Reacting to My Subscribers’ Finances

Today I'm back to look over some of my subscribers finances. Like you, they have a lot of questions about what they should do with their money. So I'm going to try to help them and tell them what I would do if I were in their situation. And here's something new. Stick around in the video because you're actually going to see follow ups from the people who I helped. Something you've never seen before. You can download the Conscious spending plan template that I use in this video. Just click the link below. But for now let's get into it. So starting with conscious spending plan number one, here's what this couple shared with me. They're on their second marriage, five total children. One is married, two are in college, soon to be three and two are at home. They're retired military and each collects a pension that is COLA adjusted annually cost of living. They don't have additional income that qualifies for earned income for retirement savings. Okay, we'll get into that. And one of us took the call to action course. This is a great course on copywriting that we offer@iwt.com products. They're in the early stages of starting an online business to supplement some additional income. They said we're interested in an honest review and exploration of our current situation, rich life aspirations and whether what we think is viable is achievable in another's point of view and experience. All right, well let's take a look at the CSP. Assets are $681,000, probably a house. Investments are $668,000. Very good. All right, so two Roths, two IRAs and one brokerage with 50K. Very good. Honestly, they've been investing for a long time obviously and they mentioned a pension. I don't know if they factored that in here or not. Probably not. Savings at $52,000 could be good. Let's see what their income and spending is. And debt at $390,000 for a total net worth of just over a million bucks. Okay, pretty good. I don't know how old they are, but since they're retired, let's assume 50s or 60s. Let's see, their gross monthly income is $20,000. Okay, $241,000 annually. That's pretty good. Wait, they're retired, retired military making $241,000. Okay, this is great. Their net income is $220,000 because they're not putting a bunch of money away for investments because they already invested and they have a pension. All right, Their mortgage, their fixed costs are 48%. I mean, this is great so far. What's the challenge? Their housing are 13%. Housing costs are 13%. Recall, please, that typically I like to see numbers less than 28% of grant gross income for total housing costs. That means everything. Your rent or your mortgage, plus your sprinklers, plus maintenance for the roof that's going to collapse in 13 years from now. All of it. They're at 13%. Probably a little higher, but still, they're great. First of all, they have 613 bucks in insurance. Please tell me that this life insurance is term life insurance. Please. Please tell me you did not follow a guy wearing shorts on TikTok who went up to a whiteboard and started talking about cash value. Make sure you insure your kids before they have teeth, because then you can't get insurance. Why the f CK does a kid need insurance? A kid is not. Hold on. I need to say this. Statistically speaking, most kids are not gonna die, okay? So first of all, why are we insuring a little baby? Second of all, the baby needs its pure parents to be insured. I agree. If the parents get hit by a bus, Little baby needs some money. Little baby needs parents who were wise enough to get term life insurance, not whole life insurance sold by an insurance salesman who's taking a fat commission off of this. Please stop listening to these whole life insurance salespeople. Anyway, I don't know if this is term or whole, but I. I'm praying it's term. They have medical, dental, vision, auto, whatever. Car payments. 672 bucks. Fine. Debt is. Is a zero percent personal loan. They're paying $1,500 a month, which means that their fixed costs will be even lower when they pay this off. All right. Why'd they take a loan, by the way? I'm kind of curious. Why do you need a loan when you make $241,000 a year? Interesting. Unless they have very wealthy parents and they took a zero percent loan to pay for their mortgage. Interesting. Groceries at eighteen hundred dollars. All right, look, normally I would say that's a little high, but considering that their fixed costs are 48%, who am I to say anything? It's your rich life, not mine. Cell phone 362 probably paying for some of their kids. Subscriptions are 8, 44. What is this? Streaming plus apps plus card fees. Oh, card fees. I'm assuming they're putting their credit card annual fees in here, which is like 3, 400 bucks. Fitness kid camps. All right, you have five kids, fine. Financial fees, $254. I have no problem with these. These are great. I mean, ultimately, as long as you're hitting your numbers, you spend your money however you want. Let's look at investments. 