251. "We own a $1M house but can’t pay for groceries"

Summary

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Podcast Summary

Money For Couples with Ramit Sethi

Episode 251: "We own a $1M house but can’t pay for groceries"
Date: March 10, 2026
Host: Ramit Sethi
Guests: John and Victoria

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Episode Overview

In this raw and candid episode, Ramit Sethi works with John and Victoria—a married couple in their 30s with three kids and a $1 million home in suburban New York. Their situation is paradoxical: on paper, they boast a net worth over $600,000, but almost all of it is tied up in their home, while they struggle to pay for groceries and are suffocating under $100,000 of non-mortgage debt (about $55,000 of that is on high-interest credit cards). Their dialogue with Ramit exposes deep-seated financial behaviors, avoidance, guilt, and the psychology that keeps couples stuck.

Ramit provides tough love mixed with empathy, pushing John and Victoria to grapple with hard truths, make structural changes, and build a sustainable money plan—not just for their finances, but for their relationship and family.

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Key Discussion Points & Insights

1. The Gravity of Their Financial Situation

• Fixed costs (largely the mortgage) consume 97% of John and Victoria's take-home pay, leaving almost nothing for groceries, savings, or debt payments ([01:02]).
• Savings are dangerously low ($1,155—less than a week’s expenses if John loses his job), while debts are immense and high-interest ([01:41]).
• Ramit lays out two stark options:
  • Sell the house, clear the debt, and start over—socially painful but financially sound; or
  • Keep the house, both work, slash all discretionary spending, and grind—leaving no room for error.

Memorable Quote:

"You are broke… Severe danger. Red flag. Stop everything."
— Ramit Sethi ([01:05])

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2. Confronting Denial, Guilt, and the “Try Harder” Trap

• Both partners admit to avoidance. John’s response to the crisis is simply to “try harder” ([04:00]), which Ramit calls out as empty jargon—what’s needed are structural changes, not just more effort.
• Ramit distinguishes “worrying” from “caring.” Most of their energy is spent in anxious rumination, not action ([11:13]).

Insightful Moment:

"Worrying accomplishes nothing. It doesn’t pay off debt, it doesn’t cut your spending, it doesn’t change your behavior. Action does."
— Ramit Sethi ([14:11])

• Both John and Victoria express resentment—of each other and of their own spending choices—but lack a collaborative money plan ([06:36], [07:13]).

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3. Patterns of Money Avoidance and Reactive Behavior

• Both partners admit they don’t talk about money because "it’s just too overwhelming" ([09:02]).
• Victoria feels powerless, John fears but does not change, and both admit to an unhealthy relationship with money rooted in family patterns and avoidance ([06:54], [11:29]).

Notable Exchange:

Ramit: "Can you tell me your debt payoff date?"
Victoria: "No, I can’t tell you that."
— ([05:50])

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4. Moving from Emotion to Mathematics: Modeling Solutions

• Ramit walks the couple through income simulations, showing how Victoria returning to work would dramatically reduce their fixed costs (from 100% down to 77%) ([21:02]).
• Childcare costs present a significant challenge; if Victoria goes back to work, her income would be largely consumed by childcare expenses ([23:13]).

Key Quote:

"If you want to keep this house… you’ve got to be specific, not vague, with each other."
— Ramit Sethi ([27:47])

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5. Shifting to Action: The Two-Month Challenge

• The couple agrees that Victoria will look for work, and Ramit challenges them to change their spending patterns and conversations in eight weeks ([30:41]).
• Assignments: redo their “Conscious Spending Plan” (CSP) with real numbers, apply for jobs, and have honest money conversations.

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6. Two Months Later: Progress & Reality Checks

• John feels “motivated, energized” after the first hard talk, crediting the release of anxiety after honestly facing their money ([35:49]).
• Victoria quickly found a new job—then lost it after three weeks, highlighting how precarious their financial situation is ([38:18]).

Memorable Quote:

“I worked three weeks and… was let go… it was not working out to be a good fit.”
— Victoria ([38:31])

• The couple build a detailed debt payoff plan, cut subscriptions, reduce grocery spending (from $1800 to $1175), and start tracking bills and receipts more closely ([41:25], [57:00]).
• Ramit points out their plan is fragile and only works "if everything goes perfectly"—not a realistic expectation ([52:01]).

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7. External vs. Internal Locus of Control

• Ramit identifies their core problem: an external locus of control.
  • They habitually believe “the world happens to us and we just deal with it,” rather than “we have agency” ([63:40]).
• This attitude shows up in their justifications (e.g., “we need dry cleaning,” “this is just how much utilities cost”), hindering further change.
• Victoria’s powerful realization:

“I deal with what I'm dealt. That is the belief that has been keeping us stuck.”
— Victoria ([64:22])

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8. The Importance of Savings—Not Just Paying Debt

• Ramit pushes the couple to allocate more money to savings—even if it means paying less towards debt each month—emphasizing the need for liquidity to handle life’s inevitable curveballs ([74:49]).
• He reframes the goal: the worst case is not higher interest payments, but complete financial collapse if something unexpected happens ([76:14]).

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9. Defining a “Rich Life” Beyond Debt Repayment

• For John, a “rich life” seems distant—contingent on being debt free ([77:04]).
• Ramit and Victoria challenge this: If you only grind, life will always be “someday.”
• John gets emotional discussing his family’s history with grind-and-sacrifice (uncle, grandfather worked till death), and Victoria implores him to claim small joys now (like working out or hobbies) ([80:08]).

Touching Quote:

“You do the work well for other people. But the question is, what about yourself?”
— Ramit Sethi ([84:54])

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10. Building Systems & Communication

• They realize true change requires systems:
  • Weekly money meetings, clear spending rules, emergency fund goals.
  • The process must become automatic to avoid falling back into old habits ([87:11]).
• Victoria concludes that if they don’t change their relationship to money, they’ll end up back in the same struggling place, regardless of the debt payoff ([86:29]).

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11. Final Updates: Did They Follow Through?

• Victoria's Update:
  • She found and lost a job, then accepted a part-time office manager role that better fits their family's needs ([92:01]).
  • Weekly money meetings didn’t stick, though it spurred more open talks.
  • Organized household bills and implemented routines for mail/finances.
  • Recognized that food is a “yes dial” (a priority worthy of conscious spending/seeking value rather than penny-pinching everywhere).
  • Ultimately, they decided to PUT THE HOUSE UP FOR SALE and use the equity to pay off their debts and downsize ([93:24]).
  • Commitment to staying in their teen’s school district and maintaining discipline in their next phase.

