“We make $27,500/month…Why am I stressed about money?”

It frustrates me that Em doesn't know those parts of our financial situation. She only wants to talk about money when it's good and we're making money.

I guess I don't care about it because I feel unprepared. And then I kind of shut down.

I know that I don't want to be in this dynamic forever. I think that we have a lot of things working against us right now. Like we have the heloc, we have the wedding that we paid for on our credit card. We have the IVF that we're paying for. We have a lot of things that have kind of built up. What I am asking, I think, of Em, is to like temporarily get in this boat with me to help me help us release the pressure.

Like you feel like you're rowing alone. If you could just have a partner in your boat, maybe you could get there safely together.

Yes, we want the same things. We just approach how to do them in different ways. I think sometimes we don't do them because we can't get to a resolution.

I'd like you to meet Kate and Em. Kate's 36, Em is 35. And here's a little excerpt from the application that they sent me. As I read this to you, try to think about your first impressions. How much do you think they make and how much do you think they spend? Listen in. I've read Ramit's book and even implemented the strategies. I explained them to my wife. But she often gets frustrated with the limitations of our plan, including how little we can spend now in order to save and how long the timeline is. We've had some major fights and disagreements about this. I feel like we have a great 12 to 18 month plan, but my wife feels like we'll never get there. How can I help her feel more confident and excited in the plan? And what can we do to start to live our rich life now? Well, I think you're going to be surprised in today's conversation, especially when we start talking about the numbers. Before we get to the episode, I want to tell you about this email I got. This asset management firm emailed me and they wanted me to be involved in their firm. They basically wanted to put my picture on their website. I was like, no thanks. And then they wrote back again, asking a little bit more intently, can we introduce you to our CEO? I said, you know what, I appreciate it, but no. Finally they wrote back and they just point blank in writing said, I don't think you understand. We're going to pay you $100,000 to be an advisor to our firm. And I declined. Again, they were shocked. Do you not understand you're getting money to do nothing? I, I have the actual email and this Saturday in my newsletter, I'm going to share that email along with the psychology of being discerning with who you work with, how to protect your reputation, and be very careful about who you associate yourself with. Most of all, you're just going to see that there are firms out there literally paying hundreds of thousands of dollars just to be able to put someone's picture up on their website. You're not going to find my picture on their website, but there's some other people who I was surprised to see there. You can only get this Saturday, December 23rd, by signing up at iwt.com podcastnewsletter now let's get to the episode.

I think that the financial discussions that we have in the way that we communicate about money, it causes enough friction in our relationship that it makes a lot of things not, not fun and not enjoyable. And neither one of us want to want that in our life. We don't want to live our life that like that. And I think that, yeah, it would be. Be really, really challenging to move forward in a happy relationship.

Good to know. Okay, Em, how about you?

I agree. I think that, like, I don't know, the couple of the podcasts that I did listen to of you and I watched the, the Netflix show, which I thought was really eye opening. I can't recall exactly what statistic you gave. Most divorces, they don't start with like a, you know, someone cheating or someone leaving someone. They start because couples aren't having the foundational or building block conversations. And a lot of those conversations are around finances. And so that kind of just woke me up to wanting to change.

When you were speaking to my colleague, you said communication is our superpower, but communicating about finance has really challenged our identity. Wow, I'm seeing nods from both of you. What does that mean?

Being in a same sex relationship. And also it was kind of an early, an early relationship with the same sex for both of us. We had to talk about everything, even if it was things that we weren't ready to talk about. Like things were on the table because we wanted this to work and therefore we had to have hard talks with our family, had. Have hard talks with each other, have hard talks with friends and things like that. And that really, from a core relationship, foundation type of thing, I think was a huge building block for us. And we were Able to fall in love and grow in love very quickly. And that was really beautiful. And when it came to doing a lot of the very serious things fast, right, you know, we went through a pandemic, and then we got married right after we moved in together, we bought a condo. You know, we did just a lot of things very fast. We started a small business. All right, after the pandemic. It, you know, we moved fast, but we didn't really talk through all of those big moments as financial decisions. It was only after those things that we started to talk about where we were at financially, as we started to just strengthen our. Our union together. And we weren't on the same page about it. And that was kind of a moment where we were like, oh, shoot, this is. This is not normal for us.

