“Our gas is getting shut off…but I won’t sell my 7 cars”

We're a month behind on our mortgage, getting a shut off notice for our gas account, you know, our electrical accounts in payment plan is just. Everything is so overwhelming for me. Megan, I've asked you multiple times to, you know, try to help out more, you know, look at different job opportunities, and I get the same answer. Oh, I'm comfortable where I'm at, but we need more and I just can't do this myself.

Do you think that Megan understands the severity of your situation?

I don't think so, no.

I listen, but I don't listen at the same time where it's like, it's become like a repetitive conversation.

We get by and that's just what we're doing. And I'm tired of getting by.

Peter, what if Megan never changes?

I couldn't deal with it.

I just.

I'm not doing this anymore. I'm still young. We got no kids. Maybe it's time to move on.

Meet Peter and Megan. They're in their mid-30s, they don't have children, and they are in very serious financial trouble. Peter wrote me in his application saying he was at the end of his rope. He didn't know what to do. Maybe he would even be better off alone. Now, as I go through today's conversation, I ask them questions to try to figure out what's really going on. I have a feeling you're going to be frustrated. I know that I was. But I want to emphasize to you how important it is to treat all of our guests with respect, including on any social media comments. That's what I expect for the couples who are brave enough to come on this podcast and share their numbers and their entire financial lives with all of us. Now onto the conversation with Peter and Megan. I started by asking them what would be an amazing place that we could get to by the end of this conversation. And I want you to listen to their answers because they provide a huge clue as to. To how they both see their current situation totally differently.

Just knowing how to properly handle money, how to put it in, like, different areas like bank accounts, like IRA type of things, savings, stuff like that, to better our future, to where we're going to be happy.

Okay, Peter, how about you?

I just don't want to be so nervous and I'm tired of being overwhelmed about everything I was hoping for. Put a little fire underneath Megan's. I feel like I tried talking to her before and I feel like I get nowhere.

How come the answers that both of you gave me are so different?

Two different minds, I guess.

I Feel like whatever I say is like, yep, no problem. Okay. I just not. Not getting any help there.

So you feel that Megan is disengaged with money?

Absolutely. It's. It's tough. I feel like I do a little bit everything myself, so I just need. I need help.

So it's like I want to help him more, but it's just. It's very tough when he's very like, single minded and him doing it, which I am fine with. If he wants to take full control of it, he can. Because I don't know how to handle that kind of stuff. For me, it would just be when the bill is due, you pay it whether there's money in there or not. Because I don't want them to go into like. Like you owe money. So like with a credit card, then you start accruing more interest when you miss your payment or with the utilities if you go too long without paying, then you get the shutoff notices, then that's a little bit scary. We've never had that happen before. But I just don't want to see that little piece of paper that says final notice, your utility will be shut off.

Okay.

It just scares me.

Why are you willing to go as far as letting your power get turned off before you make a change?

Well, I would prefer it not to get shut off.

Okay.

I'm gonna. Hopefully I'm gonna do something and I'm gonna try my hardest.

Why? Hopefully? Why try what? What is this?

It's me doubting myself.

Take me back to being a kid. What do you remember about your parents and your relationship with them, especially as it relates to money?

Nothing.

They never talked about money. Okay. What else?

Nope, never talked about money. Never showed that we were struggling or anything. Always. Everything was fine, bills were paid. So like I said, they never like fought about it, never discussed it. So I never knew anything about it. My father was self employed for years. He had a landscaping business. So with him it just never seemed to like money come up or anything. I still remember as a child and he still does it to this day, he has usually a wad of cash like this in his pocket. So I never thought we were ever poor or anything because he would sit there and just take it out and pay for something. So he never discussed finances with me at all. He just had everything situated. Like when I was 16 years old, I got my first vehicle, which was one of my father's vehicles. That was a hand me down, only way I can get it was if I had a job.

Did you like Making money back then.

Well, I was a child, so I didn't quite understand. Was just, okay, it's in a little box in my room. I need it. I need it. I don't. I don't. Because he never set up a bank account for me. Never had me go down until I really started. I think it was. I think when I worked at Blockbuster. This is going back years now where. That's when I had to have a bank account where I was like, yeah, I'm getting the paychecks every week. They gotta go in there.

Did your mom work?