0%. I don't know if that's good or bad. We'll keep going and we'll come back. Savings are at 12%. So they have an emergency fund for $1,000 a month. They have an auto fund. Okay. And they have a home maintenance fund, which is 1%. Okay. This is very savvy. I want to point something out this. There are ways to take certain expenses that seem unpredictable and make them predictable. For example, a lot of people, they'll say phrases like this. They'll go, it's really difficult to plan my money because I take one step forward and it feels like I take two steps back. I go, what do you mean? They go, well, my car broke down, and then my faucet broke and all kinds of stuff broke. I go, well, I totally understand that it can seem unpredictable, but if we zoom out enough, we realize that every 24 months, our car has some sort of issue. And we can put a dollar value to that. The first time it was 500. The next time it was a thousand. Oh. So the average is $750. That's how we start to take what seems unpredictable and make it predictable. For example, I used to have something called a stupid mistakes account. It was literally a sub savings account because I knew that every year I make a few stupid mistakes that I just can't get fixed. Fixed. It might be a late fee, it might be a parking ticket, whatever. And so I zoomed out, and I realized that every year, on average, I make, let's say, 150 bucks of stupid mistakes. So I just put that money aside, and suddenly the unpredictable became predictable. Now, that's exactly what this very wise couple is doing here. They're saying, hey, we don't know what's going to break in our house. But we know that on average, those tend to be about 1% of the price of the house per year. Typically, it's 1 to 3%. Okay? That's a safe number to save. If it were me, I would save more. But that's really up to you. Including your risk tolerance and your affordability to put money aside before you need it is one of the key characteristics that distinguishes people who live a rich life and everybody else. So I love that this couple's putting 400 bucks a month away because when their garage door breaks 18 months from now, they're going to go, oh, yeah, we have that money sitting in a named savings account called home maintenance. Boom. Pull the money from there. That's how you do it. Great job. Guilt free spending is at 40% higher than I typically recommend. But I don't mind it. You're making your numbers work. I don't know that this couple is actually spending $7,000 a month on guilt free spending. If so, maybe we dial it in. We got to look at some retirement stuff. But in general, they're retired, they have a pension, they're making $240,000 a year. Kids are on their way out. Live life. That's what it's all about. Great job. All right, I want to give a couple of pieces of feedback now because they asked some specific questions. So they are on their second marriage, five total children. So as the kids go out, theoretically their grocery store spending will go down. What you typically find is that people spending does not go down in the way they think it will. People believe that they are rational robots. They're like, well, I have one kid, so this is my expense. But when I have two kids, I'll have that much expense. And then suddenly their kids leave the house or they don't have three pets, they have two. And they realize their expenses did not go down. This is why your financial life is almost like a vacuum cleaner. It will suck up your money if you allow it to think about it. All the little things that come up could be Amazon, could be a new subscription, could be a show you see on Broadway, could be any. Now, I don't mind any of those things, all right? I love seeing a show or a movie or whatever. But we do not simply spend more when we have more kids or more pets and then spend less when we have fewer pets or fewer kids. It doesn't work like that, pretty much. If you don't set an intention and a conscious spending plan, your money will just evaporate. That is what happens with most people. And that frankly explains a lot of why most Americans save a tiny amount only every single year. A much better way is to say, hey, what's important to us? Where do we want to spend extravagantly? And then put money aside consciously for that, because if you don't, the money's just going to get sucked up by the rest of your financial system. Here's my major question for them. They said something that I find pretty interesting. They said, we don't have additional income that qualifies for earned income for retirement savings purposes. What they're saying is we are not earning income because our income is coming through a pension, therefore we don't think we can invest it. But that's actually incorrect. They may not be able to invest in, for example, a Roth ira, but you can still invest in a non retirement account at any time. This is something that a lot of people don't understand. Yes, you have limits on how much you can Invest in a 401k. Yes, you have limits on a Roth IRA. But did you know that a simple investment account, also called a taxable investment account, you can invest money there anytime, any amount, for any reason. If you want to put a dollar, you can put it in there. If you want to put $10 million a month, you can do that as well. So this couple, if they theoretically have a bunch of extra money that they want to invest, they could just literally open up a taxable account at Vanguard, Schwab, Fidelity, and you can start investing in index funds, target date funds, individual