240. “We book $10K vacations, then panic about money”

Summary

---

Money For Couples with Ramit Sethi

Episode 240: “We book $10K vacations, then panic about money”
Date: December 23, 2025

---

Episode Overview

In this episode, Ramit guides Cheryl (67) and Michael (69)—a married couple of 12 years, both college professors—through the tangled web of their financial relationship. Despite having a combined net worth over $800,000 and yearly income near $191,000, they frequently butt heads over spending, especially on travel. As Cheryl, a cancer survivor, leans into “living for now,” Michael’s cautious approach, framed by his Depression-era family background, often causes tension and confusion. The episode dives deep into the psychology, history, and structure of their finances, exposing how personal and generational stories shape money decisions in marriage.

---

Key Discussion Points & Insights

1. Getting Specific About Your Rich Life

[00:00–01:24]

• Ramit opens with his core philosophy: “Get more specific. People say, I want to travel more...Okay, this is your rich life. Get more specific.”
• He stresses that money conversations shouldn’t be about abstractions (“travel more”), but about the details—where, with whom, and how you’re experiencing life.

2. The Faroe Islands Vacation Dilemma

[01:24–02:53, 05:32–06:27]

• Cheryl and Michael dream of a $10,000+ trip to the Faroe Islands, but immediately hit anxiety about whether they can “afford” it.
• Michael: “It's not like we have $10,000 in cash sitting around that we could just shell out.”
• Cheryl: “We do, actually.”
• This reveals underlying confusion over their actual financial position and communication gaps.

3. Trust, Betrayal, and Lost Money

[01:52–02:09, 09:14–12:13]

• Michael lost $12,000 of inherited money by investing poorly (without telling Cheryl).
• Cheryl: “I really lost it—I felt betrayed...when you make a deal, you stick to it.”
• Michael admits to hiding the loss out of shame, despite knowing the “sunk cost fallacy.”
• Ramit explores how the issue is less about the money itself, more about trust and shared expectations in a relationship.

4. Money Structure—Separate Accounts and ‘Contribution’

[12:30–16:28]

• Their finances are mostly separate; Michael covers house expenses using Social Security and adjunct work, Cheryl handles other expenses including travel.
• Michael repeatedly uses the word “contribute,” which Ramit highlights as common among lower earners in relationships.
• Cheryl recalls how their roles shifted drastically when she developed cancer just six weeks into marriage: “He was so incredibly committed...I never had expectations for him to just...find full-time work.”

5. Conscious Spending Plan Breakdown

[23:34–33:01]

• Cheryl and Michael have $455k in assets, $517k in investments, $42k in savings, $186k debt, for a net worth of $828k.
• Monthly combined gross income: ~$16k.
• Fixed costs are low (37%), savings moderate, guilt-free spending high (33%). Their spending reflects heavy investment in experiences/travel.
• Cheryl: “Should we be saving more aggressively?...Maybe we should be traveling to Connecticut, not the Faroe Islands.”
• Michael: “It is reassuring to see that we're not busted…But still, it feels like we could be doing more.”

6. The Mindset Battle: Living Now vs. Saving for Later

[34:12–39:13]

• Cheryl has “cancer survivor brain”: “What if it comes back, and I haven’t done all the cool things?”
• Michael references longevity (his parents lived to 94): “Will this hold me out until 94?”
• Ramit: “Spending money in retirement is a skill...I talk so often about building the skill of spending money now.”

7. Financial Advisor Disappointment and Why They’re Here

[36:43–39:13]

• They have a financial advisor but feel advice has been generic—“no nuance.”
• Cheryl: “When I started reading your books, you look at it in terms of ‘what is your rich life?’...That’s not what life is like, especially at our age.”
• Ramit: “I don’t really believe your answers...When couples say yes to being here, it means there's a deeper problem.”

8. History Shapes Money Psychology

[49:04–65:45]

• Cheryl’s background: transient and sometimes insecure military childhood, expensive Wall Street life, widowhood, and career changes. She equates money with options and fulfillment but carries childhood scarcity triggers.
  • “I sometimes think, ‘Apparently, I don’t deserve this thing...I realize it’s not that, just that they didn’t have money.’”
• Michael’s background: Depression/WWII survivor parents; mother hypervigilant and controlling with money, father “grasshopper” with money. Michael displays both traits.
• Both discuss how family roles and trauma shaped their financial identity and fears.

9. Marriage Mechanics: Joint Accounts vs. Independence

[69:18–73:46]

• No prenup/postnup; finances largely unmerged. Cheryl resists joint accounts, citing 1970s feminism and observing her mother’s financial dependence. Michael is comfortable with the arrangement.
• Ramit: “There shouldn’t be any financial secrets in a marriage. It is the basis of betrayal...But each partner should have some money of their own.”

10. Visioning ‘Rich Life’ Together

[74:18–79:13]

• Both value travel, music, family experiences—not things.
• Cheryl: “Maybe with some of our kids...still so many places I want to see...I challenged [Michael] to find something, and that’s when he found the music camp in Maine.”
• Michael: “Jazz festivals...Airbnb, couple weeks, always with Cheryl.”
• Ramit: “When we start at the vision, it's this organic, beautiful, living, breathing vision...Too much of our lives when it comes to money, we think of money as inanimate spreadsheet...I'm interested in a beating heart.”

11. Is It Fair? Equity in Contributions

[79:15–84:32]

• Michael pays 64% of his low income towards fixed costs, while Cheryl is able to spend far more freely; but both are comfortable with this division.
• Ramit: “Each couple—as long as they understand the ramifications—you can decide what’s fair for you.”

12. The Math: Can They Afford to Retire?

[84:32–88:30]

• Projections show at age 70, they could withdraw ~$100k/year, less than their current $191k income.
• Cheryl worries about medical costs: “That’s the part sometimes I feel like we’re not factoring....I had to have an MRI and it was $350 copay.”
• Ramit recommends dialing in their fixed costs, reducing guilt-free spending slightly, and demanding more detailed modeling from their advisor.

13. Investments and Fees

[89:16–90:34]

• Ramit flags their current advisor (Ameriprise) for high fees and annuities: “Whenever I see Ameriprise, I see a red flag...Almost guarantee you’re leaking out thousands of dollars per year.”
• Suggests hiring a fiduciary for a one-time check.

---

Notable Quotes & Memorable Moments

“It's not like we have $10,000 in cash sitting around that we could just shell out.”
—Michael, [01:37]

“I really lost it. I felt very much like I had been betrayed in a way. I have the classic cancer survivor brain: what if it comes back and I haven't done all the cool things.”
—Cheryl, [01:56], [02:09]

“How many times do you use the word contribute when it comes to money?”
—Ramit, [14:03]

“The person in a relationship who earns less is almost always obsessed with the word contribution.”
—Ramit, [14:35]

“I sometimes say, I know where the big money's going. I don't know where the little money's going.”
—Cheryl, [17:47]

“If it's not actually physically in my hand, it doesn't really exist.”
—Michael, [06:51]

“Spending money in retirement is a skill. When you develop that skill, the entire transition gets easier.”
—Ramit, [19:52]

“It just seems like, when you make a deal, you stick to it. There's no point in making a plan if you're not going to follow through with what you say you're going to do.”
—Cheryl, [11:22]

“Greed is good.” (in jest)
—Michael, [90:38]

“Life is hard enough. We don't need to create problems if they don't exist.”
—Ramit, [83:52]

“I still think very independently about money and finance…that I should be a little proud of myself for getting to where we are.”
—Cheryl, [93:10]

“Once you know that kind of thing, you can deal with it. Another thing I learned was that I’m not nearly as bad with money as I thought I was...maybe not.”
—Michael, [92:56]

---

Timestamps for Important Segments

• [00:00–01:24] – Ramit introduces his “get specific with your rich life” philosophy.
• [01:24–02:53] – The Faroe Islands trip sparks a financial debate.
• [09:14–12:13] – The lost inheritance incident and its emotional aftermath.
• [23:34–33:01] – Full conscious spending plan breakdown and analysis.
• [34:12–39:13] – “Living for now” vs. “saving for later”–the couple’s foundational tension.
• [49:04–65:45] – Deep dives into Cheryl and Michael’s upbringings and how they shape their money psychology today.
• [69:18–73:46] – Discussion of financial independence, joint accounts, and differing generational values.
• [74:18–79:13] – Cheryl and Michael describe their ideal “rich life.”
• [84:32–88:30] – Retirement math: can their savings support their ideal lifestyle?
• [89:16–90:34] – Hidden costs: investment advisor fees and annuities red flags.
• [97:26–100:44] – Cheryl and Michael’s follow-up reflections, specific changes made, and their relationship's growth.

---

Takeaways & Actionable Advice

• Clarity and specificity are crucial in both money conversations and life goals—define exactly what your “rich life” looks like.
• Transparency and trust are non-negotiable. Even modest breaches can feel like betrayals and erode confidence.
• Joint decision-making doesn’t have to mean joint accounts, but uniting around a common system—where both have access and understanding—is vital for true partnership.
• When you pay an advisor, understand their fee structure in detail—ignorance is expensive.
• Build the “skill” of spending thoughtfully today, so you’re prepared for the psychological challenges of spending in retirement.
• Regular rich life reviews (as Ramit does with his wife) help anchor your financial plans in joy, purpose, and partnership.

---

For listeners:
This episode is a must-hear if you or your partner:

• Struggle with “spender/saver” tension
• Are on your second marriage or blending finances later in life
• Worry about “enough” despite significant assets
• Want to unite around a vision, not just numbers
• Need to get honest about the true fees and value of your financial advisor

The candid, sometimes vulnerable storytelling by Cheryl and Michael, with Ramit’s incisive, empathetic coaching, shows that money is never just about money—it’s always about love, history, trust, and dreams.

---

Transcript

[Ramit Sethi]

When I help people think about their rich lives, the main thing I often say is get more specific. People say, I want to travel more.

Okay, this is your rich life.

Get more specific. Are we talking about a month long honeymoon to Europe? Are we going to Disneyland for three days? Are we going on a trip to Bhutan? Get more specific. When you're on vacation, who are you bringing? Where are you staying? Are you eating anything in particular? These are all examples of things that that my students in my money coaching program have done as part of their rich lives. I want to share the specifics of how other people are spending their money in amazing ways and saving and investing so that you can finally get unstuck. In the program, you get access to a monthly money call where I dive into specific different topics like how to build your rich life, how to break down conscious spending plans, and then I answer your questions live. You also get access to the entire library of past calls, including how to spend money to create magical travel experiences, how to buy back your time, and how to find an extra thousand dollars per month. We have tons of virtual events coming up every month in money coaching and you can join right [e-mail] money coaching. That's iwt.com moneycoaching to instantly become a member. Right now.

[Cheryl]

Three or four weeks ago, we started looking at this very cool tour of the Faroe Islands where you fly to Copenhagen and then you fly over to the Faroe Islands.

[Ramit Sethi]

How much is this thing going to cost?

[Cheryl]

I can't see that it would cost anything less than $10,000 and it might cost more than that.

[Michael]

It's not like we have $10,000 in cash sitting around that we could just shell out.

[Cheryl]

We do, actually.

[Ramit Sethi]

What's happening right now? Do you or do you not have $10,000 of cash?

[Cheryl]

He had some money, some cash that he was supposed to put into, like our reserve fund.

[Michael]

Put it in a bad spot.

[Cheryl]

He put it in a bad place and lost it.

[Ramit Sethi]

How much are we talking about?

[Michael]

12,000.

[Cheryl]

I really lost it. I was very upset. I felt very much like I had been betrayed. In a way. I have the classic cancer survivor brain of what if it comes back and I haven't done all the cool things.

