193. “I’ve filed for bankruptcy twice. Will I ever stop spending?” (Part 1)

Summary

Podcast Summary: Money For Couples with Ramit Sethi
Episode 193: “I’ve Filed for Bankruptcy Twice. Will I Ever Stop Spending?” (Part 1)
Release Date: January 28, 2025

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Introduction

In Episode 193 of Money For Couples with Ramit Sethi, host Ramit Sethi delves into the complex financial dynamics of a couple grappling with significant debt and spending issues. Featuring Lakeisha (38) and James (45), this episode explores how their childhood experiences and parental influences have shaped their current financial behaviors, leading to a cycle of overspending, bankruptcy, and lack of savings.

Meet Lakeisha and James

Ramit introduces listeners to Lakeisha and James, a couple whose financial turmoil has become a major barrier in their relationship:

• James admits, "Of overspending, getting things that I can't afford. But I will convince myself this is out of necessity." (00:11)
• Lakeisha reflects, "I have set my future self up for failure. I have not thought about the future because the future seems so far away and I want to enjoy my money now." (00:17)

Combined, they are burdened with $190,000 in debt, with James carrying $26,000 and Lakeisha $165,000. Their income totals approximately $148,000 per year, but their fixed costs consume up to 73-80% of their monthly earnings, leaving them with minimal capacity to save or invest.

Analyzing Their Financial Situation

Ramit reviews their Conscious Spending Plan (CSP), highlighting alarming figures:

• Assets: James has none, while Lakeisha has only $21,000.
• Debt: James owes $26,000, and Lakeisha $165,000.
• Income: James earns $5,000/month ($60,000/year), and Lakeisha $7,300/month ($88,000/year).

Notable expenditures include high car payments ($950/month) and questionable spending on cigars and alcohol ($450/month), which Ramit identifies as areas needing immediate correction.

Exploring Upbringing and Money Psychology

James's Upbringing

James shares insights into his childhood, where his father was the primary breadwinner, emphasizing the mantra, "work hard and get by." This legacy has instilled in James a survivalist approach to finances, focusing on getting by rather than building wealth:

• "We have just been trying to get by and I'm trying to get out of it." (29:03)
• James recounts his father's career shift from iron worker to full-time pastor, leading to financial struggles and shaping his fearful relationship with money.

Lakeisha's Upbringing

Lakeisha opens up about her mother's problematic relationship with money, including gambling addiction and financial irresponsibility:

• "I don't value it. It's disposable." (00:01)
• She describes how her mother's habit of writing bad checks led to bankruptcy filings, fostering in Lakeisha a disregard for saving and a penchant for immediate gratification.

Current Financial Behaviors and Challenges

Overspending and Lack of Accountability

Lakeisha admits to impulsive purchases, often justifying them as necessary when, in reality, they stem from deeper psychological triggers linked to her upbringing:

• "Can I get away with it?" (61:11)

James, taking on the role of the "voice of reason," often challenges Lakeisha's spending but admits limited success in curbing her habits:

• "Sometimes I just try to get her to understand her purchases are unnecessary." (27:52)

Despite their combined income, their excessive spending and debt repayment consume most of their earnings, leaving no room for savings or investments.

Ramit's Coaching Insights

Ramit emphasizes the importance of understanding and addressing the root causes of their financial behaviors before attempting to reorganize their spending:

• "We can't go forward unless we understand our past." (68:51)

He connects their current struggles to their childhood experiences, highlighting how James’s and Lakeisha’s parental influences continue to dictate their financial decisions.

Notable Quotes and Emotional Moments

• Lakeisha (00:25): "Their spending habits have stopped them from saving and investing."
• James (29:03): "I wish I did have savings."
• Lakeisha (43:50): "My mom was addicted to it."
• Ramit (61:13): "Can I get away with it?*
  Lakeisha (61:24): "That absolutely does."

These moments underscore the deep emotional and psychological ties Lakeisha and James have with money, rooted in past experiences and parental lessons.

Cliffhanger and Tease for Part 2

As the episode concludes, Ramit assesses their Conscious Spending Plan, revealing their dire financial standings:

• James' Net Worth: -$25,846
• Lakeisha's Net Worth: -$144,000

Despite recognizing the magnitude of their debt, both express a mixture of fear and resignation towards their financial future. Ramit promises to continue their financial journey in Part 2, where he will delve deeper into their CSP and guide them toward actionable changes.

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Conclusion

Episode 193 serves as a compelling exploration of how childhood experiences and parental influences can profoundly impact a couple's financial behaviors and relationship. Through candid conversations and Ramit's expert guidance, listeners gain insights into breaking detrimental money patterns to pave the way for a financially secure and harmonious relationship.

Stay tuned for Part 2, where Ramit will further assist Lakeisha and James in restructuring their finances and overcoming their long-standing money challenges.

Transcript

[Ramit Sethi]

On today's episode.

[Lakeisha]

As it relates to money, I don't value it. It's disposable.

[Ramit Sethi]

Meet lakeisha and James. Lakeisha is 38. James is 45. And they are caught in a cycle.

[James]

Of overspending, getting things that I can't afford. But I will convince myself this is out of necessity.

[Lakeisha]

I have set my future self up for failure. I have not thought about the future because the future seems so far away and I want it to enjoy my money now.

[Ramit Sethi]

Their spending habits have stopped them from saving and investing.

[James]

It's heartbreaking. I wish I did have savings.

[Lakeisha]

There was no else to hold me accountable.

[Ramit Sethi]

And they've both accumulated a lot of debt, which has even caused lakeisha to file for bankruptcy.

[James]

I know for a fact that I need to do better with money.

[Ramit Sethi]

Lakeisha and james recently moved in together and they have brought their complicated financial histories with them.

[Lakeisha]

I got a check and it was in her handwriting, but it was from my account and it was to tiffany's. It said on the memo line, mom's birthday gift.

[James]

My dad was the breadwinner in our house. He was like, work hard and get by. That's how I've been living the last 40 some years of my life.

[Ramit Sethi]

Can they work through their money histories and create a shared vision of a rich life?

[Lakeisha]

We've talked about money, but it's come more from a lack of right. I want to get on the other side of that.

[Ramit Sethi]

Let's meet lakeisha and james. I'm about to open up james and lakeisha's conscious spending plan which breaks down their net worth income and where they spend. You can download your own version of the conscious spending plan or [e-mail] CSP. Okay, I'm looking at the CSP for James and Lakisha. James is 45. Lakisha is 38. Let's take a look here. Assets. James has no assets. Lakeisha has $21,000. No investments, no savings. Okay. James has $26,000 of debt. Lakisha has $165,000. Didn't she just declare bankruptcy? I don't understand this. Combined, they have $190,000 of debt. Okay, let's look at the income. He makes $5,000 a month, so about $60,000 a year. She makes 7,300amonth, so about $88,000 per year. Okay. I mean, combined, that's a lot of money. But individually, we can already see in the fixed costs he's at 67%, which is too high. And let me just look here. Yeah, that doesn't include his debt payments are 25amonth. So that's actually artificial. It's going to be much higher. Probably like 73, 75%. She's at 69%. She's paying $205 a month in debt payments. There's no way. If you have $165,000, you're paying thousands per month. So that's also artificially low. Probably like 80%. All right, well, a couple of other things that stand out to me in their fixed costs. Their rent or their mortgage is quite low. 16%. That's not bad. Car payment a little high. 950. Okay. Groceries only. 400 bucks. Okay, that's good. Cigars and alcohol. Excuse me, I don't recall putting that in my csp. Was that a line item I added? Anybody? Okay, how are you going to add $450 a month for cigars and alcohol when you have $190,000 in debt? No, no, no, no. We're going to fix this. Cell phones, 125 and 170. I guarantee you at least one, maybe both of them are paying for their kids and other people. Subscriptions are not bad. 110 total and miscellaneous. 330 and $500 a month. No, we're going to fix that. Zero investments, zero savings. That's not acceptable. And then, yeah, I don't believe this guilt free spending number. It's basically, I think they just don't track it at all. And I do think they spend thousands. The CSP indicates $3,103 together, but I don't think they know how much they spend. So we'll find out about that. The reason I don't think that some people spend a large amount of money on guilt free spending. And I can tell that they're probably telling the truth. You can see the clues in the CSP. The fact that they have $190,000 of debt and they're paying almost nothing towards their debt tells me they're not carefully tracking any of this. The fact that they have zero savings and zero investments tells me that there's a lot of sloppiness that we can work together to improve. Now the good news is they do have thousands of dollars left over per month. So that's good. Now we need to figure out how to reallocate this money. For me, I'm looking at their fixed costs. They don't have a lot of huge fixed costs. We're going to fix that cigar and alcohol thing right now. We're going to fix that miscellaneous thing right now, and we're going to get some savings and investments going, But I need to understand more about what brought them to this place. I'm excited to talk to James and lakisha. Before we jump in, I want to share a few things. Lakeisha and james are in a romantic relationship, and they recently moved in together. There's a possibility of marriage in the future, but according to lakeisha, it won't happen unless they get on the same page with their finances. In their application, lakeisha wrote that james doesn't want to discuss their money. She wrote, it's almost impossible for us to create a plan. Us getting on the same page regarding finances is a deal breaker. Obviously, the stakes are high, so I'm looking forward to helping them out and to start to figure out what's going on. I asked lakeisha about a recent shopping trip to target.

