“We make $170k—but spend like we make $450k”

He's like this money we make now, we spend now.

I think she might be low key, a bit of a shopaholic. I told her that this is not going to fly going forward.

I feel like he's my auditor.

She went a little nuclear.

I've accrued $20,000, was served a summon from the court. Somebody sued me.

She's the one that I feel like needs a little bit more help.

The way you're spending is like you make $450,000 a year.

I started contemplating it's probably better if we're not together because I don't want to have to deal with this.

My whole life I've resulted the other avenues of trying to make more money gam and more on the collection side.

What the gambling.

On what Sports betting.

Is this a joke?

Well, we're still here, still alive, still above the water. Haven't drowned yet.

I'm about to speak with Clara and Devin. They're married with three kids and Devin is a self proclaimed numbers guy who works in finance. Clara wrote in and said, quote, my dream is to bounce back from credit card debt and to be responsible enough so I can gain my husband's respect and trust. That's quite a striking thing to say if she's dreaming of earning her husband's respect. I have to imagine there's a lot beneath the surface. I'm looking at their conscious spending plan right now. You can download your own@iwt.com CSP and a few things immediately stand out. Their total net worth is around 350k which is good for a 29 and 34 year old with 3 children. But their investments are only at $16,000. That is a red flag, especially for someone who works in finance. They earn $170,000 a year, but their fixed costs are pretty high at 74%. Now yes, three kids can make fixed costs temporarily high, but I want to look into that. I also noticed that they're investing just 1%, they're saving nothing each month, and they are spending 25% on guilt free spending. When I hear Clara say that she's in credit card debt, it's easy to assume that she's the problem. But the more I dig into their story, the more I start to wonder if I'm getting it all wrong. If you're enjoying the Money for Couples podcast, I want to hear from you. In the show notes below, I've added a quick listener survey. This is really important. It helps me understand more about you and what you think of the podcast. So that we can work on getting more episodes and making them even better for you. So please do me a favor. Go to iwt.com videopod Take 5 minutes to fill out this quick survey. We are going to read every single response. Again, that's iwt.com video pod.

I feel like he's my auditor. For example, I swipe $2 like two 50 pacifier for the baby. I'd get a text, what is this 254? Or what is this 950 purchase? And you know, it's become a joke even into my own family.

Like what's the joke?

The auditor is here. Like I have to be careful or I have to tell him first what I'm going to get because my auditor is going to audit me again at night. So there's that dynamic.

I would love to check in with the auditor himself.

Mr.

Auditor, what do you have to say about. Look, he's been waiting the whole time. He's like cracking his knuckles right now. He's like, it's high time. Yeah, man, go ahead, tell us what's going through your head right now.

There's something that I don't have a lot of faith in my wife. She's great at everything else she does. It's just not her forte when it comes down to handling money.

How often do you talk about money?

Every night. I think I have all the access I can on my phone to look at the accounts. I keep a spreadsheet on one of those.

One of those. What does that mean?

Just making very sure that I have all of these things under control because I feel like this is my forte and with my wife not really being hands on with it, I can handle a little bit more comfortably and that I'm confident in. So I just want to make sure that doesn't go down the drain.

How would you describe your relationship with money?

I'd say it's pretty good. I've gone pretty far in my career with it. Something that I take pride into.

What about in your personal relationship?

Yeah, definitely is a struggle.

Okay. Claire, I want to start by reading some moments in your application that stood out to me. You wrote we have differing views on money. Not enough financial literacy. My husband is very anal with our finances and I lack self control over my spending habits. We argue a lot in terms of how much I spend. There's a lot of yelling, which is unhealthy for our little ones to witness. What comes up for you when you hear that application out loud?

That's what I feel whenever I Talk to my husband about our finances. I would like for his tone to change. Right. I would want to be able to gain his respect. I want him to view me as a responsible adult who knows how to have self control and be on top of finances.

Devin, what about you hearing that?

It's a little unfortunate. I know I tend to have a lot of control. I'm coming from a very finance, accounting, heavy background. So in regards to, like, my wife, she's the one that I feel like needs a little bit more help. I've already exhausted a lot of my avenues with her as far as being gentle, being understanding, being firm. And then when you've pretty much exhausted all the options, it's a little hard and annoying to have these conversations over and over.

This is the part that's sucks. Devin can get a bit like, condescending in terms of this topic. And that's what I hate about the dynamics of our relationship. He talks to me like I'm a child. There's that you follow what I say and you can't spend anything if it doesn't go by me. And I don't like that. I just don't respond well to that.

If I felt like my partner was talking to me as a child, I wanted to stop. And if I feel like my wife doesn't know anything about money, I want her to learn.