stocks, whatever you want. The question is, do you need to? If we look at their net worth, they have a million dollar net worth. But what makes this couple different than so many other couples that we see is that they have a pension. And because they have a pension that is indexed to inflation, cost of living adjusted, that essentially means that they have an investment portfolio of millions of dollars and they are being paid out every single month. That's the way a pension works. It's basically a highly stable investment portfolio that pays you out and adjusts every year for that reason. If you have a pension, you don't typically need as high of an investment portfolio as other people. Just to give you an example, your parents may have had a pension. They did not retire with millions of dollars in their retirement account. Most of them, some of them retired with a really expensive house. But in many parts, that's just simply because they're NIMBYs. I don't want to get into that today. Let me put it this way. Companies stopped offering that there's not as many pensions anymore. It's really expensive for companies and for governments. So what they did was they said, hey, we're going to shift all the burden onto you. Here's a 401k. Good luck. And they basically made it your problem. And that is why it is so important for you to invest in your 401k, your IRA or even taxable accounts. Because you don't have the benefit of a pension like so many of our parents did. My dad and my mom have a pension. That's amazing. That Opportunity is not as widely available to people of my generation and people younger than me. So when I see people's finances who are a little bit older, they may not have as huge of an investment portfolio. But oftentimes, as I dig, they have a pension. And that pension is very, very valuable. In this couple's case, they're making $240,000 a year. They have tons of money left over without knowing their age. But assuming they're in their 50s or 60s, my question is, do you really need to invest the money? Right now, you're throwing off tons of cash. Your house is going to be paid off at a certain point, which is going to free up even more, literally thousands of dollars a month. If you want to invest, my question would be why? You don't really need it to live. From what I can see, you're being given cost of living adjustments. Maybe you go, hey, we want to turn this into much bigger amounts of wealth and give it to our kids. Okay, that's a fine reason. In that case, if you want to invest more, simply open up a taxable account at any of these brokerages and go ahead and invest. You could literally put away tens of thousands of dollars per year if you want to. On the other hand, you might go, hey, we're Good. We have $668,000 in our portfolio plus a pension. We're good. We're going to take that money and spend it on lifestyle stuff. We're going to get a private chef, we're going to travel more, we're going to bring our kids and grandkids also. Fine. Again, without knowing your specific age or goals, it's hard for me to give specific feedback. But in general, with the pension and with the income you're making and you're starting a side business, I'm like, this is gold. It's great. Don't stress out too much about needing to invest, but know that if you want to, you certainly can. Overall, financially speaking, looks really solid. If I had to challenge you on one thing, it would be to get super crisp about what your rich life is. Are there things you've been wanting to do? Could you dream bigger? Have you used my journal to define your perfect day, perfect week, perfect month, and really come up with that crisp vision of a rich life. Because you worked hard, you were obviously successful, now you can use some of that money to really start living that rich life bigger and faster than you ever thought possible. Nice work. This couple sent me a follow up video. I'm pretty excited to see what they have to say let's roll it.

Hey Ramit, Jeremy and Shana here with our video follow up. So one of the questions you asked was about life insurance and that is a whole life policy with our financial advisor Chad who does charge 1.6% AUM except it's not really their term life policies and we self manage our assets in Vanguard.

Regarding the home maintenance fund, we realized that our house went up in value considerably. So we've increased the amount that we save. Our grocery bill has been frustrating and we realize that we haven't been doing a very good job so separating our general merchandise from what's actually groceries. So we've decided to be more deliberate about that tracking and we will see what the numbers say during our rich life review in January. Ramit asks if we actually spent $7,000 a month on guilt free spending. And the answer is kind of about half of it is spent on traditional guilt free spending categories such as clothing and dining out. And the other half is what we save and then eventually spend on travel. The big question we had for Ratmeet was whether we should start investing again. And we've decided that we are not going to start investing. We are going to use the money we have to live our rich lives now. And so we're going to continue to travel and enjoy experiences with our friends and family.

