believe that?

Sometimes depends on how much it was.

And what about the other times?

Maybe that particular experience doesn't mean enough to me. Like, for example, I think Wicked was in town and Matt's always wanted to see Wicked, but tickets were like $100 each, and that felt like a steep price to pay. So we didn't do it.

Okay, so what?

He still wants to see Wicked.

What's going on right now? You guys are adults. You earn a lot of money. You have a lot of money in savings. Like, what is this? Is it that you want me to come here and say? Like, you can spend money? Because truthfully, that's not going to change a single thing for you. It's not.

I guess we want you to work your magic because I've heard you do it with other people.

I can't change you. I'm not even sure what you really are looking for. I'm not sure you know what you're looking for. Here's what I suspect. I suspect that the two of you, your identity is forged in not spending money. I suspect it's from your families. I think that it's become comfortable and it's become part of your identity to not spend money. I think that you fear if you spent a little bit more money, who would you be? You would trip and fall and suddenly be spending $500 a day eating at the fanciest places and you wouldn't be able to go back. Look at the smiles on your faces. And I think that you have a tiny glimmer of, are we missing out on things? But that glimmer is quickly covered up by, let's not think about that because we don't have enough money. Whether it be net worth, cash flow, somebody lost their job. How can we spend this much? It's one thing after another. And truthfully, you'll probably just persist in moving the goalpost for the rest of your life. How does that strike you?

Accurate.

Pretty sad.

Yeah.

Limiting, I would say.

I think. So you know how much you're going to have if you just leave your investments growing, right?

About four and a half million dollars without adding another dollar, which you will.

What happens if you do add another dollar, the way you currently invest? How much will you have?

About eight.

What are you going to do with $8 million?

Hopefully buy a horse.

You need $8 million to buy a horse? Why don't you go on a pony ride? Costs like a hundred bucks. Oh, beautiful pony. Oh. I guess adults ride horses. Nice horse ride. Bye. What about that?

That wouldn't feel as Satisfying. But you're right that I don't need $8 million to do that.

That's also. You don't need 40 years to wait to enjoy the things you love, right?

I hope.

Who needs 40 years?

Yeah, it's a long time to wait to get your horse also.

Is a horse the only thing that would be like, a rich life. Surely there's got to be more than that.

We purchased what we think of as, like, a very adequate house for where we are right now with a nice plot of land. And the idea being that, like, right now it's meeting our needs, but maybe one day we'd really like to expand onto the house because there's more that we could see doing with our home. And that would be another thing that we would both like to feel comfortable doing and get to one day well before 40 years.

That sounds cool. Are you on track to do that?

I mean, we could take all the money out of our investment account and do it very easily, but that sounds like a stupid idea.

Yeah, I don't think I would do that. But in general, are you on track to at some point make an addition to your house?

Ish. Hard to say. Maybe. Yes. But not in the timeframe that we might want.

Maybe you guys need to save more money.

We think so. We're sorry. I think so.

Maybe you should stop eating out ice cream. Maybe you should cancel all the other streaming services too. Do you see how by setting these two goals, you have now created an umbrella under which you can justify cutting back on everything? In fact, it actually makes you mission driven. Like, we don't need that pizza. We have a mission. Do you see that? You've almost perverted the way people think about living a rich life. You're now effectively hoarding money for this goal, which you don't even know when it's not really clear what it's like. Maybe we should expand our house, but it's. We don't know. But it's going to cost a lot of money, so therefore we need to save every last penny. Do you see that?

Yeah, we know we do that.

Okay, that's good self perception. Realizing what's happening is actually a big part of it. The question is, do you want to change?

We do want to change, and I think we, like, just don't even know how.

Sure you do.

I have an idea. We can send more money now for things we want and worry less about what's going to happen in 30 years.

What do you think, Eliza?

He's right. But, like, the cash Flow situation feels scary. Like it doesn't feel like we could both save and spend a little bit more on things that we enjoy in the moment.