[Lakeisha]

Went to target, and I was supposed to just drive up and pick something up. He said, like, I'm going to go in and get some water. And then I said, oh, I'm going to go in with you. And he's like, sure. And I was like, yeah, it's fine. I go in. I told him, I just want to go to the dollar section. I went to the dollar section. I also went to the clearance section. I probably spent 50 more dollars than just the drive up.

[Ramit Sethi]

What'd you get for 50 bucks?

[Lakeisha]

I got an outfit, and I got my daughter a sweatshirt. And from the dollar section, I got, like, a little headband and, like, wristband things that you could wear, like when you're washing your face so water doesn't get on your hair.

[Ramit Sethi]

Okay.

[Lakeisha]

All right.

[Ramit Sethi]

James, I know you don't love talking about money, and I know that it's taken a lot of courage for you to show up today and talk about it, which I appreciate. I'm curious about the target experience. You go to target with lakisha. She's got a list. She says, hey, I'm gonna just go inside and walk around. And you said, really? Just say it for us. Like you said it.

[James]

She was like, I'm gonna go in too. I said, do you really need to do that? We have conversations like this all the time.

[Ramit Sethi]

So how often do you say something like that?

[James]

I'll probably say about two or three times a week. Whoa.

[Ramit Sethi]

That's kind of a lot, don't you think?

[James]

She likes to browse Amazon and things like that.

[Ramit Sethi]

So you see her, what does she have, like, on her phone or laptop? And you just kind of see her. And then. And then what do you. You just walk up to her and what do you say?

[James]

Well, if it's Amazon, I'd definitely say something. You don't need to buy that.

[Ramit Sethi]

Or, you know. Okay, just so everybody knows, Lakeisha is smiling right now. She kind of looks down. I take it that you agree that this is what happens, Lakeisha?

[Lakeisha]

Yes. When we were living separately, we both get paid on the same day. When it was payday, we would usually first call each other first thing in the morning. And there. Sometimes when it's payday, he would reach out to me first. Usually I reach out to him. And so he'll call me and be like, you're too quiet. What are you doing? Are you on Amazon? Because he would just assume that I was up in spending money because we just got paid. And I would say that there is some truth to that assumption. Not every time. Sometimes it's me paying bills or whatever, but. Yeah. So he attributed my silence on payday to me spending money.

[Ramit Sethi]

That's interesting, James.

[James]

Yeah.

[Ramit Sethi]

When you ask that question, you know, you're too quiet. What are you up to? Or you don't really need that. What is your role in that moment?

[James]

I guess a voice of reason, maybe.

[Ramit Sethi]

Oh, okay. And if you're the voice of reason, then who is she?

[James]

I'm not sure. What would you be, Keisha?

[Lakeisha]

I. I don't know. The voice of being unreasonable? I don't know.

[Ramit Sethi]

Why is this such a struggle for you?

[James]

I'm not sure.

[Ramit Sethi]

Let's shift roles. Let's say that I said this to my wife. First of all, I'll never say this to my wife, but let's just say that I did. And I. I'm going around, looking at her, scrolling on her. On her phone, and I'm like, you don't need all that or you're really gonna buy that? Why don't you put that away? We don't need that stuff. I'm the voice of reason. Who's my wife in this scenario?

[James]

I don't know. You got me thinking real hard.

[Ramit Sethi]

What are you thinking about?

[James]

Past things. Where maybe my. My dad asking me if I needed that.

[Ramit Sethi]

Oh, forget the. Forget this role thing, then. Let's talk about that. What about your dad? What your dad say? Was your dad the voice of reason in your relationship?

[James]

Yeah, a lot of times. Yeah.

[Ramit Sethi]

And what did he say to you, James?

[James]

Do you need that, or what are you doing?

[Ramit Sethi]

Okay. Love it. How old were you at this time? Take me back.

[James]

Oh, man. All the way up to my 20s, you know what I mean? My whole life, you know, so like.

[Ramit Sethi]

Five years old, you remember this up to your 20s, correct?

[James]

Yes.

[Ramit Sethi]

Okay. Wow. And can I ask you a question? When you're a little boy, go all the way back, five years, six or seven years old, your dad says this to you, what did you feel?

[James]

I guess guilty at some. At some point. And at some points, you know, I'm glad he did say something because it stopped me from doing things that I probably shouldn't have done.

[Ramit Sethi]

Why shouldn't you have done them? Because at that time, you were a child and broke. What else? As you got a little older, you got a paper route, summer job, maybe you weren't as broke, but what were you.

[James]

Learning? Irresponsible.

[Ramit Sethi]

Right, There we go. Unreasonable. So your dad was the voice of reason and you were irresponsible.

[James]

Unreasonable.

[Ramit Sethi]

Wow. And so now you have somehow elevated. It's crazy. Your dad was the voice of reason. Now you are. And now what's Lakisha?

[James]

Unreasonable. And do I gotta say it?

[Ramit Sethi]

Yes.

[James]

Irresponsible.

[Ramit Sethi]

Okay. Don't worry. Nobody's getting in trouble here. I'm not saying that James ever said to lakeisha, you are irresponsible, but do you all see that I'm trying to help you See the different pieces on the chessboard?

[Lakeisha]

Yeah, absolutely.

[Ramit Sethi]

Okay, so if the role is voice of reason, which you yourself gave that turn, James, then it stands to reason that the voice of reason is speaking to. Teaching, lecturing.

[James]

I got you.

[Ramit Sethi]

Okay, the irresponsible and unreasonable one. Now let's just tie this all up with a bow. Lakisha, how much debt have you been in in your life as an adult?

[Lakeisha]

In the six figures, including student loans?

[Ramit Sethi]

Over a hundred thousand dollars of debt, correct?

[Lakeisha]

Yes.

[Ramit Sethi]

Yeah. Okay. And some of that was purely discretionary. You charged stuff up on credit cards. You bought stuff you couldn't afford, correct?

[Lakeisha]

Yes.

[Ramit Sethi]

Okay. And when you went to target, you had a list. You already had the stuff pre bought. You went in there, you dropped 50 bucks on stuff that you probably did not need, correct?

[Lakeisha]

Yes.

[Ramit Sethi]

And are you still in debt right now?

[Lakeisha]

Yes.

[Ramit Sethi]

Okay. So do you all see that the roles are not far from what we're talking about? I certainly wouldn't call my partner unreasonable and irresponsible, but I do think the behavior of charging up a bunch of stuff when you don't have the money to pay for it is unreasonable and irresponsible.

[Lakeisha]

I agree.

[Ramit Sethi]

Did your mom take you to target when you were a kid?

[Lakeisha]

It might have not Been Target. But yes, I definitely remember going to the stores with my mom. It was usually my mom and my siblings. Sometimes it was fun because we knew that the chances of us getting something were greater if we went, but if we did not go, we were definitely not getting anything. Right. So it was always if she was going to the store, we wanted to go. For the most part. I remember it being fun, but there was some stressful moments going to the store too. People don't write checks as much as they used to, but she used to write checks, and they would bounce a lot. And so there was a certain sense of anxiety or maybe even embarrassment it when it came time to pay, like, oh, God, here we go. So for that reason, there were times where I would just opt not to go.

[Ramit Sethi]

You would opt not to go because the payment part was too anxiety inducing?

[Lakeisha]

Yes.

[Ramit Sethi]

Wow. What did you tell your mom when she asked you, do you want to go to the store? What would you say?

[Lakeisha]

No, I'm okay. She would sometimes, like, make a list. Right. Of all the places she needed to go. And so I would attribute it to, like, I don't want to be out all day, or I don't want to run all those errands, so I'll just stay back. But sometimes I didn't have a choice. Like, she didn't want to leave us home for too long, so we would have to go.

[Ramit Sethi]

Do you ever hide purchases from anybody?

[Lakeisha]

I was sometimes embarrassed with James. There was one point in time where I was buying a lot of stuff on Amazon to the point where, you know, those big plastic containers that they put your packages in to, like, transport on the actual truck? There was one point in time where I had so many packages that they just took that plastic package and left it, like, inside the building. And inside that package, there was, like, five, seven different packages.

[Ramit Sethi]

Okay. Do you have a lot of stuff in your house?