[Ramit Sethi]

Guys, you're close to 70 years old. We need to be realistic here. The decisions you make today, no joke, they're very important because if you get it wrong, you end up 85 years old, no money, and that's it.

[Cheryl]

We're at the age where our friends are dying. So. So do you hit it Hard and just say, we're going to live really hard until we die.

[Ramit Sethi]

What if you spent your whole life working hard, saving what you can, but you still don't know if you can retire? Today we're going to meet Cheryl and Mike. She's 67, he's 69. They've been married for 12 years. Both college professors, and they love to travel. But every time they talk about planning a trip, they argue. Cheryl wants to live for now. She's a cancer survivor who. Who wants to make the most of.

Every year that she has.

He says, where's the money going to come from? I'm about to show you a few items from Cheryl and Mike's conscious spending plan. Their actual numbers, which breaks down their net worth, income, and where they spend their money. You can download and create your own conscious spending plan or CSP for free at iwt.com CSP assets 455,000 investments 517,000 debt 186,000 net worth $828,000. Now, working a few more years could make a real difference in their finances. But will it be enough to support the kind of life they want? Before we hear their story, I want to hear from you in the comments. Can you tell me what was a time you spent money on something big and then you instantly felt guilty about it? Let me know in the comments below.

How are you both feeling about our conversation today?

[Michael]

I'm doing this for Cheryl.

[Ramit Sethi]

Is that right?

[Michael]

Yeah. I hate being online. I hate being on camera. I can't stand it. I don't want to. I don't like exposing myself in any way.

[Ramit Sethi]

So it sounds like you are. How would you describe it? Reluctant? Nervous?

[Michael]

Reluctantly excited.

[Ramit Sethi]

Reluctantly excited.

[Cheryl]

Okay.

[Ramit Sethi]

All right. And Cheryl, what words would you use to describe how you feel about today?

[Cheryl]

Oh, I'm just flat out excited. Michael's kind of semi retired. I'm still very much full time with the side hustle. And so I need to make the decision about when I'm actually going to retire. I don't feel confident enough yet to say, okay, I'm walking away from full time.

[Ramit Sethi]

Okay, awesome. I'm excited to talk to you more.

Cheryl, in your screening call, you said.

Something that really caught my team's attention. You said, I'm embarrassed that we're this old and we don't have our finances together. And Michael, when you hear Cheryl say that she's, quote, embarrassed. What comes up for you?

[Michael]

I know where she's coming from on that. Because we are this old and there is always these things you see in magazines that say, I'm 63 years old and I've got $2 million in savings. Can I afford to retire? And I. We think, geez, we don't have that at all.

[Ramit Sethi]

What's the timeline to retire for you, Sheryl?

[Cheryl]

I've been saying at 70, which would be two and a half years, three years.

[Ramit Sethi]

Okay, let's talk about the money discussions in your relationship, how often do you talk about money?

[Cheryl]

I would say probably not much more than once a month. Usually it's saying, are we going to spend this massive amount of money doing this thing that we want to do?

[Ramit Sethi]

Oh, like what?

[Cheryl]

Like travel. Like three or four weeks ago, we started looking at this very cool tour of the Faroe Islands, where you fly to Copenhagen and then you fly over to the Faroe Islands. And so you stop at all these gorgeous little inns and hotels and eat at these great places. And then you go on to the next one and the next one and the next one and the next one.

[Ramit Sethi]

Who brought it up?

[Michael]

Cheryl's the one that usually picks out the vacations. She likes to travel. She grew up traveling.

[Ramit Sethi]

So, Cheryl, you brought it up, and then let's talk about the money part of it. When did that part come up?

[Cheryl]

I don't even know it's come up just in a way of like, are we going to do that this summer?

[Ramit Sethi]

How much is this thing going to cost?

[Cheryl]

I can't see that it would cost anything less than $10,000, and it might cost more than that.

[Ramit Sethi]

What was your response, Michael?

[Michael]

It's not like we have $10,000 in cash sitting around that we could just shell out, but.

[Cheryl]

Oh, we do actually.

[Michael]

See. I don't know anything.

[Ramit Sethi]

Whoa. What's happening right now? Do you or do you not have $10,000 of cash?

[Michael]

Actually, now that I think about it, yeah, we do.

[Ramit Sethi]

So where did that comment come from, Michael, that you don't have $10,000 of cash sitting around?

[Michael]

I don't know. I just don't think of the savings we have as being there. I guess I just didn't think of it. Now that you mentioned it. Yeah, I can see that we do have that amount of money sitting around. Well, it's not sitting around. It's earning interest. I just. I put it out of my mind. Maybe that's the way I think about money. If it's not actually physically in my hand, it doesn't really exist.

[Ramit Sethi]

What do you think, Sheryl?

[Cheryl]

I think that is reflective of Michael's approach to money. He doesn't have Much faith or trust in knowing that it's there. I'm not sure he sees the connection that I always see between getting more money and using it to do something that you really want to do. Like, for me, that's the whole point. I love what I do. It's deeply fulfilling. It's wonderful. I never thought I'd have this career, this calling, but it also enables me to do the things that I want to do. And that's how I see money as, like, this great tool to get what you want to get to fulfill yourself. But I don't think Michael has that connection. And I don't think he's ever trusted his own ability to make money for that reason.

[Michael]

Yeah, I agree with everything that Sheryl said that we have a different relationship to money. When Cheryl was saying about things that she wants to do that she thinks up, I was thinking to myself, if it turns out we can never travel again, we need to save our money. I'd say, okay, fine. I got other things that interest me.

[Ramit Sethi]

You guys talk about this kind of stuff around money?

[Cheryl]

Not specifically that, but for the last couple years, we did hire, like, a financial planner. And so we started having, like, legit conversations about numbers and what we have. We still have our money pretty separate for the most part. So when we had to fill out all the paperwork for him, then we started having much more in depth discussions about what we have.

[Michael]

Good.

[Cheryl]

What's coming.

[Ramit Sethi]

When you started filling out these forms and talking about your money separately and together, what was the first reaction that you had when you looked at everything in totality?

[Cheryl]

I thought, it's not as bad as I thought it was, but it's not as good as I would like it to be.

[Ramit Sethi]

Okay. And Michael?

[Michael]

Yeah, that's exactly what I thought, too. It's not as bad as it could have been.

[Ramit Sethi]

All right, and then what were some of the bumps in the road that you encountered?

[Cheryl]

We both work in a profession where the money comes in very odd ways. Our contracts are just really different from Big World and the way that it works. And then our parents passed away. My mother had passed away, but a while back with it, my dad passed away and left money. And Michael's mother died six weeks later, and she left an estate. And he had some money, some cash that he was supposed to put into, like, our reserve fund.

[Michael]

I put it in a bad spot.

[Cheryl]

He put it in a bad place and lost it.

[Ramit Sethi]

How much are we talking about?

[Michael]

12,000.

[Ramit Sethi]

And you put that into some type of. What was.

[Michael]

Was stocks.

[Ramit Sethi]

Okay. You put into stocks. And you lost some of the money?

[Michael]

Yeah.

[Ramit Sethi]

Okay.

And what did that bring up for the two of you? What kind of discussion?

[Cheryl]

I didn't know about it until we had to tally things up for our financial planner. And I really lost it. I was very upset. I felt very much like I had been betrayed in a way of trust. Not the money, but we've always had a very trusting relationship. And so it was weird to me that he just went rogue. And it brought up all this stuff that I sometimes say that he's resistant to making money. He was a lawyer. He made money. Hated it. Smart. Get out of it, do something else. But I sometimes get the feeling like he puts up like, a little Teflon shield to keep money from sticking to him. And that's what he did with this money that was going to be his one big contribution to our future. And he gambled it and just lost it. And I just didn't think it was a smart decision.

[Ramit Sethi]

Do you trust each other with money today?

[Cheryl]

Sure, for the most part.

[Ramit Sethi]

What does that mean, for the most part?

[Cheryl]

I'm still, like, reeling a little bit from the incident.

[Michael]

Still got some residual anger, I think.

[Cheryl]

No, not anger, but I tease him a lot. I'm like, you don't have money, like, hidden somewhere that you're not telling me about or.

[Ramit Sethi]

Why do you say that?

[Cheryl]

Because I thought he was doing something with that money that we had agreed on and then he didn't.

[Ramit Sethi]

That's interesting. It's not about the 12k. That number is quite modest in the grand scheme. It's, as you mentioned, a betrayal. What does betrayal mean to you, Cheryl, when it comes to money?

[Cheryl]

Well, when you make a deal, you stick to it. There's no point in making a plan if you're not going to follow through with what you say you're going to do.

[Ramit Sethi]

Okay, Michael, what was your thinking behind that decision?

[Michael]

Well, I thought it's not a whole lot of money to put away. And I thought if I put it into the stock, there's a good chance I could grow it. I could have more money that would contribute more. And it all went south. And the farther I got into the fact that it was going south, the harder it was for me to confront it and the harder it was for me to tell Cheryl that it had gone this way. It just got worse and worse. And then finally cut losses.

[Cheryl]

It was.

[Michael]

You know, funny thing is, I teach logical fallacies as part of my thing, and that's the sunk cost fallacy, you know?

[Cheryl]

Yeah.

[Michael]

And I fell into it?

[Ramit Sethi]

Well, as. As we all know, just because you know something does not mean you are impervious to it. In fact, if anything, we are all human. And you could teach a textbook on something, but, gosh, sometimes you find yourself right in that textbook.

[Michael]

Yeah.

[Ramit Sethi]

Human condition, isn't it?

[Cheryl]

Yeah.

[Ramit Sethi]

How is your money currently organized? Do you combine your money as a married couple or.

[Michael]

No, no. My Social Security and my. Whatever money I get from my job go into an account that Cheryl is a survivor to, and she can access it, and Cheryl's money goes to her account.

[Ramit Sethi]

How do you pay your bills?

[Cheryl]

We kind of. Yeah, we divvy it up.

[Michael]

That's divided. One of the reasons I went with Social Security, because at that point, I was an adjunct and I was not making a whole lot of money, and I realized I was past the point where I could start taking Social Security. And I calculated that the Social Security would cover our house expenses, it would cover the mortgage, it would cover water, sewer, et cetera, Internet, phone.

[Ramit Sethi]

How did you decide this split?

[Cheryl]

It just kind of organically came up that if he could rely on that money, every month was very different from the hodgepodge of adjuncting, where you're randomly getting checks and sometimes you're not. And so that was like a steady thing that he could contribute.

[Michael]

If I remember correctly, I was the one who brought it up. And it occurred to me that I'd be able to contribute to this. Before I took this, I thought I was very much a free rider. Cheryl was paying for everything, and I would contribute money, but we didn't share it. And I thought this was a more equitable way to do it, that I would jump in and have a steady income each month that would cover the things that are required each month.

[Ramit Sethi]

It's very interesting, Michael, how many times do you use the word contribute when it comes to money?

[Michael]

Oh, I see what you're doing. A lot, actually. A lot.

[Ramit Sethi]

Not surprised. You know why?

[Michael]

This was her house. She owned it before I moved in. I relocated to the city where Cheryl lived, and then I got a job here.

[Ramit Sethi]

How does contributing fit into that?

[Michael]

It goes along with the idea that Cheryl makes a lot more money than I do because we don't have tenure.

[Ramit Sethi]

That's a big clue.

[Michael]

Yeah.

[Ramit Sethi]

The answer is the person in a relationship who earns less is almost always obsessed with the word contribution. And Michael is a great example that it doesn't mean anything good or bad about anyone. It's just a dynamic that happens when you have somebody who does not, quote, contribute as much Financially speaking, then they start to become unconsciously uncomfortable with it and they go, oh, I need to contribute. Oh my gosh, let me, let's talk about this.

