220. “I carry the baby, the bills, and the stress”

Summary

Podcast Summary: Money For Couples with Ramit Sethi Episode 220: “I Carry the Baby, the Bills, and the Stress” Release Date: August 5, 2025

In Episode 220 of Money For Couples with Ramit Sethi, Ramit delves into the complex dynamics of financial management within a marriage, highlighting how differing money mindsets can lead to tension and resentment. This episode features a candid conversation between Ramit and a real couple, Monica (36) and Michael (33), who are navigating the financial strains that come with their first child and differing income contributions.

Introduction to Monica and Michael

The episode begins with Ramit introducing the financial struggles faced by Monica and Michael. Monica is responsible for paying all household expenses, including rent, utilities, childcare, and vacations, despite Michael working three jobs. Michael, earning $95,000 a year, feels like a "leech" due to his inability to contribute equally to the household finances [01:01].

Notable Quote:

"I do feel inferior at times. I feel like a leech." – Michael [00:54]

Financial Strain and Communication Breakdown

Monica expresses her growing resentment over the uneven financial burden, leading to frequent arguments about money. A recent disagreement about categorizing a surplus in their budget exemplifies their communication issues. Monica felt blindsided when she discovered that Michael had allocated extra funds without informing her, causing frustration and feelings of isolation [03:30].

Notable Quotes:

"I feel like I'm always still trying to catch up to be part of the table and not always feel like I can be at the table." – Michael [01:13]

"There's never a true resolution or, like, a true way of path forward." – Michael [13:53]

Ramit’s Coaching and Identifying Patterns

Ramit guides Monica and Michael through their Conscious Spending Plan (CSP), revealing a household income of $200,000+, investments of $88,000, savings of $11,000, and debt totaling $145,000, predominantly student loans. With fixed costs consuming nearly 70% of their income, Ramit identifies the root causes of their financial stress:

1. High Fixed Costs: Nearly 70% of income is allocated to fixed expenses, leaving little room for flexibility [02:14].
2. Lack of Communication: Both partners avoid hard conversations about finances, leading to misunderstandings and unaddressed issues [05:28].
3. Emotional Disconnect: Michael’s self-perception as a provider and tool hampers emotional connection and effective financial collaboration [28:08].

Notable Quote:

"A lot of men… are living these lives of quiet desperation. They don't ask for help." – Ramit Sethi [30:00]

Addressing the Income Discrepancy

A significant point of contention arises from the income disparity, with Monica earning approximately $50,000 more than Michael. This imbalance contributes to Michael feeling inferior and unable to contribute adequately, exacerbating feelings of resentment and stress [13:44].

Notable Quotes:

"I do feel inferior at times. I feel like a leech." – Michael [00:54]

"I just can't believe that we make $233,000 a year." – Monica [99:20]

Practical Financial Adjustments

Ramit assists the couple in restructuring their budget to alleviate financial stress:

1. Reducing Fixed Costs: Cutting down on high expenses such as insurance and subscriptions to lower fixed costs from 68% to 63% [62:46].
2. Aggressive Debt Repayment: Encouraging Michael to pay an extra $100 monthly towards credit card debt, significantly reducing payoff time from 28 to 21 years [86:14].
3. Joint Financial Management: Establishing a joint account for shared expenses while maintaining individual accounts for personal spending, fostering teamwork and transparency [90:16].

Notable Quotes:

"We need to start paying off your debt aggressively… that could solve our problems." – Ramit Sethi [81:57]

"Monica, you make $233,000 a year. Why not aim to be a millionaire?" – Ramit Sethi [74:53]

Shifting Mindsets and Building a Rich Life

Ramit emphasizes the importance of celebrating financial milestones and fostering open communication. He challenges Michael’s self-view as a “Swiss army knife” and encourages him to embrace his role as a valuable partner deserving of recognition and celebration.

Notable Quotes:

"You are not just a tool. You are a partner." – Ramit Sethi [29:21]

"Partners celebrate when things are good, and they experience sorrow when things are not." – Ramit Sethi [31:04]

Follow-Up and Positive Changes

By the end of the session, Monica and Michael have made significant progress:

• Debt Reduction: Michael has reduced his credit card debt from $26,000 to $12,000, with a clear plan to eliminate it within the year.
• Increased Savings and Investments: Both partners have committed to increasing their contributions towards savings and retirement accounts.
• Improved Communication: They have adopted a more collaborative approach to financial planning, sharing both successes and challenges openly [99:54].

Notable Quotes:

*"Our conversations are now more big picture than just focusing on small details…" – Michael [99:20]

"Changes are on the horizon and my posture is different." – Monica [99:54]

Conclusion and Key Takeaways

Ramit concludes the episode by highlighting the importance of aligning financial goals, fostering transparency, and shifting from a deficit mindset to an offensive financial strategy. By addressing both emotional and practical aspects of money management, Monica and Michael are on their way to creating a shared vision for their rich life.

Key Takeaways:

1. Open Communication: Transparent discussions about income, expenses, and financial goals are crucial for marital harmony.
2. Debt Management: Aggressive repayment strategies can significantly reduce financial stress and debt lifespan.
3. Joint Financial Planning: Combining finances for shared expenses while maintaining individual accounts promotes teamwork.
4. Celebrating Successes: Recognizing and celebrating financial milestones strengthens the emotional bond between partners.
5. Mindset Shift: Moving from a solely provider role to a collaborative partnership enhances both financial and emotional well-being.

Final Thoughts: Monica and Michael’s journey underscores the challenges many couples face when navigating financial disparities and communication hurdles. Through Ramit’s guidance, they demonstrate that with commitment and strategic planning, it is possible to overcome financial stress and build a harmonious, prosperous future together.

Final Notable Quote:

"Monica, you make $233,000 a year. At this income level, you can go on offense." – Ramit Sethi [75:05]

---

Follow Monica and Michael’s Progress:

"We have started combining finances, paying off debt, and focusing on our collective vision. Our outlook for the future is much more optimistic now." – Monica and Michael [99:54]

For more insights into managing finances as a couple and building a rich life together, visit iwt.com/moneyforcouples.

Transcript

[Ramit Sethi]

What do you do if your partner is cheap? What do you do if you and your partner do not see money the same way at all? What do you do if you have been fighting about money for a month, a year, or even 20 years? Whether it's the third date or the 13th year? This September, I'm going to break down how these tiny questions about money can reveal big clues about how you and your partner think about money. Join me at Money and Couples live in Atlanta September 14th. And I'll be at Love and Money in Los Angeles September 26th with special guest Matthew Hussey. Reserve your [e-mail] events.

[Monica]

I'm paying literally all of the rent, all of the utilities. For a while I was working these crazy hours. I would be home with the baby overnight. Like, okay, this is all on me.

[Michael]

I would say for myself that I do feel inferior at times. I feel like a leech.

[Monica]

You'll probably see Michael shut down at some point.

[Michael]

It's being defensive, protective, and hiding behind the weight of everything versus being able to ever come up for air.

[Monica]

I was like, do I want to marry this person? Am I ready? Can I trust him? I have no idea how this guy really manages his money.

[Michael]

I just feel like I'm always still trying to catch up to be part of the table and not always feel like I can be at the table.

[Monica]

My bigger issue is not paying anything towards rent and utilities for so long.

[Ramit Sethi]

Is this working for you?

[Monica]

No.

[Ramit Sethi]

Listen to this line from their application. He feels like a non partner, and I'm starting to get resentful about how uneven our finances are for supporting our household. Michael works three jobs, yet Monica earns more. And she's paying for all the household expenses, including childcare and vacations, everything. And today I'm speaking with both of them. Monica's 36. Michael is 33. They've been together for two years, married for one, and they just had their first child together. Now, I am not a parent, but I have spoken to many, many couples and we all know that when there is a new baby at home, money becomes stressful. I read that application. The first thing I thought was, of course she's frustrated. Of course she's exhausted. Of course any new parents would be. Let's look at their conscious spending plan, which you can download for [e-mail] CSP household income 200,000 plus investments 88,000. Savings 11,000 and debt is 145,000, mostly student loans. Their fixed costs are nearly 70%. That number really jumps out when Your fixed costs are near 70%. I already can tell that you are overwhelmed. It feels tight because 70% of your money is already spoken for before the month even begins. And yet Michael is working three jobs. So here's the question. Why isn't he contributing more to the household finances? I want to understand what's going on. Let's meet Monica and Michael. Monica, in your application, you wrote something that caught my eye. You said, quote, I am paying for all our household expenses, as well as daycare, vacations, and other things. Carrying the finances has been tough but not terrible over the last year. However, I am concerned that resentment may start to creep in soon. Would you say that's accurate description of how you feel today?

[Monica]

Yes.

[Ramit Sethi]

Okay. Okay. Can you think of a time in the last few months where you were not on the same page about money as Michael?

[Monica]

Probably two days ago, when we did our csp, when we were preparing for this, I found out in real time that he had a couple hundred bucks that was going toward. I think you categorized it as a stock date, and then you said it was savings. The dollar amount is not. The problem is that there was surplus I didn't know about as the person paying for everything right now, like, really feeling the pinch. I'm like, oh, so you. You do have an extra 200 or whatever the number was, and I didn't know about it? And you just. You made a decision about it without speaking to me. So that kind of sucked.

[Ramit Sethi]

Okay, if I were sitting there with a clipboard and I were writing down the feelings that I could observe happening in those conversations, what would I write down?

[Monica]

You'll probably see Michael shut down at some point. Isolated, guilt, shame, defensive is not a feeling, but it's in there for me. I started off feeling optimistic, like, yes, let's make a plan. Let's talk. Let's see where the money's going. And then about midway, I feel like I can't ask him any more questions. So I start to get super selective about what I'm saying, how I'm asking. It feels like I'm walking on eggshells. And then I eventually shut down, so we both end up in silence, and it's awkward.

[Ramit Sethi]

Okay, how does that conversation end?

[Monica]

Well, maybe we should just talk about this another time. If I'm honest, sometimes I'll say, am I even allowed to ask you more questions? Or I'll say, well, I was just asking about row A8 because I don't understand what the formula is, or that the column wasn't labeled, and I'M truly just asking for understanding. But he takes it as I'm picking apart the numbers. So it ends with like, well, this isn't working. And we both kind of go our separate ways and then eventually come back to each other.

[Ramit Sethi]

Do you talk about it like you suggested?

[Monica]

The feature is usually a few weeks later turns into a month. So, for example, it's June. We haven't talked really about money in a formal way since maybe April. Could be March. I think neither one of us really want to have the conversation again because we're scared of how it's going to go. But yet we still hold that optimism for change.

[Ramit Sethi]

Michael, did anything that Monica just said surprise you?

[Michael]

No.

[Ramit Sethi]

Can you think of a time in the last couple of months where you didn't see eye to eye with Monica when it came to money?

[Michael]

Yes. Mostly I'll emphasize about childcare or things that's related to our daughter, whether it's Pampers, formula, things of that nature. Maybe, like groceries is another thing because it's a collective, but it's still very individual. Meaning she'll have a hundred and fifty dollars or $200 allocated for groceries for this month. Mine is about 200, 250. And she'll be like, well, I'm out. Can you supplant the rest? Or vice versa? So it feels collective as an umbrella, but individual underneath of it.