[Lakeisha]

Yes.

[Ramit Sethi]

She's nodding yes. James. James, just smiling quietly. James, what do you say?

[James]

Yes. She has a lot of stuff in her hand. Yes.

[Ramit Sethi]

And what kind of stuff?

[James]

She likes smaller things, I guess you should say. So there's all type of contraptions and container things.

[Ramit Sethi]

Lakisha, what do you have? What kind of stuff?

[Lakeisha]

I have a lot of things. I like color. Right. So there's color everywhere. Some times when I shop, it's impulsive. So a lot of times I will buy something, and then we'll later be like, I don't need this, or I'm mad at myself that I even purchased it. Sometimes when I see A need immediately. I'll try to purchase it. So the other day it was snowing. James went downstairs in the basement to do laundry. When he came back up, there was snow. It was wet all over the floor. And there. I didn't have a rug in the back, like by the deck. And so I bought a rug. But not only did I buy a rug, I bought like a boot tray so that the water doesn't get everywhere.

[Ramit Sethi]

It's kind of striking that the example you just are giving me is a need, a functional need. Would you say that that's supposedly what you buy? I don't think so.

[Lakeisha]

Not mostly what I buy, but it'll be things that I feel like is a need. I'll give you an example. I have a dehydrator.

[Ramit Sethi]

Come on, who uses.

[James]

Who buys this?

[Ramit Sethi]

The only people who buy it are on qvc and then they never use it. They're like, oh, I could get a lot of fruit or whatever. A dehydrator. I don't even know what it does. Okay, but it looks cool. All right, so you bought it. How much did it cost?

[Lakeisha]

It was less than 100, more than 50.

[Ramit Sethi]

What did you get out of buying the dehydrator?

[Lakeisha]

Absolutely nothing.

[Ramit Sethi]

Nope, that's not true. You got something out of it, otherwise you wouldn't have done it. Think about the moment you decided to buy it. What did you get out of it?

[Lakeisha]

Satisfaction.

[Ramit Sethi]

That's a pretty bland word. Do you have any other words to describe the feeling? I imagine you were feeling somewhat elated. Happy?

[Lakeisha]

Not necessarily. Because sometimes almost immediately I feel stupid, honestly. Like, why did I get that?

[Ramit Sethi]

But what happens before you feel stupid?

[Lakeisha]

I think of all the things that I can do with it. I feel accomplished.

[Ramit Sethi]

Yes. Keep going.

[Lakeisha]

I feel accomplished. I feel productive, successful. There was a certain sense of independence I felt.

[Ramit Sethi]

Tell me about that.

[Lakeisha]

Lately I've been just on this thing where I want to do everything myself. I'm so used to doing everything myself. So the more I've had to do, the more I want to do. A sense of control. Essentially. I want to make all the things myself. Even if it's would be easier to just go buy some dehydrated fruit, I can do it myself. So there's a certain sense of freedom and independence that I feel felt when. When buying those things.

[Ramit Sethi]

Can I make an observation?

[Lakeisha]

Sure.

[Ramit Sethi]

The target story was really interesting to me because you had a list. Sounds like you had maybe pre purchased the stuff. You just need to pick it up. You go inside. The way you describe it was Almost like a very excited young woman, you know, like a little girl even going into the store, I don't know what I'm going to get. And you picked up a bunch of stuff. Very excited. Look at the smile on your face right now. Right?

[Lakeisha]

Yeah.

[Ramit Sethi]

And the way then you describe growing up with your mom, There was almost this slot machine of reinforcement and punishment. Sometimes I go to the store, and sometimes I get something which every little kid wants. Sometimes I go and I'm, quote, punished because I have this embarrassing situation with my mom. It's so embarrassing, sometimes I don't even want to go with her. Fast forward here you are, an accomplished woman, still recreating some of those same feelings. I buy it. I feel excited. All these identity creations. I'm going to be this person if I buy this thing, and then the slot machine pulls and maybe you lose. I feel stupid. I feel embarrassed. All of those feelings remind me very much of how you describe going shopping with your mom. What do you think about that?

[Lakeisha]

I thought a lot about my childhood and connecting it to my experiences with money and financially, but I never have considered or made that connection before.

[Ramit Sethi]

And how does it feel to hear that connection?

[Lakeisha]

I feel like my heart rate probably just went up a ticket and I don't know why.

[Ramit Sethi]

Wow. Let's take a second and try to figure it out. This is why I love my job. The experiences we have throughout our lives affect us in ways that are sometimes hard for us to even understand ourselves. For Lakisha, she knows that her childhood impacted the way that she views money, but she never really made that connection to this one specific experience until we just discussed it. Now that she's seeing those connections, we can really get to work on changing her money psychology. We'll be right back after this short break. You remember yellow pages. It's kind of wild to think that just recently there was a book with everyone's phone number and address dropped in front of your house. We don't have yellow pages really anymore, but people's personal information is still out there online. And that means you have to develop different ways to protect yourself. That is why I've partnered with Delete Me, the sponsor of this week's episode. I'm going to tell you what Delete Me does, but I want you to know I personally pay for this service. I recommend it. Deleteme will remove your name, age, address, phone number, relatives, names, all of it. Here's how it works. You sign up. You submit your information for removal. Deleteme experts search for and start removing your personal information. Within seven days you'll receive a detailed delete me report with what they found so far and then they continue to scan and remove your personal information regularly and automatically. This is a service I personally use and I recommend it to all my friends and family. So if you want to get your personal information removed from search results on the web, go to joindeleteme.com ramit for 20% off a plan for you or your entire family. Again, that's joindeleteme.com Ramit R A M I T this episode is sponsored by Element, a delicious electrolyte drink mix with zero sugar and for a limited time you can get Elements Chocolate Medley designed to be enjoyed hot during the colder months. Now I get a lot of DMs about element, one of our sponsors, and just check out a few that I recently got. Rebecca says they've been a great aid in my hot, humid runs in Miami and they are amazing now during my pregnancy, Angela says, I love the new Chocolate Medley. I have a hard time drinking water in the winter because I'm always so cold. I love that I can sip a warm drink to stay hydrated and I especially love the Chocolate Chai flavor. Thanks to Rebecca and Angela for your feedback. As a quick reminder, each stick pack of Element delivers a meaningful dose of electrolytes free of sugar, artificial colors or other weird ingredients. And Element is the exclusive hydration partner to Team USA Weightlifting and many Olympic athletes. Get your free Element Sample Pack with any [e-mail] Ramit try it totally risk free. If you don't like it, you will get your money back, no questions asked. But this deal is only available through my link, which you can click in the description below. Welcome back. Let's keep talking to Lakeisha about the connection between her childhood and how she handles money today.

[Lakeisha]

I've tried to disconnect myself in a lot of ways with those experiences, but the fact that that connection is there regardless of how much I try to disconnect from it, I think it's just unsettling.

[Ramit Sethi]

Does it scare you a little bit?

[Lakeisha]

Yeah, because I don't know what else is there, right? I haven't thought about.

[Ramit Sethi]

That's. That's a really good point. So if I'm hearing you, you're saying I've tried through a lot of work to disconnect some of the things that I grew up with from my mom, and it's scary to realize that there's still this invisible connection I didn't possibly even know about. And maybe There are other things.

[Lakeisha]

Yeah. I think that's the scariest part, that maybe there are other things that I don't know.

[Ramit Sethi]

Just so I understand. Maybe there are other things I'm doing today as a result of what I saw growing up, and I don't even. I'm not even aware of it. Is that what you're saying?

[Lakeisha]

Yes.

[James]

Okay.

[Ramit Sethi]

All right. Well, I have good news and bad news. The bad news is definitely, yes. There are a lot more things you're probably doing today with your money, unconsciously, unknowingly, that we could probably trace back to somewhere in your past. That's the bad news. The good news is that we all do that. Every one of us has some sort of unconscious, unknown thing. We do behave with money, talk about money, feel about money that can be traced back to our past. And we can also change some of those things. When was the last time you had fun talking about money?

[Lakeisha]

Never. I don't think it's fun.

[Ramit Sethi]

And why is it not fun? What's the not fun part of talking about money?

[Lakeisha]

I don't know how.

[Ramit Sethi]

Oh, we can fix that.

[Lakeisha]

James has to also be open to it. He has gotten so much. Even from the time that I submitted the application to yesterday, he has gotten so much better with not avoiding the conversation. So there is definitely progress there.

[Ramit Sethi]

Okay, so it's not fun because you don't know how. If you knew how, would it be fun?

[Lakeisha]

It would be fun if James would engage willingly in those conversations with me. Yes.

[Ramit Sethi]

Okay. I love that. And do you think he will?

[Lakeisha]

Yes.

[Ramit Sethi]

Has he?

