Ramit digs into why a couple with just $1,400 in savings has spent $7,300 dining out this year and how struggling to say no to Lisa’s son keeps them spending.
Ramit Sethi of I Will Teach You to Be Rich talks with Trevor and Lisa, who have been together for eight years and married for six. When Lisa’s 14-year-old son asks for fast food, she often says yes. After a long workday, eating out feels easier than cooking. But those everyday decisions are adding up, and their finances can’t support them.
For Lisa, saying no brings back memories of going without, and she worries cutting back will leave her doing more cooking. Trevor worries about their spending, but they struggle to make changes together. With debt mounting and retirement approaching, Ramit challenges them to set spending boundaries, share responsibilities, and build a plan as a team.
A special thanks to our partners at Monarch for sponsoring this episode. Try Monarch free today and get 50% off your first year of Monarch Core at https://monarch.com/ramit, promo code RAMIT. Sign up through Ramit’s link to get his exact Conscious Spending Plan categories already set up in your account.
(00:00:00) Introduction
(00:03:57) Why money conversations feel so difficult
(00:10:06) What their spending plan reveals about their relationship
(00:19:42) Unpacking their income, savings, and fixed costs
(00:37:53) Credit cards, subscriptions, and dining out
(00:52:52) How childhood money experiences shape their habits
(01:07:06) Cutting housing costs and uncovering the missing mortgage
(01:23:39) Should Lisa close her business?
(01:35:04) Sharing responsibilities and building a plan together
(01:44:32) Follow-ups
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00:00:00.000 — 00:00:06.200 · Ramit
These numbers are a complete mess. Your mortgage is more than your entire take home income. You each have $20,000 of credit card debt.
00:00:06.200 — 00:00:08.080 · Lisa
I have probably 20 credit cards.
00:00:08.080 — 00:00:10.560 · Ramit
You have 20 credit cards. Do you think this is normal?
00:00:10.560 — 00:00:12.200 · Lisa
I don’t know what’s normal.
00:00:12.240 — 00:00:13.400 · Ramit
It’s not normal.
00:00:13.440 — 00:00:14.920 · Lisa
Oh, God. Okay.
00:00:14.960 — 00:00:18.560 · Trevor
It’s kind of like a little monster in a closet that we just not addressing.
00:00:18.600 — 00:00:20.320 · Ramit
It’s money. The monster? Yes.
00:00:20.320 — 00:00:29.440 · Lisa
If I say, like, oh, let’s go out to eat tonight. Well, I got to pay the mortgage. It’s like a dig, almost. I want to just go out, I don’t care.
00:00:29.440 — 00:00:34.320 · Ramit
Couples who are in hundreds of thousands of dollars of debt in their 50s do not eat out.
00:00:34.360 — 00:00:34.760 · Lisa
Ever.
00:00:34.760 — 00:00:38.760 · Ramit
Pretty much ever. What happens if we change? Nothing on today’s call.
00:00:38.800 — 00:00:40.680 · Trevor
You never retire. You’re always working.
00:00:40.680 — 00:00:43.800 · Lisa
I have to face reality. I guess I just don’t know what the move.
00:00:43.800 — 00:00:57.640 · Ramit
Is right now. You are on track for a very, very dangerous rest of your life. We can’t end this call until you make serious, substantial changes. Because the trajectory you’re on, it’s over.
00:00:59.350 — 00:03:56.710 · Ramit
Have you ever spent money just because you were tired and you wanted to make your day a little easier? You don’t want to cook, so you ordered delivery. Your kid wants something at the store. You don’t want to hear them cry. So you say yes. But what happens when you keep making those decisions over and over, even when you can’t afford it?
Today I’m speaking with Trevor and Lisa, 53 and 54 years old. Listen to this line from Trevor’s application. Quote. She has maxed out credit cards and I don’t even know if they’re getting paid. Sooner or later this issue will need to be addressed, and I’m not sure if we’re ready for that. It’s like we’re heading towards a cliff.
What really caught my eye in that application was the phrase sooner or later it’s like they know there’s a problem, but they’re putting off the conversation and I want to understand what is going on that’s stopping them. But before I speak to them, let’s take a look at their monarch accounts. All right.
Let’s take a look here. We have no way housing is $8,000, but they actually spent $40,000. There’s no way. How are they spending so much on their mortgage? Whoa. But their fixed costs were way higher than planned. 230% of budgeted income. How can you plan to spend 230% of what you make just on fixed costs?
That doesn’t make any sense. I’m very confused here. Is this just all wrong, data? They planned on $304 in subscriptions. They actually spent $1,100. They planned on spending $1,469 on debt payments, but they actually spent $5,500. So basically, they’re just spending more than they had planned, which suggests to me that maybe they just have out of control spending.
Right. Let’s take a look at the months here. Whoa. Okay. So we have a highly variable income here. So we can see that a few months ago we had an income of $16,000, but expenses of Thousand dollars, but then the next month. Income of 16,000. Expenses of 30,000. Wow. That’s massive. This is what happens when you have sporadic income.
Most people just go, well, I hope it works out in the end. Whoa. Debt payments are 65% of where their money is going. You’re sunk. If that’s the case, you are sunk. My takeaways from looking at this are there is just a lot of mess here. It’s hard to even understand what’s going on, which tells me if you have messy accounts, you almost certainly have messy spending.
I can tell there’s a business owner in this relationship. Okay, we can work with that sporadic or irregular income. We can work with that. But overall, I don’t see a lot of focus and I see a lot of spending. Stick around until the end for Trevor and Lisa’s follow up to find out if they’ve put my plan into action, and if they’re on track to live their rich life.
Let’s meet Trevor and Lisa. When I say the word money, what do both of you feel about it? Lisa.
00:03:57.270 — 00:03:58.110 · Lisa
Stress.
00:03:58.670 — 00:03:59.430 · Ramit
Trevor.
00:03:59.790 — 00:04:01.110 · Trevor
Same anxiety.
00:04:01.350 — 00:04:04.150 · Ramit
Got it. Okay. How long have the two of you been together?
00:04:04.190 — 00:04:04.950 · Lisa
Eight years.
00:04:04.990 — 00:04:06.150 · Ramit
Eight years. Married?
00:04:06.190 — 00:04:07.790 · Lisa
Married for six years.
00:04:07.830 — 00:04:10.030 · Ramit
Great. And any children in the picture?
00:04:10.070 — 00:04:14.550 · Lisa
Yes. I have a 14 year old son and he has two adult children.
00:04:14.710 — 00:04:26.150 · Ramit
Okay. So the two of you and one child in the house. Great. Let’s think about the last, say, six months or so. Can you think about a time where the two of you really disagreed about money?
00:04:26.350 — 00:04:29.310 · Lisa
Well, I feel like we argue about money almost every day.
00:04:29.350 — 00:04:30.030 · Ramit
Really?
00:04:30.190 — 00:04:30.870 · Lisa
Yeah.
00:04:31.270 — 00:04:34.830 · Ramit
Wow. Take me to one of the bigger arguments you had in the last few months.
00:04:34.870 — 00:05:01.420 · Lisa
It’s not. We don’t really argue, per se, but I’ll just say, like, oh, it would be cool if we did this. And he’ll be like, well, the mortgage is due in two weeks. And I’m like, okay. And then I just kind of shut down because I feel like it’s Incidentally, I’m being like scolded even though it’s not really a scold.
He’s not scolding me, but to me it feels like I’m being scolded.
00:05:01.780 — 00:05:24.460 · Trevor
Money is like an area we don’t really talk to each other about, because we know that it will cause an argument and kind of avoid it. And like there’s so many responsibilities. It’s always been a source of anxiety for me because of all the expectations. There’s birthdays and holidays and and things that you want.
And, you know, you expect it to provide them.
00:05:24.460 — 00:05:31.020 · Ramit
So you don’t talk about money a lot. Don’t argue. But then Lisa says you argue about money almost every day.
00:05:31.260 — 00:05:45.100 · Lisa
Argue is not the right word. It is comments like, if I say like, oh, let’s go out to eat tonight, well, I gotta pay the mortgage like that kind of thing. That to me it’s like a dig, almost.
00:05:45.140 — 00:05:48.140 · Ramit
Okay, a little jab and then do you end up going out to eat.
00:05:48.180 — 00:06:13.450 · Lisa
Yes. Oh Because of the way we split up the money. I pay for all the food and groceries and going out stuff, and he pays for most of the bills and the mortgage. So I kind of make the decision like, well, I don’t want to cook. I’m tired. I’ve been working all day. I want to just go out. It’s 30 bucks. 40 bucks, I don’t care.
00:06:13.650 — 00:06:15.610 · Ramit
Trevor, why did you apply to speak to me today?
00:06:15.610 — 00:06:29.850 · Trevor
Because I feel like that pattern is unsustainable. It’s kind of like. Like a little monster in a closet that we’re just not addressing. And there’s, like, no one wants to go in that room where the monster is, but we have to. One day.
00:06:29.890 — 00:06:38.010 · Ramit
Yeah. It’s money. The monster. Yes. Okay. And what if you don’t? What if we talk for a while today and nothing changes? What happens?
00:06:38.050 — 00:06:47.610 · Trevor
At some point, something will break. Something will give. Maybe we’ll move. We’ll have to move, which will cause some headache. We’re not going to reach whatever financial goals that we set.
00:06:47.650 — 00:06:51.720 · Ramit
Doesn’t sound so bad. Most people don’t reach their financial goals. Most people don’t even have financial goals.
00:06:51.720 — 00:06:56.640 · Trevor
So what ends up happening is you’re never retired. You’re always working.
00:06:56.720 — 00:07:00.440 · Ramit
Yeah. Lisa, what about you? What happens if we change? Nothing on today’s call.
00:07:00.440 — 00:07:49.350 · Lisa
I think if we don’t make some changes. I mean, I’m not happy. Even though I feel like I am the cause of most of this because I have most of the debt. I am not good with spending. I’m not good with a budget. I’m not happy with the way I do it either. I want to feel peace about how I’m handling things, and it’s brought a lot of stress to our relationship as well, and we’re not getting along as well as we used to.
And we think about money very differently, and it stresses him out a lot and makes it so that he sort of shuts down a little bit. And I don’t like talking about it. So we end up like at an impasse where nothing happens.
00:07:49.430 — 00:08:12.470 · Ramit
Respectfully, because I’ve read all of the material you sent over. I feel like the situation that you were in financially and the way you’re talking about it don’t match up. You’re both being very polite. We’re not going to reach our financial goals. It’s a bit stressful. If you continue the way you are going and you’ve told me you want to retire in five years, you will be able to withdraw about $26,000 per year.
Can you live on that?
00:08:12.510 — 00:08:13.430 · Lisa
No, no.
00:08:13.510 — 00:08:41.750 · Ramit
Okay. End of the story. If you don’t change something. You’re not getting younger. You’re getting older. Time is working against you now when it comes to your money. So when we’re sitting here talking about like, oh, it’s a bit stressful and we go out to dinner and this, we’re not even in the same universe right now.
No, I don’t usually cut to the chase this early on, but I’m just struck by the way you’re talking about it. It seems like that’s like a minor inconvenience. This isn’t minor. This is very serious.
00:08:42.349 — 00:08:57.940 · Trevor
Right. Well, I think we take it lightly because it’s depressing. So no one really wants to be depressed. All the times we have to live. So we kind of, like I said, that we leave that monster in the closet and we busts out. And that’s when it all comes to head.
00:08:57.980 — 00:09:26.380 · Ramit
That’s right. That’s very perceptive. So if you are having this conversation with me today and the idea is like, okay, like, let’s let this monster peek out its head and that’s it, and let’s maybe talk a little bit around the edges. About $5 here, $50 there, y’all. That’s going to do nothing. Yeah. It’s either bring this monster out and figure out a way to shoot it in the head.
Sorry to be so visual and it’s going to make us uncomfortable. We’re going to have a lot of uncomfortable conversations, or we might as well not even talk.
00:09:26.500 — 00:09:28.020 · Lisa
Right? That’s why we’re here.
00:09:28.180 — 00:09:37.940 · Ramit
Great. Great. Okay, so do we all agree? We are here to talk about money in the most honest way. Yes or no?
00:09:38.460 — 00:09:39.060 · Lisa
Yes.
00:09:39.100 — 00:10:06.330 · Ramit
Great. Okay. And do we also agree that we can’t end this call until you make serious, substantial changes. Because the trajectory you’re on. It’s over by show of hands. Okay, both people putting hands up. Great. That’s the kind of conversation I’m willing to have. Perfect. I want to take a look at your numbers.
What was it like to do the conscious spending plan together?
00:10:06.850 — 00:10:07.490 · Lisa
Terrible.
00:10:08.810 — 00:10:23.890 · Lisa
How come I don’t even like listing all the things that I owe? It becomes more real. And I also don’t want Trevor to know every single thing that I have going on.
00:10:23.890 — 00:10:25.210 · Ramit
Why? You’re married.
00:10:25.530 — 00:10:36.210 · Lisa
I don’t want him to just be like, okay, I’m done. I can’t do this anymore. I’m going to take the money that I make, and I’m going to deal with what I need to deal with, and you can fend for yourself.
00:10:36.330 — 00:10:38.770 · Ramit
Trevor, are you at that point? No.
00:10:39.090 — 00:10:40.370 · Trevor
No, I’m not at that point.
00:10:40.450 — 00:10:44.120 · Ramit
All right. What was it like for you, Trevor? Doing the CSP together?
00:10:44.280 — 00:11:04.800 · Trevor
We did it together, but we were uploading our own things. So she’s uploading her stuff and I’m uploading my stuff. You know, I’m not an angel either. But like I said, we’ve always had this habit or poor habit of mismanagement, I guess. And so we’re both dealing with our own monsters, and we’re just trying to figure out a way to fight them together.
00:11:05.040 — 00:11:09.080 · Ramit
Well, did you sit down physically together to do this?
00:11:09.160 — 00:11:14.800 · Trevor
We did sit down physically, but we were sitting next to each other while entering our own separate stuff.
00:11:14.840 — 00:11:19.080 · Ramit
Elisa, am I noticing? Is it nasal or are you tearing up?
00:11:19.120 — 00:11:25.280 · Lisa
Um, yeah, I am tearing up because it’s just hard to talk about this stuff, and it just feels
00:11:26.520 — 00:11:32.760 · Lisa
to be like this and be causing this much stress for both of us.
00:11:32.800 — 00:11:47.220 · Ramit
So I don’t mind if you cry. It’s going to be some challenging conversations today. That’s how it goes. I know, that’s why you’re here. You came here. You went through a lot to get here. So. Cry if you have to cry. Tell me if you need a break. I’ll give you a break. No problem. Okay, we’re gonna do it.
00:11:47.420 — 00:11:47.940 · Lisa
Okay?
00:11:47.980 — 00:12:08.780 · Ramit
All right. When I think about the two of you sitting down for your CSP and filling it out separately and then going, okay, Remy, like, do some magic. I think that you fundamentally misunderstood the entire point of the CSP. What is the point? What is the point that you thought of putting your numbers in the CSP?
00:12:08.820 — 00:12:19.660 · Lisa
I don’t think Trevor even doesn’t even know what the CSP is because I did it. I mean, he sat there and I said, okay, let’s I need this amount and this amount and this amount. And I typed it up.
00:12:19.700 — 00:12:22.020 · Ramit
That’s surprising. He applied. But you did it.
00:12:22.060 — 00:12:22.660 · Lisa
Yeah.
00:12:22.660 — 00:12:23.180 · Ramit
Why?