I had a financial coach. I have a. We have a financial coach. And I had used her previously. And after we combined our finances, got married, we started living in the same space. I invited Em to a meeting with our financial coach. And it was on that call I just realized that the way that I communicated about money and the things that we were talking about in that meeting and was not responding to them.

Like, what?

In the same way she sort of shut down on that call. If m doesn't feel confident or comfortable with the question, like with the. If she doesn't know the answer, I think that she has a tendency to shut down or deflect. And instead of just communicating, hey, I don't know the answer to that. Let me go check or get the answer, do some research, and we'll come back. I. She shuts down.

I think instead of me, like, participating in those to do some information gathering, I just kind of shut down and kind of figured, okay, these are the headlines, and I need to go, like, do some work after this. And it felt heavy. It felt heavy? Yeah, it felt heavy. I felt like, oh, this is going to take a lot of time. Like, I don't have a lot of time. I don't know how I'm going to find this information. I have a lot going on at work. I have a lot of, like to do. And this just feels like it's going to take hours and hours to get on the same page.

Did it feel fun?

No.

Does money ever feel fun to you?

When I'm spending it.

Oh, that's an honest answer. Like, what. What do you love spending on?

Food.

Food, like eating out, delivery. What are we talking about?

I love to cook, so it would be very, like, I'd love to just go to the grocery store and just rake up a big bill and invite a bunch of people over and have a great dinner.

It's interesting that they say their superpower is communication, but with money, they have a block that's extremely common. You see, with things like differences in decor, we intuitively know how to solve it. Let's look at pictures on Pinterest. Oh, that's a disgusting rug from Crate and Barrel. I guess we were just raised different. Oh, look at this rug. Wow. We both like it. Let's buy it. We can find a way to compromise. It's relatively easy. But with money, there are layers upon layers of complexity. First off, most of us don't even know the basics of money ourselves. We don't know the difference between a Roth IRA or an index fund, for example. Then we have these invisible scripts we picked up from our parents, often in the form of scarcity. Finally, we have immense social pressure around money. For example, to buy a house or to be a provider or to save more. And to effectively have money conversations, it can feel like you have to be an expert in 10 different things to even sit down and talk about it for the first time. No wonder talking about money feels so hard, even to a couple who has a superpower of communication. Well, my goal is to show you that you don't need to be some multimillionaire working on Wall street to know how to talk about money. You will have to learn a lot about yourself. You will have to learn a lot about your partner. You might be surprised how you see money differently, but I believe that the two of you can develop a really healthy, positive view of money together, regardless of how much you make today.

So we were thinking about going on vacation next year to go see my sister. So she was saying, I think it would be awesome to go see your sister in February. And it was kind of a spontaneous. I hadn't heard nothing previous about doing this, and I think she wanted me to be really excited about going to visit my sister. And I was not excited because in my mind, I'm thinking about, how much is that going to cost? Have we budgeted for it? How are we going to make that happen? Like, when are. When are we thinking about doing that? Already talked about going to Florida in January. It seems like that would be, you know, an expensive thing to do right after we're going to spend X amount of money in January.

So initially, when I brought it up, like, this would be fun. We could surprise her. But I didn't want to surprise Kate because we're working on this budget or this plan. And so I wanted to loop ring because I wasn't actually sure how I would do that without Kate knowing. So that's how I felt initially.

What'd you say when you brought it up?

Well, I said I actually, like, didn't ask her directly. I said something like, hey, if I were to buy you, like, a diamond ring someday, like, how would I do that? And Kate was like, what? Why?

Hold on. This was about the sister trip?

Yeah, because I was trying to figure out how I, like, could temperature check spending money without her knowing or, like, figuring out how I could spend money that we had on something that she didn't necessarily know exactly what that end. The end thing would be.

How long do you think I, a straight guy, would last in a relationship like this? Because I already have enough trouble understanding. Sometimes straight women ask. This is like you're asking a question about a jewel. That's a hypothetical that relates to a sister trip. This is blowing my mind. Okay, hold on. And Kate, did you get what she was asking?

Yeah, I did. I understood that she was asking if I wanted to surprise you with something. Like, if I want to surprise you with something big, since you know, everything that happens in our finances, how would I do that?