[Lakeisha]

In the past, we've talked about money, but it's. It's come more from a lack of. Right. I want to get on the other side of that and an abundance.

[Ramit Sethi]

I love that. Those are some of the most fun conversations to have.

[James]

Yeah.

[Ramit Sethi]

You can still have fun if you're in debt. There's no doubt about it. You absolutely can. But it's a different type of fun. It's like, hey, we're in this. We're in this struggle together right now. Let's talk about how we're going to get out of it. And there is something very bonding about that. Very. I gotta tell you. Do you remember that book the Firm or the movie the Firm with Tom Cruise? It was like in the 90s. Okay. I saw it when I was, like, 14 years old. I saw it with my mom. Never any. Any Asian or Indian person knows this, but I'm gonna tell everybody else. Never see a movie with a love scene with your mom. Okay. I Literally wanted to die. Anyway, at the beginning of the movie, there's what I consider a very romantic scene. Not the way a lot of people think about romance. Let me tell you how I think about romance. They're in this Boston apartment. It's little. He has no money. Neither does she. They're eating Chinese takeout. They're struggling. That's their life. He's a student, and then suddenly he gets an offer for a lot of money to be a lawyer. And it changes everything. And to me, I loved that part of the movie because they were working for something together, and then they got it, and it changed everything. And so I see connection and bonding and even romance. When you have debt, of course I want to help you get to the other side where you've paid that off and you're living in abundance because that's a whole different kind of fun. But for me, you can be connected at both parts of the process. We've been able to connect a lot of clues from Lakisha and James's past that affect their current relationship with money. Now, I want to go back to that target incident where Lakisha seemed to spontaneously buy $50 worth of items that she didn't really need. And I want to talk to James about his response to that situation, which was to say, do you need that? Listen to how he feels about that. Now that we've connected his role as the voice of reason to his childhood.

[James]

Maybe I should handle it a little bit differently. I don't want to sound like I'm trying to be her father or anything like that, because I got issues, too. But, you know, it's just something. Sometimes I. You know, I just try to get her to understand her purchases is unnecessary.

[Ramit Sethi]

Does it ever work?

[James]

Sometimes.

[Ramit Sethi]

Sometimes that sound like when you tell a kid, like, don't. Don't eat all this candy. And like, one out of ten times they listen to you. And then I'm like, hey, dad, does it ever work? And you're like, God, sometimes. You know what I mean? That's a kid. They don't know what they're doing. They just want candy. Adults, partners, we don't want to have those kind of conversations with them like that. Right? Right. Okay. You know what I notice is both of you following in the footsteps of what mom or dad did. Like, it's affecting your financial behavior today. It's pretty interesting, don't you think?

[James]

Yeah, absolutely.

[Ramit Sethi]

Okay. And, James, had you made that connection before?

[James]

Not until, like, last night. And today. My dad was the breadwinner in Our house, You know, my mom was a stay at home mom and he, he was like, work hard and get by. And that's. I think that's how I've been living the last 40 some years of my life. Just trying to get by and I'm trying to get out of it.

[Ramit Sethi]

Work hard and get by. What does that mean?

[James]

Just doing a bare minimum, I guess. You know what I mean? Just trying to have enough. I'm really trying to get out of that.

[Ramit Sethi]

Would that be, for example, know if you make a little extra money, you don't save it, you spend it? Is that what you mean?

[James]

Yeah, yeah, that too, yeah.

[Ramit Sethi]

Okay. What else?

[James]

Get paid. Spend the money on things you need and sometimes some of the things you don't need and then not saving anything and just trying to make it to the next paycheck, you know.

[Ramit Sethi]

And if somebody had asked your dad, for example, what are you going to do 20 years from now? What would he have said?

[James]

And I'm not sure.

[Ramit Sethi]

I'm not sure.

[James]

Okay, right, right.

[Ramit Sethi]

Is your dad still with us?

[James]

Yes, he is. Yeah.

[Ramit Sethi]

Okay. How's he doing financially speaking?

[James]

He has some struggles. I mean, he owns his house, but if he would unfortunately leave here, I wouldn't know what would happen to my mom, what would happen to other things and things like that. I wouldn't be positive that she would be okay.

[Ramit Sethi]

Wow, okay. And because your dad was the breadwinner, did he ever talk to your mom about money? This is what I want to happen if I get hit by a bus, that kind of thing?

[James]

Of course he had insurance policies and things of that nature, but other than that, I don't think it's really anything substantial.

[Ramit Sethi]

Is your mom equipped? Like, does she understand money?

[James]

I don't want to say that she invests anything like that. She might have a little box of in her bedroom or anything like that. But she does know, you know.

[Ramit Sethi]

Okay.

[James]

She need to hold on to something, you know.

[Ramit Sethi]

Okay, got it. That's interesting. All right, so your dad was a breadwinner, mom stayed at home. Yes. Okay, gotcha. And when you were a kid, what phrases do you remember the family saying about money, specifically your parents?

[James]

I would probably go by experiences like if you go to the store, we can't have that because we don't have enough money for that. Times when bills were due, saying no to certain things because we didn't have it. You know, don't get me wrong, we always had a roof over our head and all of that. But as far as anything extra or anything like that? No.

[Ramit Sethi]

Would you say you grew up middle class? Lower middle class?

[James]

I would say probably lower to middle. I would say somewhere in between there. Yeah.

[Ramit Sethi]

Okay. You saw your dad working. Do you ever see your parents talking.

[James]

About money when you grew up, when times got hard? Yeah, they would talk about, about making cuts, things like that. Being more disciplined about money around this time around Christmas, you know, it's not going to be much happening. You know, I remember those conversations. But as far as anything else, you know, like my, like I said, my dad was a breadwinner, so the money began and stopped with him, you know.

[Ramit Sethi]

What'd you dad teach you about money?

[James]

Work hard. There's a lot of things that growing up and some of the mistakes he might have made with credit and things like that. He would try to warn me of those traps, but he always, you know, would tell me, you know, get a job, work. You know what I mean?

[Ramit Sethi]

That sounds like a good lesson.

[Lakeisha]

Lucky you that you got that heads up.

[Ramit Sethi]

So that's like teaching you a work ethic. Work hard. Sounds like he worked hard. Work.

[James]

He did.

[Ramit Sethi]

You'd see him go off to work, come home from work. Okay. What did he do, by the way?

[James]

He was in construction. He was an iron worker and then he became a pastor full time.

[Ramit Sethi]

Wow. Yeah, that's interesting. Big pay cut. Yes.

[James]

Yes, that was, that was definitely an experience.

[Ramit Sethi]

And how did that affect the family?

[James]

He worked for the city when he was working. So we're doing well, you know what I mean? We were. We probably was middle class at that point. And then when he went into ministry full time, it definitely was a fall off. It was. And so I had to be about 16 when that happened.

[Ramit Sethi]

So. Interesting you say that because it's very common that when I talk to people and they had a big change in their family socioeconomically, it's very common. For some cosmic reason, I don't know why that it happens when the kids are around 14 to 18. Something happened. Yes, very common. And usually it's the dad, you know, especially back in the day, dads were often primary breadwinners and they will get laid off or their business will go out of business, or in your case, your dad took a big pay cut. And at that age, 16 year olds are very smart. They know what's going on. They don't understand the nuts and bolts of money, but they know that my family just changed.

[James]

Yeah.

[Ramit Sethi]

How did that affect you going forward? You're 16, 17, 18. What happens to you?

[James]

I guess that kind of shaped how I felt about finances and things of that nature, about having to struggle, having to fight for certain things, you know, because I mean we were, we were struggling. At one point it was four of us living, four children. It was a struggle at some points. So I guess I do try to hold on to money as much as I can. Try to have at least something in my bank account. And that's been kind of a struggle lately as well. But other than that, I think that just shaped me and I think that kind of get me to the point where I am now that I want to do something more than what I have been doing. I don't want my daughter and now our children to be in a place like you said at 16 and be a big drop off and we have nothing saved. You know what I mean? These, these jobs are finicky, you know what I mean? They love us one day and the next day they would lay us off.

[Ramit Sethi]

How old is your daughter?

[James]

11.

[Ramit Sethi]

It's pretty interesting. Yeah. Five years from now, how old she going to be?

[James]

16.

[Ramit Sethi]

I don't know why, but there is something magic about that age range. Yeah. Looking back now, as a 45 year old man, a father, when you zoom out, what do you make of that? Your journey with your family once you left the house, as it relates to.

[James]

Money, even though it was a struggle, I survived.

[Ramit Sethi]

That's right. What else?

[James]

I could have did better if I listened to some lessons. Probably could be at a better place right now.

[Ramit Sethi]

That's interesting. Maybe like lakeisha could do better if she listened to some lessons from you. Do you think maybe that comes out a little bit?

[James]

Yeah.