Quote:

“We are still learning our lesson, but we’re learning it and we’re growing.”
— Victoria ([95:44])

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Notable Quotes & Timestamps

• "You are broke. Severe danger. Red flag. Stop everything." — Ramit Sethi ([01:05])
• "Trying harder is meaningless jargon… it's a structural problem." — Ramit Sethi ([13:08])
• "Worrying is spinning in your head … caring is making different choices." — Ramit Sethi ([11:15])
• "The way you are behaving is carrying forward messages from growing up poor… there is no foresight, there is no planning." — Ramit Sethi ([04:16])
• "Do you care or do you just worry?" — Ramit Sethi ([12:06])
• "Sometimes admitting you don't care about something… takes a lot of introspection." — Ramit Sethi ([12:28])
• "You deal with what you're dealt. That belief is what keeps you stuck." — Victoria ([64:22])
• "If it’s me, I take a freakin’ hatchet to this spending." — Ramit Sethi ([66:58])
• "You do the work well for other people. But the question is, what about yourself?" — Ramit Sethi ([84:54])
• "If we just commit to a weekly meeting, things will change." — Victoria ([88:11])
• "The dreamer mentality and overspending is an old habit that will die hard. We're still learning." — Victoria ([95:44])

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Key Timestamps (MM:SS)

• 01:02 – Fixed costs, debt, and warning flags.
• 04:00 – “Try harder” and why effort isn’t enough.
• 06:36 – Resentment and avoidance unpacked.
• 11:13 – Difference between “worrying” and “caring.”
• 21:02 – Modeling Victoria’s potential income.
• 23:13 – Childcare dilemma.
• 35:49 – Two-month check-in: feelings after honest money talks.
• 38:18 – Victoria’s job loss and realities of employment.
• 41:25 – Subscription cuts and debt payoff plan.
• 57:00 – Grocery bill slashed, using receipts and ChatGPT for accountability.
• 63:40 – The core issue: an external locus of control.
• 74:49 – Rebalancing: savings before rapid debt payoff.
• 77:04 – What does a “Rich Life” mean to them?
• 80:08 – John’s emotion around family legacy of self-denial.
• 92:01+ – Victoria’s final update: part-time work, systematizing bills, selling the house.

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Structure for the Takeaway

What Listeners Can Learn

• Money problems are rarely just about numbers—they reflect deeper family patterns and psychology.
• “Trying harder” is not a money strategy; you need structural change, systems, and open communication.
• True change requires both partners to move from avoidance/worry to caring/action.
• Defining your “Rich Life” starts with small wins and self-care, not just debt obsession.
• Building systems (money meetings, clear spending rules, savings plans) prevents relapse.
• Sometimes, the bravest and smartest move is to let go of “the dream” (in this case, the house) and start fresh.

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Tone and Language

The episode is direct, occasionally tough, but laced with empathy and understanding. Ramit’s signature style blends financial expertise with psychological insight, pushing for action while holding space for honesty and even emotion. John and Victoria’s story is both cautionary and hopeful—a reminder that the Rich Life comes not just through dollars, but through honesty, teamwork, and the courage to change.

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Recommended Listen For

• Couples who avoid talking about money or feel stuck in the same fights.
• Anyone who thinks their money problems are “just numbers.”
• Listeners seeking to change deeply ingrained money patterns.
• Those who struggle with balancing debt payoff and creating a meaningful life.

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Follow “Money for Couples” for more unfiltered financial coaching, and remember:
“Spend extravagantly on the things you love, and cut costs mercilessly on the things you don’t.”
— Ramit Sethi

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Transcript

[Ramit Sethi]

Okay, let's say you want to retire,

but your partner isn't sure that it's time.

Maybe they say, what if we don't have enough?

But you say, what if I want

to start living my rich life right now? If this sounds like you and your partner and you are not on the same page about retirement, I want to talk. I love talking to couples about these big life changes. And sometimes it's not really the numbers that are the problem, but there's an unaddressed dynamic in the relationship with. We are currently casting couples for the next season of this podcast. This is basically a free three hour coaching session. Call with me. You can apply right [e-mail] apply to be considered. That's iwt.com apply previously on Money for couples.

You will probably lose your house. You're spending more than you make. You're running out of savings.

[Victoria]

We need to make better decisions on power spending.

[John]

Anything that doesn't get directly applied to our debt doesn't keep us in this house.

[Ramit Sethi]

Basically, you're spending 97% of take home pay on fixed costs alone.

You are broke.

[Victoria]

Yeah, we are.

[Ramit Sethi]

Severe danger. Red flag. Stop everything. What do you want to do?

Last week I spoke with John and Victoria, a couple in their 30s with three kids and a home in suburban New York that they are desperately trying to keep on paper. They have a net worth of over $600,000, but almost all of it is trapped in their house. And here's the reality. 97% fixed costs, which means they are spending more than they make every single month. Their Savings is just $1,155. That's less than one week's of expenses

if John loses his job.

And they're carrying RA roughly $100,000 in non mortgage debt, including 55,000 in high interest credit cards. I told them the truth. They cannot afford their house. And I gave them two options. Option one, sell the house, pay off the debt and start over. Or option two, keep the house. But that means Victoria goes back to work. They both earn significantly more, they cut spending aggressively, and they grind for years with no margin for error. The decision that they make right now will determine their entire financial future. Please remember they have children. So today we're going to see what they choose and then I'm going to check back with them two months later to see if they actually follow through. Remember, a lot of people claim they want to change, but very few people do. So let's see what they chose.

So another option is take the housing costs, sell Your house, you actually have equity. You might actually do pretty well on it. Take that money, pay off your debt, start fresh, downsize dramatically, radically change your relationship with money. It will be the hardest thing you ever did. It'll be incredibly difficult. The two of you will have to change the way you talk about money. You'll have to change the way, involve your kids. You'll have to make this something that you openly talk about. And that will feel incredibly uncomfortable. You'll feel like you're failing as parents, but it also gives you the chance to reset. Now, I'm not telling you to do it. I'm simply painting a picture. If, on the other hand, you say, nope, we appreciate the idea, but we want to keep the house, then the conclusion is, you both got to work. You still got to cut almost all discretionary costs down. There's no room for error. Anything on that list has got to go. There is no more house renovation work being done at all because it's too expensive.

[John]

Babe, how would you like to approach our situation?

[Victoria]

I don't think we have a choice anymore.

[John]

We can maybe worry about that in a few years, but I think now we got to really have a few years.

[Victoria]

I don't even know if we have a few weeks.

[Ramit Sethi]

Okay. How would you tackle it?

[John]

The way I tackle everything.

[Ramit Sethi]

Just try harder.

[John]

Just try harder.

[Ramit Sethi]

Yeah.

[John]

Hope for next year.

[Ramit Sethi]

Trying harder is. It intersects different groups of people. Men often just try harder. Brute force it.

[John]

Go out there, work harder.