[Ramit Sethi]

Do you like talking about money with Monica?

[Michael]

No, that's. That's generally not the feeling.

[Ramit Sethi]

Okay. Would you say that that happens every time you talk about money or sometimes?

[Michael]

Pretty much every time, the nitpicking. Because I do use an Excel sheet and I. It is April, so I can able to see all the numbers. So it kind of gives me that frame of, okay, what, what's on my budget that is actually important to me by the seeing those percentages on paper.

[Ramit Sethi]

Does it work?

[Michael]

It does. It's definitely shifted the way I have viewed money and viewed getting to this point because I had very, very rudimentary level of budgeting. I kind of just was able to get by each paycheck. And then with Monica's help, it's become more of a actual system.

[Ramit Sethi]

But let me ask you, if it works, then why are you feeling defensive when you talk about money?

[Michael]

Oh, it's pure ego. It was such a deficit for a while, and then when it finally got to be in a surplus, the surplus was maybe $3, maybe $7. And that hard work, seeing that little bit of a green number is a very feeling.

[Ramit Sethi]

Why?

[Michael]

Because in my mind, I would love to see it be a hundred to be a thousand thousand at some point of a surplus versus you just got by.

[Ramit Sethi]

How would you describe the two of you and your relationship with money today?

[Michael]

I've said it to her. I feel like a leech feel not equally yolked, asking permission or looking for approval before doing certain things. When it comes to money that might impact us.

[Ramit Sethi]

What does yoked mean?

[Michael]

Coming to the table as equal partners. Not being a roommate or her child that she has to be responsible for, but actually being her friend, her partner.

[Ramit Sethi]

Can you think of another example? Monica was another time in the last few months where you disagreed about money.

[Monica]

So we have a one year old. She turned one on Sunday. We have to find a new daycare for her. And we disagreed on if she should be part time in daycare or full time. For me, the conversation boiled down to the cost. Right. So Michael said, well, I really would like her to be full time eventually. And I literally said, well, who's paying for that? And daycare is not cheap. It seemed to me like if it were up to him, he would make the decision and figure out the finances later.

[Ramit Sethi]

Can we recreate this conversation right now?

[Monica]

Sure.

[Ramit Sethi]

The person who brought it up, bring it up now and just run the play, run the tape like you did just a few days ago. Okay, go ahead.

[Monica]

Okay, babe. I found this new daycare person. Her rate is pretty good for two days a week. So I think we should start with that for the month of June and then we'll see where it goes from there.

[Michael]

So what are we doing for the other three days of the week?

[Monica]

Well, my mom can probably watch her for those two days and then I work from home on Fridays and can have her with me then.

[Michael]

Happy we found somebody on such short notice. But I'm also not a fan of having mom who has retired have to be one of our main daycare providers on a weekly basis.

[Monica]

Yeah, I get that. And I also want her to enjoy her retirement and she really enjoys being with our daughter. It brings her joy. And it's only two days a week if we go full time. I'm just not clear on where that money's coming from.

[Michael]

Understood. How much would it be for five days a week? Because I think the routine of having her go every day is something that I actually would want.

[Monica]

Yeah, I don't know the number off the top of my head, but it was probably at least 1500amonth.

[Michael]

So what about if I worked a couple extra shifts to make up that difference?

[Monica]

Love that you are willing to step up and do that. And I know we've also talked a lot about work, life balance. You've worked so many jobs and so many hours for the last two years, but at what cost? We're already two ships in a night. It's hard to imagine me picking up a few extra shifts a week.

[Michael]

Definitely understand it. But I actually don't mind just picking up an extra shift or two if it means that we have a routine for her and then can utilize mom on that unique basis that something crazy happens.

[Monica]

And scene. This is probably when I just change the topic.

[Ramit Sethi]

Thanks for taking me into that conversation. Very helpful. What do you notice about that conversation now that you just heard it for the second time?

[Michael]

My priority was creating a solution that allows us to have a routine and not thinking about the money. Whereas Monica's focus was where's the funds come from? And let's just keep leaning on what has worked thus far.

[Ramit Sethi]

Okay, that's a pretty good assessment. I agree. Monica, what do you notice?

[Monica]

Yeah, kind of this ping pong back and forth. Just try to like, validate and understand where he's coming from. And also like, thank you. Thank you for wanting to work more. Thank you for wanting routine. And also like, where is this money coming from? If we did come up with the money, could that go to savings or emergency fund or a down payment? So I'm always thinking about like, yes, you can always get more money, but can we invest that somewhere else instead of like letting my mom have a five day a week retirement when she actually loves being with our daughter?

[Ramit Sethi]

Can I go out on a limb and guess that you've had dozens, hundreds of conversations like this about some random expense?

[Monica]

Yes and no. Because we have actually only been together for two years as a couple. We've been married for one.

[Ramit Sethi]

Okay, and so how often do you talk about these kinds of decisions?

[Monica]

It does happen, but not as frequently as you would think because I think we're both still, like, not trying to offend the other person.

[Ramit Sethi]

What's that gesture you just did with your hands? What is that?

[Monica]

This is how I feel on the inside. It feels like my voice is carrying louder than his sometimes. Not only because of the income discrepancy, but just. I don't know. I am also very new to this. Like, I just started making this salary a year, a year and a half ago. It just feels like there's a discrepancy between us. And so sometimes I try to shrink so that I'm not overpowering him because I already know about the money difference.

[Ramit Sethi]

This is shrinking.

[Monica]

Yeah. Never thought about that before.

[Ramit Sethi]

I mean, I saw you shrinking just now in the role play. Did you catch it?

[Monica]

Did not.

[Ramit Sethi]

Several things happened. Monica, you came with a proposal. Michael, your reaction was, what about the other three days? Not. Wow, like, that's a huge relief. Oh, my God. Great work. Who's this person? Oh, I'd love to meet them. Just what about the stuff you didn't accomplish? So right there, what does that kind of dynamic does that set? We actually saw it in the rest of the conversation because it quickly developed into Monica proposing something. Look at my body language. Hey. And then Michael going, I don't know about that. You got any facts? And that was basically how that conversation transpired. Do you all notice that with the.

[Michael]

Breakdown that you just said? Yes, now I can see it in that light.

[Ramit Sethi]

I'm going to go out on a limb again and guess maybe that happens in different conversations about money.

[Michael]

That's not the first time these conversations happen. And there's never, like, a true resolution or, like, a true, like, way of path forward.

[Ramit Sethi]

Yeah, it's actually a tough way to live because you all didn't come to a conclusion at the end. Nobody really feels good about it. It's kind of the worst of the worst, you know? Like, you talk about it, you disagree. It's not really clear why. Like, why are we actually disagreeing about this? We both have a daughter. We love our daughter. We want her to be taken care of. Why? Why aren't we? Like, why is this so hard? And then she's got to go to daycare no matter what. So if we're going to go through this discussion, why not have a positive one instead of one where it ends up negative? And then she goes to daycare anyway. Monica, you mentioned shrinking sometimes because of an income disparity. Do you make more than Michael?

[Monica]

Yes.

[Ramit Sethi]

Okay, and what is the income discrepancy?

[Monica]

The discrepancy is probably around 50 to 60K.

[Michael]

Let's say 50K.

[Ramit Sethi]

Great. So, Monica, you make approximately $50,000 more than Michael. Okay, what do each of you do for a living?

[Monica]

So I work kind of 9 to 5 as an operations director in a nonprofit. And then on the side, I have a small private practice and mental health.

[Ramit Sethi]

Okay, great.

[Michael]

Michael, day job, work for a financial firm. Nighttime, more or less, I work for an airline. And then on weekends, I work for my church.

[Ramit Sethi]

So three jobs. And how many hours are you working per week, Michael?

[Michael]

64 to 70.

[Ramit Sethi]

Wow, that's a lot.

[Michael]

That's less than What? I used to.

[Ramit Sethi]

Really?

[Michael]

I used to work close to 90 to 110 hours a week when it was just the airline.

[Ramit Sethi]

Why'd you cut down?

[Michael]

Well, I said, I wanna see you more. I need to see you more. This relationship doesn't work if I don't see you more. So decrease the hours for us to spend more time together.

[Ramit Sethi]

Got it. Okay. Michael is working 64 to 70 hours a week. Now, the first thing that comes to my mind is, what do I get? I'm putting my hand out up to the sky. What do I get if I'm working 70 hours a week at three jobs, how much money am I bringing in? Is it enough? Would it be better for me to go work at one job that pays more? Now, I understand that this is all easier said than done, but that is exactly why people come on this podcast. That is why people choose to work with a coach or a therapist or a consultant. Because when you can get somebody looking at your situation from the outside, sometimes that person can ask the questions that someone who's deep in the situation can't even think of asking themselves. So back to Monica, who brings him this clear, thoughtful plan for daycare. But he doesn't celebrate the work that she's done. The first thing he says is, what about the other three days? It's just like, what's missing? Oh, you did that. What about that? I kind of understand. I don't think he's intentionally trying to shoot her down, but this is a very common pattern. It's the equivalent of backseat driving. And especially when you are working 60 hours a week, you're deep in the weeds, you have a young child. Sometimes life becomes a series of logistical questions. And sometimes those questions come out as skeptical or even untrusting. Notice, by the way, that when his questions result in answers that cost more money, you know what he says? I'll just work more. It's this idea of, I'll just fix the problem by grinding harder instead of, let's figure this out together. This is a really common way of dealing with problems, especially from for men. Men. We are taught to handle money problems by just working more. Buckle down, take on another shift, do it alone if I'm tired, whatever. That's what men do. They provide. Don't talk about it, just fix it. But that is not actually a healthy way of dealing with these problems. It actually doesn't solve the real issue, which is how the two of them are making decisions. And that leaves Monica feeling alone. She's not actually asking about daycare. What she's really saying is, can we make decisions together as a team? And Michael, whether he realizes it or not, is saying, I'll handle it. Just stop asking questions. This pattern is so common. I see it so often among straight couples. It's also a very lonely dynamic if you are struggling to talk to your partner about money. I put together a free guide with word for word scripts that you can follow with these difficult topics. You can download it for [e-mail] partner I still have a lot of questions about where Michael's money is going. So listen in as we go through their conscious spending plan. What do you say we look at the numbers?

[Michael]

Okay.

[Ramit Sethi]

All right. What was it like creating the conscious spending plan together? Wild. Wild. Whoa. How come?

[Monica]

Well, because actually, I thought it was going to be a breeze, so I use a budgeting app regularly. Like is my jam. Love mapping the transactions gets me going. So I thought it would be a breeze. Like, oh, no, we couldn't get past the first line.

[Ramit Sethi]

Why is that?

[Monica]

Because I guess it's a different way of framing finances. That app is very much like day to day, literal transaction by transaction. Right. But the CSP is very much like, you know, what are your assets? And we just don't talk in those big picture terms. For us as a couple and thinking about the future and how do we meet our goals, we're clearly going to have to come out of the nitty gritty and think big picture. Seeing the net worth was tragic.

[Ramit Sethi]

How about for you, Michael? What was it like going through the csp?

[Michael]

To me, it was the first time we had done something financially together, like seeing our finances together for the first time, which made me excited.