I can do that.

Social Security here and there. And I see Cheryl nodding her head. Cheryl.

[Cheryl]

Well, just for a tiny bit of context, Michael and I were in a relationship and we decided to get married and that he would move here from Vermont, where he was living at the time. We got married in December and six weeks later I got diagnosed with breast cancer. We thought it was going to be like a nice cal after the holidays, after the wedding, just we'll have time to catch up. And boom, it was just a huge slam. And so when he'd moved down here, the plan was that he'd get a job. But suddenly I needed to be supported. I needed somebody to go to chemotherapy with me, go through two surgeries, go through radiation treatment. And I didn't stop working. I was working through the whole thing. So he was so incredibly committed and supportive of me going through this terrible thing six weeks after we got married that I never had expectations for him to just. It wouldn't even have worked if he went, got a full time job. Like he was driving my kid to school and picking him up and coming with me and advocating for me with doctors doing the whole thing. So it really was never a point where I thought that it mattered, that I was making more, that I had this full time job, that he probably would not find anything other than part time work. And that was fine. That was fine.

[Ramit Sethi]

That's great. Kudos to you, Michael and Cheryl, how are you doing health wise now?

[Cheryl]

Good. That was, it's 11 years.

[Ramit Sethi]

Oh, wow.

[Michael]

12.

[Ramit Sethi]

Oh, congratulations.

[Cheryl]

12. Yeah.

[Ramit Sethi]

That's amazing.

[Cheryl]

Yeah.

[Ramit Sethi]

All right. Shall we take a look at your numbers? I'm very curious. So this conscious spending plan, I'm going to throw it up on screen in a second. What was it like going through the process and doing the CSP together?

[Cheryl]

Actually, I think we laughed a lot. It was fun to figure out what you wanted on that form versus like where we thought things were and then also was a little bit enlightening. I still don't understand it. That's why I'm very interested to hear what you have to say because it seems like the percentages are weird.

[Ramit Sethi]

I'll definitely walk you through it. Do you both feel very competent understanding where your money is going or do you not feel like you have a grasp over where your money is going?

[Michael]

I'll tell you that one of the things we laughed about when Filling out the CSP was like, we get to a line item and we go, I don't know. Let me go look that up.

[Ramit Sethi]

You got to remember, most people don't.

Even know how much money they make. Yeah, forget about how much their freaking property insurance is or property tax or how much they spend on granola bars. Nobody knows. So that I'm not troubled by that at all. Sheryl, do you feel like you understand where your money's going, or no?

[Cheryl]

I sometimes say, I know where the big money's going. I don't know where the little money's going.

[Ramit Sethi]

What Cheryl just revealed is telling. She knows where some of her money goes, but not all of it. That alone tells me there are likely issues in how she and Mike manage their finances. And it doesn't surprise me. Their money is not fully combined. And when your finances are not linked together, it's incredibly hard to see the full picture, let alone to make confident decisions about retirement. You have to remember that for most people, they get most of their information and feelings purely from what is in their checking account. They don't even really factor in what's in their retirement account. And if they have a partner's money that is not linked together, you might.

As well forget about it.

That is why, especially if you are married, it is so important to combine your finances and have a bird's eye view of what is going on with your money. Retirement money is real, even though it may not feel real to you. Your debt is real, even though it may not feel real to you. All of it is real. You've got to look at it on paper. That is why I recommend you use my CSP now. I think Sheryl and Mike's story is relatable to all of us because of one big question they're asking. What if we don't have enough to retire the way we want? This question goes beyond the numbers. For decades, we are told, save, save, save. And we're in accumulation mode. Earn, invest, save, build. For a lot of people, that becomes our identity. And then suddenly one day, switch gears, start spending, and you've got to now be okay with those numbers going down forever. This is especially hard for men whose identities revolve around being the provider and often take pride in seeing the number go up de accumulation. The idea of intentionally spending your money down breaks the script that we have followed for our entire working lives. That script saving is good. Numbers should go up. You never know what tomorrow might bring. But at a certain point, tomorrow is happening right now. It's Kind of like how Indian parents.

Talk to their kids for years.

You hear, don't date, focus on academics, don't date, focus on your career. And then we academically dominate. And then one day, okay, time to get married now. Hey, why aren't you married yet? It's like no ramp up, no gradual change, just time to get married. That's what the retirement transition feels like. Very little guidance, very little planning, just you're retired, good luck, figure it out. I got to tell you, spending money in retirement is a skill. And when you develop that skill, the entire transition gets easier. That is why I talk to you so often about building the skill of spending money now, because you don't want to wait until you retire to have to grapple with that. Now when we come back, we're going to dive into Sheryl and Mike's conscious spending plan to see their actual numbers. I'll see you back here in just a second.

Real question for you. Do you know how often you're supposed to see your primary care physician?

How about the dentist? How about a dermatologist? A lot of us just wait to get a text from the dental hygienist.

To know it's time to make an appointment. But your health is important and we.

Talk about going from defense to offense with your money. What about with your health? Why not make your life easier and book this year's appointments today with zocdoc. Zocdoc is a free app and website where you can search and compare high quality in network doctors and click to instantly book an appointment. They have over 100,000 doctors across every specialty from mental health, dental, primary care and more. Just filter for the doctors based on your insurance, your location, even ratings and.

Find a doctor who's a good fit for for your needs.

Plus, Zocdoc appointments happen fast, usually within 24 to 72 hours. Instantly click through your options, book the.

Appointment and you are good to go. If I needed to find a new.

Doctor today, this is what I would use.

Stop putting off these doctor's appointments and.

Go to Zocdoc.com ramit to find and instantly book a top rated doctor today. That's Zoc. Doc.com ramit zocdoc.com ramit My wife and I have a few key important money rules that we share together. One of them is we have a target emergency fund and we are always keeping our eye on it to make sure we're good. Next, we support our friends charity events with money and third, we upgrade the things that are important to us that we use on a daily basis. And finally, we are happy to pay a little bit more for the essentials that we use every day, like the mattress that we sleep on, which is from Leesa. Leesa offers several different mattress models. So whether you sleep on your side, your back, or somewhere in between, there's one built for you and from the first night you're going to be able to tell the difference. They use premium materials and they deliver full body support. Every Leesa mattress is assembled in the US and comes with free shipping, easy returns and and a 120 night sleep trial. Plus every year they donate thousands of mattresses to those in need. Lisa partners with organizations like Clean Hub to remove harmful plastics from our Oceans. Go to Leesa.com for 20% off mattresses, plus get an extra $50 off with promo code Ramit exclusive for my listeners. That's L EE E S a.com promo code RAMIT for 20% off mattresses, plus an extra $50 off. Support our show and let them know that we sent you after checkout. That's Lisa.com promo code Ramit.

Cheryl, can you read off in this box the word in bold and then the number in full next to it for this entire box, please.

[Cheryl]

Okay. Assets, 455,000. Investments, 517,000. Savings, 42,756 and debt, $186,000. Total net worth, 828,756.

[Ramit Sethi]

Cool. All right, so net worth is $828,000. What does that number mean to you?

[Cheryl]

I vacillate completely between thinking, oh my gosh, that's not enough. Like Michael referenced, people are saying you need at least a million and a half. And I think there's probably not going to happen. On the other hand, I feel a little proud of myself because I didn't start this career till I50. I did a lot of things before I did this. I worked on Wall Street. I was married to a partner at a major firm and had a very expensive life, as you would expect from an 80s Wall street multimillionaire, that kind of house in the Hamptons and big apartment in Tribeca and traveling all over the world doing all those things. And I was very unhappy. And I really recognized working on Wall street how unhappy people were who made huge amounts of money. Just very unhappy. Snorting coke like there's no tomorrow. Just like really horrible lives. And so I thought I what I want is a life that has some purpose to it, that has some kind of meaning to it. And Then I went through a terrible tragedy. My second husband died of sudden heart attack at 36. I was 38. We had made all these plans. We'd bought a 50 acre farm. He would become a doctor, and boom, it was over. So I had to figure out what to do. And so I went back to school and got this degree in philosophy and was not sure what I would ever do with it. But when I found out that I could teach with it, and then I had my son very unexpectedly, on my own, and then I did another master's degree and so I could teach what I wanted to teach and decided to dive into it. So for me, it was the perfect. I'm fulfilled and excited and always challenged, and I make a little bit of money. This kind of money is better than any kind of money I had before.

[Ramit Sethi]

Okay, that's refreshing. I appreciate the vision and the fact that you lived that Tribeca, Hampton's life, Wall street, and then you proactively, affirmatively said, okay, not for me. I want to do this. Was it difficult to go from that lifestyle, Manhattan, etcetera, To making far less money doing graduate work, etcetera.

[Cheryl]

It was very hard. I think I'm pretty good at being poor when I need to be. I can really pull that off. Michael can too. We're just good at being super frugal if we have to be. It can be really nerve wracking. I always felt like I had a bit of a cushion, but it's still. Even when I started this job, I would be looking at it and think, do I have enough money to get through, like, this month?

[Ramit Sethi]

Was the cushion your family?

[Cheryl]

No, it was money that I had saved before I started this career. So I had enough of a cushion that I didn't have to freak, but not enough to live. Fancy.

[Ramit Sethi]

Hearing your response to my question, what does $828,000 mean to you? You notice your answer. It's what you described was your life. And when I ask, what does this number mean? What I'm really asking is, is it enough? What kind of lifestyle will it give us? Should we feel positive or negative about it? And in order to understand that, you have to have a bit of a technical knowledge. It would be like me saying, you have 50 million white blood cells. What does that number mean to you? Average person goes, I don't know. Good, bad? Am I gonna die?

I don't know.

That's how we treat this number. And with a little bit more knowledge, we will be able to have a more relevant answer to the question. Okay, so let's just put a pin in that. And I would like for you to both be able to ascertain what this number means to you on a lifestyle basis. Okay, let's continue moving along. Michael, can you read off your combined gross monthly income, please? What is that number?

[Michael]

Combined current monthly 15,949.

[Ramit Sethi]

Great.

So together, if we combined your income together, the two of you are making $191,000 per year. Who knew that?

[Michael]

I do that because I do the taxes.

[Ramit Sethi]

Okay. Michael knew it.

[Cheryl]

Cheryl, I didn't know that.

[Ramit Sethi]

Not really did I know it. 50%. Thank you very much. Keeping my statistic running. 50% of couples do not know their own household income. Why is that, Cheryl?

[Cheryl]

Okay, I'm just going to say it's because we are not paid consistently.

[Ramit Sethi]

Yeah, but you make a certain amount per year.

[Cheryl]

He might make $20,000. Yeah, and he does the taxes. So I very often ask him, what was our income combined last year?

[Ramit Sethi]

What did you think you made last year?

[Cheryl]

120,000.

[Ramit Sethi]

And you made 144,000.

[Cheryl]

I don't think he told me that. I think he's been, you know, gas.

[Michael]

Oh, I told you that.

[Cheryl]

All right.

[Michael]

Not hiding any money. Well, that's going back to the $851,000 because I do the taxes and realize that, okay, if we cut off right now getting any money whatsoever other than Social Security for both of us, we have 858, $50,000 in net worth. And I said we got enough to live on for at least eight years, probably ten years, you know.