Okay. Okay. Damn. All right. It's like you're speaking a language that's, like, in the ultraviolet range. All right.

To be honest, I don't think it's women and women or men and men or men and women. It's me.

It's you. Is that right? Has this been common for your whole life?

Kind of. I think it's a family thing.

But you speak indirectly.

Very.

Okay, okay, we'll get to that. Just hang on to that. I'm filing it away. So then her response, as she mentioned, was little bit confused, et cetera, et cetera. How'd you feel when you got her response to that?

I felt a little deflated, to be honest, because I felt like the. Like, we. We combined the excitement and the finances all together. Right. And I didn't love that.

In retrospect, if you could go back and do it again, what would you do differently? If anything, I.

Well, we did talk about this situation together, and I think something that would have been helpful is to approach her directly, but not even about the trip, but just about the actual spending. Like, hey, if we were to ever do something or I wanted to ever do something for you as a surprise, can we start to set up a plan that allows us to do that for each other?

Great. Okay. Love that. And have you actually come up with an answer to that question?

No.

No. Okay. Hypothetically. That would have been great. We talked about talking about it, but we haven't actually talked about it.

I doodled a diamond on my notepad.

I got you. Okay.

All right.

Okay. So are you gonna go see your sister? Kate?

I don't. I don't know. I don't think we had a. We didn't. We didn't kind of close the loop on the. On the.

Yeah.

Is that common that you have conversations about money, but you don't come to a resolution?

Yes. Yes. I think in general, like, these are the two different types of languages that we. That we speak. Em is very, like, spontaneous and just in general, not even with finances, but just. She's spontaneous, and she likes to surprise me, and she kind of likes to go on adventures and, like, do things like that. Go out to dinner, go on vacation, you know, live. Live our life in a way that's enjoyable. I see things through a financial lens first. I would love not to do that. I would love to go see my sister. I'd love to go out to dinner, you know, when she asked me to. I would love to be more spontaneous. So I think that's part of the reason why we're here. I think we're on. We want the same things. We just approach how to do them in different ways. And I think sometimes we don't do them because we can't get to a resolution.

Can I assume that you are the financial leader or the financial person in your relationship.

In terms of planning? Yes.

Okay. And what are you not the financial person in terms of.

In terms of bringing in the money?

Ah, okay. All right. So, Em, you're a higher earner. Kate, you. How would you describe what you do with the money?

I think I strategize.

Okay. Okay. Interesting. And how did you come to this very interesting dynamic? The higher earner brings it in, and then, Em, what do you do with the money once you bring it in? It just goes into your account, and you're like, I'm good.

Pretty much.

Pretty much, like, as long as I have something in my checking account, I'm cool. Is that it?

Yeah.

Well, I don't.

Kate.

I mean, you should share why the situation and how I came up with it.

Yeah. When we. So right before we got married, I. We made a decision to start a small business. So I. I run the small business. I'm the CEO. All of the things of the small business. But our small business is still not is not yet profitable, so I'm not bringing in an income myself. So we combine our finances, and 100% of that comes from M. And then from there, I think I've taken on the role as, you know, kind of the. The financial strategist, I guess, in terms of, like, when the money comes in, what. What are we going to do with it? So that's a new role for me. I've never been. I've never really thought about that. I've never really been good at saving money or investing money or anything like that. But I thought that, you know, since we were starting to build a life together and we were on the same. We are on the same page about the life that we want to build together, and we're starting a family that, you know, it felt like opportunity to step in and just kind of take responsibility. And, I mean, I also think that because I'm not bringing in income, it feels like I can add value in that.

Right. Okay. And you had this conversation together. You both agreed this is how you want to work it.

Yes.

All right, good. All right, well, that's healthy that you had the conversation about, hey, starting a business is not quite bringing in any money, and, you know, sure would be helpful if we need some financial strategy. All that is great. All right, so where is it not working?

So I think, like, initially that was great, and sort of that's the conversation that we had. In my role in that role as financial strategist, I had questions, you know, about where different. What different accounts were, you know, like, what the logins were to different accounts. And as I started to dig through, there were, like, you know, loans that we had and things like, decisions that we had made together. When we moved into the house, we have a heloc. We took out a HELOC loan for construction and things like that. So we've made some financial decisions. We paid for a wedding on a credit card. So we had some debt, and we didn't really have a financial strategy to pay any of that off because, you know, the money was going into her bank account and not doing much after that.