00:12:23.820 — 00:12:28.580 · Lisa
When it comes to administrative stuff like that, I take the lead. I usually take the lead.
00:12:28.620 — 00:12:40.450 · Ramit
You all are proving my point. You thought the point of this was to type numbers into the conscious spending plan? That’s not the point. What’s the point of doing it together? Why did we specifically say do it together? Why?
00:12:40.490 — 00:12:45.250 · Lisa
So that we’re more aware of what’s actually happening and what’s really going on?
00:12:45.290 — 00:12:50.650 · Ramit
Yeah. Remember when you were dating? What if I said the point of going to a restaurant is to
00:12:51.730 — 00:13:00.010 · Ramit
provide sustenance for each of you? Each of you is going to get a balanced meal. Like, what the hell are you talking about? That’s not the point of a date. What’s the point of a date?
00:13:00.090 — 00:13:00.810 · Trevor
Well, know each other.
00:13:00.850 — 00:13:21.210 · Ramit
Get to know each other. What’s the point of a CSP is actually to connect over money? You thought it was to enter numbers and be right. I need you to fundamentally rethink the point of showing up today. If you come here thinking I need to be right, or I want to prevent myself from looking bad or being told I was wrong.
This thing is already over.
00:13:21.250 — 00:13:39.600 · Lisa
I don’t want to prevent it. I’m just scared of it. Nobody likes to hear that they’re the problem. They’re the ones that are messing things up. They’re making terrible decisions. Nobody wants to hear that. I’m anxious because I know that’s what I need to hear in order to get things right.
00:13:39.640 — 00:13:49.960 · Ramit
No. Wrong. How much of your life have you gone through by saying, I know that I was wrong? I know that somebody needs to tell me to do better. How much of your life have you gone through thinking that?
00:13:49.960 — 00:13:51.680 · Lisa
Believing that my whole life?
00:13:51.680 — 00:13:53.440 · Ramit
Probably. Exactly. Did it work?
00:13:53.480 — 00:13:54.040 · Lisa
No.
00:13:54.320 — 00:16:44.250 · Ramit
You believe that somebody needs to come in here and tell you? Lisa, you’ve been bad, and you know that it’s going to feel bad, but you think that’s what’s going to change you. As if I tell you you’ve been bad enough ways, enough times. You’re. It’s finally going to sink through. Wrong. That’s not how it works.
Some very confusing things going on here. Trevor applied to speak to me. He’s obviously concerned about what’s going on. He didn’t even fill out the CSP. Lisa did. So already I’m like, what’s the dynamic here? But then they really did not take this seriously the way that they envisioned. The point of this was, all right.
We got some homework from this guy. Check check check. Let’s just put some numbers in. I don’t understand this. Whatever. What you can see here is that Trevor and Lisa did not think about the point of the CSP. If they had taken even 60s to say, what is the point of this? What do we want to get out of this? They might have said, gosh, we should probably connect.
That would have totally changed the dynamic. But because they walked in, having made the incorrect decision miles ago, they already lost. This is going to be a difficult conversation. The numbers that you are about to see are hard. The ages, the situation they are in, even the communication. There’s no easy answers today, and I want you to know that going in.
When I was in my 20s, I was a weird freak who started saving for my wedding before I even met my wife. I knew that one day I wanted to have a big, fat, huge, awesome wedding, and I did not want to have to think about cost as the first primary decision. I am so thankful that I did that. Now, I know most people don’t start saving for their wedding in their 20s, but let me ask you this do you know if you can afford to buy your dream house?
Do you know what it would take for one parent in your household to stay home with the kids? Do you know how much it would cost for you to take your dream trip across the world? Most people have no idea. And so this thing just stays a dream. They don’t even crunch a simple set of numbers to figure out what they can afford.
And to me, it is a tragedy to live a smaller life than you have to. I want you to know how long it will take for you to be able to afford that dream house. I want you to know when you can get that beach house or that beautiful sweater. And in fact, I’m going to host a live event to show you exactly how to find the answer out for you.
I’m going to show you real questions people have about big things they want. And then I’m going to show you how to crunch the numbers yourself so you know, if you can do it or if not when you can do it. It’s part of my free three Night Live event series. Sign up at.
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Availability and coverage vary by state and insurance plan. I’m going to look at the numbers. I’m going to pull them up on screen. And we’re going to see what happens as we go through these numbers.
00:19:41.850 — 00:19:42.610 · Lisa
Okay.
00:19:42.690 — 00:19:49.130 · Ramit
All right. Trevor, can you read off the words in bold and the numbers in full for this entire box, please?
00:19:49.530 — 00:20:04.930 · Trevor
Assets 620,000. Investments 382,627. Savings 1400. Debt 43,923. Total net worth 960,104.
00:20:04.970 — 00:20:06.930 · Ramit
Great. What do you think about those numbers?
00:20:06.930 — 00:20:10.410 · Lisa
I don’t know what to think about the numbers because I don’t fully understand them.
00:20:10.410 — 00:20:28.520 · Ramit
That’s honest. I appreciate that. Okay. Most people say it looks okay. I wish it was more like that’s kind of the level that most people are. And I think that you’re saying something really honest. Hey, I don’t know. Good, bad, whatever. Yeah, we’ll get to that. But I’m just trying to get an understanding of your comfort with these numbers.
00:20:28.560 — 00:20:28.880 · Trevor
Yeah.
00:20:28.920 — 00:20:35.520 · Ramit
Lisa, let’s go to the combined gross monthly income. What number is that?
00:20:35.560 — 00:20:38.160 · Lisa
20,000 226.
00:20:38.320 — 00:20:38.960 · Ramit
Okay.
00:20:39.000 — 00:20:50.200 · Ramit
The two of you make $242,000 per year by a show of hands. Who knew that? I see no hands going up. Okay, interesting. What did you think you made per year?
00:20:50.240 — 00:20:51.360 · Ramit / Lisa
Lisa, I.
00:20:51.440 — 00:21:09.800 · Lisa
Think Trevor makes 120 and I don’t know how to consider my pay. Like, if I’m paid, whatever my income is or if I’m taking away all my expenses. That’s part of my big issue is that I don’t really understand it fully.
00:21:09.840 — 00:21:10.320 · Ramit
Okay.
00:21:10.520 — 00:21:13.280 · Ramit
That’s fine. Trevor, what did you think you made per year?
00:21:13.320 — 00:21:21.080 · Trevor
I know that I felt like I brought about 120 a year, but I didn’t. I could not have fathomed how much Lisa brought to the table.
00:21:21.120 — 00:21:24.070 · Ramit
What do you guys think? Hearing that you make $242,000.
00:21:24.110 — 00:21:29.870 · Trevor
The number sounds good, but the the reality of it is we don’t manage it well.
00:21:29.990 — 00:21:33.150 · Ramit
So, Trevor, you make $8,000 a month. Is that correct?
00:21:33.150 — 00:21:35.390 · Trevor
It’s around there. Yeah.
00:21:35.430 — 00:21:38.830 · Ramit
Okay. So somebody makes 12,226 a month. Is that Lisa?
00:21:38.870 — 00:21:39.190 · Lisa
No.
00:21:39.190 — 00:21:41.790 · Lisa
That’s Trevor. The 8000 is me.
00:21:41.910 — 00:21:42.270 · Ramit
What?
00:21:42.270 — 00:21:43.070 · Ramit
What’s happening right.
00:21:43.070 — 00:21:43.550 · Ramit
Now?
00:21:44.030 — 00:21:45.630 · Trevor
We don’t know our numbers well enough.
00:21:45.870 — 00:21:53.830 · Ramit
Not only do you not know your annual income. Trevor, you don’t know what you’re making per month. Yeah, this is a problem. How are we going to manage money if we don’t know how much you make?
00:21:54.670 — 00:21:55.190 · Trevor
Yeah.
00:21:55.270 — 00:22:02.710 · Ramit
So Trevor makes 12,226. Lisa makes 8000. And that’s in your business. Is that correct?
00:22:02.750 — 00:22:03.390 · Lisa
Yes.
00:22:03.430 — 00:22:05.550 · Ramit
And then how much do you take home?
00:22:05.590 — 00:22:08.030 · Lisa
Probably 1500 or 2000.
00:22:08.070 — 00:22:08.750 · Ramit
Okay.
00:22:08.870 — 00:22:15.710 · Ramit
Makes sense. It says 2000 here. All right. Trevor, why is your take home $5,700? That seems pretty low.
00:22:15.950 — 00:22:24.580 · Trevor
Medical pay and 12% for 401 K. And then there’s, like, a maybe for one loan, huh?
00:22:24.940 — 00:22:25.900 · Ramit
You took a loan out.
00:22:25.940 — 00:22:27.260 · Trevor
From for one. Okay. Yes.
00:22:27.300 — 00:22:29.060 · Ramit
Okay. Why’d you do that?
00:22:29.140 — 00:22:30.540 · Trevor
Pay bills? Yeah.
00:22:30.580 — 00:22:58.300 · Ramit
All right, so you have that going. That’s deducted. All right. Okay, so your combined take home is 7700 a month. Considerably different from 20 K to 7000. That’s a big difference. Normally we would see this number at something like, I don’t know, 12 K, 13 K maybe. So then let’s go to the fixed cost number.
Lisa what’s this number you see here for fixed costs 230%. What does that mean.
00:22:58.340 — 00:23:02.980 · Lisa
I believe it means that we are spending more than we’re making.
00:23:02.980 — 00:23:03.820 · Ramit
Correct.
00:23:03.980 — 00:23:16.980 · Ramit
You are spending more than double what you are making every month just on fixed costs, just to keep the lights on. You have a mortgage or a rent mortgage. All right. Your mortgage alone is more than you make every month. What does that tell you?
00:23:17.020 — 00:23:18.939 · Trevor
Trevor tells me
00:23:21.130 — 00:23:24.490 · Trevor
Didn’t put the numbers together well enough to get when I got in here.
00:23:24.530 — 00:23:31.450 · Ramit
Yes. And what else? If these numbers are accurate and your mortgage is more than your entire take home income, what does that tell you?
00:23:31.530 — 00:23:40.090 · Trevor
I don’t even know how we’re sustaining it. We somehow get by, and I don’t know how we’re doing it. What it really tells me is just a wee bit off. More than we can chew.
00:23:40.170 — 00:24:03.770 · Ramit
And the arguments. You know, we we had in the beginning where the conversation was like, oh, I’m not sure the monster in the closet, like, those days are over. I don’t really care about that anymore. I care about this. I care about math. If you’re spending more than you make just on your mortgage alone, that’s the end of the story.
How we feel about it is less relevant now. We will talk about your feelings, but we need to solve this. Otherwise you all will lose your house and all of it will be gone. That’s it.
00:24:04.130 — 00:24:19.400 · Lisa
We have talked about selling the house and renting, and I feel like we were kind of waiting for this to happen before making, like a final decision, because we don’t know the steps to take or if that’s the right choice.
00:24:19.560 — 00:24:19.760 · Lisa
For.
00:24:19.760 — 00:24:20.360 · Lisa
Us.
00:24:20.480 — 00:24:21.040 · Ramit
We’ll go through.
00:24:21.040 — 00:24:21.600 · Ramit
It.
00:24:21.680 — 00:24:36.840 · Ramit
Yeah, let’s continue on. I want to look at the rest of your fixed costs here. So we have 230%, which is the highest number I’ve ever seen of anyone’s fixed costs. You have car payments $2,170 per month. What’s that?
00:24:36.880 — 00:24:48.400 · Lisa
I’m a mobile dog groomer. That’s the vehicle payment for my van. That’s why I don’t take home as much money as I could be. Because I have so many expenses with the business.
00:24:48.920 — 00:24:50.480 · Ramit
Mhm. Okay.
00:24:50.760 — 00:24:55.440 · Ramit
Debt payments of $1,469. What’s that. Debt.
00:24:55.560 — 00:24:56.800 · Trevor
Credit card debt.
00:24:56.840 — 00:24:58.400 · Ramit
How much do you have in credit card debt?
00:24:58.440 — 00:25:02.120 · Trevor
Me I probably have pretty close to 28,020 K.
00:25:02.160 — 00:25:03.280 · Ramit
What about you, Lisa?
00:25:03.320 — 00:25:04.320 · Lisa
About the same.
00:25:04.360 — 00:25:04.840 · Ramit
Okay.
00:25:04.880 — 00:25:07.520 · Ramit
Groceries at 2100 a month.
00:25:07.520 — 00:25:08.160 · Ramit
What’s that?
00:25:08.200 — 00:25:12.400 · Lisa
I don’t know if that included eating out. We eat out a lot. And,
00:25:13.440 — 00:25:20.980 · Lisa
yeah, I spend a lot. A lot on groceries, a lot on food with my son also. That’s. You know, he constantly wants to eat out.
00:25:20.980 — 00:25:23.100 · Ramit
And you have trouble saying no to your son.
00:25:23.100 — 00:25:23.820 · Lisa
Yes.
00:25:24.060 — 00:25:31.420 · Ramit
Almost every single person I’ve ever met who has credit card debt struggles to say no to their kids. What do you make of that?
00:25:31.460 — 00:25:32.340 · Lisa
It makes sense.
00:25:32.340 — 00:25:49.380 · Lisa
I mean, you want to do you want to make your kids happy? And it’s more about not adding to the stress that we already have. I don’t want to have arguments with my kid every day. He’ll, you know, I get home from work, I’m tired, I’ll make dinner, and he’ll be like, I don’t want that, I want McDonald’s, or I want this.
00:25:49.420 — 00:25:49.980 · Ramit
And.
00:25:50.100 — 00:25:51.860 · Ramit
You want me to handle this for, you.
00:25:51.900 — 00:26:01.140 · Lisa
Know, because I already know what to do. And a lot of the time I do say no, but a lot of the time I just don’t want to deal and I give in.
00:26:01.180 — 00:26:03.300 · Ramit
How come you didn’t just accept my offer to help?
00:26:03.300 — 00:26:04.140 · Lisa
I don’t know.
00:26:04.420 — 00:26:20.330 · Ramit
You do that a lot. Yes, I’m half joking. But if you FaceTime me and you go, hey, talk to my son. And he goes, hey, my mom made this meal and I don’t want it, I want McDonald’s. Do you know how much joy I would take in telling him no.
00:26:22.530 — 00:26:23.330 · Lisa
Yeah.
00:26:24.130 — 00:26:24.450 · Trevor
Yeah.
00:26:24.490 — 00:26:46.690 · Ramit
Okay, let’s continue on. Miscellaneous at $2,319. I actually think that’s probably true. I think you do spend money on uncategorized stuff. We’re going to look at that. If we look at your investments, we have $1,430 going towards investments, savings at 18%. I don’t believe this. I don’t believe you’re putting $1,400 a month towards the savings account.
Is this true?
00:26:46.810 — 00:26:48.730 · Trevor
No, that might be the balance.
00:26:48.730 — 00:26:49.970 · Lisa
That’s the balance.
00:26:50.010 — 00:26:50.610 · Ramit
Right.
00:26:50.650 — 00:26:58.250 · Ramit
All right. And then you have -$12,000 left over. I’m gonna be very honest with you. These numbers are a complete mess.
00:26:58.410 — 00:26:59.450 · Lisa
We’re screwed.
00:27:00.010 — 00:27:30.960 · Ramit
No, don’t use humor to try to escape the reality of the situation. You did not actually do these numbers properly. I don’t mind if you get the numbers a little bit wrong. Most people get 2,025% of the numbers. Wrong, I don’t mind. I don’t think you actually took this seriously. I don’t think you respect money.