[Ramit Sethi]

No, we're not using that reasoning. That's not how we make end of life decisions for our finances. What the hell? Boy, both of you just went very dark. Guys, you're close to 70 years old. We need to be realistic here. The decisions you make today, no joke, they're very important. Because if you get it wrong, you end up 80, 85 years old. No money, and that's it. That's the end of the ballgame. You do not want to die in America in poverty. So we don't make decisions by saying, let me lick my finger and put it in the air. And no, we get precise. Especially when we're in our late 60s. That's the way we're going to do it. Okay, let's continue along with the CSP. Fixed costs, 37%. That's quite low.

[Cheryl]

This is why I don't trust this. I'm not sure what we did.

[Ramit Sethi]

You don't trust it. Well, you make a lot of money and Your mortgage is $1,141. Your utilities are modest. Your insurance is modest. You have a financial planner for 150 bucks. Fine. Cars only 150, so that's probably paid off. Debt payments, $68 a month. Groceries 700. Quite modest. Clothes, 150. Copays. You have subscriptions for 469. A little higher than I typically see, but not that big of a deal. Cats 225. House cleaner 300. Manicures and haircut 75. And home repairs 200. Yeah, it's all quite modest relative to a take home income of $13,000 a month. The two biggest drivers in why this is low. Actually there's three. One is your mortgage is low, two is your car payments are low. And three, your debt payments are low. Those are the three key drivers as to why this is low. Most people in your situation, even with a equally high income or sometimes even higher, their mortgage is way higher. Their car is like astronomical. I'm talking 800 to 1500amonth. It's nuts. And then their debt payments are quite a bit higher as well. Sometimes over a thousand, sometimes two, $3,000 a month. So there you go. Believe the numbers. They look to be quite accurate to me. Let's continue along. Investments at 22%. That's pretty good. Hold on, I'm going to take a look here. So you are doing a pre tax 401k or 403b. That's fine. 800 bucks a month. And then we go down to your investments. We have 3,000 bucks a month in post tax. Okay, I see some words I don't like. We'll talk about those in a bit. Savings at 8% which is 500 bucks a month to a long term emergency fund and 500 bucks to a travel fund. Okay. I like being able to see people's fingerprints on their csp. I can tell the two of you like to travel. You fund it.

Great.

This is great. I love to be able to see who you are by where you spend your money. And then finally guilt free spending, 33%. That's cool with me. But I will say this is at the higher end of the number. Typically it's 20 to 35%. At 33, you're near the top of that. Let's take a look at how you described it. Dining out, gadgets, travel, theater, instruments and music, paints and paper, donation gifts and kids. That's $4,377 a month. So if we look at all these four key numbers fixed costs, which typically I recommend 50 to 60% yours, 37%, which means you are saving a huge amount on fixed costs. So my natural question is, where are you putting the rest of your money? Where is it going? And so we scroll down, we go, oh, they're putting more in investments. This makes a lot of sense. When you're older and you have not invested aggressively your whole life, you should be investing aggressively, especially now when you have time. So you're at 22% plus a little pre tax. That's nice. Savings at 8%. Yeah. Okay. Not bad considering you have an emergency fund of about four months and travel savings of $23,000. Yeah, okay, maybe you can save a little bit more, but it's fine. And then you are spending a lot on guilt free spending. Eating out or travel, theater, books, all that stuff. What do you make of it? As I go through those numbers, what do you think, Sheryl?

[Cheryl]

It leaves me with a question. Should we be saving more aggressively? If I want to retire in a couple years, should we be maybe not taking fancy trips to the Faroe Islands? Maybe we should be traveling to Connecticut and putting more money into investments for the future.

[Ramit Sethi]

Michael, what's your assessment? As I walk through these, in an.

[Michael]

Odd way, it is reassuring to see that we're not busted, you know, not broke. And I'm glad to hear that we are saving more and our expenses are lower than people in our category. But still, it feels like we could be doing more. We should be putting more away. Both my parents live to be 94 years old, which I don't want to do. But I was thinking, like, will this hold me out until 94? You know, geez, if you both are.

[Ramit Sethi]

Concerned about wanting to save more, why don't you just save more? You clearly can.

[Cheryl]

Because I have the classic cancer survivor brain of, what if it comes back and I haven't done all the cool things? What if I haven't gone to the Faroe Islands and the Norwegian fjords and the Machu Picchu and all of those things? And so part of it is, no.

[Ramit Sethi]

Just live, live, live.

[Cheryl]

Because you don't know we're at the age where our friends are dying. So do you hit it hard and just say, we're going to live really hard until we die?

[Ramit Sethi]

What's the philosophy been so far?

[Cheryl]

Trying to find a healthy balance. My parents lived to travel. My father was an airline pilot, so my mother would save. She'd buy the cheapest pasta in the store, but then she'd book a trip to the galapagos and so I have a lot of that, too. I don't care about the cars. We have old cars, period. I don't care. We have a small, cheap house that. So I don't care about that stuff. But I. I do want to have experiences. I do want to have all those things, because who knows?

[Ramit Sethi]

Your philosophy has been a healthy balance. Do you think you've found a healthy balance between saving and spending?

[Cheryl]

I'm not sure that we have.

[Ramit Sethi]

Okay, that's an honest answer. And, Michael, what has your philosophy been on the finances?

[Michael]

I agree with Cheryl. I know that a lot of people, they put off experiences until they retire. But we saw both sets of parents that by the time they retired, they were not capable, they weren't able to enjoy these things. And so we mutually agreed that instead of putting off these experiences until we retire, and we have plenty of time to do it, let's do it now when we've got money coming in so we can spend it and then replenish it and we'll take a couple trips a year.

[Ramit Sethi]

What I like is that the two of you have talked about it and you've developed a philosophy. I can hear that you're questioning, is this right? Are we doing it right? I can hear that. But you at least talked about it. And you have taken and integrated your family history and said, look, based on what we learned, based on what we observed, I think, and we think this is what we should do. My favorite thing in the world is meeting people who have a point of view. I don't even have to agree with it, but at least they came up with a point of view for them and a point of view on eating, on parenting, on travel, on their house, whatever. It is so rare that I love hearing your point of view on money. I have a question, because coming here, I ask you, what do you want to get out of today? And you told me, I want a decision about when to retire. I want more knowledge about where our money's going. All valid questions, all good questions. But you engaged a financial advisor, and from your csp, you're paying them, so why not ask them why are we here?

[Cheryl]

They seem to take a very automated approach. You have it, you don't have it. There's no nuance in it. Whereas when I started reading your books and you look at it in terms of what. What is your rich life? Rather than am I rich or not rich? Which seems like most financial planners kind of, we've got all this money, here's a pie chart, blah, blah, Blah, that's fine, but that's not what, like, life is like, especially at our age. It's not the same formula that you create in the way that you look at how you balance your life and your money. The difference is that you are asking us questions that lead to better answers than do we have enough money or do we not have enough money?

[Ramit Sethi]

That's a good way to put it. What's fascinating though, is that when you told me what you want to get out of today, they were all very mechanical things. I don't really believe your answers actually, and I don't think you actually believe them either.

Think about it.

I asked you, what do you want to get out of it? This is what Michael said. A solid foundation and more knowledge about where our money's going. You don't need me for that. You got the csp, you got your own credit card reports. You don't need me. Cheryl, you said, I want a decision about when to retire. Why you need me for that. Your financial advisor can give you five different conditions and scenarios under which you can retire. If you take Social Security at this age, blah, blah, blah. The only thing that really stood out to me is I would. This is what you said, Cheryl, and you added this as an afterthought. I want us to be more on the same page that I can help with, that I can help with better than maybe your financial advisor. But these mechanical questions, not only am I probably not the best person in your professional relationship, I don't even think you really want to know it, because it's probably buried in that 40 page report you got last month. What do you think?

[Cheryl]

No, I think you're right. According to our financial advisor, I could have retired this year on my birthday. Like, I could have started collecting Social Security and I opted not to, partly because, as Michael said, we had this epiphany that we could travel before I retire. I can keep working. We have this income coming in. I'm just feeling a little ornery about giving up the income because I work so hard to get it to the point where it is. And then like, I'm going to walk away. So can we keep doing the stuff that we want to do with the money coming in? But if I reach the point where I just can't deal with being a full time faculty member anymore, will it be okay?

[Ramit Sethi]

Can I just give you the short answer right now?

[Cheryl]

Yeah.

[Ramit Sethi]

Because just by pure logic, if your advisor told you that you could have retired this year and you're still working and you are investing over $40,000 per year, then obviously, if you want to stop in a year or two or three, of course, logically you can, because you're actually going to have more money invested. So what are we talking about?

Nobody comes on this podcast for a quick question. Just to be very honest, when a couple opens up with, we just need a little help, I know that's not the full story, because those kinds of questions don't make it to my desk. Honestly, if you had a quick question, you would have answered it yourself. When couples say yes to being here, it means there's a deeper problem. And deep down they know. That's why they chose to speak to me instead of going to some online calculator or a financial advisor. This is very important if you are in the business of helping people, Whether you're a coach, a trainer, or even if you have friends who come to you for advice occasionally, you've got to ask yourself, why are they coming to me? It's probably not that you just happen to be there. There's probably a deeper reason, and sometimes people aren't even aware of it themselves. But what I'm doing with these series of questions is really probing. Why did they choose to talk to me? They could have chosen to talk to anybody. Why me? And it's important for them to consciously recognize it. When Mike casually mentioned how long he thinks his money will last, that is a key insight, and you need to pay attention. Part of being good with people is being able to listen to a lot of what people say, even to encourage them to tell you more. But then you need to function almost like a sieve. You need to filter things out. Like, have you ever seen those factory videos where a bunch of apples are rolling down a conveyor belt and the robot can detect a rotten apple and it just goes, get the out of here. Slaps it away. That's a lot of what I'm doing on this podcast. Like, people will spend four minutes telling me about the importance of their dog's diet. And mentally, in my head, I'm like, get the at her. Oh, wow, Fido. So interesting. I love that you give them wet food, But I'm always listening for something that is extremely illustrative, extremely telling. And when Mike says something about how long his money will last, I go, what? That is important. It's a sign. They actually have not gotten precise with their retirement plan, even though they have worked with a financial planner. And honestly, I understand, because working with a financial planner can feel overwhelming. Sometimes they don't speak Your language. That's not what we do here. You notice the language that I'm using is very conversational to reach them. I'm certainly not here to sell them a fund. I'm here to help Cheryl and Mike define their rich life and build a crystal clear plan to get there. Now, if you want an actual plan for your money so that you know exactly how to get debt free, how much money to put aside for that amazing vacation you want to take, if you want to get a full audit of your finances so you can identify where you're spending thousands of dollars without even realizing it, you should join my Money Coaching program. In Money Coaching, you'll get access to monthly calls where I will answer your questions directly. Plus a community of people just like you, people who want to get unstuck, and people who can show you how they made crystal clear progress. Plus you'll get instant access to my Ramit AI where you can drop all of your bills and documents and we will automatically audit them for you. Go to iwt.com moneycoaching to sign up.

A few months ago I sat down.