Okay, what do you notice immediately? I can sense the tension, and it's clear that they're operating under some version of the parent child money dynamic. That dynamic is where one partner starts to function as the responsible parent when it comes to money, and the other starts behaving in a childlike way. In this case, Devin is the parent and Clara is the child. And this dynamic is no good. It's absolutely toxic to relationships for two reasons. Number one, your partner's not a child and you're not going to get them to act like an adult by treating them like a child. Number two, this dynamic is absolute sexual kryptonite. If you have a similar money dynamic in your relationship where one person acts as the parent and constantly teaches the other, does everything for the other and the other is in many ways helpless and delegates everything and says you handle it, you may be in the parent child dynamic with money. You don't want that. I cover more in my new book, Money for Couples. Now, the good news is we can change this dynamic, but first I need to understand how they got themselves here. And their backstory is pretty interesting.

Devin, why don't you trust Clara with money?

Oh, boy. Where do I begin? There was one instance she went a little nuclear. She went to the Taylor Swift concert Eras tour, got the floor, seats, the whole shebang. And you know, that set her quite back.

I'm just laughing because it's embarrassing. I spent $4,600.

Is that one seat or two?

No, that's just one. He didn't come with me. I was happy to cover for his ticket, but he's like, no, no.

So from what I'm hearing, she ran up a bunch of debt.

Yeah, pretty much. I immediately told her that this is not going to fly going forward and I'm going to manage everything.

What was the total amount of debt that you accrued?

So for my credit card, I've accrued 20,000. That's a combination of five credit cards.

What did you charge on those cards to get 20k of debt?

So I did that and then I furnished our backyard with new furniture because it was almost summer. And then I thought to myself, oh, it'll be so cool if we could have the gazebo and outdoor dining and stuff. So. So I furnished that out of my own credit card because I know that the auditor would never approve that kind of purchase. Also, I charge a lot of stuff, like for the kids, like clothes, toys.

See any commonalities among those three purchases that got you into 20k of credit card debt? No, no. Let me summarize the ones you told me. Taylor Swift floor tickets, furniture for the backyard, and stuff for your kids. Any similarities?

No.

Okay.

I don't know, Devin.

I think she might be low key, a bit of an addict, shopaholic.

I also work hard and I would love to feel the fruit of, you know, what I work hard for. And to ask somebody permission to spend $2, that just I feel is very disempowering. It's like I'm a kid again and I'm asking for somebody who has authority over me if I could spend this. And I don't feel good. Good about that.

Yeah. How have you resolved this at all? You talk about it.

So when I couldn't pay back all my credit card already on time, then it started piling up and it was harder for me to get caught up with the payment. At first I was doing the typical thing, oh, I'm not going to open my mail, I'm just going to ignore it, blah, blah, blah. And then I was served a summon from the court. Somebody sued me, like one of those collection. I was like, okay, wow, this is a wake up call for me. I can't really Be jeopardizing my family's finances for this. I don't want our wages being garnished. So that's when I started saying, okay, I'm gonna open these mails, and then I'm gonna learn how to get out of this debt. So I was able to renegotiate some of those debts. I was able to lower them down. And then I started talking to Devin about it and said, hey, I wanna confront this problem and I want to start paying them off.

All right.

Okay, hold on. How much debt do you still have?

I still have about 9,000.

9,000? That's down from 20.

Yes. Yes.

Okay.

And what's your plan to pay it off?

So I'm doing the payment plan every month. So I've been paying $200 for each of those cards.

Okay.

Yeah.

Okay. All right. I'm sorry. It's hard for me to tell. Are you crying right now?

Yeah, I am. Because I feel very embarrassed about the situation that I got myself into. And the more that you ask questions about this and the more that I talk about it, I can see now that, okay, like, he's not a bad person after all. It's not just about him trying to control me. He actually has a point because now I can see we're actually on the same page trying to achieve the same goal. We just have differing ways to communicate. But had I been more willing to see the goodness out of it, to give him the benefit of the doubt that he's coming from a good place, we would have probably made the huge improvement by now.

That's pretty moving. You want to tell them that directly?

Devin, thank you for being patient with me when I was very irresponsible. And I really appreciate you being on top of our finances because in a way, I'm also learning a lot from you. And it's amazing how you deal with so much self control in our finances.

I appreciate that. No, I appreciate that so much.

Sometimes just talking out loud helps you empathize with the other person. But when we're stuck in our own heads, we get entrenched. It's like we're digging a ditch that we are putting ourselves in. But when we just talk out loud, sometimes that's why therapists really help other trusted people. It can actually just naturally make us more empathetic. I'd like to look at your numbers. Okay. Assets are $811,000. Can you break this number down for me?