[Ramit Sethi]

Wow. All right, Monica, can you read off the word in bold and then the number in full next to it?

[Monica]

Assets, $22,000. Investments, $88,000. Savings, $11,000. Debt, $145,700. Total net worth, negative $24,700.

[Ramit Sethi]

Okay, what do you think about those numbers?

[Monica]

Womp, womp.

[Ramit Sethi]

Okay, she's putting her thumbs down and making a. Like a depressed sound. Why do you say that, Monica?

[Monica]

Because who wants to say that? Most of it's student loan debt, of course, but it sucks. And like you heard him say, he works mad hours. We both work. I don't work that many hours, but my job is extremely stressful, very demanding. So for us to put in all this effort and to have very little to show for it, it sucks.

[Ramit Sethi]

Okay, Michael, how about you? What do you think of these numbers?

[Michael]

Not surprising, given where we currently are. Yes. Of course, seeing the net worth as a negative number is not something to be excited about. But knowing that majority of that debt was student loan debt with a little bit of credit card debt, to me, isn't the end of the world, because we still both have about 20 to 30 years of earning potential.

[Ramit Sethi]

When you talk about money, what is it more like? How are we finding money for daycare, groceries, travel? Is it that type of conversation?

[Monica]

Our monthly conversations are more budget focused and like a spending accountability tool. They're Michael's numbers. Only his numbers are in a spreadsheet. So we definitely haven't had a collective side by side asset debt conversation. Part one. Part two is a little bit more deep.

[Ramit Sethi]

You're married, right?

[Michael]

Yes.

[Ramit Sethi]

Yeah. Do you two see yourselves as financial partners?

[Monica]

Yes. In theory, no.

[Ramit Sethi]

Okay, so we have one no. And. I'm sorry, was that a yes or a no? Monica?

[Monica]

A yes.

[Ramit Sethi]

Part of living a rich life is we have to be honest with ourselves and with the people around us. It's actually okay if you do not have every single thing dialed in with your money. That's actually totally fine. But we have to be honest about where we are. That's why I'm asking questions like, what do you think about your net worth? Some people will look at that and they'll be like, this is horrible. Michael said, like, hey, it's understandable, but we have, like, many years. And other people will go, yeah, like, this isn't good. There's no reason for us to have credit card debt. On the other hand, once we started saving, we made a big dent in our numbers. Therefore, we know we have a plan to execute. Right. There's different ways to look at it, but we have to be honest with ourselves. So you are both married. I would say just from our brief conversation so far, doesn't seem like you're behaving like financial partners. And it seems like you're both here because you want to change. Would that be accurate?

[Michael]

Yes.

[Ramit Sethi]

Monica.

[Monica]

Yeah.

[Ramit Sethi]

Okay, let's continue. I'm curious about the income this time. I will ask Michael to share the combined gross monthly income. Number, please.

[Michael]

$19,417.

[Ramit Sethi]

Okay. The two of you combined make $233,000 per year. Did you know that number?

[Monica]

There's no way.

[Ramit Sethi]

Okay, that's a no from Monica. Michael?

[Michael]

No.

[Ramit Sethi]

Thank you. Keeping my statistics running. 50% of people I speak to don't know their own household income. In your case, 0% know it. Am I. Why am I seeing two? Why am I seeing two faces of complete doubt.

[Michael]

It's not surprising for me only because of knowing the new job is now added into that versus what it used to be as of February this year.

[Monica]

To his point, maybe because it's new. So we haven't seen the fruits of that yet. It's. We might be a month or two in, but in my mind it's way less than that.

[Ramit Sethi]

Oh wow. In your mind. Did you ever celebrate when Michael, you got the pay increase?

[Michael]

No.

[Ramit Sethi]

No. Just another day, huh?

[Michael]

Yes.

[Ramit Sethi]

I talked to a lot of optimizers on my show. They'll spend 45 minutes figuring out which Costco bundle has the most cheez its per dollar and research kids bikes for 11,000 hours. Optimizers, please get a life. If you love to optimize everything, let me ask you this. Have you done the one thing that actually protects your family in case something happens to you tomorrow? It's called term life insurance and fabric by Gerber Life makes it easy to take care of that. Fabric by Gerber Life is term life insurance you can get done today. It's built for busy parents. It's all online on your schedule. You could be covered in under 10 minutes. No health exam required. Their policies are high quality, flexible and affordable. Like a million dollars in coverage for less than a dollar a day. And with over 1900 five star reviews on Trustpilot, they are rated excellent. Join the thousands of parents who trust fabric to help protect their family. Apply today in just minutes at meat fabric.com/ramit. Policies are issued by Western Southern Life Assurance Company not available in certain states. Prices subject to underwriting and health questions. That's meat fabric.com/remit. I've been in business for over 20 years and one of the key things that's kept me in the game is to keep learning new approaches. YouTube, TikTok, management, hiring, all of these things. I've taken week long classes. I took a leadership program at Disney. I took an accounting course at Columbia. Columbia. But I don't always have time to step away for days or weeks to take a full course. That's why I really value my masterclass membership. I can just drop into a session when I want to learn something new, even if it's just 15 minutes at a time to learn about screenwriting, design, AI prompting or whatever else I'm feeling that day. For $10 a month build annually, a masterclass membership gets you access to over 200 classes taught by the world's best, from Hans Zimmer to Alice Waters to Bob Iger. Instead of binge watching or doom scrolling. You can learn from the best to help become the best. One of my favorite masterclasses has been the home design class with Kelly Wurstler. I've always loved beautiful design, like in some of the luxury hotels that I really, really love. And I love when she took us behind the scenes of the proper hotel to show us how she designed that architecture working with the existing building in place. Right now our listeners get an additional 15% off any annual [e-mail] Ramit that's 15% [e-mail] Ramit masterclass.com Ramit that's a problem.

[Michael]

Yes.

[Ramit Sethi]

When you first reached out to us, Michael, you were earning roughly $60,000.

[Michael]

Correct.

[Ramit Sethi]

And now you're earning $95,000.

[Michael]

Correct.

[Ramit Sethi]

You had like a 50% increase in salary.

[Michael]

Correct.

[Ramit Sethi]

What happened?

[Michael]

The new job that I started in March is salary. So that allows me to know at least every twice a month what my net pay will be in addition to any hours or extra hours that I work with the airline.

[Monica]

This 95k number is fresh to me. Like I'm hearing it for the first time live. That 95k is your new annual salary. I thought it was more around 65 to 75.

[Ramit Sethi]

Did you all never talk about how much the salary increase was going to be?

[Michael]

No. Simple answer?

[Monica]

No.

[Ramit Sethi]

Okay. Why not?

[Michael]

The reason we didn't talk about the salary increase because to me it was almost a swap. At the airline, I could have made 60,000, but the new job is salary. 60,000 and then anything I work in addition to the airport can range from.

[Ramit Sethi]

What'S happening right now. You're using a range and it's actually not serving you at all because you have this super confusing thing. You actually just skipped over the most important part of this, which is telling my wife I got a 50% increase in pay. That's like the only thing that matters out of all of this. But you skipped over it because you overwhelmed yourself with ranges and details. How does that strike you?

[Michael]

I don't know if it strikes me. I guess because like you said, I'm always just focused on what's next. Can't celebrate being on a plateau or a mountaintop because I still know. I feel like it's still more of a climb to go.

[Ramit Sethi]

What is your role in this relationship, Michael?

[Michael]

I feel like a Swiss army knife to be put to use on whatever's needed for the family. Whatever role that can look like. I can morph and be utilizing multifaceted different ways.

[Ramit Sethi]

And how does it feel that you are a tool.

[Michael]

Actually, it feels good to be needed.

[Ramit Sethi]

I like that. It's kind of an interesting metaphor. I like the value. You said that you are wanted, you are needed. I like that. Personally, I don't think I would want to be seen as a tool that is picked up when it's needed. And then, all right, nice to see you. Swiss army knife. Throw them in the drawer and shut the drawer for another month and a half. The reason that Michael didn't bring up this massive salary change is exactly what we are exploring right now, because of the way that he sees himself. So if Michael, if you see yourself as a tool, then the implication is you can, number one, never zoom up to see the full picture of what's going on because you live in the weeds. And number two, it's actually not fun. You're just a tool. A tool that gets used to advance the family to the next thing.

[Monica]

Do.

[Ramit Sethi]

Do action, action. Tactical, tactical, and then you die. Kind of a dark vision, but actually one that a lot of men actually embrace. It's quite appealing because as men, we see other men doing it. And men will even tell each other to say, like, you don't complain. You just get to work. You have a family. Your job's to protect your family and provide for your family. Right. We've all heard that in some way, Michael, from whether it be a movie, parent, relative, whatever. And I don't mind providing for a family. I don't mind protecting. I like that. That's great. I also think there's got to be more to it. And I think that this example is a perfect example of you being so in the weeds that you're actually missing the big picture. Your salary increased from 65 to $95,000. What did you do when you found out your salary increased by about 50%?

[Michael]

Went to work.

[Ramit Sethi]

Yeah. What's next? Didn't bring it up with Monica?

[Michael]

Nope.

[Ramit Sethi]

Didn't bring home some balloons.

[Michael]

No. Probably just ordered the email that showed the salary increase before signing the paper.

[Ramit Sethi]

You got a 50% salary increase and you didn't even talk about it?

[Michael]

Correct.

[Ramit Sethi]

Do you hate your birthday?

[Michael]

Absolutely.

[Ramit Sethi]

Yeah. You don't like the attention. You don't like anybody. Like making a big deal of you, right?

[Michael]

Yes.

[Ramit Sethi]

Do you see how that relates to this?

[Michael]

100. I don't like being in the spotlight. I don't like to be celebrated. Just like the Swiss Army. I like to be useful.

[Ramit Sethi]

Right. Let me be useful. Don't make a big deal of it. Just put me to work. I can work, I can grind, and that's it. We don't need to make a big deal of it, right?

[Michael]

Correct.

[Ramit Sethi]

I want to jump in quickly because Michael just gave us a huge clue. He sees himself as the Swiss army knife. Did you catch that? Useful, adaptable, quiet. Just give him a task and he'll get it done. But I think what he's really saying is, I'm valuable if I'm useful, and therefore the implication is, if I'm not useful, I'm not valuable. The way, of course, that he sees himself being useful is by working. The higher the number of hours, the more useful I am. Now, a lot of people, men and women, believe that they are only valuable if they're adding value. It's a common script. It's one I grew up with, too. But what happens when you get older? What happens if you get sick? Are you suddenly not valuable? The script has a lot of implications, too. Don't share your wins. Don't talk about money. Don't celebrate a 50% raise. Just keep your head down and keep being valuable by being a Swiss army knife. That's why Michael got a massive salary bump and didn't even tell his wife. Because in his mind, it wasn't worth celebrating. It was just expected. That's the bare minimum. Because you got to keep working. I want to encourage you to rewrite that script. You are valuable. Being alive, you are valuable. Just sitting down and relaxing. You don't have to be up cleaning the house, scrubbing the toilets, cleaning up everything on the kitchen counter, taking the kids to school, working 64 hours a week just to be valuable. Sometimes you can just be. Now, this is a skill I am working on myself. In the recent past, whenever I launched some book or program, my instinct was, what's next? What's next? It's just how I'm built. What's next? I never stop to celebrate. I never stopped to appreciate. My wife, Cassandra, has really taught me how to slow down, how to acknowledge the win, and even to say, I'm really proud of what I did. Like, I'm proud of money for couples. This book is amazing. It took a long time. It includes things that no one has ever said about money and relationships. I'm proud of it, and I'm grateful that I could write the book for you. You are not just a tool. You are a partner. And partners celebrate when things are good, and they experience sorrow when things are not. But you can't connect on that level if your only thinking is, what's next? We're going to talk more about what it actually means to be a financial partner and not just a provider.