With my trainer and we mapped out what we wanted to accomplish over the course of a year and I decided that I wanted to cut some weight. So over the last few months I've cut 40 pounds. Now in order to do that, in order to make big changes, you can't just try harder. You need a system. That's why options like Factor are great. Because they do a lot of the work on the food side for you. Unlike other meal kits, Factor delivers fully prepared, ready to eat meals directly to your door. They have tons of variety. They have options that are high protein keto, GLP1 friendly already in under two minutes. Plus their meals actually taste good. 97% of customers say that Factor has helped them live healthier lives. And if I needed healthy ready made meals, they are what I would use. Eat smart at factor meals.com/ramit50 off and use code RAMIT50OFF to get 50% off your first box plus free breakfast for one year. The code is RAMIT50OFF@50 Factor meals.com for 50% off your first box plus FREE breakfast for one year. This exclusive holiday offer will not last, so lock in your savings before the new year rush offer. Only valid for new Factor customers with code and qualifying auto renewing subscription purchase. If you're listening to this podcast, chances are you're probably pretty plugged into personal finance. If you've read my book or my journal, even better, you may have Automated your money. Maybe you're automatically investing and living your rich life, but let's take it to the next level. If you need help optimizing your taxes, your investments, making sure that you are properly insured, sometimes you might need extra help, especially if you have a complex financial situation or a large portfolio. And that can mean hiring a financial planner. I have done it myself. I just want to remind you, make sure that the professional charges a flat fee like our partners at fass, Facet charges a flat membership fee for financial planning, not a percentage of your portfolio. You'll get access to a team of CFP professionals. Always a cfp, always a fiduciary who help you create a personalized financial plan. And they handle investment management, retirement planning, tax strategy, estate planning. So you have support building what works for you. That plan is not static. It evolves with your life, whether you are starting a family, changing jobs or getting close to retirement. Right now Facet is waiving their $250 enrollment fee for new annual members. And if you Invest and maintain $5,000 within your first 90 days, they'll add $300 to your brokerage account. Head to facet.com/ramit to see which membership, Core plus or Complete is right for you. Again, that's facet.com ramit I'm not a member of Facet and I have an incentive to endorse Facet as I have an ongoing fee based contract for cash compensation based on this endorsement. All opinions are my own and not a guarantee of similar outcomes and I am very selective about who I choose to work with. What do you think called you to see me?

You already have a professional relationship. There's actually a million other people you can talk to, including a therapist, including advisors and others, accountants, tax people. You had to go through a lot to get in this conversation.

Why?

[Cheryl]

I think you get to things that those people don't get to get us.

[Michael]

On the same page. I think that Cheryl thinks that I'm much more of a grasshopper than she is and she's a late blooming Anthony.

[Ramit Sethi]

Hold on.

For everybody who's not familiar with these metaphors, what's a grasshopper? What is that referring to in Aesop's.

[Cheryl]

Fables, the ancient Aesop fable about the grasshopper and the ant. The grasshopper is running around playing his fiddle and having a great time, partying and not preparing for the coming winter. The ant is very carefully putting aside things. And so when the winter comes and there's nothing to eat, a grasshopper is in trouble. Whereas the ant has put aside and saved up for the future.

[Ramit Sethi]

So who's the ant and who's the grasshopper?

[Cheryl]

We both were grasshoppers, but I became an ant and he.

[Michael]

I stayed a grasshopper.

[Cheryl]

Yeah.

[Ramit Sethi]

Okay.

And.

And your question is, can we make that work or does the grasshopper need to turn into an ant? Is that the question?

[Michael]

Oh, yeah, yeah. Actually, if we take each other's concerns seriously and not just pawn it off by saying, oh, it all work out. Don't worry about it.

[Ramit Sethi]

What if you're not on the same page?

[Cheryl]

Ugly retirement. Neither of us would have what we want.

[Michael]

We just wouldn't see eye to eye on what's going on. And we would. I don't think we'd start leading divergent lives, but it would be a thing separating us. And neither of us want to feel like there's anything separating us. You know, that's what Cheryl means by getting on the same page.

[Ramit Sethi]

You two began this conversation. I asked, how you feeling about being here? Cheryl said, unadulterated excitement. Michael, you remember your response?

[Michael]

It was probably like, yeah, I don't want to be here.

[Ramit Sethi]

You said, I'm here because Cheryl told me to. And. And you kind of laughed as it was a joke. And I said, is that true? You said, yeah, yeah, yeah. Would you say that's being on the same page?

[Michael]

Not really the same page. If it's the same pages, people are equally excited about doing something. But I think that is an unrealistic way to look at life. People are never going to feel the same about anything because everybody has their own psychology, their own philosophy about things.

[Ramit Sethi]

What's your favorite meal, Michael?

[Michael]

My favorite meal at a restaurant would be Italian food. And in fact, it's probably pizza.

[Ramit Sethi]

Okay, great. Michery, what about you?

[Cheryl]

If I'm in a restaurant, it's sushi.

[Ramit Sethi]

Perfect. Y' all ever go out and eat pizza together?

[Michael]

We got married in a pizza parlor.

[Ramit Sethi]

Even better. I did not know that. Cheryl, how do you get on the same page with Michael eating pizza, when of course your favorite food is sushi. How do you do that?

[Cheryl]

I go eat pizza and then I get him to come eat sushi.

[Ramit Sethi]

It's quite interesting because Michael, think about how that applies to coming on a show like this. Right? This might be Cheryl's thing. It's may not be yours. Fair enough. Not everybody needs this to be their number one thing of the week. But I bet you Cheryl doesn't go, michael, I'm going to eat this pizza because I know that next week we're going to sushi. Nobody says that, especially like a long married couple. They don't say it. So when we talk about getting on the same page, I actually think it has less to do with these esoteric financial questions and more about things that we often ignore. The language that we use with each other, tonality, the way that we relate body language, having a powerful vision that we are both aligned with. It does sound like you've done quite a bit of work on your vision together. I really like hearing the point of view and the shared vision and integrating your family history. I think those things are really what get us on the same page. Just to put it another way, when people are on the same page in a relationship, you can see it and feel it on a day to day basis. You can see it. If someone drops a glass in the kitchen and it shatters, how do they handle that? That tells you if they're on the same page versus some 30 page financial document. All right, I'm going to try, with your permission, I'm going to take a little screwdriver and I'm going to probe a little bit with the two of you. Okay. And let's see what comes up because I think we can all stipulate you could have retired already. Every year you're putting away $40,000 a year in investments. That just makes your retirement decision easier. Retire next year, retire five years from now, whatever. As far as financially, each year you work is only putting you in a better financial position. Can we all agree on that?

[Cheryl]

Yeah.

[Ramit Sethi]

Okay.

[Cheryl]

Yeah.

[Ramit Sethi]

So good. We know the answer to that question. And now let's try to find out how to make the journey a lot more fun. Cheryl, you mentioned a little bit about your family growing up. I'm curious, what did your family say about money when you were young?

[Cheryl]

When I was very young, they didn't have much money at all. Money was always a problem. My father was in the Air force during the Vietnam War. He was gone a great deal of the time. We watched him fly away and he didn't come back for maybe a year, maybe two years. And so my mother with her four young kids was always scrambling, trying to figure out how to make it all work. Very far away from her family. So it was always a little insecure and a little bit nerve wracking for everybody. There was always lots of love, lots of good things, but just not super financially set. And then my father left the military and went with an airline. It was like a big lag of time. And then the airline in the 70s and 80s was very insecure. Anytime a union goes out on strike, all the other units have to go out. And they were always going out on strike and there were hijackings happening. It was just kind of a wacky time. So my father would be making really good money and then they go out on strike and he'd be substitute teaching and trying to sell real estate and trying to just keep the family going. And then gradually it got better. He started making a lot of money and we always had the option of traveling for free. And so then my parents ended up with the life that they wanted when they retired.

[Ramit Sethi]

Did you grow up in a house, an apartment? Did you grow up on a military base?

[Cheryl]

No, my parents never wanted to live on a base. We probably lived in base, like very short periods of time while we would settle to the places that we moved. So they always bought houses, which is how they moved up the ladder, because things just worked. They'd buy a house and sell it and they'd make money, and then they buy a house and sell it all the way up until the very end, the last house they sold.

[Ramit Sethi]

What do you remember your mom saying about money on those one year tours that your dad was overseas? What does she say about money?

[Cheryl]

She would often say, we just can't do that. We just can't have that. We just can't do that. And then she had things that were like, non negotiable. Like she loved ice cream, like obsessively loved ice cream.

[Ramit Sethi]

What kind?

[Cheryl]

Baskin Robbins.

[Ramit Sethi]

Did you ever get the Baskin Robbins ice cream cake?

[Cheryl]

Yes, of course. Okay.

[Ramit Sethi]

For me, that was like the pinnacle of a birthday cake and we couldn't afford it. Like, my mom was like, yeah, I wish. No way. And like, I remember, I think one of my friends had a Baskin Robbins birthday cake with ice cream in it. And I was just like, this is unbelievable. Unbelievable. It's funny the things you remember as a kid.

Okay. Anything else your mom said about money.

Or showed behaviorally when it came to money, spending groceries, clothes, any of that stuff.

[Cheryl]

She really didn't care about food very much, except for ice cream, which was reflected in her shopping and the way she stocked the house. I would go to friends houses and think, oh, my gosh, they have like real bagels. They have smoked salmon. Whoa.

[Ramit Sethi]

Okay. And then later in life, the splurge of the Galapagos and traveling and things like that. Was that in part because your dad was an airline pilot and then they started earning more money?

[Cheryl]

Yeah.

[Ramit Sethi]

Okay. Did your mom work?

[Cheryl]

No. She had trained as a secretary, and she worked a tiny bit off and on, and then she did Avon lady and Weight Watchers lady, and she did some of those things that she could do on. On the side on her own schedule, but nothing. No job.

[Ramit Sethi]

Okay. And how many children do you have, Cheryl?

[Cheryl]

Just one, and Michael has two.

[Ramit Sethi]

Michael, you have two.

[Cheryl]

Okay.

[Ramit Sethi]

Anything else, Cheryl, that I should know about your family history as it relates to money?

[Cheryl]

I think I still carry that feeling that your parents can sometimes give you, that the sense that they're weighing, should I spend this money on this kid for what they want? When you're a kid, you're like, I want, and sometimes they can't give it to you. And sometimes you think they're juggling in their head, is this worth it? But when I was a kid, I interpreted that sometimes as thinking I wasn't worth it. Apparently, I don't deserve this thing if they've decided I can't have this thing. And then you get older and you realize it's not what it is. It's that they just honestly did not have the money for these things. But you still carry that away.

[Ramit Sethi]

How does that apply today? If you're thinking about taking a trip or buying something for the house, are you thinking to yourself, am I worth it to be able to go here? Is that what the connection is?

[Cheryl]

Yeah. The older I get, the more it gets amplified. And that I think, you know what? You made this money, you deserve to do this thing. But it's very new. It's very new.

[Ramit Sethi]

You're saying the last couple of years is when you started having a new voice in your head that said, you earned it, you're worth it. Go ahead and spend that money. Is that right around the time where you engaged with the financial advisor and you actually understood your numbers?

[Cheryl]

That might have been part of it, but I think it was just that I started seeing that I was being maybe too fearful about spending what I had. And then also, my son finished college. Like, as soon as your kid finishes college, if you've been paying for private school and college, and then suddenly you. You don't have this big whopping expense every month. It was like, you know what? You can go to London and go to the Chelsea Flower Show. Like you could do that.

[Ramit Sethi]

I wish more people thought like you. The fact of the matter is, a lot of times when people end up paying off their debt and they free up 2000 bucks a month or they pay off their house or whatever happens, and they have told themselves for 25 years. One day I'm going to have enough. One day I'm going to have a million dollars or whatever. And then they get there, no fireworks happen in the sky, and they find themselves still with the same old fears, just a bigger bank account. And that's why I always say the way you feel about money is highly uncorrelated with how much you've got in your bank account. So truthfully, I am loving this last couple of years of change where you said, hey, I'm worth it, I have the money, I'm going to London. I love traveling.

Like that is what I want more.

People to do, to embrace what they have worked so hard for and to be thoughtful and sometimes even extravagant with how they spend their money.

Great.

Thank you for walking me through that. Helps me understand quite a bit more. Michael, take me back all the way back to childhood. When you were young, what do you remember your family saying about money?