She did, but she was also, when she was in, like, her mid to late 30s, maybe she was disabled. She had a neuromuscular disease which basically prevented her from working. She would basically be standing up and just fall. So she collected disability, Social Security. And my parents divorced when I was eight years old. Oh. Again, never had talking about money with either one of them, even when they were divorced.

When did the two of you meet? High school.

High school?

Senior year.

When you dated, did you talk about money?

No, we dated very young. We dated our senior year of high school, and I moved out pretty early and got an apartment, I think, like a week before I graduated high school. It was all just kind of figuring it out as we go.

And you bought a house, correct?

Yeah, yeah, we own a two family house. We rent out one side. It's a duplex.

Okay.

How about when you made that purchase?

Did you talk about money then?

I did that all on my own.

And what age were you married at?

27, 28. 10 years dating. 10 years married.

When did you manage your own money, Megan?

I don't think I ever did. Not that I can recall.

You think maybe that has something to do with what we're talking about today?

Most likely. It just. I don't know how to discuss money, how to basically pay bills properly. I need an insight on how to do this. That's my issue.

What do you think's behind that? The fact that you've never managed your money on your own. What does that tell us?

That I've always seemed to, like, rely on someone else.

Yes. Who was it early on in your life?

Well, my father. For paying bills.

Yep.

But again, he never gave me money because I had a job.

Still provided a roof over your head, Right. Even though you weren't earning much back then, even as a teenager, right?

Mm. Yep.

And then how about now?

Now it's relying on my husband.

Even though you're not earning that much, you still have a roof over your Head, right?

Yes.

See any similarities?

Yes. I rely on other people versus myself.

Can you tell me a time where you were not on the same financial page?

Probably bills. Basically it's just trying to get like a credit card bill or utility bill paid, but then it's looking at the bank account, realizing there's not enough money in there. So then the panic and freak out happens and then Peter sits there and starts to try and figure out how to get money in there to help pay that bill. And it's like I try my best to finagle things and be a little frugal with money every now and then, but sometimes it's just not enough.

What happens then?

Then we get into a little bit of a disagreement about it and we just it alone. And I'm like, okay. I'm like, well, what do you want me to do? I'm like, is there anything I can try and do to help? He's like, I, I, I don't know. He's like just getting overwhelmed, trying to figure it out. And it's like, I don't know how to help. That's the issue.

How long have you struggled with money?

Probably a while.

My whole life.

Why are we talking now?

Things are getting deep.

Like what?

We're just falling behind on everything. And I got, you know, letters coming in, my credit's going down and as Megan said, I mean, we've gotten shut off notices and I mean, I just, I'm at the point where that I like about to give up.

What does that mean?

Yeah, I, I don't know. I just, it's like I'm trying to take care of everything. And like I said before, I just need the help and I ask for the hope and I feel like I get no answer. And I mean, we're just behind on everything.

Do you think that Megan understands the severity of your situation?

I don't think so.

No. I listen, but I don't listen at the same time where it's like, it's become like a repetitive conversation to where it's the same thing over and over and over again. And I guess I just kind of like block it out. Like, okay, if I don't hear it, it doesn't exist type of thing. Even though it does exist, it's just I have to change my mind frame.

Because you said just a few minutes ago you said, you know, it's not like we're getting close to any shutdown notices, any electrical thing. That would be really scary. And then what Peter just said is, we're Getting shutdown notices. Yeah.

Which I have not seen.

We're a month behind our, on our mortgage, getting a shut off notice for our gas account and you know, our electrical accounts in, you know, a payment plan is just. Everything is so overwhelming for me. Megan, I've asked you multiple times to, you know, try to help out more, you know, look at different job opportunities. And I get the same answer, you know, like, oh, I'm comfortable where I'm at. And that really annoys me. You know, I took the chance and went to a new career, a whole different, a whole different trade. And you know, there was life changing for me and made a big difference for us, but we need more and I just can't do this myself.

Yes, you have said that all before and I do understand it. But like you said, I'm just comfortable there, which I am. I've been there for 17 years now. It's like I know the ins and out. I'm afraid of going someplace new and having to start over again, possibly have a lower pay than what I have now because of minimum wage. It scares me to go to another job. It really does.