[Ramit Sethi]

You know, kind of like derived from, like, go out and toil the fields for longer. Although most men these days are not toiling the field, it also cuts across people who grew up poor. It's go out and work harder. Grind yourself to the bone. That's what you got to do. So there's an intersection of these messages. You all are not poor. You make $120,000 a year. But the way that you are behaving with money is carrying some of those messages forward. There is no foresight. There is no planning. There is simply reacting and letting the world control what happens to you. Now, if the two of you made $25,000, we'd be having a different conversation. The. The fact is, the world pretty much does control you. If you make that much very difficult to plan ahead. You've made some choices as well that narrow how far ahead you can look. But even if you two made triple the amount you made, you'd still be in debt.

[Victoria]

That sucks to hear.

[Ramit Sethi]

I'm not the judge of you. I'm not here to judge You. You could actually disagree with me. If you go, that's not true, Ramit. If you were to disagree with me, I'd actually love it if. Victoria, if you said this to me, you said, ramit, I actually don't believe it. You know why? Because I have a plan for exactly how we're going to get out of our debt. I made a plan. I know our debt payoff date. I know that if John gets another bonus, this is where the money's going. And if and when I go back to work, here's where that additional money's going. And therefore, if we had triple, we are never going to be back in debt. I know it mathematically. Can you tell me that?

No, Exactly.

[Victoria]

I can't tell you that. I don't know our payoff date because I don't know when we can switch over the purchases from or the charges. I should say the charges because they're not all purchases.

[Ramit Sethi]

You don't know your debt payoff date because you don't talk about money. You don't talk about money because you have an extremely unhealthy relationship with money. You have an unhealthy relationship with money in part because of the way you were raised, but in part because of the decisions that the two of you have individually and collectively made for years and years and years. You have now created a culture of money in your household where you don't talk about it, you spend on discretionary items, you justify them, you avoid them, and you. And here you are. Who feels resentful about money in this relationship?

[Victoria]

Maybe I do slightly. I could contribute more if I didn't stop working, if there wasn't already a preconceived notion that my son's child support does not support any asset of this CSP that John and I have.

[Ramit Sethi]

You feel resentful about that.

[John]

Okay, John, now looking at it against all these little Amazon purchases, I mean, for sure, now looking back on myself, feel a little bit of that and hurting us.

[Ramit Sethi]

You feel resentful of your own purchases as to how it's affected your family?

[John]

Yeah, I mean, the Amazon stuff is just one thing. I know I've become a dreamer, like we've mentioned, and it's, you know, I dream to utilize more of a house. So I bought insulation for the garage and so we can use it. So I feel resentful in that sense. Where I started, something I couldn't finish may not have been needed.

[Ramit Sethi]

Do you all recognize that you can't afford this house with $100,000 of debt? On top of that, there is no planet where you can afford that house. Yeah. Every day you're in it, not only are you losing money, but you're actually spending more money on all these random renovation projects. The way you're spending is like you make hundreds and hundreds of thousands of dollars, like more than triple what you currently make. You don't make that kind of money.

[Victoria]

I think our bigger problem are the not talking about the whole picture.

[Ramit Sethi]

You think that's the problem? Okay, should we fix that?

[Victoria]

Well, we can fix that by talking.

[Ramit Sethi]

Okay. If, if that's the real problem, it's that. If that's the reason you're in, you know, a considerable amount of debt, $483,000 of debt, including $100,000 of non mortgage debt. If the problem is you don't talk about money, I feel like there's a pretty straightforward solution to talk to the

[John]

credit card companies for decreased interest rates.

[Ramit Sethi]

Hold on, hold on. I don't care about solutions right now. You're jumping to solutions because you want to avoid the painful process of looking in a mirror and figuring out why you've gotten into this situation. And you will keep doing that for the next 50 years of life, and it will not get you what you want. That's why I'm being so honest and direct with you. Victoria, you said that you avoid conversations about money. Why is that?

[Victoria]

Because I guess I know, like what I can handle in terms of like a dollar amount, not anything outside of that. It's like, what's the point talking about it? I can't even handle it.

[Ramit Sethi]

Can't do anything, so might as well just not talk about it.

[Victoria]

Yeah.

[Ramit Sethi]

Guys, I'm going to be really honest with you. I can't make you care about money. It's like a teacher in a classroom and there are kids who are, you know, they all. They care about everything. They're already like getting A's. They want to get A pluses. Teachers not concerned with them. They're going to succeed. There's kids who have a chance at really doing well, different abilities. And then there are people who just don't care. Can't help somebody who doesn't care about it. I can tell you what's going to happen. I can paint the picture for you more accurately than you may have thought of yourself. But I can't make you sit up straight and say, we need a plan. Here's the best I've come up with. Poke the holes in it. What should we do? What are we doing wrong? I can't do that. What's your take?

[John]

Oh, accurate.

[Victoria]

My plan is to pay as much as we can in December and then.

[Ramit Sethi]

Not what I asked.

[Victoria]

Cards.

[Ramit Sethi]

What is your reaction to what I said? That I can't make you care.

[Victoria]

I feel like I care. To a certain level. I feel like I do care.

[Ramit Sethi]

Oh, you do? Tell me.

[Victoria]

But I can't make them both of us care together.

[Ramit Sethi]

You don't think John cares?

[Victoria]

I don't know if he does.

[Ramit Sethi]

Top. Why not? You're married. You have kids to get. How do you not know if he cares or not?

[Victoria]

Because how can he look at all the accounts and still buy certain things that we probably don't need?

[Ramit Sethi]

How can you do the same thing?

[Victoria]

When was the last time I did it?

[Ramit Sethi]

How much did that patio furniture cost?

[Victoria]

Yeah. Five grand.

[Ramit Sethi]

Five grand. When you have a hundred thousand dollars of debt and you have almost a hundred percent being spent on fixed costs. So how can John avoid it? How can you avoid it, John? What do you think?

[John]

I think I care very much. It may not be the approach that will get us out of debt, but

[Ramit Sethi]

I know I care a lot. Can I ask John, do you care or do you worry?

[John]

What's the difference?

[Ramit Sethi]

I guess worrying is spinning in your head. It's feeling bad. It's not looking at the numbers. It's. Whenever you talk about money, it's negative.

You worry.

Caring is making different choices.

[John]

I guess I worry.

[Ramit Sethi]

You worry. I agree. You worry. Which it. Which feels productive but actually does nothing. What does it get you? Does worrying pay off your debt? No. Does worrying invest? No. Does worrying increase your income? No, it just. You're just spinning in place.

[John]

I could see that now how I've kind of approached everything, especially with the credit cards where I worry about being able to get groceries, but I don't care enough to not get the credit card. And. And so I. I do get them confused and think I'm doing the right thing, but it's actually a negative.