[Monica]

Next.

[Ramit Sethi]

Imagine you had come home and you had said, babe, I did it. I'm so happy. I'm so proud. I got a 50% increase. What would Monica's reaction have been?

[Michael]

She would have been overjoyed. She probably would have hit a high pitched squeal or some extra bit over the top.

[Ramit Sethi]

Yeah.

[Michael]

And I still would have just been like, that's cool. And I'll be at work tonight later as well.

[Ramit Sethi]

Right. Like, she's sort of like doing all these celebrations and you're like the Indian spelling bee winner. You know what I'm talking about? The spelling bee winner. He won. He won the entire Scripps national spelling Bee. And there's confetti falling on his freaking head. And he's just standing there with his arms by his side like this.

[Michael]

Yes.

[Ramit Sethi]

When I saw that kid, I was like, I love this kid. And I deeply understand this kid. I deeply get him. Because as a kid, that's exactly how I grew up. I didn't know how to show feelings, not even joy. Like, when I win, everyone might, you know, be like, oh, wow, A plus clap or whatever, just standing there like this. Like, when's it gonna be over? That sound familiar?

[Michael]

Yes.

[Ramit Sethi]

Okay, so we can see this is about money, but it's about more than money. And Michael, do you see what your view on the world. I'm a Swiss army knife. I'm here to work. I don't like attention being drawn to me. Do you see the effects that it's having on Monica and your relationship?

[Michael]

Yes. If there's something to be celebrated. I'm not usually matching the energy that she has or brings to the table. It's just business as usual or just another day. And that can be a damper, especially when she wants to celebrate me or wants to be that cheerleader for me and I am closing that door or making it so that she can't do that.

[Ramit Sethi]

Great, great, Great analysis. You're playing at this level of energy, which is okay. There's benefits to that too. You're probably calm. Usually things don't phase you as much, but you're playing here. And then when there are times to call for a higher level of energy, you don't match it at all. You actually kind of bring her down with you. Okay, I agree. That's. That's problem number one also because how many? You said you have two daughters.

[Michael]

Yes.

[Ramit Sethi]

Okay, so I'm sure your daughters will pick up on that as they get older. So that's one thing. You know, Mom's the excited one. Always gotta work to excite dad. Ooh, we got dad to smile once. But you know, dad's dad, that kind of thing. Right. I'm sure you can future pace and see how that affects them in their future relationships. But two, you're simply not effectively communicating because your wife just found out about your actual salary. That's a major problem.

[Michael]

Yes.

[Ramit Sethi]

Like forwarding an email is not acceptable when it comes to a new job with a major salary. That's just. That's just doesn't work. Right. And it's actually causing some of the issues here. I want to now turn to Monica. Now that he makes 95, does that solve all of our problems?

[Monica]

It doesn't, but it makes me feel alive. Like I'm like, okay, like the 233 number you shared earlier, the 95K. There's a different energy associated with hearing that number. Promising, optimistic. It doesn't feel as broke. Again, we have not seen the fruits of this new income, and maybe we won't for another year or so, but it just lightens the energy for me. Still need a plan, but it just. It feels more promising.

[Ramit Sethi]

All right, let's keep moving. Okay, so you're making $233,000. Is that a little bit of money? A lot of money. Middle of. What is that?

[Monica]

It's certainly not bad, but knowing that I carry 120 or 130 of that, you know, from an income discrepancy level, a lot of our financial monthly talks are focused on Michael's financial spending. They're not these big picture conversations, and there's history there. But I will pause.

[Ramit Sethi]

Let's look at the spending so that I can understand a little bit more about where you're coming from. Okay. Your fixed costs are at 68%. A little high. We like to see that below 60, but especially with a high income like yours. So let's go ahead and take a look at what we have here. Are you renting?

[Monica]

Renting. Would like to own.

[Ramit Sethi]

Okay, so your rent is quite low relative to your income. You're at about 13.7%. That's great. Insurance is high. We're going to come back and talk about that. That's at 1,200 bucks. Car payment, 712. Debt payments at 700. I want to talk about that. Groceries are at 450. That's fine. Better than fine. Clothes at 130. Okay. You have two kids. Fine. Tithe at $1,000 a month. Okay, we'll talk about that. Daycare at 690. Okay. Phone at 227 and subscriptions at 204. What do you think about these expenses?

[Michael]

The insurance being high is definitely eye opening. And then my debts always are. Next thing that comes to mind.

[Ramit Sethi]

All right, let's talk about them. You have $145,700 of debt. What is that debt?

[Michael]

I would probably say about one. 30 is a student loans. And then I think it's 4,000 for her car. And then the remainder is 11 to 12k of credit cards.

[Ramit Sethi]

Whose credit card debt is that?

[Michael]

Just mine. She has no credit card debt.

[Ramit Sethi]

What did you charge on credit cards to go into debt?

[Michael]

Mostly was food, like spending money to eat while at the airport. So probably somewhere between, I would say 30 or 50 a day eating at the airport to be doing those one hundred and ten hundred hours of working a week.

[Ramit Sethi]

Let me ask you, when you were working 100 or 90 hours a week, how much were you making per shift gross?

[Michael]

So let's say 150.

[Ramit Sethi]

Let's break it down. So 150 minus taxes, how much you think you would take home from that?

[Michael]

95.

[Ramit Sethi]

95. And out of 95, you spent how much on gas to get there?

[Michael]

$10 a day.

[Ramit Sethi]

So you have 95, then you're down to 85. And then how much would you spend on food, including coffee, lunch, dinner, whatever it is you would buy on the way to your shift, on the way there or while there or on the way back.

[Michael]

Let's say 60.

[Ramit Sethi]

Okay, so you came home with like 20 bucks basically.

[Michael]

Pretty much, yes.

[Ramit Sethi]

If that, that's not a very effective Swiss army knife. Sort of doesn't make sense, right?

[Michael]

Correct.

[Ramit Sethi]

Did you ever realize that before just.

[Michael]

Now when it led to me being evicted? Yes.

[Ramit Sethi]

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[Michael]

Pretty much, yes.

[Ramit Sethi]

If that sort of doesn't make sense, right? Did you ever realize that before just.

[Michael]

Now, when it led to me being evicted? Yes.

[Ramit Sethi]

Whoa. What happened?

[Michael]

2022 was working two jobs, working at the airport and then was working at a mortgage company. We got laid off from the mortgage company and pretty much just working, working just to keep getting by, and it was never enough. Couldn't afford the place anymore.

[Ramit Sethi]

What did you do when you got evicted?

[Michael]

I moved in with a friend.

[Ramit Sethi]

Were you two married at the time?

[Michael]

No. We had just started dating.

[Ramit Sethi]

Okay. And, Monica, what was your take on learning that Michael had been evicted?

[Monica]

My heart is racing just hearing the story.

[Ramit Sethi]

Why?

[Monica]

A lot. It's a lot. We started dating in July 2023. Things are going great. We've known each other for 20 years. He had already said, I want to marry you, all these things. So I went to go surprise him one day at his place. Like, hey, babe, I'm downstairs. Didn't answer. Didn't answer. He pulls up to the apartment and he says, you look beautiful. I don't live here anymore. And that's how I found out. When I tell you I had no idea. I had zero clue that there was any financial struggle, that he was behind on rent, that probably two weeks prior, we had a conversation by the pool about finances. Really, for the first time. Seriously. We're like, oh, I like to track my expenses. You like to track your expenses. And he told me he had spreadsheets. And I told him I just had been getting more into personal finance more and all these things. So he listens to Bloomberg all the time. So the impression I had in our early dating stages was this guy's on top of his finances. I knew he wasn't rich financially, but I thought he was on top of things. And so I was shocked to pull up and learn that he was evicted. I had no idea he had moved out the night before. I had no clue. So it was shocking. And it was early on in our relationship, and it betrayed trust, really early on.

[Ramit Sethi]

So once trust was broken, what did you do then?

[Monica]

I had to reevaluate. I was like, do I want to marry this person? Am I ready? Can I trust him? He was extremely apologetic. Obviously, he said he didn't want to burden me, but it felt like I have no idea how this guy really manages his money. Once we started talking more, he shared what he shared with you about the food spending. I think we had calculated at the time, it was like, thousands of dollars a month on food. And I was just floored because I'm like, how does this make any sense? So it just, like, really undermined any trust I had at the time.

[Ramit Sethi]

And then what did you do next?

[Monica]

I cried. Not in front of him. I called a friend who was distant enough from our relationship just to ask her her thoughts, her opinions. I asked her, like, am I dumb to move forward? You know, I also have a lot of compassion for him, but I felt I had to do some discernment on my own of do I want to move forward? But ultimately decided, yes, give him a chance. We all fall in tough times. To me, it's not about the money. It's about the lack of transparency. Him not trusting me with what was going on, and then also him not asking for help from any of the strong village that we have in our life. No one knew about this. Not a mom, not a godfather, not a friend. So it was the questioning of, like, how does he logically approach life if he got into this pickle without saying a word about it?

[Ramit Sethi]

I'm going to ask a difficult question to both of you. Do you see any patterns, Michael, with what happened with the eviction and what is happening right now with Money?

[Michael]

Yes. It's being defensive, protective, and hiding behind the weight of everything versus being able to ever come up for air. It's just a consistent, you're not there yet. You got to keep pushing. You got to keep going. But it's all about you. Still that individual solo mindset for me, yeah, I agree.

[Ramit Sethi]

It's not being candid and honest with what's going on, both when things are bad, but also when things are good. It's thinking of asking for help as burdening others. So you don't ask for help. And it's quite simply not being an effective communicator. Now, if you want to do it solo, that's one thing. You can do whatever you want when you're solo. But when you're married, certainly when you're a parent, that just doesn't work anymore.

[Michael]

Yeah.

[Ramit Sethi]

Monica, what about you? What, if any, similarities do you see between the eviction and Michael's behavior with Money and what's happening right now, the lack of transparency.

[Monica]

But also, I think this is general energy is very mellow, kind of like status quo day in and day out. And it's hard to know when big things are happening, whether they're positive or negative.

[Ramit Sethi]

Right, right. And what about for your behavior, Monica, Your behavior when you heard about the eviction and your behavior now as it relates to money.

[Monica]

Super protective of him. Like, very few people know our financial dynamic. I was so scared to tell anyone at all about the eviction. But then I needed to just for my own sanity. So I think I go into protector mode. But not wanting to let other people know what's going on out of sake of protecting him.

[Ramit Sethi]

I agree with that. What about to Michael, when he mentioned the eviction? What, if any, thing did you say to him?

[Monica]

So sorry you're going through this. I'm here. Do you need to stay with me? Like, trying to figure out the logistics of it all. And then of course, I shared, like, I'm hurt that you didn't tell me. I was tearful.