[Ramit Sethi]

Here's an unusual question. When you look back at the journey, look at the 5 year old James, 7 year old, 10 year old. As it relates to money and the journey you went on, what do you feel? When you see that journey, what do you feel?

[James]

I don't know. At that age I probably feel joy because I didn't know anything.

[Ramit Sethi]

How about now as a 45 year old, looking back on that journey, what do you feel?

[James]

I don't know.

[Ramit Sethi]

You talk about your feelings a lot.

[James]

Not really.

[Ramit Sethi]

Okay, I get it, I get it. You ever gone to therapy?

[James]

Yes, I just started therapy recently.

[Ramit Sethi]

Oh, good. What caused you to start lakeisha?

[James]

I have some PTSD with some past relationships.

[Ramit Sethi]

Okay.

[James]

And she. I don't want to mess it up. So I started therapy.

[Ramit Sethi]

That's cool. Yeah. The reason I ask is men in general, we're not really taught to talk about our feelings.

[James]

Yeah, probably.

[Ramit Sethi]

There's some cultural elements as Well, I know for me, Indian people are definitely not talking about our feelings. We're not going. You don't see an Indian person in therapy, I'm gonna tell you that. Right. There's no Asians and there's no Indians in therapy.

[James]

Yeah.

[Ramit Sethi]

This generation. Yes. But nobody old. No.

[James]

Right, Exactly.

[Ramit Sethi]

Is that the same?

[James]

Absolutely. It is.

[Ramit Sethi]

Really? Okay.

[James]

Yeah. Absolutely.

[Ramit Sethi]

Yeah. Okay. That's. Well, I gotta say, I love. I love breaking the construct.

[James]

Yeah.

[Lakeisha]

Right.

[Ramit Sethi]

Okay. There's no Indian people in therapy. Well, guess what? I'm there.

[James]

Exactly. Yeah.

[Ramit Sethi]

That's cool. Yeah. Lakeisha, what do you feel as you hear James describe his upbringing?

[Lakeisha]

It makes sense. I don't know if I'm supposed to feel this way, but I feel empathy for him. To me, it's more motivating for us to develop solutions and, you know, have this conversation and continue on the path that we started to get on the other side.

[Ramit Sethi]

Yeah, I like that.

[Lakeisha]

Our past.

[Ramit Sethi]

I love that. I think sometimes when we're trying to understand our partner or anybody, to be able to really hear how they grew up, and I mean, these very specific things, like, oh, my gosh, your dad took a major pay cut when you were 16. That's got to have been tough. And, oh, my gosh, these were the phrases you heard around the house. Like, whoa, that. That really share tells me a lot. I'll tell you what I feel. I feel inspired because, James, it sounds like your dad taught you to work hard, which I love. I love a parent teaching their kids a good work ethic. I love it. I feel inspired because it sounds like there was a lot of love in the family just from the brief description you shared. And I feel sad. I feel sad that a lot of the messages you got about money were negative and that it actually got harder. In fact, you said something that. That really stuck with me, which was, my dad taught me to work hard. And what was the second part of that?

[James]

Just get back. Yes.

[Ramit Sethi]

And that's a powerful lesson, Good or bad? And I think the idea that you were taught to just get by probably over and over, kind of sticks with you. The same way we heard how Lakeisha's lesson from her mom about shopping in the slot machine, that sticks with you too. So, you know, the bad news is that stuff sticks with us. The good news is lots of other people grew up similarly, and we could change it if we want to.

[James]

Absolutely.

[Ramit Sethi]

All right, what are you all noticing about this right now, this conversation? How are we feeling?

[James]

I kind of feel relieved because it's a lot of things that just like my therapy sessions. There's a lot of things. Just talking about certain things, it comes out. And so it's a lot of things I'm relieved about right now.

[Ramit Sethi]

Yeah, I love that. I like watching you kind of go back in time and think about something that happened. I can almost see it in your face.

[James]

Yeah.

[Ramit Sethi]

I can see you connecting with where you came from. That's pretty cool.

[James]

Yeah.

[Ramit Sethi]

Lakisha, what about you? How you. How you feeling?

[Lakeisha]

Feeling good.

[Ramit Sethi]

Sound a little nervous. You sound like I sounded. I don't know what the roller coasters are at the California state fair, but there's one that it's not that scary, but it is to me. And it's right when you go up and I'm like, okay, okay. And then you get to the top and I'm like, just kill me right now. I don't want to be alive anymore. That's how you sound, like you just saw what's about to come.

[Lakeisha]

Yeah. And that's a great synopsis of how I feel because I'm thinking to myself, you just finished talking about James and how he came up in his background and family. And I'm thinking to myself, oh, God, I'm next.

[Ramit Sethi]

That is true. But let me remind you, you called me. We'll be right back after this short break. The number one financial question that parents have is which account should we use to invest for our kids? You're always freaked out about this weird question. Listen, investing for your children who are just born can't even see yet is not the first thing you should be doing. The first thing you should do is make sure you have your numbers dialed in, including making sure your family is protected in case something happens to you. That means making sure you have life insurance, specifically term life insurance. And that is why I've partnered with Fabric by Gerber Life, the sponsor of this week's episode. Fabric by Gerber Life is term life insurance you can get done right from your couch, all online and on your schedule. You could be covered in under 10 minutes with no health exam required. It's all online, it's on your schedule, and they have over 18005 star reviews. Join the thousands of parents who trust fabric to help protect their family. Apply today in just [e-mail] ramit that's meatfabric.com ramit n e e t fabric.com ramit Policies issued by Western Southern Life Assurance Company. Not available in certain states. Prices subject to underwriting and health questions. Here's a Scenario, you're in a taxi with two friends you haven't seen in years. You're going from Midtown to Grand Central. It's a close taxi ride, and you're about to pull out your credit card. Your friend goes, I got it. It's all good. They pay the bill. It's good. You all give each other a hug. Nice to see you. And then eight minutes later, you get a Venmo request to split the freaking taxi ride. It blows my mind. Why is it that so many people turn into cheap asses over a $15 cab fare? But when it comes to our financial advisor, we are more than happy to pay a 1% fee. 1% doesn't sound like a lot, right? Must be nice to have somebody looking over my finances all the time. You don't pay your gardener a percentage of your assets. You don't pay your tennis coach a percentage of your assets. Why should you pay your financial advisor a percentage? There is a better way. It's called a flat fee. That's why I've partnered with Facet, a service that offers affordable, accessible financial planning. With Facet, you get flexible access to a team of financial planners and a team of professionals providing guidance across retirement planning, tax strategy, estate planning, and more. And instead of taking a percentage of your portfolio, there's an affordable flat membership fee. But if you are getting closer to retirement or you have a complex portfolio, or you just want a second set of eyes on your specific financial plan, then I highly recommend you check out Facet. You can book a free [e-mail] Ramit speak to them and decide if it makes sense for you. Check out their membership [e-mail] ramit Again, facet.com/ramit F A C E T. Sponsored by Facet, Facet Wealth, Inc. Facet is an SEC registered investment advisor headquartered in Baltimore, Maryland. This is not an offer to sell securities or investment financial, legal or tax advice. Past performance is not a guarantee of future performance. Terms and conditions apply. Now, let's get back to our conversation.

[Lakeisha]

The irony of what you were saying with the slot machine, that was. And you don't know it, but that was triggering for me.

[Ramit Sethi]

What? Why? Who is a gambler in your family?

[Lakeisha]

My mom.

[Ramit Sethi]

Really? So I just made that metaphor up. But yeah. Your mom was actually a gambler?

[Lakeisha]

Yeah. She was addicted to it.

[Ramit Sethi]

Yeah. Oh, my gosh. This actually makes so much sense. So she would take money, she would gamble. Would she lose a lot of money? Oh, yeah.

[Lakeisha]

I never knew the amounts. Like, she would never share that part, but yes.

[Ramit Sethi]

How did you know? When she had lost money, it would.

[Lakeisha]

Show up in different ways. So there would be times where she didn't come home. So she would stay at the casino all night long. And so we knew from her disposition when she came home if she lost or. I wouldn't say we would know if she won. It wasn't like there was just excitement, but we could sometimes tell how big of a loss it was. She was just exhausted, beaten, defeated, and yeah, it was just obvious.

[Ramit Sethi]

And then what would happen.

[Lakeisha]

When we were younger, we were just so happy that she was home after being worried about where she was all night that it didn't matter. So what, you lost, you're here. So we would just want to be around her. But I think. I think the older we got, the more it almost frustrating too, that it got where it was just we kind of knew to leave her alone and not that she would be angry or lash out or anything like that, but I mean, we knew that she probably wasn't in the best of moods. And then two, it was just more so like let her rest, mentally recover from whatever just happened. But we never knew the extent of what actually happened.