You certainly didn’t respect me enough to do this and do it even semi correctly. I want to help but I’m not sure where to go. If your numbers are so wrong that you are -$12,000 per month, which is obviously impossible.
00:27:30.960 — 00:27:36.000 · Lisa
I don’t know how we’re wrong though because I feel like we put in everything accurately.
00:27:36.160 — 00:27:37.280 · Trevor
Yes, we’re I’m confused too.
00:27:37.280 — 00:27:46.680 · Ramit
I’m going to walk you through it. Okay, so this is zero post-tax retirement savings. This suggests that you are investing $1,430 per month.
00:27:46.720 — 00:27:47.680 · Lisa
That’s incorrect.
00:27:47.720 — 00:27:52.840 · Ramit
Okay, we’ll look up what it is because we have your accounts connected through monarch. But I’m gonna put that at zero as well.
00:27:53.160 — 00:27:53.880 · Lisa
Okay.
00:27:54.240 — 00:28:13.710 · Ramit
I don’t know about your income, but I want to go and I want to take a look. So let’s go through some of your numbers and let’s see what we have here. All right. So here off I’m going to go. Last month you actually had a really good month. You planned to make 7000 but you made $17,000. Did you know that?
00:28:14.230 — 00:28:14.910 · Lisa
No.
00:28:15.390 — 00:28:17.470 · Ramit
Even when things are good, you don’t know it.
00:28:17.510 — 00:28:44.190 · Lisa
No, we don’t, because we don’t discuss it together. I told Trevor I used to get bills in the mail. I mean, in my. Even in my 20s. And if I didn’t have enough money in my account, I would put the bills aside and just pretend like they didn’t exist. That’s kind of how I’ve always been, and I continue to do it. I can.
Does it work? No, it doesn’t work.
00:28:44.230 — 00:28:53.350 · Ramit
Why not? It works. You all have a what appears to be a beautiful house. Eat out a lot. Have a van, have a business. Why not? Seems to work.
00:28:53.390 — 00:29:23.940 · Lisa
No, it’s because Trevor has good credit. That’s why we have the van. That’s the only reason I wouldn’t have been able to get it without him. And I fly by the seat of my pants when it comes to money. Like, instead of paying my two credit cards that I have the biggest balances on. I haven’t made payments in two months and instead we go out to eat.
And I don’t tell Trevor that it’s less stressful for me to not think about it and not deal with it.
00:29:23.980 — 00:29:25.380 · Ramit
Sounds like it’s working great.
00:29:25.420 — 00:29:27.020 · Lisa
Yeah, clearly it’s not.
00:29:27.100 — 00:29:39.100 · Ramit
What do you mean? You’re getting exactly what you want. You get to eat out. You get to have a business. Even though you yourself could not afford to have it. You get the house. What’s not working? It’s working exactly the way you want it to.
00:29:39.140 — 00:29:43.140 · Lisa
I mean, it’s not the way I want it to, I want to.
00:29:45.220 — 00:29:54.420 · Lisa
Be better at handling all this. And I don’t want to have secrets. I don’t want him to be so stressed about money and retiring and all this stuff.
00:29:54.500 — 00:30:07.100 · Ramit
Are you telling me that you would rather downsize to a small apartment, give up the business, not eat out except once every two months in order to, quote, be better and be less stressed about money?
00:30:07.330 — 00:30:11.530 · Lisa
I’m not willing to do all of those things just to, quote, be better. No.
00:30:11.570 — 00:30:16.570 · Ramit
Okay, that’s an honest answer. I agree with that. Would you be willing to do those things for anything?
00:30:16.730 — 00:30:22.890 · Lisa
I’d be willing to do those things in lieu of losing important things. Like my husband or
00:30:24.050 — 00:30:25.290 · Lisa
00:30:25.330 — 00:30:32.770 · Ramit
Great. Now we’re getting somewhere. Trevor, have you ever had a honest conversation with Lisa about money and your concerns?
00:30:32.810 — 00:30:39.010 · Trevor
Oh, well, I’ve tried. Yes, I’ve tried to have these conversations, but it’s tough without maybe a mediator.
00:30:39.210 — 00:30:42.210 · Ramit
Have you ever seen one therapist, mediator or anything like that?
00:30:42.290 — 00:30:43.610 · Trevor
Yes, actually.
00:30:43.650 — 00:30:45.250 · Ramit
Oh, good. You did it together.
00:30:45.410 — 00:30:46.370 · Trevor
We have.
00:30:46.530 — 00:30:47.770 · Ramit
Good. How’d it go?
00:30:47.850 — 00:30:49.450 · Lisa
We didn’t continue it.
00:30:49.490 — 00:30:55.530 · Trevor
It’s tough to find the fit. Like the personality conflict. Like the cultural differences or something.
00:30:55.650 — 00:31:03.770 · Ramit
All right. Trevor, so do you want to have the conversation with Lisa about money right now? Sure. If you could say anything to Lisa, then she would listen. What would you say to her?
00:31:04.130 — 00:31:05.290 · Trevor
Well, um.
00:31:06.400 — 00:31:13.240 · Trevor
Wow. I don’t know what to say to her. I really don’t know. I’m like, I’m at a loss because I’m. No, like I said, I’m no angel either.
00:31:13.480 — 00:31:40.520 · Ramit
So it’s kind of striking to me that, you know, I asked, have you ever had a serious conversation about money? You said, no, but it’s because we couldn’t find a counselor because of fit, etc. but now I’m giving you complete carte blanche the the opportunity to say anything you want. And your response is, I’m not sure what to say.
Is it possible that you haven’t talked about money because you actually both don’t know what to say about money? Maybe even you don’t really want to talk about it.
00:31:40.560 — 00:31:41.320 · Trevor
Maybe even.
00:31:41.440 — 00:32:09.350 · Lisa
I’m a very emotional person. Trevor is very unemotional. So whenever we talk about these things, I will start crying and he’ll immediately shut down and say, I can’t talk to you if you’re crying. And then that’s kind of the end of the conversation because I can’t control it. I’m having an emotional response to it and he cannot deal with the emotion.
Okay, so we end up not talking about it.
00:32:09.350 — 00:32:27.950 · Ramit
Let’s say that my wife and I spent 230% of our income on fixed costs. Let’s say that we had close to no savings. We were in our 50s. It was a pretty dire financial situation. And she says, I can’t talk about this because I start to cry. And then I say, yeah, and I shut down. What advice would you give us?
00:32:27.950 — 00:32:32.870 · Lisa
I would say, you both have to suck it up and just deal with it and and talk about it.
00:32:32.950 — 00:32:36.230 · Ramit
But she cries and I shut down. So what would we do?
00:32:36.870 — 00:32:40.750 · Lisa
She’ll have to cry and you’ll have to not shut down.
00:32:40.750 — 00:33:01.870 · Ramit
Great. That’s pretty honest. Or we could write a letter to each other, or we could record voice notes, or we could see a therapist, or there’s a thousand different ways we could do it. But I’m not going to let crying stop me from one of the most important conversations. I’m not going to let my inability to stay present in the conversation.
I’m not gonna let those speed bumps get in the way of a rich life, are you?
00:33:01.910 — 00:33:03.130 · Lisa
I don’t want to.
00:33:03.250 — 00:33:12.930 · Ramit
Okay, then let’s not. If you’re going to cry today. Cry? I don’t mind. Crying is fine. It’s normal. I don’t mind, Trevor. You could cry to everybody could cry on this call. Let’s do it together.
00:33:13.090 — 00:33:14.330 · Lisa
Trevor doesn’t cry.
00:33:14.570 — 00:36:14.340 · Ramit
No. I also have a difficulty crying. This is messy. I was right, the numbers themselves are messy. But when I see messy numbers, messy account structure, it usually reflects something else. Messy in a relationship, you know, it’s kind of like messy mind, messy office or messy whatever. Whatever the phrase is.
I don’t know what it is, but it’s messy here. It’s messy everywhere. I want to tell you that when you are dialed in with some part of your life, it could be money, it could be fitness, it could be parenting, whatever. You know what it feels like. It feels like we all are on the same page if you think about it, with money, if I’m going out to eat, I don’t have to check something to be like, oh, is it okay for us to buy celery?
I already know because I have a system that handles it. Fitness. Am I going to work out today? It’s already dialed in. I’m going at this time these days, and I know exactly what I’m going to do and I’m going to track it. This is what I want you to be working towards, and it’s okay if you’re not there with money yet.
Most people are not. That’s okay. But there is something in your life that you are really good at and it could be you individually, could be you and your partner. I want you to start asking yourself if I was that competent that dialed in with money, what would it look like and feel like it would not look like this?
I can tell you that one of my challenges today is going to be to take all this messy information, numbers, contradictory accounts, and try to find out what matters and what we should do first. Common questions I hear from couples who are about to retire. Are we going to be okay? How do we know if we have enough?
And what if the market takes a downturn? Now these are good questions to ask. You definitely want to plan for the worst, but I noticed that very few people plan for the best. That’s why it’s helpful to explore all scenarios with the help from a flat fee planner like our friends at Fassett. Financial planning is changing and facet is helping make that happen.
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Code receipt for 20% off. I want to do a debt breakdown. You have $44,000 of debt. You each have $20,000 of credit card debt. What’s the rest?
00:38:04.280 — 00:38:07.960 · Trevor
The 20 was an estimate, so it may be split between the two of us.
00:38:08.000 — 00:38:10.280 · Ramit
That’s it. Two different credit cards. That’s your total debt.
00:38:10.320 — 00:38:13.800 · Lisa
Not two different credit cards. I have probably 20 credit cards.
00:38:13.920 — 00:38:15.240 · Ramit
You have 20 credit cards.
00:38:15.240 — 00:38:19.120 · Trevor
Why 20? I don’t know, 20. I mean, we don’t know.
00:38:19.160 — 00:38:21.440 · Lisa
I’m exaggerating. I’m exaggerating, but it’s a lot.
00:38:21.480 — 00:38:24.080 · Trevor
Okay. Stop it. Is that true?
00:38:24.120 — 00:38:25.320 · Lisa
It’s a lot. Yeah.
00:38:25.360 — 00:38:25.800 · Trevor
Okay.
00:38:25.800 — 00:38:28.080 · Lisa
Okay. At least ten. At least ten.
00:38:28.120 — 00:38:32.960 · Trevor
Okay. So. Yeah. So I’m no different. I have maybe ten credit cards.
00:38:32.960 — 00:38:34.640 · Ramit
You each have ten credit cards?
00:38:35.120 — 00:38:35.600 · Lisa
Yes.
00:38:35.640 — 00:38:37.000 · Ramit
Do you think this is normal?
00:38:37.000 — 00:38:38.840 · Lisa
I don’t know what’s normal.
00:38:38.840 — 00:38:39.920 · Trevor
I’ll tell you.
00:38:40.120 — 00:38:42.560 · Lisa
I guess not the way you’re saying it.
00:38:42.600 — 00:38:44.680 · Ramit
It’s not normal, okay.
00:38:44.760 — 00:38:46.000 · Lisa
What is normal?
00:38:46.120 — 00:38:47.360 · Ramit
Two credit cards.
00:38:47.400 — 00:38:48.800 · Trevor
Two. Wow.
00:38:49.200 — 00:38:49.880 · Lisa
Yes. Okay.
00:38:50.440 — 00:38:51.990 · Lisa
Oh, God. Okay.
00:38:53.350 — 00:39:26.950 · Ramit
All right. Let’s go ahead and take a look at some of your accounts in monarch. So last month you made $10,000 more than you had planned. So you told me that between the two of you, after taxes and all that stuff, you take home $7,000 a month. That’s this 7731. You actually made 6000 more than you had planned.
Okay, so what we’re looking at here, I see a lot of payments from your pet business. Payments of roughly 5600 bucks. Yeah. And I also see a lot of money coming in.
00:39:26.990 — 00:39:29.550 · Lisa
That’s where Trevor works. Oh, check.
00:39:29.590 — 00:39:37.350 · Ramit
Oh, great. Okay, so there’s a you have paychecks coming in from there. Great. Okay. How come you pay yourself, like, every few days? Lisa.
00:39:38.030 — 00:39:55.330 · Lisa
I used to have an accountant, not an accountant, a bookkeeper, and I don’t anymore. So now I don’t pay myself unless I need to pay bills. So that’s another big issue. I need to get another bookkeeper again so that it’s more under control.
00:39:55.730 — 00:40:05.410 · Ramit
Okay, let’s look at transportation 3100 last month. Interestingly, a lot of Tesla charges. What’s that charging $145.
00:40:05.410 — 00:40:06.930 · Trevor
That’s probably insurance.
00:40:06.970 — 00:40:12.770 · Ramit
All right I’m looking at quite a bit of gas. I’m assuming that’s for the business truck.
00:40:12.810 — 00:40:13.930 · Lisa
It’s the van. Yeah.
00:40:13.970 — 00:40:18.450 · Ramit
All right, 2169. That’s the van.
00:40:18.530 — 00:40:19.650 · Lisa
That’s the van payment.
00:40:19.650 — 00:40:31.690 · Ramit
Yeah, yeah. All right. Let’s look at the rest of it. Debt payments 3063. In a month we have two loan 90. We have freedom. That looks like a credit card.
00:40:31.730 — 00:40:34.730 · Lisa
Freedom is mortgage also, isn’t it, honey?
00:40:34.770 — 00:40:36.250 · Trevor
Freedom is freedom. Mortgage. Yes.
00:40:36.290 — 00:40:38.330 · Ramit
How do you have it? Two mortgages.
00:40:38.330 — 00:40:43.850 · Trevor
I don’t know what that top one is, but I know the other one is the mortgage.
00:40:43.890 — 00:40:47.650 · Ramit
All right, phone $553. How’s that possible?
00:40:48.200 — 00:40:57.400 · Lisa
That’s my business phone, my business line and the iPad that I use for my business. And my son’s phone is on it too.
00:40:57.760 — 00:41:05.360 · Ramit
Okay. Everybody feels like low energy right now. Am I the only one feeling that, or are you feeling it as well?
00:41:05.400 — 00:41:06.640 · Lisa
I’m feeling it.
00:41:07.080 — 00:41:09.400 · Trevor
Money does that. Yeah.
00:41:10.000 — 00:41:13.880 · Ramit
You let it do that, right? How do you think I feel when I talk about money?
00:41:13.920 — 00:41:16.960 · Lisa
You probably are excited about it because you know what to do with it.
00:41:17.000 — 00:41:19.440 · Ramit
Yeah. True. What else?
00:41:19.480 — 00:41:23.400 · Trevor
I’m assuming you. You like it? I’m assuming you liked it. You love it. I mean.
00:41:24.040 — 00:41:24.840 · Lisa
Because
00:41:25.880 — 00:41:27.760 · Lisa
why else would you be doing this for a living?
00:41:27.880 — 00:41:28.440 · Trevor
You’re good at.
00:41:28.440 — 00:41:34.400 · Ramit
It. I appreciate the compliment. Let me ask you. The two of you. Let’s. What is something that each of you is good at?
00:41:34.800 — 00:41:37.560 · Lisa
Being creative. Doing creative things.
00:41:37.600 — 00:41:40.080 · Ramit
Great. An example. What would it be like?
00:41:40.320 — 00:41:45.960 · Lisa
I’m artistic. I do a lot of crafts. I’m a dog groomer. That’s a creative profession.
00:41:46.000 — 00:41:47.910 · Ramit
Perfect. Trevor, what’s one thing you’re good at?
00:41:47.910 — 00:41:52.710 · Trevor
I wouldn’t say there’s an actual thing, but I. Consistent.