First of all, anyone who uses the word cash flow, it's usually a red flag. Okay? Two kinds of categories of people use the word cash flow. One is real estate fraudsters, and the second is people who over complicate their finances. Now, I'm glad you used cash flow. It's a technical term, whatever. But I can tell by looking at your CSP there's a lot of fingerprints of the way the two of you think about money. As you heard me rant at the beginning of this episode, Matt and Eliza really took a turn when they filled out their conscious spending plan. They added a ton of extra lines, which you can probably tell by now drives me insane. Guys, the conscious spending plan is designed to be simple. When you start adding 5,000 lines to it to articulate how much you spent on turnips last month, you're actually destroying the entire point of it. The point of the CSP is to structurally focus you on the key numbers, not to focus on these tiny minute parts of your financial life that actually make no material difference. So basically, stop messing with my format. If you're going to use my stuff, use it. Otherwise, go get a budget from somewhere else. That's not going to work. I'll see you back in six months when you decide to make a real change. Okay, okay, calm down. I'm here to help people. All right? What's really happening here is a clue about their money dynamic. It says a lot about the way they view money, the way they feel about money. The idea that we need to get every single line item out on paper really illustrates playing small. You see, it's very difficult to think about key numbers, 40 year investment strategy, guilt free spending when you are tracking tiny minute expenses. That is why I designed the CSP the way I did, and that is why I encourage you to live your rich life while saving and investing. We're going to dig into the CSP after this break. This episode of Money for Couples is brought to you by Wild Grain. Now, you all know that I love great food. If you follow me on Instagram, you will see the food I eat whether I'm in New York, Louisiana or traveling around the world. Sushi bars, my list of pizza places in New York, taking cooking classes with my friends and family. Quality food is a part of my rich life. And that's why I was excited to learn about Wild Grain, the sponsor of this week's episode Wild Grain is the first ever bake from frozen subscription box for sourdough breads, fresh pastas and artisanal pastries, Wild Grains boxes are fully customizable to your tastes and your dietary restrictions. In addition to their classic variety box, they recently launched a new gluten free box and a plant based box that is 100% vegan. The team at Wild Grain sent my team a box with croissants, sourdough bread, Belgian waffles, cookies, ciabatta rolls and more. 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And then eight minutes later you get a Venmo request to split the freaking taxi ride. It blows my mind. Why is it that so many people turn into cheap asses over a $15 cab fare? But when it comes to our financial advisor, we are more than happy to pay a 1% fee. 1% doesn't sound like a lot, right? Must be nice to have somebody looking over my finances all the time. You don't pay your gardener a percentage of your assets. You don't pay your tennis coach a percentage of your assets. Why should you pay your financial advisor a percentage? There is a better way. It's called a flat fee. That's why I've partnered with Facet, a service that offers affordable, accessible financial planning. With Facet, you get flexible access to a team of financial planners and a team of professionals providing guidance across retirement Planning, tax strategy, estate planning and more. And instead of taking a percentage of your portfolio, there's an affordable flat membership fee. But if you are getting closer to retirement or you have a complex portfolio or you just want a second set of eyes on your specific financial plan, then I highly recommend you check out Facetime. You can book a free call@fastt.com Ramit speak to them and decide if it makes sense for you. Check out their membership options@fasset.com Ramit Again Fasset.com Ramit F A C E T Sponsored by Facet, Facet Wealth Inc. Facet is an SEC registered investment advisor headquartered in Baltimore, Maryland. This is not an offer to sell securities or investment financial, legal or tax advice. Past performance is not a guarantee of future performance. Terms and conditions apply. All right, let's get back to our conversation with Matt and Eliza. How do you feel when you look at your csp?

I feel like it reflects where we are right now in life and that we probably need to earn more money.

No, when I look at your csp, I feel overwhelmed. There's no clear focus. There's so many expenses. It's not really clear to me what's going on. The point of the CSP is that at a glance you can instantly tell what the key drivers are and it's not clear to me on this. What I can see is that health care is expensive, but health care is what it is. You know, if you tell me you can't change it, I believe you. I see that child care is expensive. It will be starting in two months. I see that you're investing quite aggressively post tax. Are you doing some pre tax as well?

No, neither one of us have the option.