Yeah, sure. So we have our house, I think about 450. We also have another property in the Philippines. And now it's appraised at 250,000. Okay. And then we have the values of our cars.

How much total?

We got three cars. That's going to be like 25 plus 42 plus 7,000. So that's what, 74. Okay.

That's 774,000.

Did we put your collections.

No, I wouldn't say it would be that material. No way.

What's that?

I do some collecting, like, you can see in the background. I do some collecting with, like, cards, toys. It's a little bit of a hobby of mine. Little bit of a roi there, and it's fun for me, so.

Oh, how much is your total collection of everything worth?

Oh, I wouldn't say again, like maybe like 5,000, 6,000.

Okay, so we're at like, 70 or 30,000 short. Kind of surprising, right?

Yeah.

What do you say, Devin? Because, you know, you mentioned, like, this is your line of work a lot.

Yeah, I'd say that's kind of in line. I think we did a pretty good job. I think it could be worse as far as, you know, what we have as a total asset value. But just given the situation that we were in a couple years ago, and then with Clara not really having a great sense of just how to control finances, maybe set us back a little bit.

Yeah, I guess I'm talking about being $30,000 short in the asset value.

Yeah, that's. That's a little concerning.

You know what? We did this, like, 12 midnight after we put the kids to sleep.

I don't.

Where do we get that other number from?

Well, you know what I'm going to do? I'm going to go ahead and change this.

Okay.

To 779. I personally think that's a bit generous for a couple of reasons. One is a Zillow price is not the price that you will get.

Okay.

Even if you sold it for exactly what Zillow says, you're going to get tens of thousands of dollars less once you factor in transaction costs, moving costs, et cetera. The same is true for cars, although not to the same level. But there's a lot of transaction costs with selling, cleaning, et cetera. I think this is probably a little over, but let's leave it as is. All right, let's go down to the income. Claire, can you read off this combined gross monthly income?

It's $14,400.

And that means that the two of you make $172,800 per year combined. Did you know that? Good. That's really good to know your basic numbers. Remember, 50% of people don't even know their household income. So that's very good that you both know it. All right, let's look at the rest of the numbers. Devin, can you read off the word in bold and the full number next to it?

Right, so that's investments. That's including 401k, non retirement, all investments, 16,000 savings, nada, zero debt, student loans, credit card debt, mortgage, 477,000. The debt would be my student loan, her student loan to Carnos, all the credit card debt that she's racked up, the mortgage.

Two mortgages for the New Jersey property. We haven't paid that off yet. And then one is for the Philippines property.

So that's it. That's your $477,000 of debt?

I believe so, yeah.

Total net worth.

For a total net worth of $318,000.

All right, let's keep going. Investments are at 1%, huh? I'm directing this at Devin, who has repeatedly told me he's in the finance world. Devin, can you explain this? Yes.

Yeah, just given our situation, I just don't feel like we have that cushion that we have in order to go ahead and invest. So what little money I have to, you know, some gambling and some more on the collection side.

What? What? What the. What'd you just say?

Every single day I get a question.

About what's the best bank account, what's.

The best credit card?

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Little money I have to, you know, some gambling and some more on the collection side.

What? What? What the. What did you just say?

Yeah, you heard me. I had a feeling you're going to be disappointed. I didn't really see a big enough cushion for me to go ahead and invest, so I've resulted the other avenues of trying to make more money. If you gave me $50, I'll try to go ahead and double that. Triple that.

Gamb Ports betting?

Is this a joke? Hang on a second. The numbers guy has their finances set up to contribute only 1% to investments. So he can gamble. And it's not even gambling for fun. It's gambling to make money. What is happening right now? At first I was led to believe that Clara's overspending is the real issue. But the deeper I go, the more surprising this story gets. Honestly, this gambling thing is blowing my mind. I'm literally sweating. And it's a good reminder that seeing someone's numbers on paper does not tell you the real story.

No, please, Herbie, speak sense to him. I keep telling him so. When I started reading your book, I started doing the 401k. I started. So that 16,000 number is mine. But I keep telling him, put some percentage of your paycheck, even though it's a little to your 401k.

Can I just be really blunt with you, Clara? No advice you ever give him about money. At least not right now. He's not going to receive it. Because do you know how he sees you with money?

Yeah, unfortunately.

So the two of you have co.

Created a dynamic where you, Clara, are the irresponsible one, the one who needs to be saved. And he is the one on the pedestal, the one who works in finance. But then it turns out.