00:41:52.750 — 00:42:05.310 · Ramit
Okay. All right. Think about how you talk about the thing you are good at and the way you feel about it. Okay. Now, if you apply that to money, how would it look and feel when you worked through money?
00:42:05.590 — 00:42:24.390 · Lisa
Probably a lot better. Like if I went to a class on learning how to knit something, I’d be like, super into it. If I go to a sci fi movie with Trevor, I’m kind of like, okay, when’s this going to be over? And that’s how I feel about talking about money.
00:42:24.430 — 00:42:30.350 · Ramit
Okay, now tell me what it would feel like if you felt the same way about money. What would it look and feel like that you feel about being creative?
00:42:30.350 — 00:42:31.350 · Lisa
I feel like I
00:42:32.950 — 00:42:40.670 · Lisa
know what the hell I’m doing, and I’d be it would make more sense to me. I wouldn’t be making these mistakes that I’m making.
00:42:40.830 — 00:42:44.070 · Ramit
You notice that whenever I ask you these questions, you’re going into the negative.
00:42:44.110 — 00:42:45.980 · Lisa
That’s kind of what I do.
00:42:46.060 — 00:42:47.700 · Ramit
Yeah. It’s not working for me.
00:42:47.740 — 00:42:49.060 · Lisa
It’s not working for me either.
00:42:49.100 — 00:43:02.940 · Ramit
Then let’s change it. Stop doing that and instead try to stick with me and answer my question. What would it look and feel like if you had the same skill and approach with money as you do with creativity?
00:43:03.540 — 00:43:15.460 · Lisa
I feel like I’d be a lot wealthier. I feel like I’d have more money coming in and I’d be using it for better things, and not things that are just wasteful.
00:43:15.540 — 00:43:30.460 · Ramit
What else when you saw these numbers? Like if I walk into a yarn store as a guy like me, I’m like, what is this? This is overwhelming. I don’t care about it. I don’t understand it. That’s how you’re talking about money. Now, when you walk into a yarn store, what do you see?
00:43:30.700 — 00:43:31.620 · Lisa
Potential?
00:43:31.740 — 00:43:32.580 · Ramit
Yes.
00:43:33.300 — 00:43:33.740 · Lisa
Yeah.
00:43:33.780 — 00:43:37.500 · Ramit
You see possibility of things that don’t even exist yet.
00:43:37.660 — 00:43:38.260 · Lisa
Correct.
00:43:38.260 — 00:44:26.490 · Ramit
That’s what I see with money. I look at these things, it all makes sense to me. I see this, I see that, I go, yeah, okay. Some mistakes here and there, we could fix this and I can see the end result. You could see a blanket. I can see the equivalent with money. That is how you might feel. I need you to get there. Okay?
I need you to even visualize that. The same way you walk into a yarn store. You could do that with money. That’s what I’m talking about. Trevor. Do you see what I’m talking about here? If somebody says you. Hey, can you do that for the next 45 days straight, you go. Yeah. Of course. Consistency. No problem.
This is given. Done. That’s the same way you can be about money. Hey, can you figure this stuff out? Yeah. Of course. Yeah, it might take some work. I don’t mind putting the work in. I can figure this out. That’s the same way you both can feel. But if you don’t allow yourself to unlock, you’ll just be sitting here living in the past.
Oh, it sucks, I don’t. We’re not doing that.
00:44:26.570 — 00:44:27.250 · Lisa
Okay.
00:44:27.570 — 00:44:30.010 · Ramit
Lisa, I can see that you are. You’re getting this.
00:44:30.050 — 00:44:30.770 · Lisa
Yeah.
00:44:31.170 — 00:44:35.410 · Ramit
Just by the tone of your voice. You’re like, oh, I could just see a slight upturn.
00:44:35.450 — 00:44:37.570 · Lisa
Well, it makes sense. That makes sense to me.
00:44:37.610 — 00:44:56.400 · Ramit
Great. Yeah, I’ll tell you honestly, I’ve always been fascinated by people who are creative and can see things like you have people who walk into an empty apartment or house and they can just see it. That’s me. I want you to apply that same principle. You might have to work a little harder with this, just like I have to work harder to do what you’re naturally good at.
00:44:56.440 — 00:45:03.280 · Lisa
Yeah, I want to. I want to see money like that because I feel like that would be life changing.
00:45:03.520 — 00:45:28.480 · Ramit
Yes, that is a breakthrough. Great. Now stick with me. Let’s go through some of these other numbers. Some of them are going to be messy. Some of them are going to be depressing. Great. It’s all helping you get better at the skill of money. Okay, Trevor. Come along. Let’s watch. All right, I’m putting some more up on screen subscriptions.
You planned at 300 for. It was actually 1118. Let me look into this.
00:45:28.520 — 00:45:29.520 · Lisa
Oh my God.
00:45:29.720 — 00:45:31.040 · Ramit
That’s a good reaction.
00:45:31.080 — 00:45:31.520 · Lisa
No.
00:45:32.120 — 00:45:33.360 · Ramit
You surprise Lisa.
00:45:33.400 — 00:45:34.000 · Lisa
Yes.
00:45:34.040 — 00:45:39.280 · Ramit
All right. Let’s look at it. Actually, you read it off. Lisa, read off these subscriptions. Just go right down the list. Go ahead.
00:45:39.430 — 00:45:57.950 · Lisa
Apple Adobe Amazon. That’s a huge one. Ring. Duda website. Patreon. Google. Intuit. That’s all. That’s my website stuff. Apple again, Amazon. Relay Tesla Netflix.
00:45:57.950 — 00:45:58.750 · Ramit
Oh my gosh.
00:45:58.750 — 00:46:02.670 · Lisa
Hulu Amazon. Everything. It’s everything in the world. Basically.
00:46:02.670 — 00:46:05.750 · Ramit
It’s a lot right? Yeah. Just looking at that. What do you think.
00:46:06.310 — 00:46:08.190 · Lisa
We spend too much money on? Bullshit.
00:46:08.270 — 00:46:10.670 · Ramit
Okay. Would you be willing to make a change on that?
00:46:10.750 — 00:46:11.230 · Lisa
Yes.
00:46:11.230 — 00:46:23.990 · Ramit
Great. Love it. All right. Let’s look at some other stuff here. And now we’re starting to get a picture of what’s going on here. Let’s take a look at miscellaneous. We have a lot of bank stuff. What is this?
00:46:24.030 — 00:46:25.350 · Lisa
Those are my credit cards.
00:46:25.350 — 00:46:26.470 · Ramit
Minimum payments.
00:46:26.470 — 00:46:27.950 · Lisa
Yes, yes.
00:46:27.950 — 00:46:29.190 · Ramit
I’m gonna fix that.
00:46:29.230 — 00:46:29.710 · Lisa
Yeah.
00:46:29.750 — 00:46:32.870 · Ramit
Discover $41. You’re paying the minimum on all the credit cards.
00:46:32.870 — 00:46:37.190 · Lisa
Yes. And discover I owe over $7,000 and I’m paying minimum.
00:46:37.230 — 00:46:39.380 · Ramit
Do you know how much you’re going to end up paying in the end?
00:46:39.420 — 00:46:40.620 · Lisa
I do, I do.
00:46:40.660 — 00:46:42.220 · Ramit
No, you still do it. Why?
00:46:42.420 — 00:46:46.420 · Lisa
Because I tell myself I can’t afford to pay more because I’m not willing to give up other shit.
00:46:46.620 — 00:46:49.700 · Ramit
Okay. Trevor, what about you? What are you spending money on here?
00:46:50.020 — 00:46:52.340 · Trevor
Bills. Credit card payments.
00:46:52.420 — 00:46:53.420 · Ramit
Okay. What else?
00:46:53.900 — 00:46:55.140 · Trevor
Those memberships.
00:46:55.140 — 00:46:56.020 · Ramit
Those are yours.
00:46:56.060 — 00:46:56.780 · Trevor
Some of me are.
00:46:56.820 — 00:47:01.740 · Ramit
All right. Let’s look at dining out for just a second. Whoa! Wow.
00:47:03.260 — 00:47:13.420 · Ramit
Yeah. All right. This year, $7,300 on dining out. Let’s just take a look here. So, ASI, $36. That was yesterday. What do you all get?
00:47:14.660 — 00:47:18.180 · Lisa
Two possibles. We eat there way too often.
00:47:18.220 — 00:47:27.500 · Ramit
I can see that. You ate there yesterday. You ate there two days ago. Before that, you went to Baba Taco Bell. In and out. Coffee bean, McDonald’s.
00:47:27.580 — 00:47:30.260 · Lisa
A lot of that is my son, and I need to change it.
00:47:30.300 — 00:47:33.700 · Ramit
Okay. Do you want to get your son here? I’ll lay down the law right now.
00:47:34.060 — 00:47:37.920 · Lisa
He’s at school. Please go. Yeah. Yes.
00:47:37.920 — 00:47:41.320 · Ramit
It’s interesting. I actually think you would want me to talk to him.
00:47:41.360 — 00:47:42.720 · Lisa
I totally would.
00:47:42.960 — 00:47:45.440 · Ramit
Because it would mean you wouldn’t have to talk to.
00:47:45.440 — 00:47:46.720 · Lisa
Him. Correct? Yes.
00:47:46.760 — 00:47:47.440 · Trevor
Bingo.
00:47:47.440 — 00:47:49.120 · Lisa
Said 100%.
00:47:49.800 — 00:47:56.520 · Ramit
So now that I have taken a look at this, I have one more thing I want to look at. And then I think I will have a full picture.
00:47:56.760 — 00:47:57.480 · Lisa
Okay.
00:47:57.720 — 00:48:26.560 · Ramit
We’re going to look at your accounts. So we have in your checking and savings I see maybe 15 accounts here. You have more accounts than I have. Let’s take a look at credit cards, which, by the way, have $36,000 on them. The number of credit cards here, including be of a Kohls, Wayfair, TJ Max, Apple City, Nordstrom, and on and on and on.
Why do you need ten cards?
00:48:26.800 — 00:48:41.670 · Trevor
I guess it just kind of worked out like that. Somebody will offer you balance transfer for 0% interest and you take the offer and then you get another one and there’s 0% interest. So you’re just moving the debt around until.
00:48:41.670 — 00:48:42.750 · Ramit
Why you do that though?
00:48:42.870 — 00:48:48.150 · Trevor
To try and save money and try and slowly pay it off.
00:48:48.190 — 00:48:49.710 · Ramit
Do you ever pay it off doing that?
00:48:49.750 — 00:48:55.670 · Trevor
In the past, I have had zero debt, but there’s no defense against the debt coming back.
00:48:55.710 — 00:49:36.820 · Ramit
The way you both talk about money is as if it happens to you. What you have is something called an external locus of control. It means that you believe control is external of you, that you react to whatever life throws at you. Car is going to break. Son’s going to ask for food. Dog grooming, client is going to disappear, etc. etc. etc..
Yeah, and I just got to figure out a way to react and there’s a lot of convenient phrases I would be willing to bet you grew up with. You know, when it comes, money goes these kinds of phrases that indicate are you just gotta, you just gotta put your nose down, you gotta nose to the grindstone. You just gotta work hard.
As if we just have to react versus.
00:49:36.860 — 00:49:38.500 · Lisa
Neither of us are proactive.
00:49:38.540 — 00:49:39.340 · Ramit
Correct.
00:49:39.380 — 00:49:39.860 · Lisa
Yeah.
00:49:39.900 — 00:52:36.950 · Ramit
The thing is, you can do it for a long time. You all are in your 50s. Until it stops. And when it stops, especially for people that spend hundreds of thousands of dollars like you do, it hits like a brick wall because you will be forced to go from where you are to a place you do not want to be, and you will not have the skills to know how to downshift.
There will be a very dark future. Just look at these numbers. They are catastrophic. What we like to believe is that if they truly understood what these numbers mean, they would be here. We’re ready to do anything. Tell us we’ll do it. We know this is a ticking time bomb. We know we’re in trouble. Tell us we’re ready.
But that is not how humans behave. As you can see here, the situation is not just difficult, it’s dangerous. And I’m going to tell you right now, there’s only so much that I can do. A lot of people in the last 30 or so episodes have been frustrated that people come on the show, and their CSP is kind of messed up, and what people really want is for my team to help them fix their CSP before they come on here.
That is the wrong approach, and I intentionally do not do that. First of all, I want to see how people fill in the numbers. I don’t really care if it’s a little bit wrong, but second, as you can see here, we actually went a step further. We had them connect all of their accounts and it is still totally wrong. So getting more information is not going to solve a psychological or emotional problem.
You’ve got to understand that in America we have this deeply held invisible script that we need more information that’s going to solve it. Not true. More information is not solving their problem. They have all their accounts connected together. They don’t even know what to do with it. They can’t talk about money because this is not just an information problem.
It goes far deeper than that. I want to thank our new partners at monarch for setting up our couples on their platform to see their exact conscious spending plan. Categories. Monarch is a private personal finance app that brings all of the households accounts, checking credit cards, loans and investments into one clean dashboard on your phone or computer.
One of the biggest reasons I chose to partner with them is that monarch is built for couples. You can add your partner or even your financial planner at no extra cost, so everyone can see the same financial picture with shared goals. This turns your monthly money meeting into calmer check ins where everyone is on the same page.
One thing I love about monarch is it allows you to save up for your rich life goals. If you want to save for a wedding or an amazing vacation, an emergency fund, a house, a baby, college, retirement. Monarch makes it really easy. You set your goals up. You tell it how much you want to save towards that goal every month.
Monarch lets you see your progress visually along the way. Try monarch for free today and get 50% off your first year of monarch’s core tier with code remit at monarch.
00:52:38.590 — 00:52:50.830 · Ramit
And when you sign up with my link only, you’ll get your monarch account customized with my exact CSP categories so you can see how you are stacking up to your plan each month. That’s monarch
00:52:52.470 — 00:53:01.150 · Ramit
with code. Meet Lisa. When you think about your childhood, what do you remember your family saying about money?
00:53:01.310 — 00:53:27.740 · Lisa
It wasn’t really talked about. My dad brought in the money. My mom didn’t she, you know, was like a secretary or didn’t have a whole lot of money coming in, and then things would happen. She couldn’t afford something. And like, I remember I was living out of one of those igloo coolers because our fridge broke and she couldn’t afford to go buy a new fridge, you know.
And then she would ask my dad to help us out. Basically.
00:53:28.060 — 00:53:32.740 · Ramit
And ask your dad to help out his wife and kids.
00:53:32.940 — 00:53:35.300 · Lisa
Ex-wife. At that point, they got divorced.
00:53:35.340 — 00:53:37.180 · Ramit
How old were you when they got divorced?
00:53:37.300 — 00:53:38.100 · Lisa
Ten.
00:53:38.300 — 00:53:40.380 · Ramit
What was the effect that it had on you?
00:53:40.540 — 00:53:46.580 · Lisa
I don’t feel like he was a big part of my life anyway, so I don’t feel like it affected me that much.
00:53:46.660 — 00:53:48.020 · Ramit
What about financially?
00:53:48.060 — 00:54:03.900 · Lisa
Yeah, it was very different because even though we. I grew up in upper middle class and, you know, my dad was a doctor and made good money. It sort of was all gone because he didn’t really he wasn’t part of our lives anymore.
00:54:03.940 — 00:54:04.900 · Ramit
What did that feel like?
00:54:04.940 — 00:54:09.380 · Lisa
It just felt like we were on our own. Like there’s no one to help.
00:54:09.420 — 00:54:12.540 · Ramit
What happened as you got into your teenage years in early 20s?