And so we found Ramit's thoughts on defining a rich life to be the most meaningful part of the review. We have started the no numbers journal but lost momentum. And so his challenge to get super crisp about defining a rich life really struck home for us. Despite a lot of amazing trips, we feel like we've missed some opportunities as we have envisioned our rich life to be. So we resumed our weekly 30 minute journal date and that has helped us refocus on define what we want our rich life to be. And one of those was to be more deliberate in time with our parents. So we've scheduled bucket list trips with each set of parents over the next coming years. So we're thankful that Ramit chose our CSP to provide his thoughts on and for us the opportunity to share with how that has changed our lives. So thank you for this opportunity and thank you for your efforts in helping others to live their rich lives.

Thank you Ramit.

Now let's move on to conscious spending plan number two. Here's what I know about this couple. They're 34 and 35 years old in New York. They're both in creative fields and and hustling. That's in all caps. Hustling to make money. We both have full time jobs and freelance night and weekends. We are tired. They said that in all caps. Okay, file that away. We're renting a one bedroom apartment. Okay. Damn. This is like a lot of angst in this description. We've been living below our means for 15 years because we wanted to someday own a home. This dream feels like it's slipping away. First of all, before I go on, I just want to say, let me try to visualize who's writing this. I see a lot of emo energy here, you know, like all black, like, really depressed. Look at the words they're using. We're renting a one bedroom apartment. This dream feels like it's slipping away. All right, sometimes my role here is not to simply calculate some ratio like a human calculator. It's simply to say, let's zoom out and provide some perspective. When I get to their numbers, I'm certain I'm going to find some surprises, but I just can't avoid the hardcore emo energy in this question. I don't see it too often. It just reminds me of, you know, some really depressing music that I listen to. Their question, can we afford a $1 million home in New York? We know the 28% rule, but we honestly can't figure it out because we're grinding it out so hard to barely qualify for that threshold. All right, all jokes aside, it is very frustrating for people to be able to afford housing. Housing is unaffordable in almost every city in America. That is crazy. There are ratios that tell you what, affordability is less than 30%, blah, blah, blah. Housing has skyrocketed in huge ways. And so a lot of what you hear, particularly from young people, is a feeling that it's unfair and a feeling of hopelessness. And it's not about how much apples cost at the grocery store. A lot of it traces back simply and purely to one thing, housing costs. That is why I am such a huge proponent for building more housing. It's really important. A lot of the questions I get these days, particularly if you're talking about expensive cities like New York, San Francisco, Louisiana, even Austin, Texas, is, how am I supposed to live a rich life when I can't even afford a basic house? So I joke a lot, you know, with the emo stuff. But in general, I deeply empathize with this question because I get it all the time. Now let's look at their CSP. Their assets are $3,500. Okay, that's quite typical for renters. They don't usually have a bunch of assets. What's that? $3,500. Like a couple of pans, some clothes. This is totally normal. In fact, if you looked at my assets, they wouldn't be worth that much anyway. Investments, $241,000. Now, that is an interesting ratio. You don't see that too often. You might see someone with low assets. But when you see $241,000 in investments, that tells me demonstrated track record of being able to invest consistently over a long period of time. Very impressive savings. Am I reading this number right? $753,000. Hold on. This is crazy. I got to just calculate this just so you know, in interest alone. If they just have that in a savings account, as of now, they're making about $34,000 a year in interest. Now, that might sound like a lot. You're like, whoa, that's, you know, a lot of money every month. But actually, they're losing money because of where that money could theoretically be if they invested it. So these ratios, I'm seeing 3,500 in assets, 241,000 in investments, and $753,000 in savings are very unusual. And from looking at it, you can just tell this couple is thinking of buying a house. That's pretty much the only reason that. That people keep this much cash in savings. The other alternative would be that they're simply