[Ramit Sethi]

How many siblings in your family?

[Lakeisha]

There was three of us.

[Ramit Sethi]

Your two siblings, how are they with money?

[Lakeisha]

Not great.

[Ramit Sethi]

Three siblings, all three, not great with money. What do you think that that says?

[Lakeisha]

I hate to default to that, because I do think at a certain point in time and age, even if you weren't taught it as a child or in high school, we can learn things. So I. I don't want to default to that. I feel like in a lot of ways that's an easy way out, but I can't ignore it either. The things we experienced, the things we saw growing up, money was disposable. We knew that it was always coming in. We didn't know from where, but it was always coming and it was always going.

[Ramit Sethi]

Where was it always coming in from? What'd your mom do for a living?

[Lakeisha]

My mom was a single mom. It varied. Mom, I made mention to writing bad checks and other things. So she actually went to jail for some time for financial crimes. That's another reason why I guess I was feeling those feelings. Because when you made mention to that age. Right. 14 to 16. I was in eighth grade when that happened. And she was gone until my sophomore year. So she's gone a couple years.

[Ramit Sethi]

What was the story in the family? Mom went to jail. Did you all say that?

[Lakeisha]

Yeah, I think the story everybody told either to themselves or to each other was for writing bad checks. I didn't know this until I was later in life. That's something that had everybody knew and kind of was, like, a thing. Even, like, before I was born, I didn't know.

[Ramit Sethi]

Oh, she was known for writing bad checks?

[Lakeisha]

Yes.

[Ramit Sethi]

Okay, fine. So she was known for writing bad checks for, like, a long time, maybe decades. And then she. What? She got caught?

[Lakeisha]

It caught up to her. Yeah.

[Ramit Sethi]

All right.

[Lakeisha]

And so when that happened, I was angry with her because it was avoidable. Like, you didn't have to do this. Also, I didn't know how she was funding the lifestyle that we had, but there was, like, designer clothes and, like, all of those things. I didn't know how. I much rather would have had my mom as opposed to anything she ever purchased. But that was just, you know, the reality of it at that time.

[Ramit Sethi]

It's tough to hear. It's gotta be a hundred times tougher to have lived it. So. I'm sorry you went through that.

[Lakeisha]

Thank you.

[Ramit Sethi]

What did she say when she came back her sophomore year?

[Lakeisha]

She apologized. She definitely said, I'm sorry.

[Ramit Sethi]

And how did you take that?

[Lakeisha]

I accepted it. The whole time she was gone. I never wrote her, though. I was adamant about that. I was angry.

[Ramit Sethi]

Okay.

[Lakeisha]

She wrote me lots of letters, but I refused to write her. I wanted her to feel my anger. I wanted her to feel what she did. The consequence of making that decision is a separation for me, and I wanted.

[Ramit Sethi]

Her to feel it. Wow, that's very mature for a eighth grader. Like, extremely. And then she came back, she apologized. And you accepted the apology?

[Lakeisha]

I did.

[Ramit Sethi]

I feel like I could learn a lot from you, because if somebody does something wrong, like, really wrong to me, I'm not accepting their apology. I'm like, see you in hell, you know? And here you are in 10th grade. You're like, okay, I accept.

[Lakeisha]

I wanted to believe that it was a mistake, and she realized it was a mistake and that it was a mistake that she would not make again.

[Ramit Sethi]

Is she still with us?

[Lakeisha]

Yes.

[Ramit Sethi]

Okay. And how's she doing financially?

[Lakeisha]

She's doing okay. And to my knowledge, there has not been any instances of anything like this. But there was one time, and I have to share this because this did something to me. I feel like, at a different level. When I was in college, this one bank used to send you your checks back after, you know, they cleared or whatever. So freshman year, I'm on campus, I'm away, and we'll never forget. I got a check, and it was in her Handwriting. But it was from my account and it was to Tiffany's. And it said on the memo line, mom's birthday gift. And it was like for 200 and something dollars, mind you, this is freshman year of college. So we've been through all of that before. And so I think at that moment I just felt like I cannot trust her, period. I can't trust, I won't trust her trust. When it comes to just reliability and believing in somebody and that they're going to do what's right and have your best interests at heart, I just.

[Ramit Sethi]

That's tough. Sounds like you made the right decision for you. I respect that. What connections do you see between the modeling that your mom provided for you with money and the way that you behave with money today?

[Lakeisha]

I don't value it. It's disposable. I'm not and have not been future oriented as it relates to money. My mom is in her 60s now and I don't know if she even has anything saved for retirement or what that looks like.

[Ramit Sethi]

What else?

[Lakeisha]

Definitely living in the now and just thinking about today.

[Ramit Sethi]

You said that your mom, you finally concluded freshman year was not trustworthy with money. Are you lakeisha trustworthy with money?

[Lakeisha]

I'm trustworthy with other people's stuff and things and money more so than mine.

[Ramit Sethi]

Why do you treat other people's money with more respect than your own?

[Lakeisha]

I don't know. For the longest I felt like I'm doing this thing to me, right? So like I'm spending my money. It's only going to affect me, right? And of course, obviously making sure and considering that my. My daughters always had what they needed. But I just felt like it's only affecting me. So there was nobody else to hold me accountable or that I had to answer to. If I took one of my checks in and decided to blow it, I had nobody to answer. Who's going to check me? Like nobody. Like nobody knows because it's mine. It's damaging. And at some moments, in times I did not care.

[Ramit Sethi]

Do you know why?

[Lakeisha]

No, I don't.

[Ramit Sethi]

You ever thought about it? Why do I continually get in these financial situations? Why do I make these choices? Why do I end up here? What have you concluded?

[Lakeisha]

Historically, I feel like I have not thought about the future because the future seems so far away and I wanted to enjoy my money now, however, I will say the older I get, like now, even though the future is. Does still seem far away, I am terrified that it's going to be here before I know it. And I'M not going to have anything to show for it. I think I always thought that I had time to figure it out.

[Ramit Sethi]

I do agree that most of us kick the can down the road for money, for flossing, for, you know, having a healthy relationship with our parents. I agree that's very common. I don't think that's the crux of this. We'll get to the crux of lakeisha's relationship with money right after this Quick pause to support our sponsors. I've helped thousands of people start successful businesses through my business programs. Dating coaches, nutritionists, MCAT tutors, consultants and I have a big tip for anyone starting a business in 2025. Keep it simple. Don't get stuck in the weeds worrying about the perfect about me page on your website or the alignment of your font. It really doesn't matter. Instead, focus on landing your first sale. If you're selling online, Shopify, this episode's sponsor, can help make it happen. And once you start getting sales and you have so much money you don't even know what to do with it, then you can work on all these tiny little details. Shopify makes it simple to create your brand, open your business, and get your first sale. With thousands of customizable templates, you can get your store up and running easily. No coding or design skills required. Plus, they help you grow your business, supporting you with things like shipping, taxes and payments from one easy to use dashboard. With Shopify, your first sale is closer than you think. Establishing 2025 has a nice ring to it, don't you think? Sign up for your $1 per month trial period at shopify.com ramit all lowercase go to shopify.com ramit to start selling with Shopify today. Shopify.com ramit welcome back. I want to get to the bottom of Lakisha's relationship with money. And we can't do that without talking about a pivotal moment in her financial life. Her bankruptcy. You've been bankrupt, correct? Yeah, once.

[Lakeisha]

No, I actually filed twice, but the first time it was dismissed.

[Ramit Sethi]

That's out of the ordinary. So there's gotta be something besides like, oh, I thought there would be time later. What might it be? I'll give you a hint. You said something really interesting. You said, there's nobody to check me. I'm just doing it on my own. If I wanted to spend all my money, I spend it. Do you think I would ever say there's nobody to check me?

[Lakeisha]

No.

[Ramit Sethi]

Why?

[Lakeisha]

I don't think that you would ever say that because you don't need anybody to hold you accountable most of the time.

[Ramit Sethi]

That's true.

[Lakeisha]

James can attest to this very early on in discussing finances. I have literally asked for accountability. I feel like I need it.

[Ramit Sethi]

Is he the right person to ask for accountability? Isn't James in a bunch of debt?

[Lakeisha]

No, he's not. And then too, I feel silly even saying that because I feel like you're a grown woman. Like, why? Why do you need somebody to hold you accountable for your own stuff?

[Ramit Sethi]

Everybody needs some accountability in some part of life. I have a trainer. They hold me accountable. They push me further than I would push myself, and I pay them. I don't feel any. I don't feel shame or embarrassment about it. No problem. You ever go to the grocery store and buy one of those salads that are pre made, you're just like, hey, I'm gonna buy a little bit of convenience. That's okay. Okay. So I don't feel any shame about it as long as I can afford it. But accountability comes in lots of forms. I probably don't think James is the right person to hold you accountable in the majority, but I do think that the two of you working together can go pretty far. We're getting close now. You said there's nobody to hold me accountable. Nobody look over my shoulder, nobody check me. What is the implication there? That if I don't have somebody to do that, I am, what, on my own? Yes, you are on your own, which for you is really scary, right? It is incredibly scary. And you are irrational and unreasonable. You have not been married before, correct?