[Michael]

My father owned his own business. He was a plumbing and heating contractor and my mother was a housewife. And I remember we couldn't afford to have everything we wanted to. I remember I wanted some toy and there was just no way I was going to be able to get this toy because my parents said, no, it's just too expensive. My mother was really good with stretching a dollar. You gotta understand, okay. My father was born 1921. He was depression kid. My father went into the military, went World War II, and he met my mother. And my mother was born in Germany of Jewish heritage, so she spent the entire time dodging the Nazis. She was basically a Holocaust survivor without going to through the camps. My father was in the army of occupation. They met and married. My father, father had a more of a grasshopper view of money. And I think that might have come from this thing of, hey, we could be dead any minute now.

[Ramit Sethi]

Your dad grew up in the 20s, so he was like 8 years old when the Great Depression happened. That's pretty old. You know what's going on means he and his family had a tough time throughout his formative years.

[Michael]

Yeah, very tough actually, until he was.

[Ramit Sethi]

16, 17, off to war. How do you think that specific eight year segment of his life shaped his views on money?

[Michael]

He always had this thing that you never throw away anything. It's not like keeping garbage. He wasn't a hoarder or anything, but it was like, let's try and fix this. He was really good with his hands and he would make things last and make things work.

[Ramit Sethi]

This is great. What else from that? Eight years of his life Both my.

[Michael]

Parents had pretty simple tastes in food.

[Ramit Sethi]

When you say a simple taste in food, what are we talking, like, baked potatoes?

[Michael]

Yep, baked potatoes. Classic boiled dinner.

[Ramit Sethi]

This is horrible. Wait, keep it coming. I. I want to know.

[Michael]

I remember cube steak. I actually kind of like cube steak, cream chip, beef on toast. My father loved that, and I hated it. We ate tripe, smelt all these things you can't find in the store anymore.

[Ramit Sethi]

Yes. This is really helping to paint a picture of somebody who grew up in the Depression, which we don't get a lot of opportunity to hear from somebody who had direct experience with someone from there. I'm really appreciating being able to share that story because those memories need to be preserved. Okay, so your dad, they ate the food they could find. We don't even eat that kind of food anymore. Yeah, that's what they could do.

[Michael]

Right.

[Ramit Sethi]

I remember in my persuasion classes in college, there was a very famous psychology work done by the US army who had to convince housewives to eat the worst cuts of meat, neck meat, stuff like that. And so they brought in these psychologists and they created this massive and very successful campaign to convince housewives who were the ones buying and preparing the meat. This is actually the prestigious kind of meat that we're now going to eat. So there's a whole history, just of food in America. It's very fascinating. Okay, thank you, Michael, for sharing that. Your dad gets older, goes to World War II, meets your mom, comes back to the States.

[Michael]

Yep.

[Ramit Sethi]

Tell me about the financial history that he had from then on.

[Michael]

He came back to where he grew up and got a job at a gas station while he was getting his business off the ground of being a plumbing and heating contractor. And then he ran that all his life. And my mother would always say something like, if it were up to your father, we wouldn't have any money. She was the one that took care of the finances. She was the one that took care of the banks.

[Ramit Sethi]

And what was your dad, in her view?

[Michael]

He was a good worker and all this stuff, and he was a good provider and a good husband and a good father, but he really didn't know how to put money away for the future, that he didn't think of the future, you know.

[Ramit Sethi]

Michael, see any connection to today?

[Michael]

Yeah, I see that. Yeah.

[Ramit Sethi]

The thing is, I don't think your dad was probably bad at money, nor do I think you're bad at money. I don't think that at all. I think there's probably some roles that we take on, and they are Often passed generation to generation, often unconsciously. And they are repeated and concretized through these little words, little phrases that family history whispers, oh, uncle was an alcoholic. Or you know, she was always great at managing the money in the house. Like these little myths are propagated, they're turned into legends and then they often become self fulfilling prophecies. So, Michael, what connection might you draw with the role that your dad played with money and the role that you play today with money?

[Michael]

I'm much more like my father in relationship to money, in that my father had the thing of what good is money if it's not to enjoy it? Why pretend to be poor when we can spend a little bit of it? And my mother was always pulling back on that.

[Ramit Sethi]

You feel the same way as your dad.

[Michael]

Money is meant to be enjoyed. But at the same time, I got the thing from my mother of saying, oh God, I got to save money. Because things could go really bad any minute now.

[Ramit Sethi]

If you could float above your parents and you could see them not as your parents, but as individuals, almost like a video game character. And they have these different levels, they have empathy and they have cognitive strength and they have warmth and all those things. And you could pick and choose the best of their financial views on life. What would you pick for yourself?

[Michael]

To use money, but to spend it wisely. Don't spend it foolishly on something that is not going to last or something that's going to break or something that is a fad. My mother used to say, why aren't we rich? We don't go bowling, we don't drink beer. She always said that. But we always had enough money. We were never in this position of bankruptcy or losing the house or anything like that. My mother was more, let's say, had a more nervous approach to money.

[Ramit Sethi]

That's a good word.

[Michael]

Yeah. Anxious about. Yeah.

[Ramit Sethi]

When I think of nervous anxious, I think of a deer in the woods and its ears are flickering and it's always hyper aware of what's going on around it. And then I think of a lion or an elephant and they're just like, I'm gonna take a nap in the sun because what are you gonna do? I'm a lion.

[Michael]

Yeah.

[Ramit Sethi]

And I'm not saying one is better than the other. I think we all naturally aspire to be a lion just because of movies and stuff like that. There is value in being vigilant for sure, but there's probably some element of dysfunction in being hyper vigilant about money all the time. Especially when you don't need to be. And I see that a lot. I see people being very hyper, vigilant, obsessed with spreadsheets, and they really want to explain every freaking line to me. And I just have to gently say, put the spreadsheet away. We're here to talk about something much more meaningful than that. I want to teach you how to stretch out in the sun occasionally and enjoy all the work that you've done. Okay, thank you, Michael. Very helpful to understand your background. Also, thanks for the sharing the story about your parents. Very illuminating.

[Michael]

An additional thing about my mother, when she died, as Cheryl mentioned earlier, we had a real hard time settling the estate. And part of the estate problem is that my brother, who was the executor, would find bank accounts that nobody knew about that my mother had put away, like in all these different banks around the area.

[Ramit Sethi]

Why do you think she did that?

[Michael]

That was because of the precariousness of money thinking, oh, they've got to put it someplace. If I spread it out, it's less likely to be all lost.

[Ramit Sethi]

I mean, if I grew up with Nazis running around, I would do the exact same thing. Most likely, many of us would. So sometimes the very peculiar things we find even our loved ones do, and we just, like, be like, why did they do that? Oh, there's some very rational reasons. Very rational. Especially in those formative years of life.

I think we just hit a record for historical references in one segment. Great depression, World War II, dodging Nazis, 1970s feminism, 1980s greed, and cocaine. What happened to this podcast? Forget about Money for Couples. This is a historical podcast now. I love it. Hearing Cheryl and Mike talk about their childhood gives me a much deeper understanding of how they think about money today. Like, take Cheryl, she lived in Tribeca and the Hamptons. If you know New York, that is the elite of the elite. And now she's like, yeah, we live in a small house with a small mortgage and we like to travel. I like that. It tells me that she's lived both ends of the financial spectrum. It's actually refreshing to hear how she talks about wealth. She had it. She doesn't need it. It's kind of cool to hear. But what really stood out to me is how many times Cheryl has reinvented herself. She lived an extravagant life with her first husband. She had a career on Wall Street. Then her second husband died. She had a baby on her own. She didn't start her current career till she was 50. What I take away from that is she really has this skill of resilience. Which happens to be one of the things that I value most. A lot of people get knocked down by one big life event. She's been through multiple changes, and she's reinvented herself. She got right back up and adapted. Michael's story is different. You can hear the generational trauma in his background. His parents literally escaped Nazi Germany decades later. Now he talks about money with a sort of casual detachment, like it's just something he hands over to Cheryl. I think he's probably minimizing the effect of his family upbringing on money. Candidly, I'm not sure he fully grasps it. And I say that respectfully, because most of us don't. You simply cannot grow up in a household shaped by war, survival, and displacement and not internalize something from that. You certainly learn to be cautious. Understanding their backstories actually provides a lot of clarity on the numbers themselves. And now that I understand that, it's time to go beyond those money messages and to elevate the way they look at money. Every December, my wife Cassandra, and I do a Rich Life review. It's one of my favorite times of the year. We get cozy. We talk about what we loved this year, what we want to do more of and less of next year. I highly recommend that everybody do this.

Especially if you have kids.

You're talking about questions like, what trips do we want to take? What memories can we create? Are our children protected if something happens? I think it's important to be aligned on those things so you can take action. Like getting term life insurance from our friends at Fabric by Gerber Life.

Fabric by Gerber Life is term life.

Insurance you can get done today. It's made for busy parents like you. It's all online, on your schedule, right from your couch. You could be covered in under 10 minutes with no health exam required.

If you've got kids, especially if you're.

Young and healthy, now is the great time to lock in low rates. And even if you have life insurance through your employer, it may not be enough to protect your family, especially if you leave your job or you get let go. Join the thousands of parents who trust fabric to help protect their family. Apply today in just [e-mail]. that's meatfabric.com Ramit M E E T fabric.com Ramit Policies issued by Western Southern Life Assurance Company not available in certain states. Prices subject to underwriting and health questions.

Now, I understand that this is not the first marriage for either of you. Did the two of you talk about your views on money when you first met?

[Michael]

I don't think we did. We.

[Cheryl]

I don't think we did, no.

[Ramit Sethi]

Did you discuss a prenup or postnup?

[Michael]

No. You could tell by that reaction.

[Cheryl]

I mean, I know the reasons for them having been in a world where people are very rich and they're marrying people fairly young. And I totally understand it. My best friend had a prenup when she married her husband. And smart, especially if you have children from previous marriages or whatever. But it didn't seem like we had enough assets to make a difference. I was making a salary, but certainly not rich.

[Ramit Sethi]

I agree that probably from an asset and income perspective, maybe it did make sense. I am a little surprised though, because second or third marriage for each children, and most importantly of all, there's a former lawyer in the room, like 1, 2, 3. And yet not only did you not do a prenup, which is totally fine in your case, it probably didn't need to happen. But the reaction when I asked was like, whoa, no. We had a former lawyer in the room.

Michael, what kind of lawyer were you?

Corporate.

[Michael]

And in fact, I had to tell you, my ex wife is a divorce lawyer.

[Ramit Sethi]

This is crazy. What kind of attorney were you?

[Michael]

When I was an attorney, I represented a bank, usually doing real estate closings. And when people would default on loans, I would have to go to court and argue for it.

[Ramit Sethi]

Very interesting. I am curious. When it comes to your finances, you have not combined your finances. That's one thing that surprises me.

[Michael]

Why?

[Ramit Sethi]

You both seem quite aligned in many ways, but not combining the money. Why?

[Cheryl]

We're pretty transparent. So it's pretty clear to me how much money has coming in most of the time and where it's going. And I've never combined my money. It's true. This is my third husband. I've never had joint accounts.

[Ramit Sethi]

What? Why?

[Cheryl]

Because I'm that kind of like 70s raised feminist who believes that you have to maintain a certain amount of independence. And I watched that. My mother was very much a housewife and very dependent on my father's income. And. And I could sometimes see the frustration, not that they were not completely equal partners. They got married at 18 and 19 and had four kids by 24, like they were very much partners, but she was not bringing in the money. And I looked at that and thought, I don't want that. I want my own, even if it's my pittance. I remember living in New York out of college, if I had to take a taxi because it was like ungodly pouring rain. Or snow. I'd be watching the meter. I knew how much money I had in my pocket. And you had to pay in cash in those days. And I would be watching the meter and say, okay, stop. I gotta get out of here.