extremely afraid of investing, which is common also. And that belief costs people millions of dollars. But that's not this couple. You could tell because they have quarter million dollars invested. Debt zero. Nice job. Total net worth, $997,000. Honestly, this is very impressive. This couple is 30, in their mid-30s. They have a million bucks saved up. Although I probably wouldn't keep the majority of my net worth sitting in a savings account, I can understand why they're doing it. Overall, very impressive. Let's take a look at the rest of their numbers. Gross monthly income is $23,000. Well done. That means they make a total of about $280,000 a year. You can see that their net monthly income is 14,500, which means their, you know, paying a lot in taxes, but also putting a bunch of money away in their investments. Do you all see the connection? Let me make sure I make this connection explicit because it's not obvious. I will often see a couple right at the top. Their investments have some huge number, like $241,000. Everyone's like, oh, wow, that's so cool. Must be nice. I wish I had that much money. And then I go right down to their income, and I see a huge difference between their gross income and their net income. Like a huge difference. And everyone be like, oh, the government, the government so much in taxes. Why they like, it's not just Texas. They're literally taking a lot of their money, and every single month, they are maxing out their investments. The way that you get a huge amount in your investment account is by taking money out from your paycheck and sending it to your investments every single month. You do not build a multimillion dollar portfolio by just winning the lottery. It almost never happens. You don't just wait around and say, one day I'll start investing. No, it's every single month you have money automatically set aside and put in your investments. So there's a direct relationship between a big investment portfolio and how much money you are investing every single month. I'm saying this, it sounds obvious, but many people do not make that connection. That the way you build a huge portfolio, just as the way. The way you would build fluency in Spanish, is you practice every single week. And then one day you realize, oh, my gosh, I'm really good at this. Same as investing. All right. Fixed costs are at 34%. Again, we're talking in New York. This is very impressive. This is like, low. It's almost too low. You know what I mean by that? How can a finance guy say that they're spending too little? I'll tell you how. Because they're using words like hustling, tired, one bedroom apartment, living below our means for 15 years, and the dream feels like it's slipping away already. I can tell you that one of the reasons that they sound so emo and full of angst is that they're living way too low beneath their means. People can do it all right? Some people can live well beneath their means for a long period of time, but most people can't do it forever. It's not just restriction. This is severe restriction. And often it causes people to rebound and make really unhealthy decisions. So already I can see there's some problems here. Let's keep going. Investments at 11%. Great. That's probably in addition to their 401k maxed out. It's nice. They're investing 1600amonth. That's a lot of money. Good job. Savings at 45%. They're putting $6,500 a month away for savings. I mean, I have to say this is very impressive. I don't particularly agree with the way that they are living, but the fact that they can put $6,500 away every single month is amazing. Just so you know, that's $78,000 a year being saved, alright? And their guilt free spending is 11%. Gee, I wonder why you feel so stressed out. I wonder why you feel like the dream of life is slipping away. Can we get some Phantom of the Opera music in here playing, please? Can I just fix this for you? I'll just fix it right now. All right? Your question was like, can we buy a house? And like, yes, you can definitely buy a house. Okay, you can almost buy a house cash. The way you guys are on track, give it a couple more years to buy the whole thing in cash. But I don't really think that's the real question you should be asking. The question you might instead be asking is, why have we been grinding for so long and we feel so unhappy and we're getting unhappier? Well, from my assessment, you set a goal arbitrarily. A $1 million house. Why does it have to be 1 million? It's like people who say, I want to have a girlfriend or a boyfriend. That's it. You just want to have a boyfriend or girlfriend. Not like, I want someone who makes me feel good or we can go to the park together. No, just a girlfriend. I want a one million dollar house. Why? If you want a house, you