00:54:12.580 — 00:54:30.960 · Lisa
I was reckless, I did reckless things because I didn’t want to be without. And I just wanted what I wanted because I was used to not getting what I wanted. So when I would want something, I would figure out a way to get it. And I didn’t care what the consequences were.
00:54:31.000 — 00:54:33.000 · Ramit
Were you the same way before the age of ten?
00:54:33.040 — 00:54:34.080 · Lisa
I don’t think so.
00:54:34.440 — 00:54:35.600 · Ramit
So what happened?
00:54:36.040 — 00:54:44.999 · Lisa
I think we’re living in a way that was upsetting to me, and I didn’t like it. I didn’t like being put in a position where if I needed something or
00:54:46.320 — 00:54:50.080 · Lisa
I guess, wanted something that I couldn’t have it.
00:54:50.120 — 00:54:58.880 · Ramit
Does that show up for your expenses? Because when I’m looking at your food, for example, I’m seeing Asahi Boba talking. I mean.
00:54:59.200 — 00:55:16.400 · Lisa
It’s similar in my thinking where it’s like, yes, I want to eat Asahi today, so I’m going to go get it. And I don’t think like, oh, I shouldn’t go get it because it’s 40 fricking dollars. It feels like I’m giving something up that I want, and I don’t like that feeling.
00:55:16.440 — 00:55:18.320 · Ramit
Do you think your son has the same feeling?
00:55:18.360 — 00:55:19.040 · Lisa
Yes.
00:55:19.080 — 00:55:20.400 · Ramit
And what do you think about that?
00:55:20.440 — 00:55:33.870 · Lisa
He has a lot of same qualities that I have that I don’t perceive as good qualities. And I know that I’ve created it. I don’t like it. I don’t like seeing it in him, and I don’t like seeing it in myself.
00:55:33.910 — 00:55:40.910 · Ramit
So is your conclusion like, yes, I see some of those qualities that I don’t love in myself, in him. And it sucks.
00:55:41.030 — 00:55:45.270 · Lisa
Yeah, because I don’t I don’t follow through and I don’t fix it.
00:55:45.310 — 00:55:59.350 · Ramit
Okay. I appreciate the honesty. I would rather hear the honesty than I need to do better. When people say that, I just disregard it because that’s just words. But I appreciate you just being like, yeah, I don’t follow through. Okay.
00:55:59.590 — 00:56:00.070 · Lisa
Yeah.
00:56:00.110 — 00:56:08.230 · Ramit
Trevor, is there anything that Lisa did not mention about her upbringing as it relates to money that you think is important?
00:56:08.270 — 00:56:25.220 · Trevor
She’s being very open about her upbringing. I mean, if she needed if she wanted the money, she, like, asked her mom, right. And I think she, like you also mentioned that surpass down behavior. You know, like she’s like my son, you know. Mom, I want and he gets well.
00:56:25.260 — 00:56:34.220 · Ramit
How does he do it? Does he text you? I’ve seen teenage kids that just text their mom like a link. That’s it. No context. Nike shoe link.
00:56:34.460 — 00:56:36.180 · Lisa
No, no, no, no, I’m not like that.
00:56:36.180 — 00:56:49.620 · Trevor
I disagree I disagree because he does do exactly that. He’s be honest. He’ll send you an Amazon link saying, mom, I want this shirt. Mom, I want these, I need these, I want that.
00:56:49.660 — 00:56:52.980 · Ramit
Can we just look at the text, open them up.
00:56:54.340 — 00:56:54.940 · Lisa
Okay.
00:56:55.100 — 00:56:56.180 · Ramit
Yeah. Why not?
00:56:56.500 — 00:56:58.220 · Trevor
He’ll send you a link like I want it.
00:56:58.220 — 00:57:21.210 · Lisa
Okay. So like Sunday, he said he wanted Taco Bell. I said, fine, text me. What, you want a steak quesadilla with seasoned chicken Caesar, blah blah blah. I want a large Baja Blast and a small Baja blast. And I said, why do you need two drinks? Because the big one is not big enough. And I just said, okay, two.
00:57:21.770 — 00:57:27.610 · Ramit / Lisa
Drinks for a kid. I never even got one drink. I know this is insanity to me.
00:57:27.610 — 00:57:34.970 · Ramit
And your answer okay. I don’t know, I’m not here to lecture a 50 year old mom of a 14 year old. That’s not my job here.
00:57:35.290 — 00:57:35.970 · Lisa
I know.
00:57:35.970 — 00:57:43.810 · Ramit
So, Lisa, what’s going on? When he sends in his order to his mom and you go, okay, what’s happening there?
00:57:43.850 — 00:57:47.290 · Lisa
I’m just giving in because I don’t want to fight.
00:57:47.330 — 00:57:50.490 · Ramit
I guess what else do you get out of saying? Okay.
00:57:51.330 — 00:57:52.690 · Lisa
Him being happy.
00:57:53.330 — 00:57:55.610 · Ramit
Which means what? To you.
00:57:55.850 — 00:57:59.170 · Lisa
It makes me feel good that I’m getting him something he wants.
00:57:59.490 — 00:58:05.610 · Ramit
You feel loved when you are buying him something? Yes. And if you say no, it feels like.
00:58:05.610 — 00:58:13.530 · Lisa
What feels like how I felt. It feels like somebody’s not giving you what you want. And it sucks.
00:58:14.410 — 00:58:21.000 · Ramit
Yeah. Let’s just fast forward 20 years from now. What is his future look like based on the current trajectory?
00:58:21.040 — 00:58:36.840 · Lisa
I am scared for his future. I am, I mean, there’s a lot that you also don’t know about, which is his, his father. And that’s a big problem regarding money. Um, his dad just gives him whatever he wants.
00:58:36.880 — 00:58:39.840 · Ramit
Okay. What happens when your son is 34?
00:58:39.880 — 00:59:01.120 · Lisa
He’s not going to be able to fend for himself. He’s not going to know how to survive. He’s going to be begging me to help him with things. And I don’t want that for him. And I don’t want it for me. He’s not going to know how to get an apartment. He doesn’t want to work for money. He doesn’t do any chores. That’s a huge thing that we constantly are arguing about.
00:59:01.160 — 00:59:04.920 · Ramit
Is you’re arguing as in you’re trying to convince him and he’s saying, no.
00:59:05.120 — 00:59:25.950 · Lisa
He he’s not saying no, but I don’t follow through. And it’s that’s my pattern. I don’t follow through and I don’t make it happen. I should say, you can’t have these things because you’re not doing this and this and this, and I don’t do that. I still give him the things, even though I shouldn’t.
00:59:25.990 — 00:59:30.310 · Ramit
I think you find comfort in beating yourself up. I notice you do it a lot.
00:59:30.670 — 00:59:34.750 · Lisa
It’s not comfort. It’s just what I’m used to doing.
00:59:34.790 — 00:59:42.350 · Ramit
But despite my many attempts to get us to focus on the positive, on the things you can do. You take me right back there.
00:59:42.390 — 00:59:43.710 · Lisa
I know I’m
00:59:45.390 — 00:59:46.910 · Lisa
not very positive.
00:59:47.230 — 00:59:48.190 · Ramit
Do you want to be?
00:59:48.430 — 00:59:49.270 · Lisa
Yes.
00:59:49.950 — 00:59:52.070 · Ramit
Would you be willing to change things to do it?
00:59:52.110 — 00:59:52.870 · Lisa
Yes.
00:59:52.950 — 00:59:54.710 · Ramit
Okay. What’s the first thing you should do?
00:59:54.870 — 00:59:58.870 · Lisa
Make changes with how I deal with my son and tell him no.
00:59:59.230 — 01:00:02.830 · Ramit
Okay, so next time he texts you, you’re going to just say no.
01:00:03.350 — 01:00:03.990 · Lisa
Yeah.
01:00:04.030 — 01:00:06.949 · Ramit
All right, I’ll pretend to be him. Mom, give me a
01:00:08.430 — 01:00:19.060 · Ramit
Quarter Pounder with cheese, plus three drinks, plus a McFlurry. Plus a 32 piece chicken nuggets.
01:00:21.700 — 01:00:24.700 · Lisa
Doesn’t talk like that to me, but. Okay.
01:00:24.740 — 01:00:26.020 · Trevor
He nailed the McFlurry.
01:00:27.740 — 01:00:28.660 · Lisa
God damn it!
01:00:29.860 — 01:00:32.060 · Lisa
No, you’re not getting any of that.
01:00:32.140 — 01:00:36.220 · Ramit
I want a 32 piece now.
01:00:36.940 — 01:00:40.940 · Lisa
Well, now you’re not getting anything. You don’t talk to me that way, please.
01:00:42.060 — 01:00:44.980 · Lisa
But no, we have food in the house.
01:00:45.020 — 01:00:45.980 · Ramit
I don’t want that.
01:00:46.020 — 01:00:50.460 · Ramit
I’m so hungry. I was running at school in P.E.. Etcetera, etcetera, etcetera.
01:00:50.500 — 01:00:52.900 · Lisa
Oh, God. This is very realistic.
01:00:53.620 — 01:00:54.980 · Trevor
Uh, God. Are you.
01:00:55.020 — 01:00:55.660 · Trevor
Him?
01:00:58.300 — 01:01:04.940 · Lisa
There’s food in the house. I’m not getting that for you. I’m tired of you asking me to spend money on junk food.
01:01:04.980 — 01:01:18.680 · Ramit
You tried to reason your way out of it, I think. Lisa, you’re probably not going to be successful in doing this on your own, but I do think you could get help. does a lot of things were not successful at. On our own. I need help with many things.
01:01:18.680 — 01:01:19.400 · Ramit
Even.
01:01:19.400 — 01:01:20.000 · Ramit
Money.
01:01:20.000 — 01:01:21.120 · Ramit
And I’m good at it.
01:01:21.120 — 01:01:27.080 · Ramit
So if you can’t do this on your own, as we can see from this very quick simulation, then what could you do?
01:01:27.760 — 01:01:29.200 · Lisa
My therapist. Help me.
01:01:29.720 — 01:01:30.600 · Ramit
Beautiful.
01:01:30.920 — 01:01:32.880 · Lisa
I have a therapy appointment on Monday.
01:01:32.880 — 01:01:33.600 · Ramit
Really?
01:01:33.880 — 01:01:34.320 · Lisa
Yeah.
01:01:34.320 — 01:01:56.000 · Ramit
I think this would be a great topic to bring up, because your ability to set boundaries with your son is table stakes for your ability to set boundaries with yourself and your ability to set boundaries with money. They all actually are very similar, so it’ll be a great topic to bring up. Good for you. Okay, I love hearing that.
Trevor. What do you remember of your family saying about money when you were a kid?
01:01:56.240 — 01:02:19.510 · Trevor
My parents never married. I was a weekend kid with my dad. I lived mostly with my mother. We kind of struggled financially. We moved frequently. Um, there are several times when we moles and we don’t have any lied. Sometimes no heat, sometimes no phone. We didn’t really talk about money other than the fact of it was always a shortage.
01:02:19.950 — 01:02:20.870 · Ramit
What did they say? What?
01:02:20.950 — 01:02:37.950 · Trevor
Phrases like we don’t have it, don’t. We don’t have the money or rob Peter to pay Paul. And so we hear that I heard that a lot. And I asked for money sometimes, but I didn’t like to because I didn’t want to be the contributing factor to the to the stress. Okay.
01:02:38.110 — 01:02:41.470 · Ramit
So you were you were living with your mom, with your dad on the weekends.
01:02:42.550 — 01:02:45.190 · Ramit
And did that go on for your whole childhood?
01:02:45.230 — 01:02:53.830 · Trevor
Yeah. Yeah. I mean, my dad seemed to have more money, but I didn’t want to ask him for it. I didn’t talk to him about money often.
01:02:54.150 — 01:02:54.550 · Ramit
Is he still.
01:02:54.550 — 01:02:56.070 · Trevor
Alive? He was. Yeah. Yeah.
01:02:56.110 — 01:02:57.630 · Ramit
He talked to him through life.
01:02:57.670 — 01:02:58.270 · Trevor
No.
01:02:58.470 — 01:02:59.630 · Ramit
Okay. And mom?
01:02:59.670 — 01:03:02.910 · Trevor
Yes and no. I talked to her about her money, but not much. No.
01:03:02.950 — 01:03:04.790 · Ramit
How’s she doing financially?
01:03:04.830 — 01:03:06.590 · Trevor
It’s not great, but it’s okay.
01:03:06.630 — 01:03:10.460 · Ramit
Do you think that you’ll end up taking care of her as she gets older.
01:03:10.500 — 01:03:22.500 · Trevor
As long as she’s able to take care of herself, she will always try. We wanted her to move into an assisted living, but as we got closer to that, she backed away and I wasn’t going to push. All right.
01:03:22.740 — 01:03:27.580 · Ramit
Lisa, anything you want to add on Trevor’s behalf? Like I said, partner sometimes knows best.
01:03:27.620 — 01:04:00.100 · Lisa
The only thing I would add is that they’re not very open. They don’t talk about a whole lot. And Trevor doesn’t like to push anybody to divulge anything. Like, we went to Vegas and spent the entire day looking at all the assisted living places there, and then she decided like a week later. Oh, I don’t want to do it anymore.
And he was just like, okay. And didn’t ask any other questions. So there’s hesitancy in getting deeper and asking more questions.
01:04:00.100 — 01:04:07.290 · Ramit
And Trevor, you and I are very different. I love to ask the questions. Huh? You did what? What? Why?
01:04:08.530 — 01:04:14.930 · Trevor
I live in another state. So the time we spend together, I don’t want to spend it in conflict. Ah, and.
01:04:14.930 — 01:04:20.530 · Ramit
Notice that the idea that if we’re talking about money, it’s conflict.
01:04:20.570 — 01:04:21.730 · Trevor
It will lead to conflict.
01:04:21.770 — 01:04:22.130 · Ramit
Okay.
01:04:22.170 — 01:04:24.330 · Trevor
Maybe my dad will get angry.
01:04:24.330 — 01:07:04.220 · Ramit
But look at the worldview you have. It shows up in this relationship. Yeah. If we talk about money, it results in conflict. It will result. If that is your worldview, then it will happen. Like, if I walk into a yarn store, I’m going to feel stupid. And then I leave because I feel overwhelmed. That’s not how Lisa walks into a yarn store.
She goes, I know I can build something here. I don’t even see it yet, but I can make this stuff work. When I talk about money, I go, we’re going to talk about money so that we can live our rich life. If that’s the North Star, then how we get there? Yeah, there’s going to be some tough conversations. There’s going to be some tears.
There’s going to be this and that. Okay. But we’re going somewhere positive. We always want to go towards something positive. Even if you’re in the middle of a conversation, it’s really tough and somebody’s fighting and yelling and whatever. It’s okay to just be like, hey, wait a second. I feel like I haven’t done a great job in this conversation right now.
I just want to call it. My goal here is so that we can get towards this rich life. I don’t know how to do it alone, but I know that right here I feel like we’re fighting. I don’t want to be a part of that. I want to just take a time out, come back in ten minutes and go towards our rich life. That’s how you have those difficult conversations, okay?
These are the kind of things you’re going to learn over time. Okay, here’s the deal. Now that I know a little bit more about how you were brought up with money, I, I have a better understanding, but I think it’s time to make some changes. Right now, you are on track for a very, very, very dangerous rest of your 50s and rest of your life.
You simply can’t sustain it. And there are so many different ingredients that are coming together. We have just a lot of debt. We have a lack of money management and a lack of basic understanding of numbers. All of these can be changed, but we also have the attitudes that are keeping you from even confronting these things.