[Ramit Sethi]

How did you get from. My boyfriend got evicted and didn't tell me it to like, what, a year later we're getting married. How'd that happen?

[Monica]

Yep, lots of work. It was more so like premarital counseling, premarital coaching. I've said to him, the spending has to change. You ask why our conversations are so dry. Why are they so transaction focused? Is because for a while, we just had to make sure he wasn't spending thousands of dollars a month on food.

[Ramit Sethi]

How come I'm only finding this out right now? This is really impressive. I didn't know this.

[Monica]

Yeah, he's made a ton of progress as far as. Yeah. Staying within budget.

[Ramit Sethi]

Monica.

[Monica]

Yeah.

[Ramit Sethi]

The way I feel right now is the way you felt about discovering he made 95,000. Michael, do you see what your approach to the world, how it's affecting other people now, including me.

[Michael]

I see by one not sharing the good and or the bad. It's like coming in to a book on chapter four versus actually getting the preface and everything before it.

[Ramit Sethi]

Nice. Nicely put. I agree with that. And actually, I'm hearing things about spending close to over 50% of what you made every shift on food. Okay. And I know airport food. It sucks. And then I'm finding out, oh, wait, actually, you're really good at spending. You actually dramatically change your spending after your now wife said, like, hey, this. You really got to change this. And you did it. I can't get a full picture. Nor can your wife. If you are not open with the good and the bad. This is not just about money. Michael was evicted. He didn't tell a single person. Not Monica, not his family. He did not ask for help. He just kept going. Because in his mind, that's what a provider does. You handle it yourself. Even if it breaks. You do you guys see how so many people, so many men in particular, are living these lives of quiet desperation. They don't ask for help. A lot of times they don't even realize they can ask for help. And what's even worse is that this silence doesn't just affect you. It affects the people around you, like Monica, whose trust was broken. And a lot of times those people who you're not telling would actually be happy to help. But Monica also played a role. Michael hides. Monica absorbs. He avoids these hard conversations. She avoids pressing him and asking for details. Michael, both of them are almost walking on eggshells instead of working through life's difficult situations together. Now, I will say Michael has made some really good progress. He stopped spending thousands of dollars on airport food. He's earning more, but he didn't talk about it. And Monica noticed the change, but she didn't ask or push to learn. Neither of them wants to rock the boat. So Michael, who sees himself as a Swiss army knife, he's always ready to be deployed. Send me where you need to send me. I'm a tool. But tools don't build relationships. Partners do. Monica wants a teammate. Fine. I appreciate that. But in a team, you also have to have honest, direct conversations. So if they want to build something real, both of them need to face their financial challenges head on. Let's keep going. We still have a little bit of credit card debt, in part because of spending that was going on a while ago. There was an eviction. There was a lot of work done, premarital counseling discussions. That's why you track spending. Michael, what was your credit card debt at the peak and what is it now?

[Michael]

At the peak, it was probably close to almost 26. Knocked it down. Thanks to Monica. And I say thanks to Monica for carrying the rent, carrying some of the heavier things that where we live, that I've been able to put more money towards paying down debts and not putting anything else on these cards.

[Ramit Sethi]

26 to 12K.

[Michael]

Correct.

[Ramit Sethi]

All right. It's pretty good. I wish I hadn't gotten that high, but that's a good trajectory.

[Michael]

Yes.

[Ramit Sethi]

Now, let's continue through the rest of the CSP here. We talked about debt payments at 700. How long is it going to take you to pay off your credit card debt, Michael?

[Michael]

I see it being done in this year.

[Ramit Sethi]

Great.

[Michael]

Yes.

[Ramit Sethi]

Did you know that, Monica, that was.

[Monica]

Our last shutdown with the finance talk was exactly what. Remember, Remember? He was like, I got defensive ego. And then I said I didn't want to ask any more. Spreadsheet questions. Wait.

[Ramit Sethi]

How can you get defensive when you have a great answer? What's to be defensive? It's like everybody applaud, I'm great. What's the problem?

[Michael]

Michael, as Colby would say, job's not done. So it keeps like you still. I still have work to do.

[Ramit Sethi]

Your inability to celebrate anything is going to be one of your downfalls. What do you get out of it?

[Michael]

I think it's a. It's definitely a protective thing. It's a callous way that I've learned how to live life.

[Ramit Sethi]

That's very perceptive. Something good happens, who knows? Might be here tomorrow, might not. Something bad happens. Gotta work on it, no matter what. Some use the word mellow. I don't like that word. That's, in my opinion, overly charitable. Mellow is one thing, but not showing any affect, that's a whole different one.

[Michael]

I give a lot of smiles and energy to my daughters. That's where my. I guess my most vulnerable part of.

[Ramit Sethi]

Me is love that. Love how you describe that, too. Do you give any of that energy to any adults?

[Michael]

There's a decent amount I try to do with my wife. I try to let her know she feels loved, that she's beautiful, and. And that, like, I'm always in awe with her. We have. We have our moments where it's definitely, like, lovable moments.

[Ramit Sethi]

I just keep going back to this metaphor you had for yourself of a Swiss army knife. You know what a Swiss army knife doesn't do? Show emotions, cuddle, be playful, flirt. It's just there to do a job and then get the out of here. So the more you see yourself as a tool, the less able you are to actually connect in the way that is, as you put it, vulnerable. And you can do it with your daughters. Almost everybody can do it with their kids, but it's not happening here. Okay, debt payments, they're going to be paid off by the end of the year. That's awesome. That's amazing. You want to practice sharing that news with Monica because she didn't know it.

[Michael]

Hey, babe. By the end of 2025, there will be no more credit card debts. Balance will be zero.

[Monica]

That's crazy. That's awesome. I didn't even know by the end of 2026 they would be paid off. So this is shocking, but in a positive way.

[Ramit Sethi]

Okay, first of all, round of applause. That was awesome. Great job. Great job with the debt. That's awesome, too. Can I make a gentle suggestion, Michael? The way you delivered that was like you were telling Me, which zone of the parking lot my car is in. Look at it. Now. That's a smile. Here's what I'm going to say. Michael, a little tip. Okay? And again, I feel very connected to this topic because again, you look at videos of me back in the day, not a freaking smile, not one. I want you to do two things when you tell Monica the news. Number one, you got to work in a smile. And then, number two, you got to tell her not only the information, but you got to tell her what it means to you. Go ahead, take a second to think about it if you need to, and then go ahead and share it again.

[Michael]

Hey, babe. At the end of this year, 2025, there will be zero credit card debt, meaning the balance will be zero. And for me, that means a job well done and I accomplished something I put my mind towards.

[Monica]

Yay.

[Ramit Sethi]

Okay, Michael, how did that feel?

[Michael]

I guess still struggling because obi line still echoes loudly, but at the same time, great to be able to communicate with my partner and share good news with her versus not sharing anything with her.

[Ramit Sethi]

What'd that feel like for you, Monica?

[Monica]

Yeah, more energy, more excitement, more levity, and, yeah, it's a positive shift in how we talk about these things.

[Ramit Sethi]

Michael, I thought that was really good. A couple of things that I noticed. First of all, you have a great smile. Like, when you smiled, it made me smile. And this is a good sign that we signal to other people with our body language. Like, if your daughters are about to touch the stove. No, you signal to them. Right. They learn from that. But we also do that as adults. We signal when we're. And. And sometimes it's incongruous. Like, if I'm going around and I'm like, I am making 50% more than I used to. People like, what the. This guy's a psycho. There's something off. And actually, they don't receive the message. You could actually tell them something quite great. But if you present it without the appropriate affect, people actually will not even hear it. The other thing is, when you talk about what it means to you, it actually made me feel more connected to you. And I suspect Monica also felt that way. Monica?

[Monica]

Yeah, definitely more connection. It feels like something I can also get excited about because he's proud of himself. We can celebrate that. And then there's also a part of me that is feeling like, wow, he's. He's a leader in this way.

[Ramit Sethi]

Exactly.

[Monica]

He set a goal. He met it. I know where we're going. I can hang on for six months. Like there's a plan.

[Ramit Sethi]

Everybody wants their partner to have a plan. The plan could take two years, three years, five years. But they want him to have a plan and they want him to update him. Michael, one last thing. You, you do this thing, which is very related to you not wanting attention on your birthday. Anytime I ask you to talk about yourself, you talk about the grand us, our relationship. You always talk about, like, what's going to be good for Monica, what's going to be good for us. And you really struggle to talk about you, almost as if you don't believe you're worthy of anyone. Like, listening to us hear about you. I think you are. I bet that shows up in a lot of places in your life. That will be a skill I will encourage you to work on. Is talking about you and the both of you. A coworker of mine uses a water delivery service and her dispenser broke. So she called their support and they said, we'll send out a replacement Tuesday by 3:00pm well, nobody came. She followed up, no response. Tried calling a bunch of times and then got stuck on hold. And then she gets an email that says, we're rebranding. Thanks for your patience. That's nice. But she still had no water. That's the problem when a business has no clear system for handling customer messages. This episode's sponsor, OpenPhone, fixes that. OpenPhone is the number one business phone system that streamlines and scales your customer communications. It runs through an app on your phone or your computer. No need to carry two phones or mess with a landline. Your team shares one number and handles calls and texts like a shared inbox. That means anyone can see the full conversation and step in without missing a beat. Keeps everything fast, clean and consistent. Even if five different people touch the same customer thread. And after hours, their AI agent can actually step in to handle calls, answer questions, and capture leads so you don't lose business when you are offline. OpenPhone is offering my listeners 20% off your first six months at openphone.com ramit. That's O-P-E-N P-H-O-N-E.com ramit and if you have existing numbers with another service, OpenPhone will port them over at no extra charge. OpenPhone. No missed calls, no missed customers. All right, back to the fixed costs. Here we have $1,000 a month on tithing. You both religious?

[Michael]

Yes.

[Ramit Sethi]

How do you feel about the tithing?

[Monica]

I'm excited to talk about this because I go back and forth almost every day in my head about it. Biblically, The Bible says 10%. I get it. God is good. We have so many blessings. How could I not give back? And then I'm like, we hardly have any savings. We want to have a house. We, you know, the list goes on and on. So there's a constant conflict.

[Ramit Sethi]

Yeah.

[Monica]

Neither one of our churches pressures us. It's not this weird thing like a spiritual call to do. But I also be like, God wants me to have nice things.

[Ramit Sethi]

God put brought that YSL bag in my Instagram feed. God knows I think about it driving.

[Monica]

To work, like, all the time. In the Bible, it says, like, if you have to begrudgingly give, don't give. So then I'm like, well, I'm giving all this money, and it's not even in the way that it's. It was designed to be done. So.

[Ramit Sethi]

Okay.

[Monica]

It's a struggle.

[Ramit Sethi]

That's interesting. How do you feel about it, Michael?

[Michael]

I fully believe whatever God puts on our heart to give is what we give. But I also don't think it has to always be financially.

[Ramit Sethi]

That gives me some flexibility. Just want to show you a quick calculation here. If we just took that thousand dollars tied down to 100 just to show you. Keep an eye on this number up here, this fixed cost number. Okay, it's going to go from 68. You want to guess what it's going to go to?

