Episode 217: “Are we broke…or just bad with money? (Part 1)”
Release Date: July 15, 2025
Host: Ramit Sethi
Guests: Dominique (33) and Chris (34), engaged parents of a two-year-old son
Introduction
In Episode 217 of Money For Couples with Ramit Sethi, Ramit engages in a candid and raw conversation with Dominique and Chris, a young engaged couple grappling with significant financial stress. This episode delves deep into how money psychology influences their relationship, uncovering the root causes of their financial strain and the emotional turmoil surrounding it.
Understanding the Financial Strain
Dominique's Perspective: Dominique expresses a profound sense of overwhelm and isolation in managing their finances alone. She states:
“I feel like we're almost like one really big couple way from just losing everything.”
[01:04]
Chris's Perspective: Chris reveals a sense of shock and realization about their financial mismanagement:
“At the moment, no, I don't think we can afford it. I really. I really don't.”
[16:37]
Key Financial Metrics: Ramit breaks down their financial situation using the Conscious Spending Plan (CSP):
- Total Assets: ~$1,003,100
- Investments: $24,526
- Savings: $13,198
- Debt: $615,339
- Net Worth: $425,485
- Combined Annual Income: ~$180,000
- Fixed Costs: 69% of income
- Investments: 13%
- Savings: 18%
- Guilt-Free Spending: 0%
Root Causes of Financial Stress
High Fixed Costs: Their fixed costs consume 69% of their combined income, significantly higher than the recommended 50-60%. This excessive allocation leaves little room for savings or investments.
Lack of Guilt-Free Spending: With guilt-free spending calculated at 0%, Dominique and Chris find themselves unable to enjoy discretionary expenses without financial guilt, leading to increased tension.
Debt Management: A substantial debt of $615,339, primarily from mortgages and credit cards, contributes heavily to their financial anxiety.
Communication Breakdown
Recreational Conversation Analysis: Ramit facilitates a reenactment of a typical financial disagreement between Dominique and Chris about purchasing another vehicle. This exercise highlights their communication barriers and emotional responses.
-
Dominique's Concerns:
“Our house is expensive. But I don't think we should get rid of it.”
[05:25] -
Chris's Approach:
“I think we should get it. Look into getting another vehicle because we need to have something in case something happens.”
[09:26]
Emotional Responses: Both parties exhibit feelings of being overwhelmed, misunderstood, and annoyed, rather than addressing the financial issues constructively.
Impact of Upbringing on Financial Psychology
Chris's Upbringing: Chris shares his childhood experiences of financial instability, witnessing his parents' struggles and eventual foreclosure of their home. This background fosters a "live in the moment" mentality towards money.
“Tomorrow's not promised. So you know, live in the moment, have fun while you got it.”
[01:28]
Dominique's Upbringing: Dominique recalls her father's mantra of "we're broke," instilling a fear-based relationship with money despite their actual financial status.
“We're screwed.”
[07:56]
Current Financial Behaviors Influenced by Past
- Chris: Tends to make financial decisions based on feelings rather than numbers, leading to impulsive spending.
- Dominique: Adopts a scarcity mindset, resulting in excessive spending on non-essential items to compensate for perceived financial inadequacies.
Conscious Spending Plan (CSP) Evaluation
Initial Assessment: Dominique initially perceives their finances as dire upon reviewing the CSP, feeling "screwed" due to high debt and low savings.
"We're screwed."
[07:56]
Detailed Breakdown: Ramit guides them through their CSP, revealing discrepancies between their perceived and actual financial status. Notably, Dominique's investment contributions are misrepresented, highlighting gaps in their financial understanding.
Adjustments Made:
- Corrected investment figures to reflect actual contributions.
- Identified significant overspending in guilt-free categories, particularly eating out and personal services.
Overthinking and Reactive Financial Management
Dominique's Overthinking: Dominique admits that overanalyzing financial decisions leads to paralysis and inaction.
“I could be nicer. I mean, I could hear him out, you know, and I.”
[12:18]
Chris's Reactive Approach: Chris acknowledges a lack of proactive financial planning, often reacting to financial crises rather than preventing them.
“I feel like I need to be more positive for myself and not beat myself up about certain things.”
[54:25]
Lessons from Upbringing and Their Impact
Chris's Takeaways: Growing up in a middle-class family that faced financial struggles, Chris developed a belief in spending freely when possible, fearing future scarcity.
Dominique's Takeaways: Dominique internalized her father's message of scarcity, leading to a constant fear of financial instability despite their substantial assets.
Conclusion and Insights
Ramit Sethi's session with Dominique and Chris sheds light on the profound impact of money psychology on relationships. Their upbringing instilled conflicting financial beliefs—Chris's "live in the moment" mindset versus Dominique's ingrained scarcity mentality. These divergent beliefs manifest in poor financial communication, excessive fixed costs, and a lack of proactive planning.
Key Takeaways:
- Align Financial Goals: Couples must openly communicate and align their financial goals to avoid hidden resentments.
- Move Beyond Emotions: Financial decisions should be based on numbers and data rather than emotions or past conditioning.
- Proactive Planning: Anticipating future financial needs and planning accordingly can prevent reactive financial crises.
- Address Money Beliefs: Understanding and reshaping inherited money beliefs is crucial for building a healthy financial relationship.
Notable Quotes:
-
Dominique on financial despair:
“At that moment I'm just like, we have no money, we're screwed.”
[01:15] -
Chris on financial education:
“We're doing something wrong.”
[33:30] -
Ramit on changing beliefs:
“If we can change our beliefs, then sometimes we can change our realities.”
[79:21]
This episode serves as a crucial first part in understanding and addressing the financial struggles that many couples face, setting the stage for actionable solutions in part two.
Stay Tuned:
In Part 2 of this conversation, Ramit will explore strategies to handle rising childcare costs, develop long-term financial plans, and ensure that Dominique and Chris do not pass down detrimental money messages to their son.
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