[Ramit Sethi]

I'm with you. I remember many times in the city watching that freaking thing tick and going, please don't tick up once more, please. Let me just make it to the end of this block. I'll get out there. Ok, so that's quite interesting. Totally can at least empathize with you. Obviously, I was not raised a woman in the 70s, but in my newest book, I talk a lot about how even in our lifetime, there are people whose moms could not have a bank account without permission. And so when we hear these common phrases, which we often hear from women, I need to just put a little bit of money aside in my own account just in case something happens. This is the genesis of a lot of difficult conversations that couples have, because a lot of times husbands are like, why are you hiding money from me? And then wife might say, here's why.

And.

And it's this whole thing. But there are certain reasons for keeping money to yourself. I happen to agree with that, that each partner should have a little bit of their own money, however much they want, in an account that only they have access to. However, I don't think it should be secret. I think that each partner should know there shouldn't be any financial secrets in a marriage. It's toxic. It is the basis of betrayal. A word that both of you have used.

[Cheryl]

I was also a widow for a decade before Michael and I got together and got married. So I had already established my own financial life. My investments and my salary and the way that I was earning money and the way it was allocated. And so it's not that easy to meld your financial life as it is to meld, like your furniture. You could say, okay, don't bring that wagon wheel coffee table to my house. It's harder to merge up money when you've had very separate.

[Ramit Sethi]

It's not that hard. Come on, Cheryl. I wrote a whole book on it. It's one chapter. I even have a little diagram in there. It's not that hard. The bigger question is, why would we? What does it get us? And then if we agree on those things, then tactically, how do we do it? The tactical part is not that hard, but it's really. It's a question of, hey, we've had our own lives before. Why is there a compelling reason for us to Change. I do want to know a little bit about your vision. If you could wave a magic wand, what is your rich life from now, for the next 10 years?

[Michael]

If I could live a rich life, it would be to have good experiences. As Cheryl said, we're not car people. We don't have, you know, things. We want to travel, we want to experience things, want to see things, see new places, be among different people. Very interested in music. I would like to visit some jazz festivals around the world. The Montreal Jazz Festival is considered one of the best. I'd like to see some of the smaller ones, like the one in Umbria. Italy would be fantastic. I've never been to Italy. There's several in France. Memoir is really interesting.

[Ramit Sethi]

How long do you go for?

[Michael]

Couple weeks. Not more than that.

[Ramit Sethi]

Great. And you go solo or you go with Cheryl?

[Michael]

I would always go with Cheryl.

[Ramit Sethi]

Cool. When you go there, what's the experience like? Are you staying in a hotel? Airbnb. What's it look like?

[Michael]

Probably an Airbnb.

[Ramit Sethi]

What are you eating?

[Cheryl]

I actually cook when we go on trips. That's why we do Airbnbs. We spent two and a half weeks in Maine. Michael was in a music camp for the piano for two weeks for jazz improvisation. And I cooked a lot. We always get a decent kitchen. I sometimes pack my knives. I worked as a chef. I like to cook. I cook better than a lot of restaurants cook. And all my friends are like, you cook on vacation? What are you thinking? It's fun for me. It's relaxing. All right.

[Ramit Sethi]

I like it.

[Michael]

One of the things she loves to.

[Ramit Sethi]

Do, Michael, when you just walked me through going to Montreal and Umbria and cooking, and what did that feel like for you as you were walking me through that?

[Michael]

Actually, I felt really excited about it, which is interesting now that I think about it, because I'm usually a person who doesn't like crowds. But, boy, if there's music, I love it.

[Ramit Sethi]

You know, what I find interesting about it is watching your reaction. As you described it, we're actually talking about money, but we're talking about it in a way that excites you. So it's not about financial goals, it's not about yield or withdrawal rates, all of that stuff. Important but mechanical. It's about, what are you going to do for the next decade, that most impactful decade that you have? What are you going to do? What does it look like if it's awesome? What does it look like if it's 10 out of 10? And I always like to start there, start with the vision. Sometimes couples have a very similar vision in many ways. It sounds like you do. I want to hear from you, Cheryl, too. But it sounds like your vision is quite aligned. Sometimes one person wants to do something, the other wants to do another. That's also fine. We can usually make it work. But hearing the vision and living in the vision. Where are we going? What are we eating? Where are we staying? Provides a lot of clarity for what to do with our money. When we start at the vision, it's this organic, beautiful, living, breathing vision of what we want. Think of it more of a human heart versus an inanimate spreadsheet. Too much of our lives when it comes to money. We think about money as dollars and cents in an inanimate spreadsheet. I'm not interested in black and white. I'm interested in a beating heart. But if you get that wrong, or more commonly, if you just skip over it, you'll live your life in black and white for the rest of your time. I don't want that. Cheryl. Magic wand. Take me through the next decade. What is your rich life?

[Cheryl]

Definitely travel. Maybe with some of our kids. I had to travel with my family all the time because when your father's a pilot and you get to fly for free, none of your friends can come, so you travel with your family. And it's not always great, but I still think it's a worthy goal. There's still so many places I want to see. I feel like I've been to a lot of places. Like I. I took myself off to Chelsea Flower Show a couple years ago and I just booked to go again this May. It's still a dream to go to this place that is so meaningful for crazy gardeners. It's like going to the Oscars. I was actually debating in my mind what if I flew Virgin Airways upper class as a kid. I flew first class all the time because we flew space available. You got the MTC and it was often in first class. And then of course, I grew up. And so my idea was like, it's just this one time. Maybe I will spring for the upper class of Virgin Airways. I've always been curious about it, but I also love when Michael gets excited. And so after I'd been on two trips by myself, I went on a yoga retreat in Greece with a bunch of old friends. And then I did Chelsea. I challenged him to find something and that's when he found the music camp in Maine. I would like to keep balancing, like, things that he gets excited about, like a Jazz festival. But I still like to do stuff on my own. I still like to do the sort of trips that I don't think he'd really enjoy shuffling around Chelsea Flower Show. I just don't think it would make him that happy. So balancing what we each want to do would make me happy.

[Ramit Sethi]

Who pays for these trips?

[Cheryl]

I do.

[Ramit Sethi]

Any issue with that?

[Michael]

No.

[Cheryl]

It's funny because I didn't even realize when I looked at the sheet. Michael's paying a lot of the fixed costs. Like a lot.

[Ramit Sethi]

Yeah, you want to talk about that? So here it's quite interesting. Michael, your income part time, and I assume this also includes Social Security, because we have a higher net than gross. So, Michael, you are grossing $3,949 a month. And you're netting $3,506 a month. What's really interesting is that of your net income, 64% of it is going towards fixed costs. But Cheryl, of your net income, which is $9,588, only 26% is going to fix costs. So basically, the person making 25% of the household income is spending 64% of their income on fixed costs. Obviously, if we're simply going by like, is this fair or not? That's not fair. Okay, but let's scroll down because it gives us a little bit more color. We see Michael is investing 708 per month, which is 20% of his net income. Then we go over to Cheryl. We see that she's investing 708 plus 1500 into an annuity. A total of 23%. Remember, she makes more. But where it really becomes striking is the guilt free spending. Michael is spending 15% of his net income on guilt free spending. That's $540. But Cheryl is spending 3,837 or 40%. So if I were to just describe this at a very high level. Basically, Michael is making much less. He's paying 50, 50 on the fixed costs, which is disproportionately expensive for Michael. And then Cheryl is paying a lot more towards guilt free spending. Things like travel, et cetera. What do you both think of that?

[Cheryl]

I think it works because he knows exactly what to expect coming out of what he has. Because his amount is limited and he knows exactly what's coming out of it. So when we go out to eat, I pay. When we have other things to pay for, like the trees had to be cut down the other day, that's 800 bucks. I paid. The repair costs for things that come in, I pay.

[Ramit Sethi]

Do you ever disagree about spending on something?

[Cheryl]

I don't know. Do we?

[Michael]

I don't think we ever have.

[Ramit Sethi]

Okay, sounds like a no. Typically, with a married couple, they would put it all together and then they would make joint decisions. So when you ask me, hey, Ramit, how do we get on the same page with money? The actual answer is you combine your income and then you make decisions together, and then you can actually wipe out this, his and hers and all that stuff. Of course, the two of you can each have some money going towards your own individual accounts. I insist upon it. But the way that you actually get on the same page is combine your money and then make joint decisions. One person owns this thing, one person owns that. Now, I'm going to say one thing, considering that you're both in your late 60s, you're on your second and third marriages, and you don't seem to disagree about your expenses. If you want to keep it the way it is, go ahead. It's your money. Would I. No, I would not. I'll tell you why. Because when my wife and I finally combined, it was like we are totally unified. And I always say our future is together. And so it just made it structurally easier. In the same way that the two of you live together, of course you would put your money together. With all that said, it's totally up to you. I'm curious to get your reaction.

[Cheryl]

We've found a sort of way to do it together that keeps me happy as the seventies feminist.

[Ramit Sethi]

Fine, Cheryl. Sounds like I'm good the way it is. I'm actually most interested in Michael. What's interesting about your situation, Michael, is you seem perfectly fine with the way things are. You're like, hey, I get to go to my jazz thing and I put my money here. It's fine. I am almost always thinking about the lower earner in the sense of fairness. Is it fair for you? Does it feel equitable for you and each couple? As long as they understand the ramifications, you can decide what's fair for you. But, Michael, I just want to ask, is this fair for you?

[Michael]

Sure. It was my idea to pay for the fixed costs out of my account, and it seems fair to me. Maybe we're not on the same page. Maybe we're on facing pages. It's the same story, except different pages.

[Cheryl]

Like two. Two tabs on the same spreadsheet.

[Ramit Sethi]

Hey, listen, listen.

Life is hard enough. We don't need to create problems if they don't exist. I'll take it. Your investments are currently at $517,000. At the current rate that you are investing, in three years, it'll grow to approximately $786,000. So that means if you were to withdraw 4%, you would withdraw about $31,476 a year. Cheryl, you have Social Security at 70. Let's say 46,800. And then Michael, your Social Security, you're already withdrawing it roughly $22,000 a year, correct?

[Cheryl]

Right.

[Ramit Sethi]

Okay, great. So then that total amount that you would be able to withdraw as of age 70 would be approximately ballpark, a.

Hundred thousand dollars a year.

What do you think about that? Is that enough for you to live on?

[Cheryl]

If you look at the figures, yeah.

[Ramit Sethi]

Let'S take a look. So right now if we were to take out the investments because let's just say we stop investing, right? And savings, let's just zero that out too. Fixed costs are at 60%, which is actually like quite amazing. And when will your mortgage be paid off?

[Michael]

When we die.

[Ramit Sethi]

Okay, fine, fine. So you would have approximately thirty two hundred dollars a month to spend. That would include eating out, travel, any fun stuff, etc. That's if I strip out all of your savings, all of your investment. What do you think about that?

[Cheryl]

So I'm a little curious because we are old. I think most of the people you talk to are younger. The healthcare costs. I had to have an MRI in my brain the other day and it was $350 co pay. So it just seems like one of those things that we don't think about because we have insurance, but they're paying fewer and fewer claims. And I have a medical history. And so that's the part that sometimes I feel like we're not factoring enough in for that.