And so I'm starting to sweat, I have to admit. I just want to say I'm starting to sweat. I heard heloc. I had one. One thing come down my face. Then I heard you put credit card debt for a wedding. I start sweating over here.

Yeah.

Okay.

The credit card. The credit card debt is gone, though. Okay.

Thank God. How much did you take out for your wedding?

So I think we put about $50,000 on credit cards?

What the hell?

For our wedding? Yeah.

Are you serious?

Yeah.

I mean you're talking to the one guy in the world who's like spend a lot on your wedding if you want to. Just one thing, guys. If you can afford it, if you put on a credit card, you can't afford it, right?

Yeah, totally.

All right. You found some skeletons in the closet.

I found some skeletons and as I started to work through them and ask questions, those are the types of questions that would make em uncomfortable and that there would be some friction when we got into conversations about those questions. So I, for example, I said to em, you know what, like what is the bank account that the HELOC is under?

I guess it's my citizens. Kate, can you look there?

I already looked there and that's not where it is. So I need you to think of maybe another account that you opened or go through your email and see if there's another account.

Well, I don't really have a lot of time right now, so I'm going to have to look at it later. Well.

I have time to do this right now and it's important and I feel like you should prioritize this because we need to get on top of this and we need to start paying this money back because there's an interest rate and every month that we don't pay it back we have to pay more and more money.

I get that it's important, but I just have a lot to do today and this just feels really heavy.

Do you know how much the interest rate is on our HELOC loan that we're currently not paying back?

I don't know, probably like 2%.

It's more like 17 or 18%.

Oh, how, like how did this happen? You know I would ask that.

Yeah, you would.

All right, all right, so let, let me pause. Okay, first of all, great work. That was good. You two are great actresses. Even though that was real, how honest would you say that was relative to the actual conversation?

Yeah, I think like the words that we were saying back and forth were right but we were being very nice and careful.

Right. I think in the right. Probably a little less nice when you had this con because like I could see how it could become very stressful.

I'll just be honest. I also like, it frustrates me that doesn't know like about the interest rates or she doesn't like the, the aspects of those, like those parts of our like financial situation. I would really love for her to understand.

Do you know why she doesn't understand them or seem to care.

She's just not, she's not in, they're not interesting to her. She only wants to talk about money when it's good and we're making money.

Well, why don't you ask her? Maybe you're right.

And why don't you care about the interest rate on our heloc?

I guess I don't care about it because I think I just assume that when I opened the HELOC that what was true that day would just stay true throughout its entirety. And so like I just feel like it's a trick or something when things change and I kind of go on autopilot and then when something changes I feel unprepared and then I kind of shut down.

Well, and the HELOC is for some construction stuff. What'd you do?

So when I bought the this condo, it needed just some updates in the bathroom, in the kitchen. And so we took out a HELOC for $50,000 to redo the kitchen and bathroom and get it in good shape for us to move into.

Out of curiosity, who suggested you take the heloc?

I think our mortgage broker. Right?

Yeah, I think our realtor and our mortgage broker.

Yeah, tell me, say it out loud. I want everybody to hear.

Yeah, our realtor and our realtor broker when we were looking at the property, take out this wall and do they.

Were like tack it on to your mortgage and then you just make like one payment a month.

So interesting. And what do you think their incentive was in suggesting that to you?

Commission.

Yeah, that's to buy the property.

Oh, that's so weird. Oh, you guys could just take a heloc. Oh, will I add to my commission?

That's beside.

Of course it will. I'm legally obliged to tell you that. But anyway, you can have such a cool beautiful bathroom. Don't take advice from brokers or realtors ever again. They have an interesting dynamic. One partner brings in the money, the other is the financial strategist. I'll tell you what I like about this is that they've talked about money. They affirmatively made that decision for their roles. Now let me tell you what I don't like. I don't like that one partner essentially just delegates money to the other and then his hands off. That gives you short term problems like we're seeing with Em and Kate, but even bigger long term problems such as divergent views on what to do with your money. And of course the biggest risk of all. What if one partner dies and the Other is left without knowing how anything works. Now, I asked them how they grew up with money. Listen to the gender issues that M encountered as a child. Unfortunately, this is too common, far too common with young women.