[Lakeisha]

No.

[Ramit Sethi]

So you've been doing this on your own. You have how many kids?

[Lakeisha]

Two.

[Ramit Sethi]

Two kids. Oldest is 19. There's something, this belief that if I don't have something external, then I am irresponsible.

[Lakeisha]

At one point, I even asked my daughter. I thought it would be a good learning experience for her. I basically was an open book financially with her and showed her how much I make, what goes where, what debt was everything. I said, this is my budget. Like, I need your help in making sure that we stick to this. We stick to this. Right. Because it's a group effort. I've been wanting somebody and needing feeling like I need somebody to do this with forever to the point where I've even resorted towards, you know, soliciting my daughter to help. It scared mess out of her, so she got really responsible financially. But that was very fleeing. Now it. She's repeating some of these habits that I had.

[Ramit Sethi]

Your daughter is repeating the habits that you have. And you are repeating the habits that.

[Lakeisha]

Who had My mom.

[Ramit Sethi]

Yeah. Story as old as time.

[Lakeisha]

Yeah.

[Ramit Sethi]

One of the reasons that I was so excited to talk to you is that I love to be able to see a couple chart their own path. This is our rich life. Of course we have to acknowledge how we grew up. We have to honor our past. We can take the best of it, and we get to choose what is the next chapter of our life. Always knowing that if we have children, as the two of you do, we can help change the trajectory of our family legacy. But that takes some extreme agency. The ability to feel like, wow, we have control, we can change stuff. And an extreme long term view, which I think both of you will admit you don't have.

[Lakeisha]

No.

[Ramit Sethi]

Well, the good news is it can be done. What I hear from you, lakisha, is a feeling that you want somebody to help you, which is totally reasonable. You've been raising kids solo, doing a lot solo for a long time. That is perfectly reasonable to me. I get it. But I also noticed that you have not done the work yourself. Like, for example, have you read my book?

[Lakeisha]

Yes. I'm more than halfway through it.

[Ramit Sethi]

It's only been out for 15 years.

[Lakeisha]

So let me tell you why I have not gotten through it. I'm a very analytical black and white, like that person. And so as I'm reading, right. I will stop. And when you say, okay, do this in the next week until I do that thing, I can't move on to the next chapter. I just can't.

[Ramit Sethi]

Did that sound like a good answer to you in your head? Because it sure didn't sound good out loud.

[Lakeisha]

No, no. I just needed you to know that I'm waiting to do this step before I move on.

[Ramit Sethi]

All right. Do you see the pattern here? It's not about the book. I'm sure you will finish the book at some point. What pattern are you exhibiting right now?

[Lakeisha]

Inconsistency.

[Ramit Sethi]

Yes, that's true.

[Lakeisha]

Not completing things.

[Ramit Sethi]

No follow through.

[Lakeisha]

And just I start things that I don't finish.

[Ramit Sethi]

No follow through. Which is really hard because in life, ultimately, that's what matters. Everyone can start a bunch of stuff, but follow through and then also telling stories about justifying why. And there's a story you're telling yourself which you feel very self satisfied telling the story. Oh, here's the reason. Oh, will he buy it? I don't know. And to me, all of this comes down to a theme. Can I get away with it? Can I get away with it? Does that Sound familiar at all to you?

[Lakeisha]

That absolutely does.

[Ramit Sethi]

Can I get away with moving money here, moving money there, declaring bankruptcy, holding off on this Klarna thing? Can I get away with it?

[Lakeisha]

Yeah.

[Ramit Sethi]

Can I get away with not finishing the book? But I actually did chapter four, but then I skipped to six, but then I'm gonna do five later when I tell Ramit, I definitely am gonna tell him that I'm a black and white person. Can I get away with it? This sound real? When we go to Target, I got my list. It's all ready. The bags are in the trunk. Can I go in and check out and get $50 of stuff? Which by the way, brings me back to my mom because she walked up to the counter and she tried to charge it, not knowing if the check would go through or not. Mom saying, can I get away with it? Now, one last question for you. Have you ever seen your daughter try to get away with it?

[Lakeisha]

Absolutely.

[Ramit Sethi]

Okay. What do you think of this?

[Lakeisha]

That's insane. You are right. I don't understand why I have not gotten here sooner. I want to fire my therapist.

[Ramit Sethi]

Fire them.

[Lakeisha]

I want to, like.

[Ramit Sethi]

What do you mean, want to. What's the problem? Send an email. Done.

[Lakeisha]

I've been wanting. Yeah, that's a whole nother story.

[Ramit Sethi]

I have a new service called nass no as a service. And anyone who has a problem saying no in this case, firing somebody, come to me. Not a problem. I can handle that. In 15 seconds, I'll do while I'm eating chips and salsa. Anyway, what else do you notice about this? Can I get away with it? You see it in other parts of life.

[Lakeisha]

It is the, the sad motto of my life. Can I get away with it? Not only as it relates to my children, but even academically, Right. College, high school. Can I get away with getting an A on this test but not doing homework? On my tombstone, it should read, she got away with.

[Ramit Sethi]

Do you normally get away with it?

[Lakeisha]

Yes.

[Ramit Sethi]

It's interesting, right, because your mom got away with check writing for 15 plus years, then she went to jail, and then she continued with the financial fraud afterwards. She kind of. Aside from the two years, she kind of got away with it, right?

[Lakeisha]

She did. She did.

[Ramit Sethi]

And so you pick up on that consciously or unconsciously. It's like, oh, I can like do all this stuff. Get away with it. You're probably pretty smart in school. So you get good grades. Does it hit you in college? Does it get harder then?

[Lakeisha]

No.

[Ramit Sethi]

Okay, so you, you got away with that and you declared bankruptcy. Got away with that. But here you are today, got debt, no savings, and frankly, you're still, quote, getting away with it.

[Lakeisha]

I want you to tell me it's possible. There was some app, calculator, and I plugged in some numbers and I sent it to James and I said, look, it's possible if we start today, like we can have this much in 25 years. Let's say by the time I'm 65, 67, like we can start today. So I want you to confirm that what I hope and dream for us and for our children is possible.

[Ramit Sethi]

You want me to confirm a calculation for you? I feel like Google can do that or calculators can do that. You don't want somebody to check. You see, here's why I'm asking. Because I often find a lot of people, they infantilize themselves. They kind of ask their partner, like, I want you to like, make sure I'm not overspending too much. And they basically put themselves in this subservient financial position. It drives me crazy. Because we're all adults here. I'll not allow one person to put themselves in that role. And then guess what? Guess what role the other person is put into. The voice of reason, basically the parent child dynamic. I hate it. Is that what's happening here?

[Lakeisha]

Sometimes. But here's the thing I don't understand. If you did not from a psychological standpoint, if you did not get that thing maybe that you needed as a child, did it not make sense that you would want that or desire that or maybe even need that to a certain extent as an adult, of course.

[Ramit Sethi]

What you are doing might make perfect sense. That's where a good therapist can work with you and help you understand what unmet needs do I have? I'm sure there are some. Just from the stories you told me about your upbringing, how am I manifesting those right? And then how do I meet those needs that are legitimate in a more healthy way? So the target example is such an interesting dynamic because notice the roles that you each put yourselves willingly into, but you never stop to think about what happened. You get to the store, I just love this slice of life because it's like 20 minutes, but it tells me everything. You get to the store, you've already done the pre work of ordering ahead, which is logistically, you need some chops for that. You get there. James goes, I'm going inside for a second. You go, let me come too. I'm going to walk around. And he instantly takes on the role of voice of reason. Are you sure you need to. And you take on the role of lakeisha. What?

[Lakeisha]

I felt like a child. I looked like a child. I literally went from one section to the other like a child would. From toys to games. Like, I did that.

[Ramit Sethi]

Okay, so the kid walks around and like you said, irresponsible. Yes. As it relates to money. Because we're going to look at your csp, and it probably was irresponsible, financially speaking, to go in there. But you go in there already, knowing that you got your bags in the trunk, and then. What's that phrase going unconsciously through your head?

[Lakeisha]

And I get away with it.

[Ramit Sethi]

Can I get away with it? Can I get away with it? Considering that I. I'm in debt, considering that I don't have any savings, considering that I already have everything I need because it's in the trunk already, Can I get away with it? So when I share these examples, I don't share that. These to berate you. Not at all. I hope you can hear that in my voice.

[Lakeisha]

Absolutely.