[Ramit Sethi]

Yes. Good insight, Victoria.

[Victoria]

How do I care?

[Ramit Sethi]

Do you care or do you just worry?

[Victoria]

I'm in a state of worry at the moment. I'm currently using. I feel like more of my child support to buy our groceries than I think I should be doing.

[Ramit Sethi]

Do you care?

[Victoria]

Not enough in the moment.

[Ramit Sethi]

Yeah. That's honest. That's honest. I want to give you both kudos for that. Sometimes admitting you don't care about something that is staring you in the face and is incredibly risky, that actually takes a lot of introspection because we are. Our natural tendency of course I care. Of course I'm, I care so much. But when we're really honest with ourselves, we go, if I cared, I'd be doing different things. I would be spending differently. I would be talking about money differently. We would be doing this together. We'd even be talking to our kids about money if we cared. I think it's pretty honest of you both to admit that in order to get out of this financial situation, you can't do it by just worrying.

I'm being tough on John and Victoria and I'm doing it for a reason. Because every time I push them to face reality, they retreat to the surface. We'll just try harder. We'll talk more. We'll be better. I want you to listen, especially if you've ever tried to change somebody or change yourself. When people say trying harder, it's actually meaningless jargon. It is truly just random words that people use to escape the discomfort that they are experiencing. Because if that's truly just what they needed to do, they would have already done it. The problem is not effort. This is a structural problem. They are grasping onto the very thing that has put them into this financial mess, their house. Sometimes we need to hear the unvarnished truth and to realize that all these words and jargon and squirming that we have done have actually avoided the key truth. We cannot afford our lifestyle. In fact, John just admitted something that most people never say out loud. He said, I worry about being able to get groceries, but I don't care enough to not get the credit card. A lot of people, their relationship with money is simply worrying. And if you ask them, what would you be if you were not worrying about money, they are completely confused. They have no idea. That's all they know. But candidly, worrying accomplishes nothing. It doesn't pay off debt, it doesn't cut your spending, it doesn't change your behavior. Action does. And that's why I'm being so direct, because those surface level solutions, like, we'll

try harder, that's not going to work.

It's not going to save them. They need to fundamentally make different choices, not talk about making them, not plan to make them, actually make them. And that's what the rest of this conversation is about. Let's see if they're ready. One of the most shocking things I've learned from this podcast is that almost all, all of the couples who come on my show with 10 out of 10 money problems have never read a single book about personal finance. Not just my book, they never read any book about money. You'll note that when people talk about money, it is very easy to dream

about what they want.

And actually I like dreaming. It's good. We should dream. We should come up with our rich life vision. But we don't just need dreams. We need a plan. So you can create that plan yourself and and figure out how compounding works and when you'll be able to withdraw this money and on and on. Or if you need help building a specific plan for you, our partners at Facet can help. Facet charges a flat membership fee for financial planning, never a percentage of your portfolio. You get access to a team of CFP professionals. Always a cfp, always a fiduciary who help you create a personalized financial plan for your rich life goals. And they handle important things like investments, retirement planning, starting a family, becoming empty nesters, estate planning.

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15% [e-mail] Ramit masterclass.com Ramit Victoria, I'd see this is a little difficult for

[Victoria]

you to hear slightly because I'm not working and I feel like me stopping working has put us in the hole.

[Ramit Sethi]

Can I ask a question? Let's just explore for a second. What if you went back to work?

[Victoria]

It would fix a lot of problems.

[Ramit Sethi]

Okay, just explore with me for. I'm not saying you have to go back to where it's not my place to tell you. I'm just saying let's explore. Okay. You're saying it would fix some financial problems? Maybe. How many problems would it fix?

[Victoria]

I'm hoping it would fix our debt rather quickly.

[Ramit Sethi]

Have you tested it to see what would happen to your finances?

[Victoria]

No.

[Ramit Sethi]

Are you aware that that is how people make savvy financial moves? They put in some numbers, they kind of model it out and see what would happen. Are you aware of that?

[Victoria]

No.

[Ramit Sethi]

Okay. That's an honest answer. Fair enough. Look, if somebody came to me and they're like, are you aware that in order to fumigate your house, you do this? And I don't even know the freaking words to use, I'd be like, no, I don't know anything about this. Can you just lay it out for me? So I'm going to do the same for you. Okay.

[Victoria]

Okay.

[Ramit Sethi]

I'm going to walk you through a simulation of what would happen if, Victoria, you started earning a full time income. And the reason I'm gonna do this is it's gonna do two things for us. Number one, it's gonna show us the financial impact on your household finances.

Two, it then opens up a conversation about lifestyle.

Is it worth it? What about the kids? They're young and all of that.

But too often we skip the numbers

and we just let our emotions guide everything. Does that sound familiar? She's saying yes. All right, let me show you. I'm gonna pull up the csp. Let's take a look. So here we are in the CSP. Lovely, perfect document. Everybody can download it. Iwt.com CSP Download it right now and follow along. So here we have a beautiful little cell. It Says zero. That's the potential income that Victoria would make. Victoria, what would your gross income be if you went to work full time?

[Victoria]

Probably between 65 and 80.

[Ramit Sethi]

Okay, let's say 65. Just to be conservative, let's move down to net. First of all, how come you have $0 gross and 2200 net?

[Victoria]

I put in my child support.

[Ramit Sethi]

Okay.

[Victoria]

I do clean a friend's office off the books that I make some money from here and there. And then it is the gift, the rest of it.

[Ramit Sethi]

All right, fine. You pay taxes on child support?

[Victoria]

No.

[Ramit Sethi]

Okay. All right, so 5,400. Let's just say that gives us an extra 3,000. All right, look what just happened. Did you guys see this number change here? The fixed spots, number 20?

[Victoria]

Yeah.

[Ramit Sethi]

What'd you see? Victoria dropped a lot. To how much?

[Victoria]

77%.

[Ramit Sethi]

What does that tell you?

[Victoria]

That I probably need to go back to work.

[Ramit Sethi]

Nope. That's not what it tells you. I just want to know what you see on the document before you spin a bunch of conclusions. What does it tell you?

[Victoria]

That it makes things easier.

[Ramit Sethi]

Yes. It. It eases your fixed costs quite dramatically from basically 100% to 77%, which is a major, major, major drop in fixed costs. It's still too high, but it gets you moving well in the right direction. Now, that does not say whether you have to go back to work or not. That's not what it says at all.

It simply gives you a little bit

of information to make a bigger, broader decision. Okay, I'm just going to be really direct with you. The two of you jump right to conclusions, and your conclusions are usually wrong. All right, John, what did you see when I put in an extra 3,000 bucks a month net?