want to own it? Fine. If you were sitting down with me, I would say, tell me why? What does it get you? How would it feel? What would it look like? What are the alternatives? Okay, you started putting money aside and you did a great job. You saved a ton of money. The problem is you forgot to live along the way. What happens with people, particularly techy people, Although in this case you're both creative, which makes this particularly interesting, is you set a goal and you became tunnel vision, focused on it. $1 million house. All we're gonna do is grind and save. We're gonna cut all of our expenses to the bone and then one day we'll buy a house. And then the American dream, what is it? Will finally be happy. How many times do we have to tell this story where I show you that that's not how it really works, that you can save all this money and make all this money and be a multimillionaire and you're not going to be happy? The way you feel about money is highly uncorrelated with the amount in your bank account or the real estate that you own. So my suggestion for you would be spend a little bit more. You're currently spending $2,600 on your rent. You have 12% going towards your housing costs. This is in New York. This is mind blowing. What if you just spent an extra $1,000 a month? What would happen? Oh my God. That money could be going. If we compounded it and then we put it here, it could actually turn into $6,000 in 78 years. What if you just got a little bit of a nicer apartment? What if instead of one bedroom, it was two bedroom? What would happen? Would it allow you to perhaps sustain yourselves longer? Maybe get reinvigorated, maybe rejuvenated? You're running a very long race here and I don't think you need to be sprinting towards a future which once you get there, you go, why did we spend the last 15 years grinding? Grind. I don't mind it. I love people who work hard. But remember that you've got to live a rich life today and a richer life tomorrow. My suggestion would be spend a little bit more on your housing costs. Buy a little bit more space, Get a place that's closer to a park. Do something that makes you feel good on a day to day basis. I notice your guilt free spending is really low. Wouldn't it be nice to be able to go out on a date once a week and not really worry about how much you're spending at a restaurant? You earn $279,000 a year. You should be able to do that now. As for your house, can you get a million dollar house? Of course you can. You have $753,000 in savings. Savings. You could get a 20% mortgage. You could put 20% down, 30% down, 40% down. It would be fine. That's not the real question. The real question is what can we do today to start living a rich life? So instead of putting $6,500 a month away for a house, you could literally still be putting away $4,000 a month for your house if you want to. Or you could invest more, but your quality of life would go way up with a couple thousand dollars spending on housing and or eating out or things that make you happy. So that's my feedback to you. Overall, what you've done is very impressive. You set a goal, you worked really hard. But I can tell that it's a problem when you start describing your situation as hustling, tired, slipping away. That's not calm, cool and methodical. And that is how I Want you to feel about your money. If you have a goal that's big, set it, save for it. But remember, don't forget to live life along the way. Do you think this couple took my suggestions? Let's take a listen to their one month follow up.

Hi Army. Thanks for taking a look at my csp. What surprised me is when you said that we could buy the house. I think that's just because what. What I know is that I'm grinding it out so hard right now to make this income and it doesn't feel sustainable. And even at this level of grind, it's just barely at that threshold of being able to afford kind of a compromise house of what I would want to live in. So it just doesn't feel like it's quite getting there. So the change we're gonna make based on your advice is that we're actually gonna move to a different city. Bittersweet. Because we love New York. But even if we spent another thousand dollars on rent, we would get a slightly worse place than we have now just because of how crazy the rental market has shot up over the last couple of years. Gonna spend a little bit more on rent, but gonna keep saving for that house. Like you said, we're gonna direct some of those savings a little bit more toward investments instead of just piling it into savings and see if that helps grow a little bit faster so that one day maybe that house becomes a reality. We actually do do okay with guilt free spending. We just work too much. Anyways, thanks for taking a look.