Honestly. This is difficult to listen to. They're in debt, they're getting shut down notices. But Megan doesn't seem to care. Her answer is, I'm comfortable there some clues that I noticed. Peter basically came on this podcast so I could convince his wife to get a different job. Megan has been subsidized for her whole life. She grew up with her dad taking care of the money. Then she got married young. Peter became the, the person taking care of the finances. We see this on the podcast all the time. One partner, sometimes both have no real consequences for their financial behavior. What does it really matter? They still have a roof over their head. Power's still on, at least for now. But because they don't have any skin in the game, they don't change.

Hold that thought.

We'll be right back. Now back to Peter and Megan. Let's take a look at their numbers. Their assets, $447,000. Investments, $42,000. 70. Savings, $3,500. Debt, $215,000 for a net worth of $277,700. Peter's income is about $83,000. Megan's income is about $31,000.

It just, it's tough in my mind frame. I am, I'm like stuck where I am and I can't get out of it. I've tried looking at other jobs, seeing like what else is out there, trying to better manage our money.

How many applications did you send out?

When it was six months ago, it was like three of them.

Three.

We got into a big, huge fight and I stopped because I got frustrated.

I think you stopped because there's nothing really at stake here.

No, there's a lot at stake. I just don't admit it to myself.

And when situations like this arise, Peter, you pretty much handle it somehow. Does that strategy work?

Obviously, no. I mean, we get by and. But that's just what we're doing, and I'm tired of getting by.

Okay, can I ask you, do you get by? Are you losing money every single month?

Yes. After I started messing around with the CSP and, you know, kept on updating it and you know, like, oh, we forgot this, and you know, we need to put this in there. And it's like all of a sudden now it's like, yeah, yeah, we're losing money.

Yeah, you're in the red every single month.

Yeah.

Okay, so does it work?

No.

Thank you. Sometimes the first thing we have to do to make a change is to acknowledge that what we're doing is not working. It's really hard to just give a point blank answer like you just did. So I totally applaud you for that.

Megan.

Is it working?

No. Because even when he put it into like the calculator, I think we were like 70, 80% in the red. It was an eye opener. Then it was okay. Now we really have to figure out where to be a little more frugal with the money. How to cut coupons in a matter of speaking, to save that couple of dollars, to hopefully help save in the long run, or if there's a really good deal on something, get it type of thing, and hopefully it all works out.

I just want to cut in here to point out two things that I just heard from Megan. First, hearing that they're in the red every single month, on top of the debt, on top of the shutdown notices, her solution is, we need to cut coupons. Now, this is a typical response for someone who's never really engaged with their money before. They'll often present very simple solutions to complex problems that have built up over many years. Now, if Megan is serious about changing, I can show her the total picture of the situation. I can show them how they need to cut more than coupons. But I'm not sure she's ready. And that's because of another thing she says. She says, hopefully it all works out. This is typical of people who grew up religious and or Feel that they have very little control over their lives. They don't make a plan because in their experience, they don't really have much control over what ends up happening. They live for today. They rarely think about a plan for next week, Much less next month, Certainly not next year. Personally, I don't want to use hope for anything important to me. If there's something that's important to me, I want to take a candid look at the situation. Where am I today? I want to make a plan, Always leaving a comfortable amount of buffer, and then I want to use overwhelming force to get there. Okay, let's continue. And I have to tell you that this is the part of the conversation where my jaw really started dropping.

I got to say, the lock. That we've been pretty lucky with stuff. And I think that's why she keeps on saying that.

The Pontiac.

Every time something goes wrong, all of a sudden, something works out for us. You know, I. I'm on the marketplace like crazy. It's one of my addictions. I hit a big home run, and that's how I paid off the Corvette. I bought a vintage car and for $6,000 and wound up selling it for like, 25,000. I sold the car for. To a guy in France, you know, and, yeah, I didn't put much money into it. And I've been a mechanic my whole life, and I consider myself a fixer or I could fix anything.

Can you fix your financial situation?

Well, that's the only thing I can't fix. That's why I'm on the call with you.

Okay.

We can fix it. Gotta have confidence.

Yeah, eventually.

Okay, tell me, Megan. I like that confidence. Knowing what you know, how can you fix your financial situation?

Goes back to getting a better job.

It's that simple.

Not always. It's getting a better job, learning how to, again, spend money differently.