[John]

A way to chip away and make, I guess, some freedom to then apply to other categories. Because for me, that 20% then can be applied to debt.

[Ramit Sethi]

Good. Before we move on Victoria, looking at that number.

[Victoria]

The 77%.

[Ramit Sethi]

Yeah, the 77%. And, you know, the ability to make between 65,000 to 80,000. What does your gut tell you?

[Victoria]

That I have to work.

[Ramit Sethi]

Okay. Would you be willing to.

[Victoria]

It's whether or not we can find child care at this point, your cost

[Ramit Sethi]

would go up because child care would be significant, substantial. Right?

[Victoria]

Yeah. I mean, I don't know if my mom can do it all with two children. My mom, when I was working, was our babysitter, and now it would be her having to babysit two young children.

[Ramit Sethi]

That's pretty difficult.

[Victoria]

It's a lot. She's 70.

[Ramit Sethi]

This is a really tough situation because we added the extra income. But if you were, I mean, look, I. Maybe you could ask your mom, but that seems like a lot to ask a 70 year old woman for to watch two kids full time. That's not my place. If you were to pay for childcare, those costs are very high.

[Victoria]

Yeah.

[Ramit Sethi]

Do you have a sense of how much you it would cost for childcare per month for two kids?

[Victoria]

I don't know. I mean, I think one of my friends who was paying for childcare full time, I think they were spending like 28 grand a year, I think.

[Ramit Sethi]

Yeah. So essentially eating up the amount that you would make. At least if you made it at 65k.

[Victoria]

Right.

[Ramit Sethi]

At 80k it may provide some profit. Basically we'll call it.

[John]

Okay.

[Ramit Sethi]

Something to consider. I don't know the right answer here, but we're starting to become a little bit more informed. Right. We can't just say should I do it or not? We gotta get how much childcare would cost and then factor that in as well. Okay. Regardless, we still have things we can do.

[John]

Are you willing to, I guess, start working and accept that I may have to look for another job because we need to make more money?

[Victoria]

I don't think you need to look for another job. I think you have really good health insurance with your current job. And that's an unseen costs that people don't take into account when thinking about bringing more take home. And I know that means I probably have to go back to work and it's my mom needs money too. My mom also works. And that's part of the other problem is that if, if I go back to work full time and she's watching the kids full time, I'm probably going to have to pay her. She's not going to be a totally free babysitter this time around.

[John]

I could perhaps do my part and see if I can do some childcare from home and work remote.

[Victoria]

I know it's just working remote, you don't get any. It's just no productivity at home with two young kids. And I wouldn't want you to do that and then potentially lose your job. We can't lose your job. I think the only answer is that I have to go back to work if we're staying in his house, if that's our desire.

[Ramit Sethi]

Can I step in for a second?

[Victoria]

Yes, please.

[Ramit Sethi]

Okay, first of all, great work. I feel like that was a really honest conversation. When was the last time you had a conversation about money like that?

[Victoria]

Probably never.

[Ramit Sethi]

Never? Yeah, I Felt that the two of you were listening to each other. I felt that you were talking as a team. You're really talking specifics. It's a tough conversation. It really is. Did you feel that you made a decision in that conversation?

[Victoria]

Yeah, the decision is that I have to go back to work.

[Ramit Sethi]

Okay, so you go back to work. All right. And assuming you go back to work, and let's even assume that instead of 65k, you make 70k, you have to pay child care in some form, would that solve your problem? Yeah, it would.

[Victoria]

Well, I mean, we would be able to make substantial debt payments if I went back to work.

[Ramit Sethi]

Really? How much?

[Victoria]

I would hope that we could put 60 to 70% of what I'm making towards debt.

[Ramit Sethi]

So 65 or 70% of your take home towards debt. But what about child care?

[Victoria]

I mean, child care would be whatever my mom says she would need to stay afloat on her end. I'd assume she would need at least 250 or 300 a week, which is a lot.

[Ramit Sethi]

We can run some numbers, but let's just stay at the conceptual level. So you'd get a job that paid, let's just say 70k. I think you'd end up with thousand bucks a month or something that you could put towards debt. That's good. That certainly helps a lot. I don't think it really gets you out of the position you're in. You would need more. What would you want to do?

[John]

I think she could do better. I think she's worth more. I don't think we should. She should just take the first offer.

[Ramit Sethi]

How much? Just be specific.

[John]

I mean, someone with her knowledge in the fields. I mean, I'm assuming she can make as much as I can in the financial industry, which she's, you know, excelled in and has knowledge in.

[Ramit Sethi]

Can I tell you how my wife and I talk about money in situations like this? Like if there's something we really want, right, we need to have it. We'll sit down. Of course, we're, you know, we always start with a compliment. We do all the stuff in Money for Couples. And when we get down to the numbers, we talk numbers, we go, look, if this is what we want, then you need to be earning this much and I need to be earning this much. Like point blank. Do you see the difference? What is the difference in how we talk about it versus how you.

[John]

Very vague right now.

[Ramit Sethi]

Yeah. Being vague is allowing yourselves the ability to escape from reality. If you both are in this together and you have said, we want to keep this house, no matter what. Now is the time to get specific with each other.

[John]

She needs to be looking for something and, you know, fight for something. Around a hundred thousand.

[Victoria]

I just think from experience and looking at jobs and listings. Is that right?

[Ramit Sethi]

It's.

[Victoria]

I don't know if I can make more than 80. I think 80. 80 is probably like a high. And I mean, maybe 95 would be the highest that I could see myself bringing home.

[Ramit Sethi]

Victoria, I say you make 80k. As you said, maybe you can make 80. Does that solve your problems?

[John]

We have to run the numbers and discuss it.

[Ramit Sethi]

No time like now. You could tell me the numbers. You want me to plug in? I'll do it for you. Here we go. You want to say 80,000? I was going to plug in 82, so that's 68. 33 per month. How much is the net going to be on that with everything?

[Victoria]

3,700.

[Ramit Sethi]

Yeah. Cool. Take a look. All right. Your fixed cost number is down to 69%. And our mortgage, your mortgage is down to 23.5%. That's good. I think this. This looks pretty good. I do want to point out that this only works if you two are making a combined income of $205,000. That's a lot of money.

[Victoria]

Yeah, it is.

[Ramit Sethi]

Here's what I want to do. I want to give you some homework. I'd like to speak to you again. I don't do this that often, but I think that there are some major changes that you both recognize have to happen and they have to happen now. You cannot wait. Here's what I would like for you to do before we talk again. I would like for you to redo your conscious spending plan. Taking a look at all the changes we made. I'd like for you to make them on your own. And any additional changes that we haven't considered. Those would be things like how much would childcare cost? I think it's probably time to have a conversation with your mom. Taking a look at the bookkeeper positions or the other jobs that you would apply. How much are they going for?