Thanks for sending your csp. Now let's look at conscious spending plan number three. Here's what I know about this couple. They're a married couple in their late 20s, early 30s, no children. Husband is a medical fellow, wife is a stay at home wife. Currently working on tech skills to pursue a career in it. Okay, let's take a look at the numbers. Okay, assets of $44,000. All right. Investments of $140,000. Impressive again. Remember, late 20s, early 30s. And husband is a medical fellow, which means he's probably not earning as much as he's going to. So that's. Where did that money come from? Savings $122,000. Where's all this money coming from? That's impressive. Oh, debt is $200,000. All right, medical school. Fine. Total net worth, $108,000. Honestly, this is fairly good financial net worth snapshot for somebody who's in medical school. I've seen much worse. I've seen people with four or five Hundred thousand dollars of debt and certainly not these kinds of savings and investment numbers. Overall, not bad. I remember I spoke to medical students at UCSF once, and they're all like, depressed and mopey. Oh, we're not. We don't have any money. Our friends are all going out to bars, which is true. It does suck. I know I have doctors in. But you also have to remember that medical students go from being some of the poorest people in America with literally hundreds of thousands of dollars negative net worth to overnight becoming some of the wealthiest people in America. And it's a fairly certain amount. Like if you're going to be a dermatologist, you know how much you're going to make. Medical students and doctors have a very interesting money psychology because they go for so long without making any money, and then one day overnight, they start making a lot of money. GROSS Monthly income, $5,300. What did I say? Medical students and medical fellows not making a lot of money. So again, I'm asking the question, where did all this money in their savings and Investments come from? $63,000 a year annual income. That in general, for a married couple would not be a lot of money. But we also have to remember in the back of our head that this person is going to start making a lot more money. All right, let's see how the rest of it shakes out. Fixed costs at what? 106%. This is not good. This is a problem. So their housing costs are 35%. Basically, every number is going to be above the benchmark because their income is relatively low. So everything is going to be higher than it should be. But, you know, if it's 62% fixed cost or 68%, I can work with that at 106%. We have a structural problem here. Let's take a look. Insurance, 500 bucks. All right. Car expenses, 100. That's good. Pets, 200. Of course, we know that you're undercounting donations at $458 a month. No. How can you do that? You're spending more than you make every single month. All right. Debt payments, 178. You're basically paying nothing on your loans. You'll figure it out later. Groceries, 400. Close 50. Therapy, 99. Phone is zero. How are you paying $0 for a phone? Product subscriptions, 100. That are miscellaneous. All right, okay. Let's keep going and I'll give you some feedback. They're investing in their 401k. Or he's investing this 401k and backdoor Roth IRAs. What? All right, that's fine. Savings are at 6%. $50 a month for vacations. I like that. They spend more on their pets than their own vacations. Like they spend more on pretty much everything that are over. Look at this. They spend more on therapy than their own vacations. They spend more on product subscriptions than their own vacations. Literally, they spend more on everything than their own vacations. All right, again, it's your money. No emergency fund, no car maintenance, and their guilt free spending is negative 12%. So basically, they're spending more than they make every single month. Okay, let me give you my feedback. I noticed that they have way too many sub savings accounts. Like they're saving $250 a month and they have 1, 2, 3, 4, 5, like almost 10 categories. You don't need all that. You need your Savings to have five categories or fewer. Especially if you're doing $250 a month. It makes no sense to overcomplicate things. When you first look at the csp, it's quite alarming. You're spending way more than you make every single month. You're spending 106% of your income on fixed costs alone. And then you've got all these other things going on. But then we start to add in some other clues. First off, you have $140,000 in investments, very impressive. Then you have $122,000 in savings, also very impressive. Then, most importantly, he is going to go from a medical fellow to some kind of doctor. His income is going to skyrocket, which will eliminate most of these financial problems. And she is working on improving her tech skills so she can get a job in tech. You realize that we can't just look at an immediate snapshot. You need to put all these other things in context. Overall, I think you're fine as long as you are willing to draw from your savings. Because right now there's no other way for you to continue with the amount of income that you're making as long as you're okay drawing from your savings until your income skyrockets. I'm all good with this. Now listen to what this couple has to say in their one month follow up. Thank you for reviewing our csp, Ramit. We appreciate the feedback. I think the biggest surprise that the both of us had was the initial assumption that I'm the one that handles all the money in the relationship and my wife is frozen now and that we don't discuss money together. I think that's a fairly common assumption when there's a income discrepancy, and certainly that was the case in the beginning of our relationship. But over the last year and a half of marriage, we've both gotten better at discussing finances together and our vision of a rich life. So that was the biggest surprise.

Yeah, I agree. And I feel like the biggest takeaway was that despite the drop in income when he went for fellowship training, we didn't adjust our spending day to day. It was eye opening to see that.

And it's a wise lesson for the future.

Our income has now gone from $65k to.