[Michael]

62.

[Ramit Sethi]

Okay. What do you say, Monica?

[Monica]

60.

[Ramit Sethi]

All right, 61. Wow. Right in the middle. That's quite interesting. Okay, let's keep going. I'm going to keep your tithing at where it is for now. You got daycare at 690, and you could theoretically spend more on this if you wanted. Correct. Okay, Good. Phone is 227. All right. And your subscriptions at 204. Makes no sense spending 204 bucks when you have credit card debt of thousands of dollars over $10,000. It just doesn't make sense to me. Cut it down by half. What do you want to do, Michael?

[Michael]

Who goes away?

[Ramit Sethi]

Great. We'll take that down to 100. You're still at 68%, but it sends a signal to yourselves, we're in this. We're taking this seriously as a team. That was cool. All right, let's keep going. Investments are at 5%, which is $600 post tax retirement. But we actually know that you're investing more than that because, Michael, you're putting away more every month. Correct.

[Michael]

The jobs is total 16 of my income going in.

[Ramit Sethi]

Okay, so you said 16 of your income.

[Michael]

Correct.

[Ramit Sethi]

Gross income. That's 1. So 16 of your gross income is $1,266 a month.

[Michael]

Correct.

[Ramit Sethi]

Great. Did you know that, Monica?

[Monica]

You know, I didn't look at that.

[Ramit Sethi]

Smile on Monica's face. Go ahead, Michael. Let's do the same exercise again. Get that big smile queued up. Go ahead.

[Michael]

Hey, babe. Every month I put $1,200 into my retirement account for the future.

[Monica]

Wow, this is awesome. And is the plan to continue doing that each month or is it like a one off?

[Michael]

The idea is to continue doing this and as our finances changes, we can talk about different, other avenues that we could go about. Just making sure that we're getting a full match and getting the free money from the companies.

[Monica]

Okay.

[Ramit Sethi]

Great work. Love that. Nice job, Michael. Nice job, Monica. Let's take a look at how much it's actually going to be worth. So I'm taking that. I'm going to Google. I'm searching remit calculator. Here I am at the investment calculator on my website. So right now I'm going to approximate this, but it's pretty close. You got about 1200 bucks in there. Let's just say you're adding 15,200 annually. How many years are you going to keep investing for?

[Michael]

At least another 30.

[Ramit Sethi]

Good. And we got a 7% annual return rate. That decision alone is going to give you $1.4 million.

[Monica]

Wow.

[Ramit Sethi]

Michael, I think you can see this is just another example where it really pays to communicate. I'm not just talking about financially. Your job as a partner is to keep your partner informed. You would do that on a soccer team. You would do it on a relay team. You got to do it on your home team. Let's continue on. Monica, what about your investments?

[Monica]

403B.

[Ramit Sethi]

How much?

[Michael]

She's putting 3% of gross.

[Ramit Sethi]

3% of gross. How do you know that so fast? That was impressive.

[Michael]

Retirement advisor. Not literally, but so.

[Monica]

He's very financially astute, which is ironic and also enraging.

[Ramit Sethi]

How can you be financially astute when you're spending $50 a day at the airport?

[Monica]

Yes, that. That was the frustration.

[Michael]

To have the knowledge is amazing. But to be able to use it in practical time wasn't possible. Meaning working all those hours, There was no way I would come home and feel like cooking or feel like going to the grocery store. So it was always the convenience over everything else for me. Yes, I knew I was just getting by. Guess I was waiting for that next break to happen. But break was the Eviction.

[Ramit Sethi]

What the hell? The guy who got evicted is the one driving their investment strategy. How does this make any sense? Michael listens to Bloomberg. He actually knows Monica's 403 contribution down to the exact percentage. And he's putting $1,200 a month into retirement, more than most people making twice his income. And yet his financial behavior is not that great. You know, he's lost his apartment not because he didn't understand money, but because he was spending $50 a day at the airport working 100 hour weeks and pretending everything was fine. This is the knowing doing gap. So many people can tell me what an expense ratio is and why diversification is important, but when you look at their portfolio, it's horrible. I remember recently I posted a video deadlifting. It was just a normal deadlift. And I got this comment from somebody who's like, actually, bro, you're hinging a little bit too much at the hips. That could really affect your lower back. I was like, cool, thanks for the feed. Hey, can you send me a video of your latest deadlift? No response. You know, I hit him back. I was like, hey, just following up here. Two days later, I have a calendar reminder for all Internet trolls. I will never let them off the hook. I go, hey, just following up. He goes, yo, you know, bro, I've been studying Jon Jones and I've actually been learning about posterior chain mechanics. He writes me this long paragraph. I go, that's awesome. Show me your form. He blocks me. That guy is the perfect metaphor for people who know everything about money supposedly, but they don't actually live it. Now, if you know someone like that, someone who reads all these money books, follows all this online news about money, but they still have credit card debt, text them this episode right now because they need to hear it. The knowing doing gap is so prevalent. You could be book smart, you could know everything in the world, but until you actually do it, what's the point? Now, knowing all of this, I have a hunch about Michael. Let me see if my hunch is right. Tell me if this sounds familiar. Michael, it's tough right now, but that next deal, that next gig, that next job, that next shift, that will change everything.

[Michael]

It was probably more like the next five shifts to change a lot of things or the next month it would be a little bit better. But yes, that's the epitome of what I would have to tell myself.

[Ramit Sethi]

That describes one of the four personality types in Money for Couples. My book, and it's called the Dreamer. The Dreamer does Not really focus on consistent investing, saving. It's more about, oh, like, I've got this ball in the air and that ball in the air, and one of these is going to come through and this deal will come through in this gig and that will solve this problem that I have right now. That's a dreamer.

[Michael]

Spot on.

[Ramit Sethi]

Yeah, it's really hard for the partners of dreamers. It's really hard because they often want a plan. Dreamers don't want to give a plan. They try to get specifics. Dreamers hate being pinned down. It feels confining to them. What's interesting, Michael, is that I think you're admitting to having some pretty striking dreamer tendencies. But also at the same time, you've massively changed your spending. You've dramatically cut your credit card debt, and you know, your debt payoff date, which is incredibly rare. So I find this to be quite interesting. I like to continue on so we can get to the end. And let's look at the CSP here. Monica, you're putting 3% of gross income away every month, is that right?

[Monica]

According to my advisor, yeah. Yeah.

[Ramit Sethi]

Okay. How come you don't know your own numbers? Monica?

[Monica]

Agreed. So know all the transactions but retirement, 403bs. There was a stretch for many years where I was grinding and not really having a ton of extra money. So ever since I left corporate America, basically I stopped contributing. So this all feels new again. I'm married to someone who has great financial acumen, even if it's not put into practice. And so I let him just tell me what the best thing is.

[Ramit Sethi]

Okay, that's not the way we do money. We're not going to do that anymore. This doesn't make any sense. But we'll fix it. That's why I'm glad we're here. How come Monica's only putting away 3% when she has such a high income?

[Michael]

So just to get the match of the employer. And she was just starting out. So the salary before January this year was actually only 100k from her. Yeah, the raise of another 20k was still shocking. But we never adjusted.

[Ramit Sethi]

You all know about, like NFL players, they retire and then they don't change their diet.

[Michael]

Yes.

[Ramit Sethi]

Interesting. Like what happens?

[Michael]

It catches up them really quickly, really quick.

[Ramit Sethi]

This is exactly the same thing, but in reverse with money. So your income has gone up dramatically, but you haven't changed your allocations, nor have you actually changed your feelings about money. You're making $50,000 more than you were a few months ago.

[Monica]

That's crazy.

[Ramit Sethi]

But the way you're acting with money, you have not changed a single thing. And that's a problem, because at your income, there is zero reason you should have credit card debt. Zero. I find it actually unacceptable a family that's making $233,000 with two daughters has credit card debt. Unacceptable.

[Monica]

But where is the room to cut it down?

[Ramit Sethi]

Let's look at the numbers here. Your savings are at 7%. So you've got 600 bucks a month for an emergency fund. You get 100 bucks a month for gift and 150 for regular. Was regular.

[Monica]

Regular savings, meaning not allocated for an emergency fund.

[Ramit Sethi]

No, we're not. You all got to understand, when you have credit card debt, that actually necessitates, in my opinion, it is an emergency. People who have credit card debt, they really get used to living with. It's like it's not living with a paper cut. It's, in my opinion, living with a. A bloody open wound. If your daughters had a bloody open wound on their arm, what would you, would you be like, oh, that's cool, let's have dinner tonight? No, you'd be like, we're going to the hospital. That is the equivalent for having $12,000 of credit card debt. Like, shut it down. Shut down all discretionary spending immediately. Redirect everything. Get this debt paid off quickly. And in the meantime, once the automation is set up, we're going to talk about how did we get here? We're not going to blame each other. We're going to talk about it because we're a team. How do we get here? What decisions did I make? Did you make? What did we make? And how are we going to make sure this never happens again? That's how we approach it. All right, you've got 20% towards guilt free spending. $2,370 a month. How often do you eat out?

[Monica]

Shockingly, not often. We're not. We're not going out to have steak dinners. Like, we're not. That's not us. I would, I would love that to be us. It's part of my rich life. But now we're good. And if we need to grab something, it's. It's Chick Fil A. Is this. Or is that.

[Ramit Sethi]

Mm. Okay, hold on. How often are you grabbing Chick Fil A?

[Monica]

Too often. Currently, probably for four times a week.

[Ramit Sethi]

I can see by that smile that you're not telling me the truth.

[Monica]

No, this is embarrassing. Four times a week. That's crazy.

[Ramit Sethi]

It is. Especially when you have credit card debt and you're telling me two minutes ago. Where does the money come from? We need to be honest with ourselves. You're eating out three times more than you thought, and you're not even counting other stuff. Like, that's a. I could see a very nice room behind you. I don't see any furniture. I don't know if you have your nails done, Michael. I suspect maybe, you know, there's hanging out with friends once in a while, grabbing a couple drinks. I don't see any of that here. Now, my point is, you may believe you are very good at tracking on an individual basis. And I actually think you're probably both pretty good at it. But you can track every number and miss the entire point of personal finance. Yeah, most of the time when I find people overspending, specifically on cars and eating out, and I go, is that part of your rich life? And almost always they go, no.

[Michael]

Yeah.

[Ramit Sethi]

Do y' all have a shared vision of what your rich life is?

[Monica]

Eating at nicer restaurants every once in a while. Going to the Miami food and Wine Festival because I always wanted to do it. Traveling first class, having Gordon Ramsay cook for us at some point, I'm not expecting us to be millionaires. But right now, like I said, have the highest salary I've ever had. And I'm tracking every single time I go to Chick Fil.

[Ramit Sethi]

A, first of all, I love the vision. I'm curious to hear, Michael, your vision.

[Michael]

Be able to play golf at least twice a month and definitely travel. Eating out with our daughters, go to school, paying off whatever student loan or whatever they have, Giving them a better base jump off point than starting at nothing coming out of college.

[Ramit Sethi]

I like the vision. I like it a lot. I like both your visions. I think they're really beautiful. Specific, complimentary. Are you on track to be able to live some, Maybe not all, but some of those parts of a rich life?

[Michael]

Simple answer. No.