I mean, this is going to sound bad, but. I mean, maybe not bad, but this is just. I grew up in, like very comfortable, like upper middle, like upper middle class, I would say.

Why does that sound bad?

Well, no, I'm. What I'm about to say could be is I just didn't know there was an end. Like, I didn't know that there was a budget. I didn't know that we couldn't get, you know, we had to get something not name brand. Right? Like, I just didn't know that that wasn't a thing. I mean, we weren't spoiled by any means, but like, my mom would rather spend, you know, $500 on a J. Crew jacket that I'd have for five, six, seven years than to just buy me a jacket at JCPenney and it be done in a year. You know, my dad is. He started a family business and so he was very much in charge of business, earning, finances, planning, everything, investing. And my mom, she made a decision to be a mom caretaker. And so she raised all of us kids. And my dad, you know, there's three and three. So three boys, three girls. And he was very supportive of all six of us. But the way he showed support for the boys was very different than the way he showed support, support for the girls. And so my brothers, I think, ended up with just more of that sort of shotgun riding with my dad of here's how money works and here's how money can work for you. Where my sisters and I, we didn't get that same type of coaching and development. It was.

What did you hear instead?

Well, how much money do you need? How much does that cost? Like, oh, I got it. Or, you know, I'll open an account for you, or I'll cover it, or.

Don'T worry about it.

You know, those sorts of things.

And zooming out now at the 50,000 foot level, looking back, what lessons did you internalize from what your dad communicated to you about money?

Make enough money so that what's in your account is more than what you're spending and save. Like, open a savings account and, you know, kind of do the. What is it, like the rule of threes? Like invest 30, save 30 and spend 30 or whatever. Well, whatever it is, that would be amazing.

But Wait, you. That would be amazing. But you're like, I don't really want to invest. It's too heavy for me.

Yeah, I.

So I had an account with Northwestern Mutual, so I just would basically send 30, like, basically 30% of my earnings.

Okay. And do you like the mentality? I'm not saying. Well, I was gonna say. I'm not saying one is better or worse, but I do think that everybody should be taught how to make their money grow for them. I do think that investing is important. And I. I don't think there's any reason that women should be taught that you should squirrel money away only and that men should be taught like, hey, make your money grow and turn into millions. What do you think? Taught like, hey, make your money grow and turn into millions. What do you think?

I would agree with you. I think as my, I think as my family, as we've all grown, we've definitely all developed different stances on, on money and investing and like, what I, I think, you know, it's not just the boys invest and, you know, have passive income and have their money grow for them. And the women don't. Like my one sister, I mean, she's a serious go getter. I mean, her and her husband are just absolutely, just brilliant in their careers and brilliant in savings, and I think that they do a really great job. Maybe it's even more extreme than I'll ever get, but, I mean, she's cutthroat and it's admirable. And I have a brother who's maybe less aggressive on things. He's very much low risk. He's got a really big family. He's got a lot of people to take care of. And so he is really particular about how he spends his money and what he does with his money.

Parents, you have to talk to your kids about money, especially your daughters. And I say that because I talk to too many people whose parents never talk to them. And when it comes to women, I frequently hear that the only things they were told about money, save money, don't spend a lot and hide a little money just in case something bad happens. That is not effective teaching for any child. And I'm begging every parent out here to begin having regular, proactive, positive conversations about money. Of course, the only way you can do that is if you yourself have a positive relationship with money. When I saw you recreate your conversation, I noticed a few things. I noticed a bit of frantic energy from Kate. It's like, I need this. I need this. I need it right now. I have this time right now. Like, where is it? And like, this is really important, and if we don't get it, like, something bad's gonna happen, and I need you to know. Okay, Kate's, like, nodding her head. Yes. Kate, you agree?

Yes, Kate.

Where'd that come from, that energy?

I think it's my general energy. When I have something that I want to get done. I don't have a lot of patience.

Oh, okay. Okay. So is this true in other parts of business and life?

Yes, I'd say both.

Okay. All right. Is there an area of life where you are accomplished but also relaxed?