What could you realistically get?

Starting to put the feelers out on that. Don't wait. Get those job right now. Double checking your debt payoff calculations and knowing exactly how much you're going to put when you're going to be debt free. Put that up on your fridge. Okay. There's a lot. I know that. I know there's a lot. I would like to talk to you both again after you make some major changes. All the things we talked about Victoria. I want to talk to you when you get another job.

[Victoria]

Okay.

[Ramit Sethi]

And I want it to happen soon. I know. This is so crazy. It's like, oh, my God, we're completely changing our entire life. If you both adopt the frame that we want this to happen, we want to keep our house. So we are going to aggressively make changes, then you're going to want to do it as quickly as possible. What's your deadline you think is realistic?

[Victoria]

Two months.

[Ramit Sethi]

Okay. I like it. Let's go with eight weeks. I think that sounds totally reasonable. Eight weeks to change your life is a very powerful concept. Gosh, Once you really got clear on you wanting to keep a house, like, it really started to move quickly after that. Did you notice that? Yeah. It was like once you made this

one big decision, other things became easy.

That's the feeling I want for you to feel easy, to feel like we can move and be decisive, not be stuck like this.

[John]

Sounds like a plan.

[Ramit Sethi]

I'm excited to see what happens within eight weeks. And please be in touch. My team will be in touch. I can't wait to talk again.

[John]

Look forward to it.

[Ramit Sethi]

All right.

[John]

Big help.

[Ramit Sethi]

Thank you so much.

Something kind of shifted in that conversation. For the first time, John and Victoria were actually listening to each other. They got specific about numbers, they negotiated.

Honestly.

John said Victoria could make 100k.

Victoria pushed back with 80k.

I think the old John and Victoria would have just agreed to whatever sounded good and then figured it out later. But right now, these two were actually being honest about what's truly possible. And they made a decision.

Victoria goes back to work so they

can keep the house. Okay. If that's their decision, I understand. So I gave them two months, which is long enough to see how they will handle the inevitable obstacles that will come up. Will they go back to the way they were, or are they ready for change no matter what? What it takes? You know, in my experience, most people can change for a week, maybe two. Very few people can sustain true change for eight weeks and then turn those changes into a new way of living. So let me just detail what has to happen. Victoria needs to get a new job. They need to redo their CSP with real numbers, including childcare costs, debt, payoff dates, everything. And they need to start talking about money regularly. Not once a year in December. So when I check back in, I'm going to know, are they actually different or were they just talking about change? Guess what? We're going to find out right now because it's been two months. I talk a lot about the three dollar versus $30,000 questions that so many of us are obsessed with. And that same principle applies to kids too. It's really easy to get caught up in the small stuff. Did I remember to buy Cheez Its do they need new socks? But the bigger things like will they be protected if I get hit by a bus tomorrow? Those things often get pushed to the wayside. Not anymore. This year, start by asking the big questions and protect your family by getting term life insurance from this episode Sponsor

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business guide demystifying [e-mail] Ramit that's netsuite.com Ramit all right, welcome back.

How's it going?

[Victoria]

Good. How are you?

[Ramit Sethi]

Good, good. I'm excited to talk to you again.

[John]

Thank you.

[Ramit Sethi]

I have a lot of questions for you. I'm very curious what changes have been made and I want to hear honestly, what has changed, what has not. Let's just be an open book today. How did you feel after our last conversation?

[John]

Motivated, energized, refreshed? Sometimes felt good to, you know, just discuss it and talk. And it felt like just that initial, like elephant on the shoulders was off. And it felt good.

[Ramit Sethi]

Good. Victoria, how about you?

[Victoria]

I agree. I felt like it was eye opening.

[Ramit Sethi]

In what way?

[Victoria]

So in for me that. That like we probably do have certain areas where we both can be cutting back on spending, such as groceries for me. And then secondly, I think that I was like heard in the sense that we are overspending. Yeah. I think it was reaffirming that he realized as well.

[Ramit Sethi]

Okay, what kind of conversations did you have after we talked?

[John]

I think we mostly talked about, you know, going through the finances and tracks transactions and going through and categorizing where our lifestyle fits into those TSP categories.

[Ramit Sethi]

Do you think that the overspending and the financial situation you got yourself into was a result of purely numbers or was it a result of your relationship with money?

[John]

I would say it was a relationship to money. I've survived this two months. I know. Speaking on my behalf with kind of slim. A slim down, I guess, financial freedom. And I survived.

[Ramit Sethi]

What do you mean by that? Slimmed down financial freedom? What is that?

[John]

Well, like not eating out and getting lunch at work or eating what's in the house instead of going to the grocery store and bulking up again in the pantry and stuff. So just making sure I'm aware of what I really need versus what I want. So in that sense, I mean, slim

[Ramit Sethi]

down, how did it feel?

[John]

It felt good.

[Ramit Sethi]

What? Hold on. That was the least convincing good I've ever heard. Yeah, it felt good. It's that good to.

[John]

To know that I. I don't need. What I don't need is just purely, you know, wants. So being able to be cognizant of that felt good.

[Ramit Sethi]

Yeah. And that making that connection and then. Victoria, how about you?

[Victoria]

One of the other homework assignments was to go back to work. Correct. So I was working. I worked three weeks and then I was like, oh, on Friday. So sorry, it just wasn't working out to be a good fit.

[Ramit Sethi]

What's the story there?

[Victoria]

They didn't think it was a good fit. The fast paced, moving environment, office, their words. And that they didn't think I was being accurate enough with the payroll what

[Ramit Sethi]

do you make of it now that you look back?

[Victoria]

I do feel like that it was a fair, an unfair and very quick judgment or potentially two minor errors, in my opinion. But I also am not entirely upset regarding it because literally the night prior, on the way home from work, I had called John and said, I think I'm going to start applying to places again because I don't know if I'm going to. Last year, it was turning into the fact that I was there until six o' clock every. Almost every night, and I was not okay with that. And not being able to leave at 5, it was like not. It was not encouraged for me to be leaving by 5 o'.

[Ramit Sethi]

Clock.

[Victoria]

There were some reasons why I don't. I didn't want to be there anymore anyway, but obviously wasn't going to quit. And, you know, with our financial situation at home, so until I had found another job, I wasn't going to quit. But they did let me go. Then the very next day.

[Ramit Sethi]

How did you work childcare out while you were working there?

[Victoria]

My mom was watching them, my mom was watching the boys, and we were paying her 250 a week.

[Ramit Sethi]

Do you think that you'll be able to do the same thing if you go work at another job?

[Victoria]

Yeah, I mean, the deal is that, you know, if I go back to work, then I pay her 250 a week because she can't do her own work.