We don’t like to talk about money. It causes conflict. I’m not good with money. Then on top of that, we have these very conflicted roles. From childhood, we never talked about money. Money felt like deprivation. I give my son things so that he stops bugging me. And also I know that I am loved when I do that.
There’s a lot here. We need to fix the money stuff right now. What changes are you both willing to make in order to fix the money situation? And when I say fix, it means you will get control of your finances. It will be clean and simple. Yes, you will still have debt, but you will have a plan to pay it off. You will stop being stressed about money because even if you have debt, you can feel good about it knowing you have a plan to pay it off.
What are you willing to to do in order to get there?
01:07:04.300 — 01:07:05.900 · Lisa
Whatever it takes.
01:07:06.100 — 01:07:53.780 · Ramit
Wow. Two people saying the same words independently. Whatever it takes, I love it. Okay, I’m going to throw your conscious spending plan up on screen and we’re going to start there. We’re going to try to simplify things and then we’ll look at some transactions. We are at your fixed cost and this number is 230%.
It needs to come down to approximately 60%. So that’s a vast drop. So we cannot be sitting here talking about 1 or $200 changes. We need thousands and thousands of dollars of changes. I would like for you each to just look at these fixed costs. And before we get started, I would like you to just think about what are we willing to change in this category alone?
Trevor, you want to go first?
01:07:53.820 — 01:08:01.810 · Trevor
My first thought was the mortgage would be the biggest impact. We could somehow Syl had moved to an apartment.
01:08:01.850 — 01:08:04.170 · Ramit
Yeah. How much would the apartment cost that you would move to?
01:08:04.210 — 01:08:05.970 · Lisa
About 3400 bucks.
01:08:06.010 — 01:08:12.210 · Ramit
01:08:12.250 — 01:08:20.450 · Lisa
I think one of the biggest hurdles that we have with moving forward with that plan is that we’re upside down.
01:08:20.770 — 01:08:21.650 · Ramit
On your house.
01:08:21.690 — 01:08:22.290 · Lisa
Yeah.
01:08:22.330 — 01:08:31.210 · Ramit
How can you be upside down when your asset says 620,000 and your debt only says 43,000? Where’s the mortgage debt?
01:08:31.690 — 01:08:35.170 · Lisa
Oh, I guess we didn’t put mortgage debt there.
01:08:35.210 — 01:08:36.930 · Trevor
Oh, yeah, that should be a lot higher.
01:08:36.970 — 01:08:39.569 · Ramit
How much is your mortgage? How much is left on it?
01:08:39.609 — 01:08:40.810 · Trevor
696.
01:08:40.810 — 01:08:52.370 · Ramit
01:08:52.410 — 01:08:53.049 · Lisa
Yeah.
01:08:53.370 — 01:09:08.069 · Ramit
You’re in a bad position there because you can’t afford the house, Obviously. So, yes, it’s time for you to call the bank and ask them what your options are. You need to tell them we cannot afford this house. Why did you guys buy this house out of curiosity?
01:09:08.350 — 01:09:19.509 · Lisa
Because our other house was sort of. It was in a bad neighborhood and sort of falling apart. And we wanted to be on the other side of town where it was newer, and it was a brand new house.
01:09:19.549 — 01:09:20.509 · Ramit
Why not rent?
01:09:20.549 — 01:09:30.750 · Lisa
It didn’t occur to us, I think it just didn’t. I mean, we thought we can make money off of our old house. Let’s move in. And we moved into this new place. All right.
01:09:31.029 — 01:09:33.230 · Ramit
Not not a good financial decision.
01:09:33.270 — 01:09:33.870 · Lisa
No.
01:09:33.870 — 01:10:25.660 · Ramit
And I think what is very clear now is the two of you need to get seriously educated about money. Coming on here is not enough. I need you to read the book. I will teach you to be rich. You need to read it, and you need to understand it. And it might be hard. And that’s okay. You actually have to understand it. Because for the biggest financial decision of your life, a house.
You just. It didn’t even occur to you that maybe we should rent, even for the smallest financial decisions of your life, like McDonald’s. It’s not occurring to you that we need to actually radically change. And part of it is you need to get educated. Bottom line okay. Moving along in this case, I’m going to assume you can sell your house.
Are you going to end up having to pay the remainder? Maybe. Maybe not. But for the purposes of right now, let’s just look at it and see we’re down to 3400. What is $3,400 apartment get you, by the way.
01:10:26.180 — 01:10:28.980 · Lisa
Nice enough to three bedroom apartment.
01:10:29.020 — 01:10:31.820 · Ramit
Three bedroom. Why do you need three bedrooms?
01:10:31.820 — 01:10:34.860 · Lisa
I don’t know what the prices are for a two bedroom.
01:10:34.860 — 01:10:43.820 · Ramit
So let me tell you how I would think about this. If I’m in your financial situation, I’m getting the cheapest place I can get. That’s it. 3000 bucks.
01:10:44.100 — 01:10:44.740 · Lisa
Okay.
01:10:45.660 — 01:10:50.140 · Ramit
You’re at 154%. At least we’re going in the right direction. Lisa, you’re up next. What do you want?
01:10:50.140 — 01:10:52.500 · Lisa
To change the eating out.
01:10:52.540 — 01:10:57.810 · Ramit
Okay. How much? It’s 2100 a month right now. How much should you spend eating out per month?
01:10:58.250 — 01:11:02.930 · Lisa
$0? I have no idea, I really don’t. Should we not be setting out at all?
01:11:03.010 — 01:11:25.130 · Ramit
Lisa, can I tell you something? Yeah. This sort of what I call the innocent dough. Innocent dough technique? Me. Little old me. I have no idea how much other people spend. I just I couldn’t even reason it out loud. It’s not working for me. It’s a technique that people use, consciously or unconsciously, to allow them to evade difficult questions.
01:11:25.330 — 01:11:37.410 · Lisa
I literally don’t know, though I can only base it on what I do. I don’t know what everybody else does or what I should be doing. I just know that what we’re doing is way too much and it needs to be cut drastically.
01:11:37.410 — 01:11:38.690 · Ramit
So what’s the number?
01:11:39.090 — 01:11:40.650 · Lisa
$500 a month?
01:11:40.690 — 01:11:48.810 · Ramit
Okay, so you’re eating out five times a month, $500 total. So each time you eat out for fast food is going to be $100. Does that sound reasonable?
01:11:48.850 — 01:12:09.440 · Lisa
No it doesn’t. That’s not what I meant. I was thinking like, if we went out to dinner. Not just to, like, fast food. I’m saying of, like the three of us went to dinner. We would probably spend at least $75 every time we went, depending on where we go. You know, so it’d be like three. 375. Okay.
01:12:09.480 — 01:12:18.160 · Ramit
I would say that a couple who is in hundreds of thousands of dollars of debt doesn’t eat out ever. Pretty much ever.
01:12:18.760 — 01:12:19.480 · Lisa
Okay.
01:12:20.000 — 01:12:28.040 · Ramit
I think this is especially painful for you to hear because it it almost takes me back to when you told me how it felt at age ten, 11, 12, 13.
01:12:28.080 — 01:12:36.479 · Lisa
There’s other issues at hand, which is if we don’t eat out, it’s on me to then
01:12:37.480 — 01:12:40.200 · Lisa
prepare food. And
01:12:41.240 — 01:13:17.110 · Lisa
that’s an issue because I don’t I feel like I’m I’m the only person that would prepare food. And so it just means more responsibility for me. And I know that that hasn’t been working. So I’m willing to make changes. But it is hard to imagine never eating out again for the foreseeable future for any of us, because it feels like a lot more work for me personally every single day.
I know that I have to be willing to do more work to make this happen. I get that.
01:13:17.350 — 01:13:41.230 · Ramit
Yes, as you are talking about this, I think you make some really valid points. It probably will be more work. It will probably be more work for you. I would like to get Trevor involved in this so that he can take on some of the burden as well. But Lisa, it feels like when we are starting to talk about real changes, what you are doing is saying these changes feel too big, so I can’t do them.
01:13:41.390 — 01:13:45.030 · Lisa
I’m not saying I won’t do them and I’m not saying I can’t do them great.
01:13:45.030 — 01:14:00.140 · Ramit
I love that, I love that pushback. Hey, that’s not what I’m saying. I’m thinking about it. Okay. Let me suggest something to you. I love what you said. If you think about it as all changes we make are going to make my life worse, then they’re not going to last more than seven days.
01:14:00.420 — 01:14:28.660 · Lisa
It is very difficult for me to see positive in this other than like the big picture outcome. And I, I get that that’s huge and I should be thinking about that at all times when making these changes. But I think on a daily basis, realistically when I’m, you know, been working all day and I’m exhausted and I come home and now I have to think, oh, okay, we don’t can’t go anywhere, I’m going to make something and we’re all going to eat it and enjoy it.
01:14:28.780 — 01:14:49.290 · Ramit
You’re right there because you’re spinning yourself up right now. Yeah. What you are doing is you are taking your current way of life and just making it worse. You actually need to create an entirely new way of life. Do you think everybody is coming home from work after so many hours? And then they’re just like looking around saying like, what should I make for dinner?
A lot of people are, but a lot of people are not. What are they doing instead?
01:14:49.330 — 01:14:50.650 · Lisa
They’ve planned ahead.
01:14:50.690 — 01:14:55.850 · Ramit
Exactly. That’s a completely different way of life than you live right now. You don’t do that.
01:14:55.930 — 01:14:56.650 · Lisa
I don’t.
01:14:56.690 — 01:15:13.570 · Ramit
I need you to be open to the idea of changing your entire way of life. Otherwise, what are we doing here? There is no tweaking. Let’s cut down by 50% on our eating out. When you have 230% fixed costs, it doesn’t work. Okay, I’m not going to waste my time. And I’m not going to lie to you. I’m going to tell you the truth of what you need to do.
01:15:14.050 — 01:15:16.010 · Lisa
That’s fine. I need to hear it.
01:15:16.050 — 01:15:46.230 · Ramit
Couples who are in hundreds of thousands of dollars of debt in their 50s do not eat out. They do not take vacations. I hate to be the one to deliver this message, but you need somebody to tell you your groceries at 1000 is going to be very difficult. We’ll make it 1400, and the two of you need to meal prep together, and you probably need to get your son involved, but that’s for another conversation.
So when are you going to meal prep where you both decide you prep it, all that stuff? When’s it going to happen.
01:15:46.430 — 01:15:47.150 · Lisa
On the weekend?
01:15:47.190 — 01:15:47.990 · Ramit
What day?
01:15:48.270 — 01:15:49.070 · Lisa
Sunday.
01:15:49.110 — 01:15:49.950 · Ramit
What time?
01:15:49.990 — 01:15:50.750 · Lisa
Noon.
01:15:50.790 — 01:15:55.510 · Ramit
Great. Are you going to have the food ready? Is already going to be in the fridge. Or where’s the food coming from?
01:15:55.550 — 01:15:57.550 · Lisa
We’ll have to go grocery shopping and get it.
01:15:57.590 — 01:16:00.750 · Ramit
Great. Two of you going together or separately? I’m trying to get into the details here.
01:16:00.750 — 01:16:02.590 · Lisa
Together. We’re going to go together.
01:16:02.870 — 01:16:06.270 · Ramit
All right. And then you’re going to come back and you’re gonna what?
01:16:06.310 — 01:16:13.710 · Lisa
We’re gonna come back and we’re gonna meal prep together and plan what we’re going to eat for the week.
01:16:13.790 — 01:16:18.390 · Ramit
Love that. Trevor, get in on this. Notice that she’s taking on all the burden herself. Get in.
01:16:19.150 — 01:16:23.470 · Trevor
Okay. Yeah. Sounds good. I’m. I’m meal prepping. I’m all for.
01:16:23.470 — 01:16:27.190 · Ramit
It. Let me ask you a question. Have you ever done this in your entire relationship together?
01:16:27.230 — 01:16:27.870 · Trevor
No.
01:16:28.470 — 01:16:38.990 · Ramit
Okay. Okay. This is like the connective tissue that makes other things possible. It’s like the equivalent of, like when you go in the bathroom, you have toothpaste in there, right?
01:16:39.110 — 01:16:39.470 · Trevor
Yes.
01:16:39.510 — 01:17:49.930 · Ramit
Yeah. Yeah. You just have toothpaste all the time. And if it’s running low, somebody goes and get some. It’s the connective tissue that makes it possible to brush your teeth every day. Now imagine doing that in other parts of life. The parts that happen to cost you 2000 plus dollars a month. You’re always going to have the equivalent of toothpaste.
You’re always going to have food. Keep it simple. Make the same stuff. Start there. Make sure you get your son involved and tell them, hey, this is something new we’re going to be doing. We actually do not have money to be able to eat out. We are making changes so that we are in a better financial situation.
Notice it’s not just saying we can’t afford it. We can’t do that. We’re in a horrible situation. No, here’s a situation. Then you talk about what you are doing. Okay. We have made a plan. From now on, we’re going to be meal prepping. This is how much we are going to be spending each week for grocery shopping, which is approximately like 350 bucks.
This is our plan on what we are going to get. This is what the meals are going to look like. If you would like to change something, you’re welcome to make a suggestion for up to, I don’t know, two of the meals or whatever, but it’s got to fit within this amount of money. And when he complains, what are you going to say?
01:17:50.210 — 01:17:52.610 · Lisa
Sorry, this is how it’s going to be from now on.
01:17:52.650 — 01:17:56.970 · Ramit
Love it. Yes. He doesn’t have a job, right?
01:17:57.250 — 01:17:58.170 · Lisa
No, no.
01:17:58.250 — 01:18:12.810 · Ramit
Amazing. So you have the golden rule, which is he or she who has the gold makes the rules. He has no money. He’s 14 years old. He’s going to eat what mom and dad eat. That’s it. Okay. That’s it. Putting it back up on screen here. What’s next?
01:18:12.850 — 01:18:19.650 · Trevor
Trevor, I would point at the utilities, but if we’re moving, the utilities are still unsure about.
01:18:19.690 — 01:18:21.890 · Ramit
Let’s drop them down a bit. They’ll be less.
01:18:22.330 — 01:18:30.490 · Trevor
150 and moving also will knock the HOA fees away. If we moved, we dropped 1200 from that 1200.
01:18:30.530 — 01:18:36.130 · Ramit
Great. All right, let’s leave 300 on there. All right. Nice work. We’re at 126%. What’s next?
01:18:36.170 — 01:18:45.800 · Lisa
We do have a lot of subscriptions. Yes, I and I think this isn’t accurate, because you said that you came up with 2100 or something, some crazy amount.
01:18:45.840 — 01:18:51.800 · Ramit
We will look at that. Yeah, you did spend a ton. Just look at all these. So what do you want to do about all these subscriptions?
01:18:52.280 — 01:18:55.280 · Lisa
We can definitely consolidate some of the subscriptions.
01:18:55.320 — 01:19:00.120 · Ramit
The way to do this when you have this many subscriptions is to pick one and everything else goes bye bye.
01:19:00.480 — 01:19:01.080 · Lisa
Okay.
01:19:01.120 — 01:19:02.720 · Ramit
What’s the one you want to keep?
01:19:02.880 — 01:19:05.000 · Lisa
I think Hulu or Netflix.
01:19:05.000 — 01:19:10.040 · Ramit
Only one of those services has a hit show called How to Get Rich. Which one are you going to?
01:19:10.120 — 01:19:10.760 · Lisa
Which one is.
01:19:10.760 — 01:19:14.880 · Ramit
It? I love that my own guests on my own show haven’t even watched my Netflix.