Okay, so you're putting away about 1,100 bucks. I see that you have whole life insurance for $583,000. I was a little alarmed at that. I see zero savings, which surprises me considering you only have two months of savings. Two and a half months. That surprised me. And then I see that your guilt free spending is quite low. Why do you have no savings?

We had savings and then when we purchased this house about 2ish years ago at the same time, we started IVF and the house needed a new roof which was about $30,000. IVF is about $50,000. We were able to get an interest free loan to cover a portion of ivf, but to cover the drugs which ended up being, you know, recurring expenses that are in the several thousand dollar range. Just for people who don't know it's a lot. And so the combination of the roof and IVF drained our savings.

Gotcha. Okay. Got it. That helps me understand. Before we move on, I just want to acknowledge how difficult their IVF journey has been. And for any couple listening who has had any sort of fertility challenges, that is emotionally draining, financially draining, and very few people talk about that. So I love that we can start to shine a light on these topics that are hidden behind closed doors. We can start to reduce the stigma around fertility treatment and mental health. This is really one of the big reasons that I started this podcast. So I appreciate Matt and Eliza for sharing. And from a financial perspective, hearing that Matt and Eliza went through their savings for IVF helps me get a clear picture of why their healthcare costs were so high. So I'm doubly glad why they shared that with me. I still have questions now why they are prioritizing investments over savings. Let me ask Matt what he has to say about their current savings strategy.

My viewpoint a little bit on the savings thing is that it's very easy to move money in and out of like a Charles Schwab account. So to me, if I think the Charles Schwab account is going to benefit me more than a savings account, a high yield savings or whatever bank account, may as well just put it in and then I can take it out when I need.

I don't think like that. And I'll tell you why it's sloppy. Because what you're doing is you're basically commingling different funds for different things. And not only are you commingling funds, you're co mingling different types of assets. Cash is for savings. Most of the time you don't need savings, like especially an emergency fund. But when you need it, you need it right now. And often the times you need it right now are when there's a recession. So you lose your job, the market's down, you're in double trouble. This is why what we want to do with money is we just want to create some simple rules and never violate the process. It's like really simple. Black or white, right? You need more than two months of savings, especially if you're going to have kids, which you are. So, okay, I understand why. Work your way up. But investments are separate. Those are long term. That's how I think about it. And I think it's a pretty good guideline. Why are you paying $583 a month for whole life insurance?

I've had it since I was 18. I look at it as another Tax Advantage Savings Vehicle.

Okay, that's not a good idea. You ever look at the fees of that?

No.

How can you be worrying about $3 expenses and not look at the fees on this larded up whole life insurance policy like you're paying thousands.

I think that when I signed up for it, I learned about the growth potential over the years and the tax savings and the dividend and so I got it.

Yeah, but okay, maybe when you were 18, you didn't know that much, but you're pretty smart now.

But now I feel like if I stop paying the premiums, I'm going to lose what I put in.

Sunk cost fallacy. You ever hear that there?

Yes.

And you're going to pay 583amonth for how long?

Ever.

You know what I think about whole life insurance policies, right?

It wasn't in the book that I got from the library, but I've heard you talk about it on the show before.

They're like one of the worst products out there. Your insurance salesman made a ton of money off you. You've been paying tons of money for like 20 years. And if you just simply calculate how much you would have made if you just put in an S and P fund or a target date fund, it would be like tens of thousands of dollars more. Right? Again, I'm not here to beat anybody up for one off Decisions. Things happen. You make decisions.

Okay.

What I'm trying to help you understand is part of developing that new taste is starting to focus on what's important and what's not. A $5 Coke not going to be material to you. Fixing your whole life insurance policy worth tens of thousands of dollars to you, maybe more over the course of your life. So that's important to know. I think right now you probably treat every expense roughly the same, whether it's $3 or $30,000. Would that be fair?

Yes and no. When we went out to dinner and he decided not to get a Coke, I decided to upgrade my soup from a cup to a bowl.

Wow.

But. But like we're stuck on this EV decision. No traction there.

What do you want to make the decision right now?

Yeah.

Okay, go ahead.