[Ramit Sethi]

All right. Are you applying for other jobs right now?

[Victoria]

I have been looking. I looked yesterday, but I didn't see anything that I wanted to apply to.

[Ramit Sethi]

Okay, can we take a look at your numbers, your csp? This was your previous conscious spending plan. If I recall, you had 97% fixed costs. And then I see that you created a bunch of tabs up here, which I'm curious about. Should I go to conscious spending?

[Victoria]

Yeah.

[Ramit Sethi]

Okay, cool. Whoa. Oh, my God. What is all this? Okay, I'm excited to find out. So just to everybody listening, I'm going to describe what I see on screen. I see the typical csp, which has some changes. I also see some. It appears to be a debt payoff plan, which is cool. I love seeing this. And I see some total amount of debt broken down. You know, PayPal, Klarna, Amex, etc. Basically, a lot of details are broken out here. Okay. I'm already excited. So here's my question for you at a high level. What changed in the conscious spending plan?

[Victoria]

The amount that we're gonna put towards debt, I think is the main area. And then the number in the subscription box.

[Ramit Sethi]

Okay, so take me through it here. Originally you were paying $1,836 a month towards debt. Now you are paying how much?

[Victoria]

2, 800.

[Ramit Sethi]

So like a full thousand dollars a month more towards debt.

[Victoria]

Correct.

[Ramit Sethi]

Okay, I. I'm loving that overall. And then subscriptions in the past were 394amonth. Now they are 236. Yeah, 238. Okay, so about 150 bucks less per month. That's great. Take it. What would you cut there?

[Victoria]

We stopped ordering the dog food on subscription and we're getting that from Costco now. Instead cut out our chat GPT subscriptions. I'm pretty sure John canceled the Amazon prime, the Disney account. We added in the ad level. So the savings there.

[Ramit Sethi]

All right, good work. So you cut about 150 bucks off subscriptions. How did that feel?

[Victoria]

It felt good.

[John]

It felt good.

[Victoria]

I felt relieving.

[Ramit Sethi]

Wow, that's pleasant. We could do more though.

[Victoria]

I disagree. I don't know if there's anything more that could be cut off that list. There's.

[Ramit Sethi]

Oh, not a subscription, I guess. Hold on. You don't think so?

[Victoria]

I don't. Well, I guess.

[John]

I mean we can kind of.

[Ramit Sethi]

You want me to tell you? Because I'll break it down right now. Yeah, I mean, water pitcher, filter, apple services, recycled sponges. I'm not even going to get into that. Delete. Price efficient Matcha. It's not that price efficient.

[John]

That's a guilt free spending.

[Ramit Sethi]

Then it shouldn't be here in subscriptions. Well, it technically is. I just cut off like 50, 70 bucks. There you go. You're welcome. Now I'm not saying you have to do it. I am saying sometimes it's helpful to have a third party look at what you consider essential and be like, no, hey, do you need price efficient sponges or whatever? So you take it as you will, but I appreciate that you cut 150 bucks off. I think that's awesome. Big round of applause. Can we look at the rest?

[Victoria]

Yeah.

[Ramit Sethi]

Okay. I'm loving it so far. I do want to point out that your fixed costs are still 91%. All right, let's just take a look at the rest of this investment. 0 savings are at 9%. Huh, what's this?

[Victoria]

So I had split my paycheck to go 75. I think it was 75. 25 into checking and then savings. So this way we do have that extra thousand dollars to put towards debt.

[Ramit Sethi]

Hold on, the extra thousand that you're talking about? Up here.

[Victoria]

Right, Right.

[Ramit Sethi]

You also put it here.

[Victoria]

Yeah, I might have.

[Ramit Sethi]

Okay. Hey, good news. You double counted in a way that's going to help you. You actually do not need to put it here in savings. So I'm going to take this out. Okay. That's going to drop your savings to 2%, which it realistically is, and that's going to bring us down to 7% of guilt free spending or $931 a month. Is this accurate?

[Victoria]

No, because I don't. We're not going to actually have that left over because that guilt free spending is what we were going to use to pay off the debt.

[Ramit Sethi]

All right, that's okay. Let's take a look at it now. So right now, you know, the numbers do add up.91% on fixed cost, 2% on savings, and 7% on guilt free spending. So at least they add up to 100.

[Victoria]

So then there is extra.

[Ramit Sethi]

Yeah, there's an extra $931 per month for guilt free spending. Although I propose maybe you want to put that money somewhere else. You tell me. What do you think?

[John]

Right into the debt.

[Ramit Sethi]

No, I love a good disagreement.

[John]

I mean, we can't do it now, obviously.

[Victoria]

I can't do it anyway, regardless, because things come up. The bigger point is that there's unforeseen things that come in the mail. And that's always been one of my challenges in terms of keeping to a money plan is that there was never any wiggle room to pay the unexpected expenses. So that's why we can't take the $900 and put it all back into debt. As. As nice as it would be to pay everything down faster, it's not the best plan.

[Ramit Sethi]

I think that was a very good explanation. That was outstanding. Crystal clear. Great examples. Nice firm conclusion. Victoria. Well done. Great. That's great communication. I agree. There will be unexpected expenses. You need some liquidity. Liquidity, meaning you need some cash. You cannot run skating so close to the line that you have $0 left over every single month.

You'll be destroyed.

How long until your debt is paid off?

[Victoria]

I think it was November 2026. If we keep this schedule, guys, a

[Ramit Sethi]

year is not bad at all. What the hell?

[Victoria]

No, it's great.

[Ramit Sethi]

Okay, wait, are we smiling or are we depressed? I can't tell which one's happening. Good.

[Victoria]

It's good. It's just now, obviously I don't have a job that's attributing to all this paycheck decision making in the csp, so I have to get Back on it. And it's obviously contingent on me working. So it's. The plan is great, and once we start the action, it's great. But for now, I personally feel like in a limbo from Friday to today.

[Ramit Sethi]

Okay. Because the layoff or the.

[Victoria]

Right.

[Ramit Sethi]

Your job loss happened on Friday, Correct. All right, John, how do you feel about. About a year to pay off this debt?

[John]

This is awesome. I'm ready to do whatever needs to be done if I need to keep cutting. And I'm in it for the long run, so.

[Ramit Sethi]

Good. Okay. Okay. I like this. I'm getting excited now. Hold on. I'm excited and I'm concerned.

[Victoria]

Okay.