Okay, you have cars. I understand. When you bought a car, multiple cars, did you talk about money then?

I did. I think we have a total of like, seven vehicles. Big into cars. I remember going to work, and I. I bought a Corvette. And so I kept on driving by seeing this car, and, you know, you know, I try to let me know everything that I'm doing. And I saw this car, I was so excited about it, and I told her I was going to buy it, and she got a little nervous about it. I was like, yeah, I was like, you know, it's no big deal. I can take care of it. You know, I could pay for it. And, you know, next thing you know, I wound up purchasing it. Got a great interest rate on it. At that time, my credit was great. Everything was doing good, and purchased the car, no problem.

How much was the car?

It was. It's. It's a older Corvette. It was, I think, at the time I purchased it for, like, 25,000.

Okay. What was the interest rate?

I was at like 1.8%.

Oh, that is a good interest rate. Yeah.

Okay.

Home run. Is that car paid off now?

Yes, that car is paid off.

So you have seven cars. What other kind of cars do you have?

I have a Corvette. I got a Chevy Silverado pickup truck. I got two 1963 Chevy Impalas. I got a 20 Subaru Crosstrek, and Megan has a Jeep Wrangler and the Harley. Oh, yeah, we have a brand new Harley.

Brand new means what?

Yeah, it's old now, so. Right.

22 years old.

22.

Okay. How much does a Harley cost when you bought that thing?

Well, so that was a CVO. So that was like, almost 40 grand.

Oh, what's the CVO? Is that the model?

Yeah, yeah. Street Glide CVO. It's like the top of the line early.

That was 40 grand. All right, so I understand that your transmission just blew out. Megan, since we last spoke, so this is actually an interesting moment for us to talk about it. First off, sorry the car went through that.

Thank you.

How are you going to handle a situation like this?

Me? I have no idea. It literally just happened a few hours.

Does that fall to Peter?

Yes. Yeah.

Play this out for me.

How would it normally go? Because I'm sure you've been married a decade. Things come up, things break. So, Megan, in this case, your car broke down, so you come home, you tell Peter, and then what typically happens?

I was a mechanic for 14 years. That's my little side hustle. I have a garage, and I'm calling up the junkyard tomorrow to pick up a transmission, swap it out.

How much will that cost?

I would probably get one for about three to $400.

Okay. And out of curiosity, why not just give Megan one of the other cars?

The other cars are, you know, you got two vintage cars and my Corvette I. My Corvette I drag race. So that's not even street legal.

Okay.

And the truck is too lifted to get in and out of the.

The truck? Yeah, the truck. She could drive the truck tomorrow. That's no problem. But, yeah, she doesn't feel comfortable driving it.

Okay.

So you don't talk about money that often. You haven't really talked about it much when you do talk about it. It's, hey, I'm gonna go buy this $25,000 car.

I'll be honest. I've spent a lot of money on my race car, and that was in the past, and I've been really good on it.

It's expensive.

How serious is this?

Extremely.

What would you be willing to do to change your financial situation? I'm gonna ask each of you. Peter first, then Megan.

I feel like I'm doing everything that I can. Yeah, I can cut back on eating out. And, you know, I didn't ask you to justify it.

I asked you, how much are you willing to do in order to change your financial situation?

I'm willing to. I'm willing to do a lot, but there's certain things that I can't do, like I can't get rid of certain vehicles and stuff like that.

What else?

That's pretty much it. That's. That's where I was scared about. I've listened to one of your podcasts, and it really hit home. I was at work, and you were talking to a guy who had a lot of motorcycles, and I. I'm not willing to sell what I have.

Okay. You said in your pre interview, you said, I heard the episode where you told someone to sell his motorcycles. It's my biggest fear. I can't sell my toys.

Yeah, I think that's it.

Is that true?

Yes.

Is your biggest fear selling your cars, or is your biggest fear running out of money and getting divorced?