01:19:14.920 — 01:19:18.440 · Lisa
I didn’t, we just have so many channels, we don’t know which one it’s on.
01:19:18.560 — 01:19:19.200 · Trevor
Yeah.
01:19:19.240 — 01:19:42.510 · Ramit
All right. You’re keeping Netflix and everything else is going bye bye. Wonderful. I’m going to drop that number to, let’s just say 30 bucks. We’re down to 123%. I think we need to talk about something important here. You’ve made some big changes. The debt payments probably need to go up because you are paying the minimums on a bunch.
It’s not acceptable. And the fact is, you’re still at 123%. So what do we need to do in addition to this.
01:19:42.550 — 01:19:43.110 · Trevor
Increase in.
01:19:43.110 — 01:19:44.310 · Ramit
Income? Yes.
01:19:44.790 — 01:19:45.430 · Lisa
Okay.
01:19:45.510 — 01:19:59.310 · Ramit
So let’s look at the income. This is the gross these numbers here. This is how much you make at the top line. And then once you have all your taxes and expenses and stuff taken out, this is how much you take home every month. What do you notice?
01:19:59.350 — 01:20:00.830 · Lisa
It’s not enough.
01:20:00.870 — 01:20:02.030 · Ramit
Who’s not enough?
01:20:02.070 — 01:20:02.630 · Lisa
Mine.
01:20:02.670 — 01:20:08.990 · Ramit
Yes. Lisa, you currently take home $24,000 per year. What does that tell you?
01:20:09.350 — 01:20:12.190 · Lisa
It’s not enough. It’s not enough to live on.
01:20:12.230 — 01:20:18.550 · Ramit
Correct. You could make more working any job. First of all, why do you think that is? And then what needs to happen?
01:20:18.870 — 01:20:26.070 · Lisa
I know why it is because I’ve chosen to not work as much as I could.
01:20:26.190 — 01:20:27.950 · Ramit
What do you mean you work? How much do you work?
01:20:27.990 — 01:20:29.510 · Lisa
I work four days a week.
01:20:29.550 — 01:20:30.070 · Ramit
Why?
01:20:30.350 — 01:20:33.630 · Lisa
Because I want to, I guess. And that’s the only reason.
01:20:35.630 — 01:20:38.180 · Lisa
Because I’m not busting my ass. And I should be.
01:20:38.620 — 01:20:40.300 · Ramit
I just don’t think you don’t have a reason to.
01:20:40.340 — 01:21:19.020 · Lisa
I do have a reason to, I just. It’s. It’s like a thing that I do where it’s like, if I don’t want to do something, I don’t do it. I don’t look at the way it should be. I look at what I want versus how it should be, and I give in to that. It’s something I’ve always done and I continue to do it, and it’s just a habit that I need to break.
I do it when it comes to how I eat it. I do it when it comes to how I spend. I do it when it comes to.
01:21:21.380 — 01:21:40.530 · Lisa
You know, doing things that I should be doing every day like I should. My habits should be very, very different. And they’re not because I do what’s easiest and what’s the lowest stress. It doesn’t pay off anyway because this is the situation that we’re in and this is very high stress.
01:21:40.570 — 01:21:42.010 · Ramit
Trevor, are you okay with this?
01:21:42.050 — 01:21:45.690 · Trevor
Well, I’m not okay. I mean, like, I feel I feel responsible for it.
01:21:45.730 — 01:21:47.650 · Lisa
No, you don’t you don’t feel responsible.
01:21:47.690 — 01:21:50.850 · Trevor
Like, I like I got you the business. Like thinking it was great.
01:21:50.890 — 01:22:19.970 · Ramit
It’s not about the business, Trevor. It’s about the fact that Lisa herself just spent five minutes explaining. She doesn’t follow through her habits around food, her habits around business, perhaps around finance. And instead of taking this opportunity to say, hey, I’m actually not okay with this.
This is important to you. I’m in my 50s. I can’t go on like this. You’re starting to apologize for her and provide yet another example of saving her. I don’t even think she wants you to save her. Why are you doing it?
01:22:20.010 — 01:22:30.810 · Trevor
I don’t know, I guess I got stuck on the. You said she could make more and my mind started going. Wait a minute, I thought. I thought it was just a pretty good business to to start.
01:22:30.850 — 01:22:35.200 · Ramit
Who told you it’s a good business. Why did you think that? What calculations did you run?
01:22:35.560 — 01:22:36.920 · Lisa
He didn’t run any.
01:22:36.960 — 01:22:38.400 · Trevor
I didn’t run any calculations.
01:22:38.440 — 01:22:40.040 · Ramit
What calculations? Lisa.
01:22:40.600 — 01:22:51.080 · Lisa
I did a lot of research on how much money I could make. And it could be a very profitable business. Is it? But I’m not running it properly.
01:22:51.400 — 01:22:58.160 · Ramit
Yeah. You’re using your business expenses to pay personal. You don’t have a bookkeeper, etcetera, etcetera, etcetera.
01:22:58.200 — 01:22:58.920 · Lisa
Yes.
01:22:59.320 — 01:23:02.680 · Trevor
Is the business inherently dead or is it just.
01:23:02.720 — 01:23:12.880 · Ramit
It doesn’t matter. It’s not working. It doesn’t matter. Why are you also insistent on doing a history lesson of what happened ten years ago? You guys are heading towards, in your own words, a cliff?
01:23:13.520 — 01:23:14.160 · Trevor
Yeah.
01:23:14.640 — 01:23:38.380 · Ramit
Guys, this conversation is over in a little bit. I want the best for you, but you are heading back to your own lives. You have very not enough. In retirement. You have an inability to talk about money. I’ve tried multiple times to get you to talk about money. I really want you to. And we are stuck on. Wait. Is this a good business?
What about the profit margin? It’s not working. Why are we not being decisive and making decisions right now?
01:23:38.460 — 01:23:39.740 · Trevor
So how do we get out of it?
01:23:39.780 — 01:23:41.500 · Ramit
Do you want me to tell you what I would do?
01:23:42.100 — 01:23:42.580 · Trevor
Yeah.
01:23:42.620 — 01:25:11.970 · Ramit
Yes, I would shut this business down. I would sell the car. Lisa would get a full time job working 5 or 6 days a week. The net income, the amount you take home would go way up. It would double, probably. And immediately. That would make major changes. I would eliminate almost everything when it came to your expenses, the food, all that stuff we talked about, I would call up the credit cards and I would say, look, I can’t pay this the way it is.
We need to make an agreement on it and see what they would come back with. They may or may not agree. At the same time. I hardly ever suggest this, but I would look at a way to consolidate the debt, all of it, and start making aggressive payments. You will never pay the minimum amounts on these credit cards anymore.
You will be aggressive about them and so you would take all the extra money you make, all the extra time would go towards paying off the debt. It will take years, but that’s what you would do. And the two of you would have a mission. You would know the exact month and year. I can’t calculate it here because it’s so messy, but it would probably be several years.
There wouldn’t be a lot of fun, but you would have a mission and you would be accomplished, and you would be building savings and investments. That’s what I would do. Now let me tell you the reasons that might not work, because that is not as fun as the life you have today, the life you have today where you get to go out, eat and go on dates and live in this big house.
So why would someone willingly choose the way where you have to move? You have to get rid of your business. You have to work more hours. You have to start communicating about why would you choose that? Lisa, what’s your reaction?
01:25:13.690 — 01:25:15.650 · Lisa
I feel like it’s.
01:25:17.890 — 01:25:32.280 · Lisa
Almost been a waste, I guess, and I don’t feel like I’m even capable of going going and get a full time job right now because I’m not qualified anymore to do what I would get a full time job for.
01:25:32.320 — 01:25:34.480 · Ramit
What did you do before you started the business?
01:25:34.640 — 01:26:13.439 · Lisa
I was a graphic designer, and I decided to change everything I was doing and become a groomer because I wanted to work with dogs and have my own business. And I did a ton of research, and people were making hundreds of thousands of dollars. And in the beginning of the business, I was making a lot more money than I am right now.
I, you know, a lot of things changed. I chose to take three days off instead of the two. I was working Saturdays in the beginning, and I’m not anymore. Like I’ve just been lax about it and
01:26:14.640 — 01:26:31.630 · Lisa
I don’t want to get rid of the business. I’m happy doing this, but if it’s not working and it’s putting us in this situation, then I have to face reality. I guess I just don’t. I don’t know what the move is, what the right move is.
01:26:32.190 — 01:26:33.630 · Ramit
How could you find out?
01:26:33.710 — 01:26:36.510 · Lisa
By making changes and seeing if it works better.
01:26:36.550 — 01:26:38.430 · Ramit
What changes? Be specific.
01:26:38.870 — 01:26:48.590 · Lisa
Work more days during the week. Work on the weekends or work more hours during the week and increase my rates.
01:26:48.590 — 01:26:50.790 · Ramit
And so, what’s the plan?
01:26:50.830 — 01:26:52.910 · Lisa
There are definite things I could change.
01:26:52.910 — 01:27:22.550 · Ramit
So here’s the deal. Lisa, I like that you are pushing back a little and you’re saying, hey, I like this business. I could probably make it run better. I love that, I love when somebody disagrees with me and says, this is what I want, this is what I do, I love that, and if that’s the case. Amazing. I want to point out to you that you would need to make every decision correctly, and you would need to follow through on every single decision in order for that to work.
Or you would need to make one decision, sell the business, get a full time job.
01:27:22.550 — 01:27:23.790 · Lisa
I understand that.
01:27:23.830 — 01:27:55.300 · Ramit
In my experience from talking to you, it would probably be more likely for you to succeed with a full time job. But it’s your life. It’s not mine. If you go, I’m going to make this work. I’m going to get a level of conviction and follow through that maybe I haven’t had before. But there’s a reason I’m going to work six days, maybe seven days a week.
I’m going to work more hours than I’ve worked. I’m going to control my costs. I’m going to learn how money in a business works and get control of all this. Okay. But that requires you to be right about all of those things.
01:27:55.380 — 01:28:02.980 · Trevor
If she got a full time job, how much would she need to make for it to be better than what she’s doing with the business?
01:28:03.060 — 01:28:36.970 · Ramit
Excellent question. Now we’re asking great money questions. So right now she’s taking home $2,000 a month or $24,000 a year. Let’s say she doubles that. Okay, we can see that number drops to 98%. Still not enough on your fixed costs. You’re still spending more than you make. So it would need to be more. Treva.
you might need to make more as well. Let’s actually play it out. Let’s make it. She takes home 5000. Now we’re at 89%. Still not enough. Your fixed costs are just too high. With your debt, the two of you, you’d have to make $300,000 a year.
01:28:37.010 — 01:28:38.770 · Lisa
And that’s with selling our house.
01:28:38.770 — 01:28:41.610 · Ramit
Yeah, and if you sold your house, you may have that debt as well.
01:28:41.650 — 01:28:42.250 · Lisa
Yeah.
01:28:42.370 — 01:28:58.450 · Trevor
Wow. So it’s it feels a little. I mean, I guess because I helped invest in the business and she’s been doing it for four years. You know, I guess it’s hard to let go because it’s like you’ve poured so much into it. Just clientele.
01:28:58.490 — 01:29:00.730 · Ramit
Look at Lisa’s face. What’s she saying right now?
01:29:01.410 — 01:29:03.770 · Trevor
She’s like throwing in the towel.
01:29:04.090 — 01:29:23.640 · Lisa
No, I’m not throwing in the towel. I want you to stop talking about all that stuff. I don’t want you to list all the reasons why I’m going to be sad. I want to figure out what I either need to do to make it work, or have to face facts and or if it’s not going to work, then I have to make some major changes.
01:29:24.240 — 01:29:55.280 · Ramit
Trevor, are you hearing this? Yeah. You are co-creating this dynamic. Something has changed just now. Lisa’s like, I’m ready. Stop talking about all this. And you are still living in the. I feel bad, I don’t know, I contributed. What about. She’s like. Stop it. You see this, Trevor? The same way that Lisa said she’s speaking to her therapist is something you actually need to do as well.
Because your inability to actually have honest, candid conversations, even ones where you confront reality, is actually a.
01:29:55.280 — 01:29:55.760 · Trevor
Huge.
01:29:55.760 — 01:30:19.840 · Ramit
Part of this dynamic. Did you know that? No. It is. Again, I want to take you back to what you wrote to me. You wrote. She has maxed out credit cards. I don’t even know if they’re getting paid. Sooner or later, this issue will need to be addressed and I’m not sure if we are ready for it. You might as well have written.
I’m not sure if I’m ready for it, because Lisa seems to be ready. Are you?
01:30:20.220 — 01:30:20.860 · Trevor
Yes.
01:30:21.020 — 01:31:15.460 · Ramit
Okay. Get help, both of you. From a therapist. Individual and couples. Is it expensive? Yeah. It’s going to be pricey. Take this to them and tell them we realize we are in hundreds of thousands of dollars of debt. I, Lisa, have been living in the clouds and unable to confront the fact that I’m paying minimums on tens of thousands of dollars of credit card debt.
I have an inability to say no to my son. Literally. He texted me and I go buy him whatever he wants. He’s now taking on the same characteristics I’ve taken on. I hide things from my husband. Now I Trevor, won’t bring things up with Lisa, even though I feel that it’s not good. And when I went on this podcast with Ramit Talk about money, Lisa actually was ready to make changes.
And then I started talking about the past. Instead of talking about what we should do going forward. What do y’all think about that? I’m not usually this direct, but you need it.
01:31:15.740 — 01:31:19.570 · Trevor
I guess this is what our previous counselors weren’t doing okay.
01:31:19.570 — 01:31:23.010 · Ramit
But did you go in there asking them? Exactly. Here’s the problem.
01:31:23.010 — 01:31:35.170 · Lisa
I feel like maybe I did with my counselor. Okay. But again, didn’t follow through. I didn’t keep going. I didn’t, you know, it’s like I give up when things get too hard.
01:31:35.210 — 01:32:40.680 · Ramit
Exactly. Nothing changes. If that doesn’t change everything from the business to the food to all of it, it stays exactly the same. If you don’t change Lisa and Trevor, I’m discovering that that’s the same for you. If I were in your position, Trevor, I would be saying things like, look, this isn’t the way I want to spend the rest of my life.
We don’t have enough money. I want to be able to retire. I feel anxious all the time about money. We don’t talk about it. It’s not the kind of relationship I want. I want us to get better. But in order for that to happen, Lisa, you have to get better at money individually, and so do I. That is my expectation for what we need to do as a family.
That’s going to be our number one priority for at least the next three years. We’re going to talk about it every week. Each of us is going to have numbers that we own. One of us is going to be responsible for the grocery. The other is going to be responsible for XYZ. We’re going to talk about this all the time, and there will be no secrets.
It’s going to be difficult. We’re gonna have to change everything we do. We’re gonna have to move to a smaller place. The business is going to have to go all this stuff. This is what we need to do. You know, it’s funny when you talk like that. And when you said a big, bold vision, people actually often want to come along.
01:32:40.720 — 01:32:43.440 · Lisa
What is your opinion on bankruptcy?
01:32:43.720 — 01:33:21.590 · Ramit
That’s a great question. People choose bankruptcy because people who get into consumer debt, they usually get into it because they make bad decisions over and over again. That’s what’s happened here. Okay. So what they will do is they will then start grasping for straws. They’ll do 0% balance transfers, which you have done.
They will do everything except the only thing they need to do, which is to pay off the debt. And because they will do anything except that thing, They will then look at bankruptcy and often resort to it, and sometimes they get it. Granted, it’s not often, but they get it.