[Ramit Sethi]

I'm here, like, as your detective, I'm trying to knock on doors and figure out what's going on here and start to make some connections again. My hope is that you hear this, you receive it, and you go, oh, my gosh. Like, I never made that connection between my mom saying, can I get away with it? Me saying, can I get away with it? In different parts of life, and perhaps even my daughter saying, can I get away with it? James, Same for you with your dad. You know, work hard, but just get by. It shows up everywhere. Shows up in your csp, which I would like to take a look at now. What was it like creating the CSP together?

[James]

It was okay. It was definitely shocking to see some of those numbers on there, just to see everything just planned out that way. It really shows you got a lot of work to do.

[Ramit Sethi]

What else did it show you?

[James]

That if we do get it together, it's possible that we could get out of this mess that we're in.

[Ramit Sethi]

I like that. I like that. Yeah, I noticed, James, that you're kind of future oriented. Like, when I ask you what'd you notice about these numbers? You say we could hopefully get out of it, which I think is great. Very positive. But, you know, it's interesting that you didn't say, wow. It made me reflect on what decisions I made to get into this situation.

[James]

Yeah, that's. That's true.

[Ramit Sethi]

Do y'all see what I'm trying to do with you here? Like, the reason we haven't looked at the numbers yet at all is we can't go forward unless we understand our past.

[James]

Okay, I know I'm jacked up. I know I'd have made some decisions that I know I shouldn't have made.

[Ramit Sethi]

Do you know why you made those decisions?

[James]

I would say out of necessity. For example, if I needed a car, did I necessarily have to go get a car with payments that were high? I could have made a different choice as far as that is concerned. And that has been consistent throughout my adult life, getting things that I. I probably know I can't afford. But I will convince myself this is out of necessity.

[Ramit Sethi]

Do you know why you justify yourself?

[James]

Because I really want it.

[Ramit Sethi]

You know, that's actually a pretty good answer. One thing that I think about and talk about a lot, that I don't hear either of you think about or talk about a lot is my own future. I deserve to have an even better future than I'm having today. Specifically. I don't just mean like words like, oh, let's have a good life. No, I mean like, I'm putting money every month towards investments because I deserve it. I deserve to live a awesome life. And I'm going to. I understand my numbers. I know exactly how much it's going to turn into. I know when and I set it up so that it's going to happen. It is a guarantee. I don't hear either of you talking like that. What's the difference?

[James]

Your statement is way more optimistic than the way we're. We have the speaking, you know, and I think we just get used to the way we're living.

[Ramit Sethi]

And what else?

[James]

I did say I work hard, but me working hard and working since I was 18 years old is. Has not given me anything. You know what I mean?

[Ramit Sethi]

Do you know why?

[James]

Because I have not committed myself to investing in the right things I need to invest in.

[Ramit Sethi]

Yeah, I don't think you prioritize your future self. You prioritize what you wanted at the time, which is okay if you can afford it. But, you know, you probably didn't take the time to read about compound interest, personal finance, that kind of thing, right? Correct. All right. That's paying yourself first. That's giving yourself a future that's bigger than today. Lakisha, what about you?

[Lakeisha]

Just going back to the question about the CSP and us filling out together. One thing James said that kind of stuck out to me from our conversation during that time was your line item that says, like, guilt free spending. He said, like, that's. There's no such Thing basically as guilt free spending. So I didn't say it to him then but I kind of thought to myself in my head maybe he does feel a certain sense of guilt when spending.

[Ramit Sethi]

But what about you Lakeisha? What about the fact that you have no savings investments. You're almost 40 years old. Why is that?

[Lakeisha]

It is exactly what you said it was. I have not considered my future self at all. I've had jobs where I had a 401k or something and I have cashed those out. I have not rolled them over into anything. And so I have set my future self up for failure.

[Ramit Sethi]

That's correct. A lot of way you've robbed them. That's the word. Rob. Literally robbed. Taken money from them. Yep. So I can't make you change. You have a lifetime of attitudes and behaviors when it comes to money that would need to change. It's a very complex situation we have here. I do want to look at the numbers because they tell a lot. I'm glad you created this together. We're going to take a look at it now. Lakisha. Let's have you read off the word in bold and then each person's number next to it. I'll do the first one just as an example. Assets James 0 Lakisha 21,000 Investments 000.

[Lakeisha]

Savings 000 Debt 25,846 For James Lakeisha.

[Ramit Sethi]

$165,000 Total net worth for James is how much?

[Lakeisha]

Negative $25,846.

[Ramit Sethi]

Uh huh. And how about for you?

[Lakeisha]

Negative $144,000.

[Ramit Sethi]

All right. Let's start here. So what do y'all notice about these numbers?

[Lakeisha]

Vastly different.

[James]

Vastly different. Yes.

[Ramit Sethi]

So James you have about $26,000 of debt. Where? What's that from?

[James]

I had a repossessed car, credit cards and some loans. I'm scared to do things. So I guess that's why I didn't accumulate a lot.

[Ramit Sethi]

Scared to do things means I'm scared to save money. I'm scared to invest. Is that what you mean?

[James]

Yes I am. I have a business degree so I've learned a lot of things about investment and things of that nature. I guess I'm just afraid to do. Do something about it.

[Ramit Sethi]

I can empathize with that. And it's clear that this fear is not serving you. It's literally costing you hundreds and hundreds of thousands of dollars. This fear. So I will say the good news is that I'm so glad you are tackling it with the help of a therapist and hopefully Maybe some other folks. It's not a normal fear. Like, oh, I'm scared of a spider. I don't want to be in a room with a spider. This is causing, like, severe lifestyle financial issues. Probably more than that. All right, let's talk. Lakeisha Lakisha. You have $21,000 in assets. What is that car? Okay, what kind of car?

[Lakeisha]

It's an suv.

[Ramit Sethi]

You got an Infiniti suv?

[Lakeisha]

Yes.

[Ramit Sethi]

Hold on. Should we just do the thing where you proceed to tell me how you need it for the kids? Go ahead. Let's just run that story. Go ahead. I'll wait.

[Lakeisha]

My car was paid off. I had a Volkswagen Jetta paid off since the end of last year. My daughter needed a car in college. I let her buy my Jetta from me, and so I needed a car. Did it have to be an Infiniti SUV? No.

[Ramit Sethi]

And how much did this Infiniti SUV cost you?

[Lakeisha]

My car note is $820 a month.

[Ramit Sethi]

Okay, and how many months?

[Lakeisha]

60 months.

[Ramit Sethi]

Okay. How much you pay for gas every month?

[Lakeisha]

$300. I work from home. There is not a lot of driving.

[Ramit Sethi]

All right, fine. Let's continue moving. So we're going to get to first, let's go over the numbers. Then we're going to talk about what it means.

[Lakeisha]

Okay.

[Ramit Sethi]

What do you see, Lakisha, already in your decision to buy an Infinity? By the way, what's the total price.

[Lakeisha]

Of this infinity is like 32, 33,000.

[Ramit Sethi]

It's a used one.

[Lakeisha]

Yes.

[Ramit Sethi]

Okay. I mean, could be worse. Don't take this as me complimenting you for getting an Infiniti suv, but we can. We can talk about it. No savings and no investments.

[Lakeisha]

How come I don't have a good reason?

[James]

I don't know. It's heartbreaking. I tell you that. Because I'll be 45 in a few weeks. You know, I wish I did have savings. I just didn't have a future, James. And in my view, when you look.

[Ramit Sethi]

At zero savings and zero investments, do you both feel anything about that? Guilt.

[James]

Feel good?

[Ramit Sethi]

Yes. And Lakisha fear.

[Lakeisha]

If something were to happen, we have nothing. Like, we would have to borrow money in order to mitigate whatever that something is.

[Ramit Sethi]

And have you ever gotten in that situation, Lakisha, like, zero savings? Maybe you had you got sick or you lost your job or anything like that?

[Lakeisha]

Fortunately, no, I have not.

[Ramit Sethi]

You're basically driving without a seatbelt. You know, most of the time you're going to be fine. The one time you're not, and it's over and nobody can tell you. No. I'm not a parent here to nag you. Put your seatbelt on. Build a savings account. I can't do it. Only you can. But when I see this, I feel extreme fear. I'm not afraid of a lot. I'm afraid of teenage girls because they're mean. And I'm afraid of big old insects, you know, that fly, maybe roller coasters. But I'm afraid of this. Wow. Zero savings, zero investments. And at the ages of 38 and 45, $190,000 of debt. You can hear the extreme concern in my voice. We have a lot of work to do to put them on a path to their rich life. My question is, are they willing to. We'll find out next week in part two of my conversation with Lakisha and James. We'll dive deeper into their conscious spending plan and see what changes they're willing to make to get them on the right path. As always, thank you for watching and thank you for listening. I will see you next week.