[Ramit Sethi]

Okay, Monica, I agree. You make $233,000 a year. Monica, you said something that struck me. You said, I'm not expecting to be a millionaire. Like, why not? I always expected to be a millionaire. Why would you not at 233,000 for me?

[Monica]

Still getting used to even hearing that number because I'm like, who are you talking about? Which household has 233k?

[Ramit Sethi]

I'm talking about the couple who spends a lot of time tracking every single expense but doesn't actually know their own income.

[Monica]

Yes, you're right. It feels far off. One, one is certainly not having a plan. Two is not having the joint finances. And three, we need to get Michael's debt paid off. Yeah, it just seems like these are far off dreams.

[Ramit Sethi]

If you both want to make this rich vision a reality, we can start doing it. I mean, you have more chances of accomplishing it than most considering your income. But it will take you probably rethinking the way that you approach money, approach each other.

[Monica]

So open to it. Let's do it.

[Ramit Sethi]

Cool, Michael.

[Michael]

100% agree.

[Ramit Sethi]

Michael, you described a quite a emotionally loaded word. The word leech. I don't want to be a leech. First of all, I don't think you're a Leech making $95,000 a year. When I was reading over your material before I came on, I was a little confused because there's a lot of words about income discrepancy and leech and stuff like that. And now that I hear your story, I can understand more. You know, having credit card debt, spending a huge amount of money, eating out, being evicted and not sharing it. None of those things are positive when it comes to money. But I don't think anybody making 65k working 3 jobs is a leech or 95k. I do think you don't communicate about money effectively. I don't think you combine your money. I don't think you have a rich life vision that's crisp. I'm trying to get to why that is, but I just kind of want to shine a light on this big elephant in the room about Monica earns more. A lot more. And what does that imply for the relationship? Especially because sometimes women earning more money. There's a sensitivity around that. Michael, you alluded to that. You mentioned a provider. You mentioned Monica. You mentioned the elephant in the room. Is this a topic that you all talk about?

[Michael]

No, we don't say it in those terms.

[Ramit Sethi]

Okay.

[Michael]

But I will say for myself that I do feel inferior at times because I don't feel as equally yoked and have to rely on her, especially in early beginning. I just feel like I'm always still trying to catch up to be part of the table and not always feeling like I can be at the table.

[Ramit Sethi]

That's pretty honest. I appreciate that. Monica. Gender and money.

[Monica]

Yeah, of course those norms are there. I don't subscribe to them, or at least I don't think I don't. But feel free to challenge me on it. My bigger issue is not paying anything towards rent and utilities for so long. So the dynamic that we describe in the application is we're living. Yes, we're both Working. And I'm paying literally all of the rent, all of the utilities. And it, you know, it's hard. It's hard sometimes to come in to the space and knowing, like, okay, this is all on me.

[Ramit Sethi]

Is this working for you?

[Monica]

No. Our relationship romantic history is two years.

[Ramit Sethi]

Yeah.

[Monica]

Right. So we're still kind of early in. So for these two years, it's been tough. And he feels like a leech. I feel like we have this load. I don't want to make him feel bad about it.

[Ramit Sethi]

Can we get off that? I don't want to make him feel bad about it.

[Monica]

Yeah.

[Ramit Sethi]

Nobody's here to make anybody feel bad. But sometimes, in order to reach a shared vision together, one or both people are going to feel a little bad. Nothing wrong with that. Life isn't only about cupcakes, you know, Sometimes it's going to be hard. In fact, this stuff is really hard when you're coming out and starting out. It's complicated. I don't mind, but we're not going to start this by saying, one of my core visions is, I'm not going to make my other partner feel bad. No. Then we're walking on eggshells.

[Monica]

That's what it is.

[Ramit Sethi]

That would be like me trying to run a 400. And I go, I'm not going to wear one shoe. I'm not going to start off a race by saying what I'm not going to do. I'm going to say my vision is I'm going to win. Same thing with money. And over time, as you become more and more skilled, you're not going to feel bad. They start to feel okay, and they start to feel really good. And you're like, holy, we're a team. That is an amazing moment. And we can get there. So can you paint a picture for me? What are the big money goals for the two of you?

[Monica]

Retirement.

[Ramit Sethi]

Okay.

[Monica]

I say travel. It's not a huge, big one, but just growing up as someone who traveled the world, I want to be able to pass it on to our kids and it not be a financial strain.

[Ramit Sethi]

How often? That sounds pretty vague.

[Monica]

Michael would like to travel a couple of times a year. One with just us, at least two with the kids. For me, I'm good with one big trip and maybe one local trip.

[Ramit Sethi]

What else?

[Monica]

Whether we buy home next year or in five years or 10, that it does mean something to me. So, yeah, homeownership in some way, investment properties, those things are of interest to me.

[Ramit Sethi]

Michael, what about you?

[Michael]

This family? So being able to be around not only be around my wife for a long term, but be around my kids as well. With dad passing away young, definitely emphasize the time that's spent with the kids and spent with my wife. So seeing the family trips excites me because I didn't get to do that. Being able to grow old, whatever that really looks like, excites me because I know that nothing is promised to say. I was there to walk my daughters down the aisle. Yeah, well, I was there to take them on this trip to Oshkosh, Bagosh, wherever they wanted to go to. I think that really hits me in a very special way, especially because I know how short life can be.

[Ramit Sethi]

Okay, we're going to go to your CSP and we're going to try to make some changes now.

[Monica]

Yay.

[Ramit Sethi]

You both have told me what your vision is. You even went Fast forward to 75 and you look back on your life. So now we actually get the chance to make those changes. I'm putting your fixed costs up on screen. You're at 68%. Before we get into line by line changes, philosophically, what kind of changes do you want to make?

[Monica]

Eating out.

[Ramit Sethi]

You want to eat out less?

[Monica]

Yes.

[Ramit Sethi]

Okay, what else?

[Michael]

Something else that I want is more of money being put towards investments or.

[Ramit Sethi]

Say, give me like five more. Let's go fast.

[Monica]

Emergency fund.

[Ramit Sethi]

Emergency fund. Great.

[Michael]

Travel. A travel amount.

[Ramit Sethi]

Okay, what else?

[Michael]

Something for the kids, whether it's for education or just their own savings. Being able to put that in something as well.

[Ramit Sethi]

Wait a minute. How come no one's talking about their debt?

[Monica]

That's real. What's so interesting is Michael's debt is very top of mind for me because again, we look at it every month because I have deferred payments for again, truly is out of sight, out of mind, which is a problem. I wasn't even thinking about my student loans. It's just not even Simon there. I'm thinking about that rent.

[Ramit Sethi]

$130,000 in student loans needs to be addressed.

[Monica]

Absolutely.

[Ramit Sethi]

I am not in favor of putting money aside for your daughters while their own parents can't manage their debt. So that needs to go. Okay, what else?

[Michael]

That's the top of mind.

[Ramit Sethi]

I mean, that's pretty good. The changes you've told me are pretty effective. They're simple, but they're extremely high impact. Let me tell you what I mean. You said we are going to start investing more, we're going to start saving more, we're going to pay off our debt, and then we're going to put Some money aside for travel. Those are high impact. Those are $30,000 questions. What's up with this insurance? $1,264. What is this? What is this insurance you're paying for? Explain it to me. Better not be whole life.

[Michael]

No, Both of us have our own term life insurance policy on each other. Term life insurance.

[Monica]

I think your auto insurance is the high variable, right?

[Michael]

Yeah. My insurance is like 270, I think a month or 280. Yeah, we can find cheaper auto insurance.

[Ramit Sethi]

Let's talk about your car payment. You have two car payments or one?

[Monica]

One is mine. It's 333amonth.

[Ramit Sethi]

How long till it's paid off?

[Michael]

It's a year and a half.

[Ramit Sethi]

Okay, and then what are you going to do once it's paid off?

[Monica]

Good question. I haven't thought that part. I mean, I would hope to roll it into paying off debt.

[Ramit Sethi]

That is a correct answer. The incorrect answer is what most Americans do. They go, time to buy a new car. I go, no wonder you're in debt for your whole life. No, keep that car. Okay. Yeah, the. The time period where you have a car with no car payment is like the golden age. You keep that, and every month you're saving money. And that money, just as Michael said you, you can treat it as if you're still making a car payment. Sure. Take A. Take 10% and use it for guilt free spending. Go out to a nice restaurant every month. But the rest of it, you can split. Just as I talk about in part two of money for couples. You can put it in investments, put it in savings. You can even start saving a little bit for car repairs, which eventually you will have. There's lots of cool things you can do automatically. Okay, I'm gonna tell you what I see. So far, you're at 61%. I think there's two things. One, you need to start paying off your student loan debt. Monica, you need to run a calculation. But we're just gonna say for easy math, we're gonna put 500 bucks a month into there.

[Monica]

Wow. Okay.

[Ramit Sethi]

I mean, it should probably be more depending on the interest rate. I mean, it's a huge amount of debt. You need to pay that off. Otherwise you're gonna be paying it till you're 60 years old.

[Monica]

Yeah, heard.

[Ramit Sethi]

Gosh. I really want you to take another look at your insurance. Something is not adding up for me on this. Let me just say this is too high compared to what I've seen for other people. It might be the case that just for whatever Unique reason that yours is this expensive, but just strikes me as something is wildly off here. And if you could drop that down even to 800, which would be really. That would be high. It would be at 61%. So I'd like you to try to do that. Well, the good news is that the credit card debt will be paid off soon and that money can be rolled into other areas. So basically, 12 months from now, you're going to have an extra thousand dollars of cash flow. That will be 650 from Michael's credit card debt and like roughly 350 from Monica's car payment. That's an extra thousand dollars of cash flow that you will be able to use. That's pretty good.

[Monica]

That's great.

[Ramit Sethi]

You're tithing. I dropped that to zero because I just can't see you spending 200 bucks a month. And it dropped your fixed cost to 63%. Okay. God is very patient. God will wait while you get your act in order and then you can go back and, you know, go to church, volunteer. All right. Phone at 2:27. Can you guys drop that?

[Michael]

The 140 is mine and my daughter's together, and then hers is just hers. Let's say yes.

[Monica]

Yeah, maybe we can just get a family plan, smack it out. But I thought 140 was a lot.

[Ramit Sethi]

Yeah, I think that's worth looking into at this point. Savings. We're going to drop this. 150 is just going to become 750 here. No need to overcomplicate it. Okay. And 100 for gifts. What gifts?

[Monica]

Birthday parties, someone's bridal shower, baby shower. Random acts of kindness.

[Ramit Sethi]

Why don't you be kind to yourself and pay off your credit card debt? That $100 a month is actually really meaningful. I'm going to give you an example. If you actually put your $130,000 into my debt. Payoff, calculator, student loan debt, and you put an extra hundred dollars a month towards it, you will shave off years of the debt. You want to see? Sure. Let's just say $130,000. Do you know the interest rate?

[Michael]

5 or 6.

[Ramit Sethi]

Let's just say 6. And right now, let's just say for easy Math, you're paying $800 a month. That's 28 years to pay it off. Okay. That's a long time, Barry. Let's just watch this. We're going to pay 900. That's 21 years. We just shaved off almost seven years of payments for an extra $100 a month. Am I the only one who's blown away by this?