01:33:21.590 — 01:33:23.630 · Lisa
And then start over doing the same thing.
01:33:23.630 — 01:33:53.550 · Ramit
Because they never changed the actual root cause. You cannot be successful if you can’t eliminate your fast food spending to zero. It just won’t happen. You cannot be successful if you cannot change your relationship with each other and with your son. Bottom line oh sure, you might be able to declare bankruptcy, but three years from now you’ll be back in $20,000 of debt.
It was an excellent question. Should you consider it? Yeah, you should consider it.
01:33:53.550 — 01:33:57.990 · Lisa
But only after making significant life changes.
01:33:58.030 — 01:34:19.460 · Ramit
Yes, Lisa, I don’t know what’s going on, but I’m really enjoying this. You’re asking awesome questions. You’re even telling Trevor, stop it with that old. We’re on to the new. Like you have come alive in a way that I did not anticipate. I’m so impressed. Can you tell me what changed for you just in the last few minutes?
01:34:19.620 — 01:34:35.380 · Lisa
It’s a reality check. I need to make significant, significant changes. And I knew it was going to be hard to hear it. And I kind of knew this was coming. I don’t want to feel like this anymore. And I don’t want our lives to continue like this.
01:34:35.380 — 01:34:54.340 · Ramit
Great. I love hearing that some people would look at, you know, somebody crying and saying, I don’t want our lives. And they’d be like, oh, this is so sad. I think this is awesome. Sometimes you need to feel sick of this. So I’m done. I’ve been doing this. It’s old, so I like it. Trevor, you look proud of Lisa.
What’s going through your head?
01:34:54.420 — 01:35:03.620 · Trevor
Yeah, I am. I’m happy that we’ve made it through this. And it’s been a long time in the work, but we’re here. Yeah, and I’m happy for.
01:35:03.620 — 01:35:03.940 · Ramit
I like.
01:35:03.940 — 01:35:04.500 · Trevor
That. I’m happy.
01:35:04.500 — 01:35:09.740 · Ramit
For Lisa. I got a question for you. Do you think Trevor needs to change his relationship with money?
01:35:10.380 — 01:35:11.260 · Lisa
I do.
01:35:11.290 — 01:35:19.170 · Ramit
Okay. What expectations might you have for Trevor? Because this is too big of a problem. Neither of you can do this alone.
01:35:19.170 — 01:35:24.290 · Lisa
I feel like his changes need to be more than just with the financial.
01:35:24.650 — 01:35:28.690 · Ramit
Well, first of all, let’s start there. What changes does he need to make financially?
01:35:28.730 — 01:35:42.970 · Lisa
What I want financially is also what I want in our relationship. I want more help. I feel like I do everything alone, and I’m in all the situations by myself and I’m left to figure out everything.
01:35:43.090 — 01:35:45.570 · Ramit
Okay, let’s start with food. What do you want?
01:35:45.610 — 01:35:51.490 · Lisa
He does already go grocery shopping with me, but I think we need to figure out how to eat healthfully
01:35:52.650 — 01:36:04.050 · Lisa
at a lower cost and meal plan and figure out what we’re going to eat through the week. And not just me planning it. I want him to sit down and plan it too with me. Right now. That doesn’t happen.
01:36:04.050 — 01:36:32.520 · Ramit
What else do you want? If I’m you and I’m I’m being asked. God, I can ask for anything I want. I would like for I want us to go grocery shopping together, because that’s actually kind of a fun thing we can collectively do, etc. I want us to share the meal prepping, but honestly, I would like him to cook on Thursday night and I would like him to cook on Saturday, whatever the thing is.
Point is like, why does everything have to be done together? You’re doing stuff solo. Shouldn’t he do something solo as well?
01:36:32.640 — 01:36:43.200 · Lisa
Yeah, I mean, our biggest thing is that he doesn’t really take a whole lot of initiative to do something on his own. He waits for me to tell him, I need you to do this.
01:36:43.240 — 01:36:56.840 · Ramit
Okay? Let’s just fix this right now, because this can’t go on. You cannot be successful if someone is not replacing the garbage bags or something like that. Come on, Trevor, I don’t even want to ask Lisa. Tell him what to do. You tell me what needs to be done. What are you going to do differently?
01:36:57.200 — 01:36:58.560 · Trevor
I’m very willing to help.
01:36:58.640 — 01:37:00.160 · Ramit
Know. Be specific.
01:37:00.200 — 01:37:01.320 · Trevor
What I need from Lisa.
01:37:01.360 — 01:37:04.200 · Ramit
No. What are you going to do for Lisa?
01:37:04.240 — 01:37:26.580 · Trevor
What am I to do for Lisa? I’m going to. I don’t even know where to start. First things first. Make calls. We got so much to dismantle right now. We got so much to take apart right now. I don’t even know what to start taking apart first. We got to take apart a mortgage. We got to take apart our business. We got to take apart our our food spending.
We got to take apart our subscriptions.
01:37:26.620 — 01:37:28.100 · Ramit
Okay. So how are you going to do that?
01:37:28.140 — 01:37:29.060 · Trevor
We got a.
01:37:29.820 — 01:37:32.700 · Ramit
Not we I, I, I, I’m talking about I got you.
01:37:32.740 — 01:37:36.700 · Trevor
Yeah. First things first. Call the mortgage company. Look, I can’t do this anymore.
01:37:36.900 — 01:37:39.300 · Ramit
Nice. What’s next?
01:37:39.380 — 01:37:47.660 · Trevor
Next is. I gotta call the apartment complex. Hey, I need an apartment. When can we set a moving date?
01:37:47.700 — 01:38:00.100 · Ramit
Nice. First thing’s first. Calling the mortgage, figuring out that out. Then once you understand that, then you can go and figure out the apartment. But I like where you’re thinking. Good. It’s all about sequencing. How about all these subscriptions? That’s easy. Yeah. Subscriptions.
01:38:00.100 — 01:38:00.780 · Trevor
Next.
01:38:00.940 — 01:38:22.410 · Ramit
Boom. Cancel that today. How about Lisa? Okay. Pause here. What do you need from Lisa. Because you’re talking about, hey, all these action items from this call, I’m going to start taking the lead on some of this and I will update you, Lisa, so you know what’s going on. Of course Adobe’s canceled, etc. the mortgage is in process.
I got to talk to the bank and blah blah blah. What do you need from Lisa?
01:38:23.050 — 01:38:25.850 · Trevor
I would say support, but that’s not specific enough, is it?
01:38:25.890 — 01:38:26.450 · Ramit
Nope.
01:38:27.690 — 01:38:30.370 · Lisa
I think we need to make a list of everything that needs to.
01:38:30.370 — 01:38:31.170 · Trevor
Be canceled.
01:38:31.210 — 01:38:31.450 · Lisa
And.
01:38:31.450 — 01:38:34.450 · Trevor
Change big. It’s a big piece of cake. It’s a huge.
01:38:34.490 — 01:38:43.410 · Ramit
It’s a big list. So maybe when you have a big thing to do, you can’t do it on your own, right? So how do you do it? How do you break it up so that you can tackle this massive project?
01:38:43.610 — 01:38:45.930 · Trevor
I could at least hope I’m making this list.
01:38:45.970 — 01:38:46.250 · Ramit
There you.
01:38:46.250 — 01:38:47.010 · Trevor
Go. Do list.
01:38:47.290 — 01:39:47.440 · Ramit
Because neither of you could. It’s so big you can’t even make it. So you do it together. Each of you can come. Hey, here’s what I think we need to do. Here’s what I think. Let’s combine them. What did we duplicate? What are we missing? And once you got that list, first of all, you just pause and give each other a high five.
Damn, we did this together. That’s actually awesome. We haven’t even taken a step. but this is a big accomplishment. We’re going to start giving each other a high five and a big hug, because we’re going to feel good doing this process. We have to find a way to feel good because it’s difficult to move out of a house.
It’s difficult to exercise, but we’re going to feel good every step of the way. We’re doing it together. We’re doing it intentionally. Okay, next we got our whole list of 45 action items. Let’s pick who’s going to do what. I’m going to take these. These ones we don’t even know yet because first we got to do this one before we find out.
But we put each other’s initials next to them and at least we know okay. What’s next? We’re going to update each other on Friday. Here’s what I got done. This one’s still in process. I didn’t get to this one. What does this sound like?
01:39:48.200 — 01:39:48.960 · Trevor
Teamwork.
01:39:49.000 — 01:39:53.960 · Ramit
Yeah, yeah, both of them. That’s how you do it. Teamwork and a plan. That’s beautiful.
01:39:54.200 — 01:39:54.840 · Lisa
Yeah.
01:39:55.160 — 01:40:15.150 · Ramit
Here’s what I want to propose to you. Do you notice that sometimes if you get up from a chair, you go like, oh, when you get up, stretch. Yeah. Just like, kind of like a grunt or a moan or, you know, it’s either you do that or people we know do that. Yeah. I noticed both of you do it with money. Have you noticed that a lot of.
Huh?
01:40:16.270 — 01:40:19.070 · Trevor
I’ve been doing it for decades, I know.
01:40:20.590 — 01:40:35.190 · Ramit
I want to propose that the two of you show up differently with money. Because I bet you, Lisa, you don’t show up like that at the yarn store or at work because you love it. I bet you don’t go. Oh, God. Another dog?
01:40:36.870 — 01:40:58.590 · Ramit
Why would you? You like it? I never show up like that when I get the chance to meet couples like you, I love it, I love this, so I want to encourage the two of you to notice that and to explicitly say. I’m not doing that anymore. This whole, uh, it’s very somatic. It’s. It actually tells your body, get ready to eat shit.
01:40:58.950 — 01:40:59.670 · Lisa
Yeah.
01:40:59.830 — 01:41:00.710 · Ramit
Not anymore.
01:41:01.180 — 01:41:04.140 · Lisa
It already puts you in a negative space before you’ve even started.
01:41:04.180 — 01:41:04.900 · Ramit
Yes.
01:41:05.060 — 01:41:05.380 · Lisa
Yeah.
01:41:05.420 — 01:41:14.620 · Ramit
But we can do anything. We can be theatrical. Yes. I get to talk about personal finance. Whatever. Oh my God. You decide. I don’t care how crazy it is.
01:41:14.780 — 01:41:15.420 · Lisa
Yeah.
01:41:15.460 — 01:41:18.580 · Ramit
But we are going to change from the outside in.
01:41:18.620 — 01:41:19.340 · Lisa
Okay?
01:41:19.500 — 01:41:32.940 · Ramit
This shows up everywhere. The text messages with your son. Because when I text. No, I love you, but that’s not part of our plan. Then inside, you start to realize I’m the kind of person who follows a plan.
01:41:32.980 — 01:41:33.660 · Lisa
Yeah.
01:41:33.900 — 01:42:13.290 · Ramit
You’re going to make the plan. You’re going to have a to do list. You’re going to work your way down and you’re going to adapt. As time goes on, you’re not going to have the perfect plan. That’s okay. I’ll tell you what to do next. All right. I want you to go back through the conscious spending plan, and I want you to go back through monarch, and I want you to fix it.
This time, I want you to do it together, and I want you to do it right. Okay. Take your time. You don’t have to do it all at once. It’s going to take a while. Don’t worry about it. Yeah. Get it right. Get a handle on your finances. Simplify it. Start to realize. Why do we have all these credit cards? It’s not serving us.
And you’re going to have a lot of reasons. Well, this this da da da da da. We want a simple financial system.
01:42:13.330 — 01:42:19.049 · Trevor
All of those things we have to do seem like a big, big jobs. Like, I’ve never
01:42:20.530 — 01:42:25.690 · Trevor
had just two credit cards, but it’s possible you can, like, you could have no credit card.
01:42:25.730 — 01:42:59.360 · Ramit
Yeah, yeah. Taking it apart is. It’s hard. Yeah. It’s easy to add on random to a financial system. It’s really hard to have a simple financial system. That’s why I say you have to fight for simplicity. Fight because the world wants you to have all this stuff. Freaking Wayfair card. Kohl’s card. All this.
No, we are not the kind of couple who does that. We have a couple of credit cards. Simple. Now all the information you need is there. There’s two books I will teach you to be rich and money for couples. Get them, read them. Do them together.
01:42:59.400 — 01:43:00.760 · Lisa
We have money for couples.
01:43:00.800 — 01:44:31.310 · Ramit
Perfect. Start there. It’s going to make it really fun. You know, there’s going to be times you can have uncomfortable conversations. That book will show you exactly what to say. Okay, so use it. It’s there for you. I’m not a magician. Nobody could have fixed this situation in one conversation. That’s actually not my expectation when I see numbers like this.
When you have consistently made decisions that have put you in a financial place as precarious as this, there are no good options. There’s a lot of work. I do believe there’s hope, but it’s going to be incredibly difficult. Maybe the most difficult thing they have ever done together in the past. I used to want to wrap it all up with a nice bow, but that’s actually not realistic because in life there are problems that are so big they cannot be solved easily, or sometimes they cannot be solved at all.
But what we can do is we can start to make progress. We can start to have them work together as a couple, and that at least provides hope for doing this as a team. Now they have a lot of work to do, but I was very pleasantly surprised by Lisa’s awakening. If I could see that energy from her and from him, that’s two people rowing in the same direction.
Wow. You can make huge changes in a year if two people are aligned. So that is my hope for what they accomplish starting today. And now let’s check out their follow ups.
01:44:32.070 — 01:45:15.650 · Trevor
I would say the biggest surprise from the interview was how much reduction we needed to make, how many fixed expenses we need to cut, and how the percentage was way over. Biggest takeaway is how important it is. And I guess the thing we decided the biggest changes we’re going to be making soon are we’re moving.
We’re going to have to cut, cut our, um, housing expense in half. So that’s going to be one of our biggest changes and, um, better at accounting, better accounting of the funds we’re using.
01:45:16.290 — 01:45:43.730 · Lisa
My biggest surprise from the conversation with her meet really was how emotional it made me to talk about it. I didn’t realize that just bringing up these topics, um, was going to be so difficult. I’m glad I did, and I guess it needed to be done for a really long time. My biggest takeaway is along the same lines, it’s more,
01:45:44.770 — 01:46:00.279 · Lisa
um, you know, how much of an impact all of this is making on my life and my family’s life. Every decision that I make regarding money is affecting us, and it’s
01:46:01.400 — 01:46:32.440 · Lisa
basically, you know, destroying us. And we need to make a lot of changes. The ones that I have decided to make, the biggest ones are to focus really on why I’m doing certain things, um, why I need feel the need to do certain things regarding money, and to really do things with more intention and think about everything before I do it.
01:46:33.280 — 01:47:26.830 · Trevor
It’s been about three weeks since we had our interview with The Hermit. It’s been a wild roller coaster ride and we’ve had so much to do. I still have so much more to do. What stood out the most in our interviews? We had so much to cover. We were so we were both on opposite pages and not really working from the same plan of on finances.
We had a lot of spending that we weren’t even aware of. So going forward, we have to. We’ve made a lot of changes in how we spend and we’ve cut a lot of expenses. We have many more expenses to go make, make. We make dozens of calls all the time, every weekend. And it’s an ongoing process, and we really appreciate Ramit and his team, um, with, with the help and advice he is giving us.
Uh, thank you so much.
01:47:27.430 — 01:47:41.470 · Ramit
I want to thank our partners at monarch for setting my guests up with a free one year account so they can easily stay on the same page with money. If you want your own monarch account with my exact conscious spending plan categories built in. Go to monarch
01:47:42.870 — 01:47:49.390 · Ramit
to try it for free and get 50% off your first year of monarchs. Courtier with code remit.
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