The EV would end up costing to purchase roughly $20,000 to $21,000. We then have to install a charger which is somewhere between $600 and $3,000, depending on if we change our electric panel at the same time. And then the six month insurance rate on an EV is about $1,700. So that seems like a lot of cash coming out of our pocket, A, upfront and then B, on an ongoing basis. And, like, we haven't been saving as much as we should over the past year. So maybe we don't deserve this now, even though we'll benefit from the $4,000 tax credit, which we can't use any other year.

Eliza, if you said that we don't necessarily need the second car now. There are certain expenses, insurance, and whatnot.

Fine.

I think that there are other places we should be looking to open up. I don't feel the need for it right now, but I don't want this to just be another thing that we say we don't need and then just keep on saying we don't need things. I guess.

Does anybody feel like they made a decision?

No.

Oh, I. I thought we did.

Do you see how you two don't actually make decisions?

Yes.

So make it.

Maybe right now we should be focusing on building up towards the savings goals and one of the savings goals down the line.

Notice that you're still not making a decision. You've already pivoted to something. In the future, make the decision.

Matt, I think now might not be the time to get the ev. Do you agree?

Yeah, I think that's totally fine right now.

Done. Take a round of applause. That's how you make a decision. What changed right there?

Just say it and move on.

Yeah. It's easy when you understand the dynamics, the dynamics of the two of you. The way you talk is what, talking around? Yep, talking around it. What else?

I don't think either one of us wants to push the other.

Yep.

And so we feel like we're being respectful by not telling the other one what to do.

You're all about to have a baby. Like having a conversation where you clearly can't afford an EV anyway. It's so obvious on the numbers that if you can't have this type of discussion, how are you going to have discussions about, like, who's picking up the baby and all that kind of stuff? Right. This is like training. That's the way to look at it. Okay, so you. You are dancing around each other. You don't want to be definitive because it feels like you're hurting the other's feelings or being too specific. No one actually says what they think directly. I think this. And then no one asks the other person. It's a lot of statements. There's no ball tossing. I often say, toss the ball. Toss the ball back. What do you think? I'm not sure. What do you think? Here's how I think about it, but I could be wrong. What's your opinion? That's tossing the ball back and forth. Right. And then finally, one thing you both do to avoid making a decision is you simply pivot to talking about some other financial thing you need to do. It's really depressing because it's. It's never fun, Right. It's always like, all right, well, we need to save for this and that, and it's just never fun. So not only did you not make a decision here, you're now talking about a depressing thing like, 10 years in the future. What do you guys think?

There's a lot of accuracy there. Yeah.

The talking around, I think I knew. I guess it just like the lack of, like, interest in confrontation, which I think for me is more natural than. Eliza, you avoid.

You avoid confrontation.

Yeah. Like always. Yeah.

Do you guys see a couple's therapists.

In the context of fertility? We did.

Okay, that's good. Would you ever see one going forward?

Honestly, I don't think it's so necessary.

Okay. Eliza?

I don't think it's so necessary.

Of course, it's, you know, your choice and stuff like that, but considering there's a baby coming, considering, like, a lot of stuff is going to change. Sometimes the best thing you do is get ahead of it, right? And it's like, hey, we're coming in here because we know life is about to change in many ways we can't even predict. We also know that we have these little inklings that maybe we're not communicating effectively. And we sure would love to get some tools to communicate because soon there's going to be a lot of stuff about childcare and waking up at night. Whatever it may be something to consider. And remember how you're all talking about wanting to spend money more effectively. What could be more important than spending it on the two of you?

That's fair.

See, for me, when I look at money, I don't simply look at how much it adds up to in a savings account. I know my numbers. I know compounding. Yes. I know all that stuff. But I look at it and I go, that's a night nurse. That's therapy. So that the two of us can be really effective. That is a date night every two weeks, every week, every month. That's what I look at it as. And I start to say, like, what's my rich life? Vivid, specific details. And then how is my money going to help me get there? Some of it I can do today. Ice cream cone. I can do today. I don't need to think twice. Horse. Okay, I can't do it today, but I want to know what it's going to take in order to get there. And though it may take many years to get a horse, certainly.