[Monica]

No. Thank you for reframing that way.

[Ramit Sethi]

Okay, Got it.

[Monica]

The extra 100. Yeah.

[Ramit Sethi]

An extra $100 shaved almost seven years off your debt payoff.

[Monica]

Yeah, yeah. Got it, got it, got it. 20 years is so long, you can.

[Ramit Sethi]

Actually shave that number way down. But the fact is, like, you haven't been paying anything on it for a long time.

[Monica]

Yeah, with these numbers, we can shave it way down.

[Ramit Sethi]

Yeah. I'll show you how. But let's get. Let's work our way down. But right now there's more changes to be made. Take a look. Emergency fund is at 750amonth. Let's keep going. So now that we've accounted for your student loan debt, you still have $2,195 in guilt free spending money per month. What do you guys think about that as wild. Mm. You were like, where's the money coming from? It's just sitting there.

[Michael]

Yeah.

[Ramit Sethi]

It's meant to be used on your rich life. So let's go back to what you told me your rich life was. What did you want to do again? You wanted to pay off debt. Right now I feel like we're doing okay with debt. I'd like to pay it off a little faster because I don't like $130,000 of debt. And if I can pay an extra couple hundred bucks towards it per month and it's just a flip of a switch and I never even see it, and then it shaves off years and years. I want to do it. What do you say?

[Monica]

Let's do it.

[Ramit Sethi]

I'd rather play offense with money. You have a high income. I keep saying it because I want you to both internalize it.

[Monica]

Yeah.

[Ramit Sethi]

That you are actually making almost a quarter million dollars a year. And it's important for me to say that so that you hear it and feel it and that you begin acting accordingly. A couple with making almost a quarter million dollars a year can afford to be extremely aggressive about debt payoff. They can also afford to save a lot of money. In fact, I think you should be saving more because again, if one of you gets laid off, you're in big trouble. You can afford to be thinking expansively on a decades long basis. I also think that you're not factoring in a few things. What happens to your child care expenses in about three, four, five years?

[Monica]

Goes down.

[Ramit Sethi]

They go down. Are they going to go to public school?

[Monica]

Hopefully, yeah. I don't imagine private school.

[Ramit Sethi]

Now's the time. Honestly, to be talking about it. You know, again, a couple making a quarter million dollars a year plans ahead. They never make decisions on a whim. And if something has to be made on a whim, that's already been planned for as well. Oh, we have to fly somewhere because mom or dad or somebody's sick. That's already been planned for in our emergency fund. Let's tap it and go. Okay. That's what a high income earns you. So your child care costs going to go way down, which is 700 bucks a month. Anybody going to get a raise in the next five years, let's claim it.

[Michael]

Yes.

[Ramit Sethi]

Love that. Love the, the great positive answers from both you. Yes. That money, as with any new income, you should have a decision, what do we do with extra income? And it should be split up on a percentage basis. I talk about that in part two of Money for Couples. My wife and I have a rule. Any new additional income gets split accordingly. Boom. We never think about it. It just follows the system and flows like water.

[Michael]

Yes.

[Ramit Sethi]

So you are actually setting yourself up for having hopefully positive things. Of course we want to plan for the negative, like a layoff, something, somebody getting sick, that kind of thing. But that's why I think that paying off your debt aggressively so that by the time you're 45, you're debt free. You got these young kids. Wow, you have at least two chapters of life left. You got a lot. I really would not want to be sitting around on that till 52 just because I just didn't decide to put an extra few hundred bucks a month towards debt. Nah, that's why I think like that.

[Monica]

Thank you.

[Ramit Sethi]

You said you need a thousand bucks in guilt free, which I think is realistic. I actually think your number is right on the money. A couple that's in credit card debt should not have the typical 20 to 35% free spending. They should have less because it's an emergency. You should be paying that money off. A couple that has $130,000 of student loan debt should be having their guilt free number reflectively going down. So 10%. Exactly what I would suggest.

[Michael]

Okay.

[Ramit Sethi]

You still have money to go out, you know, go out for a couple of meals and stuff like that. But you're actively redirecting money to debt payoff to investing, and we need to get some towards savings. So there's one last thing which is combining your incomes and your expenses. I think it needs to happen combining your money into a joint account. Each of you has individual money every month. Right. You'd Each have a little bit of individual. It could be 100 bucks, could be 300 bucks. Whatever the number plays out to be, you can spend that on whatever you want. Lunches, self care, no questions asked. Your partner doesn't even have access to that account. They know about it, but they don't have access to it. It's yours. But meanwhile, the majority of your life is together. So your rent, your car payment, all of it, kids stuff comes out of that. And both of you are involved. Both of you own one or two numbers and each month when you talk, you report on it. All this is laid out in money for couples that brings you together, literally puts you on the same page. How do you both feel about that?

[Monica]

Feels great. It feels like a big step, Feels helpful.

[Ramit Sethi]

Michael, how do you feel about it?

[Michael]

It's something that we've talked about and I'm liking it because it resembles what the conversation I had with my mother. So that gives me a place to come from that's comfortable in knowing that it can work.

[Monica]

And our debt payments would be combined essentially, like debt would come out of that joint account. So we tackle debt evenly together.

[Ramit Sethi]

Totally. Again, you can always make certain tiny exceptions. Like I think Michael's credit card debt should rightfully be his. And I think he should probably pay more, way more towards it. Michael, I think probably for the first X months that should be coming out of your guilt free spending money because it's your debt that you incurred and it's discretionary. It's not even like student loan debt. It's just like lunch.

[Michael]

Yes.

[Ramit Sethi]

Sometimes it's important for us to accept the pain of a consequence because then we learn. I don't like this. I'm not going to do it again.

[Michael]

Yes.

[Monica]

That's okay.

[Ramit Sethi]

Michael saying yes. Boom, done.

[Monica]

Perfect.

[Ramit Sethi]

I love that. I love that. Okay, my, my feedback to you then is the following. Number one, pay down your debt aggressively. You can actually afford to spend a lot of money paying down debt and you can be debt free in 9.5 years, possibly even faster, depending on raises, other expenses. That's amazing. I think the two of you should give yourselves a round of applause for putting yourself in the position of being able to do that. That's incredibly impressive. Okay, a few questions for you. What do you notice about how you communicated about money at the start of our conversation versus now?

[Monica]

Definitely more of a we focused, which is wild because it felt like we were doing that, but we really weren't, clearly, so that's huge. Also the tone, I don't sense a Defensiveness from Michael. That's big.

[Ramit Sethi]

I love that.

[Monica]

Yeah.

[Ramit Sethi]

Michael, how about you?

[Michael]

For me, it's definitely expressing the emotion of what I'm feeling with things too. In addition to having our collective vision or things that we value be said and built towards and not just, well, I had this. You have that.

[Ramit Sethi]

I think that coming here, first off, we just start off with some. Some distance about like, oh, I didn't even know you got a raise. So, you know, we spend time on that. But as we start to unpeel it, we realize, oh, my gosh, there's so much more here. What seemed existential was actually just a tiny piece of the overall picture. And that idea is, you know, Michael, how you see yourself with money affects the way that you communicate and treat money. It even affects the way that you spend time, how many hours at work, et cetera. Monica, the fact that you were kind of struck and shocked by the income increase. Also, it seemed that for a while you were kind of on your back heels, like, oh, my God, I can't believe that we make $233,000. And part of what I love seeing you is to start to embrace that. Both of you. Yes, we are actually a couple that makes almost a quarter million dollars. And what does a couple that makes $233,000 a year do? Well, let's talk about it. They don't have credit card debt. Do they have student loan? Maybe, but they're paying it off aggressively. They have a plan. Whether it's five years, 10 years, 15 years, what? They know the exact number. Boom, they know it. Do they stress out about going out to eat? No, no, they actually have a plan. And when they go out to eat, they have talked about it and they've appreciated it. Whether it's $5 or whether it's a $50 meal, they appreciate it. Basically, what I saw emerging from the two of you is this realization that money is so much richer and more textured than like, should we track this or that? That's to me, so one dimensional. And what we started talking about was appreciation and gratitude and connectedness and this textures of like, I want to buy a house. Okay, I can support you on that. I want to eat out. Okay, I want to support you on that. How do we do it? How do we make all these things possible? That's the beauty of a rich life together. A huge thank you to Monica and Michael for speaking with me today and for sharing so openly. This conversation took a lot of turns. At the beginning, it was all about Michael his debt, his eviction, how he needed to change. But by the end, Monica realized she had a massive blind spot of her own as well. $130,000 in student loans she hadn't even considered paying down. This is one of the common psychological traps of student debt. Once it hits 50,000, certainly 100,000. A lot of people check out. They compartmentalize. They start saying things like, I'll die with my debt. That's exactly what Frank said on my Netflix show. That's what Monica was doing here. Interestingly, people also treat their 401ks the same way. When I ask them, how much money do you have invested? A lot of times they don't even count their 401k. They don't even think it's real. Just like student loans don't feel real to some people. Newsflash. Both of those are real and both have real consequences. Monica could have knocked this debt out years ago. She makes over $200,000. She has the money, but she doesn't have the mindset to be aggressive with her finances. That's why I kept repeating, at this income level, you can go on offense. And even if you make less, this strategy still applies. I want you to stop asking, what's the minimum we can pay? Instead, I want you to start asking, what if we paid an extra $500 a month, $700 a month, $1,000 a month. How fast could we be done? That's how you stop treading water and you start building your rich life. Now let's check out their follow ups.

[Monica]

My biggest surprise was that we make $233,000 a year. Specifically that my husband's income is now at 95k. I had no idea. So that was, that was quite shocking.

[Michael]

Don't want her to feel like surprises are happening. I realized that these things are hurting us more by her just feeling surprised. So just being as transparent as possible and helping her see the things that I'm feeling and see the things that I going on specifically financially as well.

[Monica]

The finances have felt really heavy for a long time. Just hearing that, hey, his credit card debt will be paid off by the end of the year. That, hey, we can, you know, have some wiggle room with how much we are putting away in our emergency fund or paying off student loan debt. Those takeaways were really big.

[Michael]

We decided to how to fund a joint account. I already set up the percentage going into that on every paycheck basis. Continue to pay off my debt, reducing my ties temporarily and we'll continue to keep Like I said, paying off this credit card and help it out a little bit more around the house as these credit cards get paid off to help alleviate some of the stress for Monica.

[Monica]

So I'm walking away feeling just different, more inspired. Like, changes is on the horizon and my posture is different. You know, walking around like a couple who makes almost a quarter million dollars a year feels very different than walking around like a couple who's making it paycheck to paycheck. Hi. We're checking in to let y' all know how we're doing with our financial updates. We went to the library a few weeks ago and talked about our big picture finances. It was much more productive than our typical monthly conversations. We have been struggling with talking about finances on a more regular basis, so that's something that we need to work on.

[Michael]

Our conversations are now more big picture than just working on focusing on, like, the small details of little things that don't matter as much anymore. We have started combining finances as far as certain bills and joint account. We deal with joint account and just piecing together how we continuously collectively work together financially and continue clearing up my credit, getting rid of bad debt and just past mistakes. That is giving a little bit more optimism and better outlook for the future.

[Monica]

And we definitely don't go to Chick Fil A as much. All right, thank you.