Peter's referring to episode 78 with Alex's five motorcycles. But we also heard the same thing in episode 75, the COVID nurses, where Dan used to be working at Walmart, saw a car, and that became his definition of success. Now, putting all that aside, is this a joke? They're in debt. Peter tells me he's stressed out beyond belief. Megan won't get a new job. Then I find out he has seven vehicles. And not just any vehicles, not even just a Corvette, but a Harley. All right, let me take a deep breath. I need to calm down here for a second. I understand that in America, cars are a huge sign of success to a lot of people. I get that. Just because it's not my thing doesn't mean that Peter doesn't truly value it. It's totally fine. Your rich life is yours. My rich life is mine. But to Peter, when I even bring up the topic of cars, he preemptively tells me he won't sell them. Because to him, selling one of those vehicles is like chopping off an arm selling seven of them. In many ways, it's like his identity dying. Now, I understand that, and I understand these cars are part of a rich life. But in order to live a rich life, you have to be able to afford the things you're buying. And I can tell when people are not ready to make a change. That's because when I ask, how much are you willing to do to change your situation, you notice that he responded with pauses and qualifications and yeah, buts.

That's not promising.

Let's get back to the show. Next in the conversation, I moved on.

To their other expenses. All right, fine. Your insurance, 330. Your car payment is 1,198. What is this.

Car payment? So that is my Subaru and Harley.

Why are you breathing so heavy right now?

Stressed out.

Why?

Don't know. It's just overwhelming.

How many years have you been stressed out about money?

Since I moved out on my own. I mean, I moved out a week before I graduated high school. I had my own apartment.

How do you think that stress affects your health?

Oh, it's not good at all. I know that for sure.

All right, I agree. Hate seeing you cry. I hate seeing you stressed out, breathing difficult. I don't want this. It's not good for your health. It's not good for your relationship. The fact that we're talking about this right now as I'm staring at a $1,200 a month car payment is blowing my mind. It's like in your head, you've created this mental prison and you've put yourself inside of it. And you know what else is inside that prison cell with you? Seven other things. What are they? I don't know. You created your own prison cell and you said, I'm not leaving without my toys. And you're in that prison. Look at that. Wiping away tears as we're sitting here talking about how stressed you are, how bad it is for your health, how bad it is for your relationship, and you're just looking out through those bars going, somebody help me get out. You can get out anytime you want. It's going to take changing the way you look at money.

It feels like I got to start all over, though. Sell everything.

And what's the alternative?

I. I don't see that. I see that. Helping out where we're at right now, and it's only going to get back into that same situation.

Two separate problems. One, it's like the house is on fire. Let's deal with the fire right now. Let's Put the fire out. That's problem number one. Problem number two, what are we going to do about the apples that we bought yesterday and now the fridge burned down and we need some new apples? That's problem number two. Two totally separate problems. We gotta deal with the fire first.

Put that fire out, and then we.

Will deal with all the other problems. Second, you have to change the way you think about earning, about speaking with Megan about your expenses right now. You built your entire life around a few inanimate objects. I'm not trying to demean the fact that you've accomplished something amazing with these vehicles, the Harley, that stuff's impressive. But another way to look at it is if I did it once, I could do it again. But I need to put this fire out. And that's how I look at it. Let's keep going with your expenses. You pay $1,000 a month for debt. What kind of debt is this?

It's a credit card debt.

How much is the credit card debt?

I think it's about 40,000.

40,000. Okay. At like what, 27, 28% interest?

Yes.

Okay, so that's essentially just growing, right?

Yes.

And how much do you pay for your shop?

It's not on there. I pay almost 500 for the shop.

Where's the money come from?

Shop pays for itself.

Does it make a profit?

Yes, the shop does.

Where's that income?

I leave that strictly like on the shop.

How much does it make?

If I had to say on average, I'd probably say the shop makes about what, two grand a month, give or take. If we had to like average it out month to month. And that's at like high end of it.

Yeah. And is that the money you use to buy the vehicles?

Yes. Either, you know, help to help out for that stuff or I consider it like free money.

What's that old example of Nero fiddling while Rome burns? Have you guys heard of this example? You know, someone's just like fiddling on the roof while the entire city is burning behind them. Anybody feel like that's what's going on here? Ah, working on these cool cars in the shop. Meanwhile, house is burning down.

When you put it in that perspective, yes.

The shop is my, my safe haven. I could have the worst day at work and the worst day at home and go there and it's like everything's okay.

Okay, all right.

It's your Zen time.

And supposedly according to this, you can spend up to $521 a month on guilt free spending. But you and I know that number's not accurate.

No.

How much are you spending on guilt free spending?

I couldn't tell you.