[Ramit Sethi]

Yeah, I agree with you. I think that especially if you have a family history, especially if you are cutting it close. I never want to cut important items in my life close. For me, luxury is being able to have room to spare. And luxury can be as simple as, like when friends used to come over to our house. My mom always had extra food. It's not expensive, but it's luxury to know that we could always feed anybody. Same with healthcare. I don't want to cut it close because if you end up needing it, that is the time where you want it. What I notice is that you're currently making $191,000 a year. And what's great is you're investing quite a bit of it. I think that's really smart because we are talking about three years in some cases, going an extra one year, especially when you're investing 40 or $50,000 in a year, can actually make a profound difference. So here's what I would do if I were you. Because these numbers are so small, I would go back to my financial advisor and I would say, model these things out for us right now. Let's just confirm if we retire at 70, how much are we going to have and walk through the numbers together. We're going to stop saving, we're going to stop investing, we're going to be able to use all that money for us. What I think you'll discover is you're cutting it probably a little too close for comfort. Going from 191,000 to 100,000, that's a sharp drop. Gosh, I sure would like that number to be more like 190 to 110, 120 at least that's a little bit more feasible. So that will be up to you to decide. One other lever you have to pull is it's possible that right now instead of spending the amount you were spending on guilt free spending, close to 35%, maybe it dropped that down by 4 or 5% for the next three years. You're still traveling a lot. Just being a little bit more mindful of it. Put that money into investments, give yourself a little bit of breathing room.

These are the levers you have to pull.

Of course there's other levers. You could increase your income if you decided you want to take on a little bit more work, etc, that's up to you. I probably wouldn't do that as my first lever, but it's a lever available and then you have controlled your levers of spending. You understand the math carefully and do we work? Do I, Cheryl, work three more years, four years, five years, what's that number? And of course during that time you're not waiting to live life. You are living a very rich life right now. Just being quite thoughtful about where that money's going every single year.

[Cheryl]

That's exactly what I meant when I said in the beginning I want to know can I retire in a couple of months? I didn't just mean be safe, I meant like still not have to drastically cut back. Our financial planner has said along the way, yeah, you can retire then, but you need to reduce your spending or whatever. And that's so vague to me. So I did want to hear what would be the benefit to not retiring immediately at 70? What would be the benefit to maybe saving a little bit more along the Way, like you said, cutting the guilt free spending and then also maybe working another year. I have a colleague who's working part time and he's 80 and he's doing it because he loves it. But it's also nice to make money when you're 80.

[Ramit Sethi]

Yeah, it's nice. Extra income. Couple last things I just want to mention. When I see Ameriprise, I go, oh God. Because they charge a lot of money. So like their fees are crazy. I would like you to understand their fees and I would like you to calculate those fees. Your financial advisor, are they through Ameriprise? Yeah. All right. Considering that these dollars are very valuable to you, I would do a careful review of your investments, the fees that you are paying. Because whenever I see Ameriprise, I see a red flag. Then I see the word annuity, my head explodes. And if possible, you may want to engage with fee based advisor, somebody you can pay a one time fee for. Just give me a second set of eyes on this. You spending 500 bucks or a thousand bucks is going to be well worth it. Someone who's not commissioned, they're a fiduciary and they're going to be able to take a look and say, hey, let me deconstruct all this stuff. That's my suggestion. I'm not saying you have to switch anything tomorrow. But of all the stuff we're talking about where you've got leaks, your fixed costs are totally. There's nothing to change there. Keep it, it's fine. But your investments almost guarantee you're leaking out thousands and thousands of dollars per year. I'd love to see it fixed.

[Cheryl]

That's very depressing.

[Ramit Sethi]

Welcome to Wall Street.

[Cheryl]

I know.

[Ramit Sethi]

That's it.

[Cheryl]

I learned nothing.

[Michael]

Greed is good.

[Ramit Sethi]

First they got me on the cocaine, now they get me on the fees 30 years later. All right, all right. Not bad, not bad, not bad. You could fix this stuff. But overall, structurally, you have some key decisions to make. That's fine. I don't mind that. If you're not being satisfied by what your current advisor is doing, find another. There's plenty of other people out there. What surprised you about today's conversation?

[Cheryl]

It sounds like it's not as bad as we maybe thought. It's good to hear that a lot of the things we're doing are working because I certainly have heard in your podcast that's not always the case. I like to think that we're old enough now that we have had all those issues in our pasts and we've Come to a place where, like I always say, the older you get, the longer you're with somebody. You fight in shorthand. Like, you. You just used to stay up all night fighting, and then pretty soon you're like, oh, no, we can get. We can work this out in 15 minutes. If we just focus, then we can get some sleep. But there's also that yawning on top of all the general scariness of what's happening right now, socially and politically, is terrifying. Terrifying. And Michael comes from a Holocaust survivor, and we're like, when do you know, Should I be putting my money in a Swiss bank or, like, offshore? Like, all that's around. I think the whole process of doing this, from the spending plan to this conversation with you, reassured me that Michael and I actually act more like partners than we think we do.

[Ramit Sethi]

Good. Oh, I'm really glad to hear that.

[Cheryl]

Yeah.

[Ramit Sethi]

Michael, what about you? What surprised you about today's conversation?

[Michael]

Thing that surprised me is that, yeah, we're in a better position than I thought. Not just financially, but, I mean, mentally, spiritually, connectedly, and that it's not as frightening as money can seem to be. You've really caused me to delve deep into why I have that particular attitude towards money and where it comes from. And once you know that kind of thing, you can deal with it. Another thing I learned was that I'm not nearly as bad with money as I thought I was. You know, I had this voice in the back of my head, you're no good with money. But maybe not.

[Ramit Sethi]

Yeah, maybe it's time to turn the page on that one. Maybe it's time to add a new voice that says, hey, this is a skill. I'm not bad, and I could actually get pretty good at it. Sheryl, what about you? What is something you learned about yourself in today's conversation?

[Cheryl]

That I still think very independently about money and finance. It's always in the top of my mind that I need to pay attention to this and that it's important to me and that I have gotten to a certain point, and I should be a little proud of myself for getting to where we are. And I've always said Michael is teflon about money, and I know his whole family story and the situation, and I know that explains a lot of things, but actually hearing him talk about it and the questions that you asked him gave me more insight into some of his ideas about money.

[Ramit Sethi]

That's amazing. That's what I want from each of these conversations. It's, like, very gratifying. To me personally and professionally to know that you can still learn new things about a partner who you've known for a long time. It's really enlightening to know that there's so much more we can still learn.

I always find it revealing when people actually spend their money on something expensive or something they thought they would love and then they decide it's not for them. I actually love that. I have done that myself. An expensive car, for example. Nice restaurants, okay, I appreciate them, but I've realized they're just not the thing for me at this point in my life. And that's refreshing. What I love about that is it is not bounded by scarcity. Scarcity is I'm never going to go to a nice restaurant. I don't need those kind of fancy places. I'm perfectly fine with Taco Bell. Okay, fine. Nothing wrong with Taco Bell. But many times when I hear people talk about spending a little bit more money on something, whether it's going on a camping or glamping trip, a certain type of food, a certain type of travel, even a freaking flower vase for their house, there's this almost scorn that why would I ever spend money on that? In my opinion, abundance. And saying, hey, I work hard. Of course I want to try a few different things in life. I'm going to sample them and if I like them, then maybe I'll redo my csp. If I don't like them, that's equally valuable because now I know I don't need to eat at a Michelin starred restaurant. Cool. That's exactly what Cheryl and Mike have done. They've lived in expensive cities, they've had big lives. And now after they've sampled them, they've chosen a simpler path that makes room for what they love most, travel. Interestingly, that mindset is at odds with how they are managing their finances with this financial advisor. Now, there are great financial advisors out there, but there are also a lot of advisors who simply collect fees for substandard service. Why do they do this? Because there's a lot of money in charging 1% A for clients who don't actually understand how money works. And these advisors in particular love clients.

Who are 50 plus with serious assets.

That they can charge huge fees on. To me, the most outrageous part of this entire dynamic is that many consumers simply have no idea what they're paying. Like if you ask them, as I have, how much do you think you're paying your advisor? Most of them will shrug. They have no idea. How insane is it that we spend our entire lives agonizing over the price of freaking coffee and yet we don't know how much we are spending on a financial advisor whose fees often add up to hundreds of thousands of dollars. In what other part of life would this be? Okay, I want you to be informed. My number one piece of advice for Cheryl and Mike and for you is this. If you are paying an advisor, pull up your accounts. Look at every fund, every fee, every line item. If you are paying someone, I want you to know exactly how much they are getting paid today, 10 years from now, 25 years from now. I don't want to know percentages. I want absolute dollar values. No more black boxes. No more trusting someone just because they wear a suit and use words like diversification and send you a Christmas card. If you are paying your advisor a percentage of assets, my suggestion is get out. Find a fee based advisor, someone who charges a project fee or hourly rate. You can [e-mail] and apfa.org or check out our partners at Facet Get Clear. It's your money and it is your rich life on the line. Now let's hear Mike and Cheryl's follow up videos.

[Cheryl]

This is Cheryl following up. Michael and I were surprised at how much we learned by doing the conscious spending plan together. It made us just really thoughtful. We thought we knew more than we knew, but then we also realized we know more than we thought we knew, so. Which sounds crazy, but yeah, we are more on track than we think we are. It's just that we have not been entirely intentional about how we're going to plan out the coming years in budgeting, travel, looking at it more specifically, instead of being like we've been, which is like, oh, look at this shiny place in Ireland written up in the New York Times. Let's go there. We can do that, but we have to maybe make a more strategic plan about how we're going to do that, how we're going to get there and how we're going to spend like the coming couple of years. Will I keep working past 70? Maybe. Will I just power up on saving money before I retire in a couple years? That might work too. But overall I think that we learned a lot. And we were surprised that Ramit kind of backed down on the fact that you have to have a joint checking account because what we're doing seems to work and we'll just change some of the planning that we do to make it, I don't know, more intentional. Yeah.

[Michael]

Biggest surprise from the conversation is how we weren't nearly as bad with money as we thought we were. And also, one of my things was how much I didn't hate it. I thought I would. I don't really like talking about myself. Biggest surprise was how much the idea that we both have separate accounts, it seemed to blow Ramit's mind. It was interesting. It's, you know, we came into this because this is second and third marriages, and it works for us. Okay, so why change it? Specific changes we decided to make is to plot more proactively and to think more proactively about the experiences that we do want to take and what we want to do with our money. It was very heartening. It brought Cheryl and me closer together, I think. And actually, we rather enjoyed it. Thanks.

[Cheryl]

It's been, let's see, three weeks since we talked to Ramit. I think we have honed in on some of the ideas he had, like working on our subscriptions. We did go in and look at that. We were looking. Two weeks ago, I needed roadside service when my car wouldn't start. And so we looked at, like, what's the best coverage? We just kind of had stuck with one for a long time, but then we looked at it and thought, yeah, I can save money and get more service. So we also met with our retirement planner, and we were a lot more proactive, and he thought it was a great meeting. And I thought, yeah, that's because we're kind of much more on the same page with each other and thinking a little bit more creatively about what is our rich life. We always thought our rich life mostly had to do with traveling, but now we're looking at it from other angles, too, like scheduling in theater trips and where we want to go. That's a little more local, not as dramatic, but also, like Ramit said, maybe saving a lot more cash for things like travel. While I'm still working, instead of just thinking of it all as retirement money, think of some of it is like retirement play money.

[Ramit Sethi]

If you want my help with your specific money questions, you can apply to.

Be on this [e-mail] apply or you.

Can become a member of my money coaching program [e-mail] Moneycoaching in money coaching, you get access to monthly calls where I answer your questions directly on a private call. And I get the chance to go much deeper on the concepts of money that have made a huge change in my life. Plus, you'll get access to a community of other people like you who will inspire you and push you to live your rich life. Check out money [e-mail] moneycoaching.