[Ramit Sethi]

I have a lot of feelings. I need to work through them with you. Okay. I'm excited that you have a debt payoff plan, which is awesome. Let me remind you, 90% of people I talk to who are in debt don't even know how much debt they owe. 95 plus percent of people do not know when their debt will be paid off. You know, both, in fact. You have. I'm going to show it on screen because there's a lot of numbers here and you put a lot of work into this. It deserves to be seen by the world. You have a debt payoff plan here. You're paying off the minimums. You're paying a little bit more aggressively. You got them broken out by Apple and Amex and PayPal and Klarn, all these different things. And it shows when things are going to be paid off. I love it. November 2026. Fantastic. So great work on that. What I'm concerned about. Can you guess?

[John]

The implementation?

[Victoria]

No.

[Ramit Sethi]

What is an example of implementation? First, John, I want to hear from you.

[John]

I guess just. I mean, it's a year. A year away is a long time.

[Ramit Sethi]

No, it's not.

[John]

Well, anything can come up, I think, like, we were just discussing. So I. My point was, in that year, anything can come up again. So that can be very worrisome for, you know, for me, for anyone that I agree with.

[Ramit Sethi]

I'm not concerned with one year, if anything. I think one year is, like, really fast. Like maybe too fast.

[John]

It's definitely gonna happen fast.

[Ramit Sethi]

Yeah. So I'm not concerned that it's taking too long, if anything. I'm like, damn, this is like, really fast. Almost to the point of a detriment to you. Yeah.

[John]

I mean, like, things come up, like the holidays that need to be accounted for, school stuff, all these little things.

[Ramit Sethi]

There's no holiday spending this year.

[John]

That's one thing we did discuss We're. It's going to be very slim this year.

[Ramit Sethi]

Yeah, that's okay.

[John]

It's just one year.

[Ramit Sethi]

My point is, I love that you've discussed that. You're going to have a smaller, shall we say, much more conservative holiday. My concern is what's going to happen for the next year. Two years, three years? Because things are going to come up. Traffic tickets, kids, expenses. Things happen when you have a family. So I'm a little concerned about that. I want you to give yourself the ability to withstand life. Right now, it's really freaking tight. Like, if one bad thing happens, what do you do?

[Victoria]

Right.

[John]

Can't imagine.

[Ramit Sethi]

Now, Victoria, what do you think? What's your take? What do you think?

[Victoria]

I'm concerned about sticking to it. Sticking with the plan.

[Ramit Sethi]

Yeah. Yeah. Like, this plan only works if everything goes 100% perfect, right? How often has that happened?

[John]

We wouldn't be here if it was higher than 50%.

[Ramit Sethi]

Yeah, exactly. So, like, the good news is you built a plan. That's great news. The bad news is your plan is based on you being 100% perfect in a way you never have for your entire lives. We need to build a plan that's

a little bit more realistic.

What do you say?

[Victoria]

Okay. How do we do that?

[Ramit Sethi]

Okay, great. That's the question I was hoping for. So, first of all, we got the income issue, which is the biggest issue of all. Let's just tackle that. Your income, Victoria, on this CSP, was what, 64? 17amonth?

[Victoria]

It was 77,000 for the year, whatever that divided out to.

[Ramit Sethi]

So that's now zero.

[Victoria]

Right.

[Ramit Sethi]

How long until you think you can get another job, realistically?

[Victoria]

Well, it took me three weeks to find that job. 21 days and 61 applications.

[Ramit Sethi]

Yeah, I was.

[John]

I wanted to make it clear. Victoria was the beast.

[Ramit Sethi]

Yeah.

[John]

Applying for jobs.

[Ramit Sethi]

I just want to say what a great answer that was. You knew your numbers like that. Hey, everybody listening? That's the kind of answer you need to have when it comes to, when is it? Are you going to find your job? When are you going to pay off your debt?

When?

[Victoria]

When?

[Ramit Sethi]

When? You better have your freaking numbers down. That is a great answer. It took me three weeks, 61 applications, blah, blah, blah, boom. Okay, so can we assume three more weeks, Victoria?

[Victoria]

Yeah, we can assume three more weeks. And in the interim, I do still have my friend's office to fall back on, so I can always bring in some. Something.

[Ramit Sethi]

How much?

[Victoria]

Maybe 500.

[Ramit Sethi]

I think you should do it. You need the money.

[Victoria]

Yeah, well, I'm. I'M going tomorrow.

[Ramit Sethi]

Perfect. Fantastic.

Here's what I'm seeing. John and Victoria did some of the work. They built a debt payoff plan. They now know exactly when they'll be debt free, which is November 2026. Candidly, most people in debt can't even tell me how much they owe, much less when it will be paid off. So I think that's real progress. They cut subscriptions by $150. They're putting an extra thousand dollars a month towards debt. John stopped eating out for lunch. All of those are positive.

They're real change.

But here's the problem. Their plan only works if everything goes perfectly. And for John and Victoria, things never go perfectly. Victoria lost her job after three weeks. Their fixed costs are still at 91%. And when I asked if they could cut more subscriptions, they immediately started defending Matcha and water filters.

You see what's happening?

It's that old pattern creeping back in, justifying, defending. We need this. The good news is that Victoria knows her numbers. She got a job in 21 days with 61 applications. Tomorrow she's going to clean her friend's office to bring in $500. But if I'm being honest, I'm worried because this plan requires Victoria to get another full time job in three weeks. It requires them to stick to aggressive debt payments for a full year and it also requires nothing unexpected to happen.

That's not realistic.

What happens when life throws them a curveball? What happens when the car breaks down or their kids need something they didn't anticipate? By the way, Victoria's student loans are yet another thing they haven't planned for. These are the ones that got her wages garnished. The one she's been avoiding for years. So listen in now as I ask about those student loans.

Speaking of income and loans, Victoria, last time we talked you mentioned your wages have been garnished for student loans. What is this balance and the plan for student loan repayment?

[Victoria]

Well, currently I am waiting. I assume something's going to be coming in the mail that I giving me an option to pay it before they go against. I mean this is what I looked. I like did a Google search. What happens when these types of things are in place? Because it was our tax return that was garnished. So it wasn't like wages that have ever been garnished from me prior. So I wasn't sure the exact course of what was going to happen when I started to work. So I just, you know, did a Google search and kind of tried to look into it a little bit. And from what I saw, that they initially will contact the, you know, person. So me to start a payment plan versus garnishing the wages. So right now, it's a waning game to get something in the mail and hopefully set up a payment plan, even if it's like $50 a month, just so we stay in good standing. And then.

[Ramit Sethi]

Why don't you contact them yourself?

[Victoria]

I don't know who to contact at this point. I don't know how many times the loan has been sold. I don't know who's responsible for it. I tried actually looking for this information when John and I bought the house because we were going to potentially pay it off then, but I was unsuccessful in finding.

[Ramit Sethi]

You have a bill?

[Victoria]

I don't.

[Ramit Sethi]

You don't have any bills?

[Victoria]

I don't have anything recent, which is part of. Part of. Part of the problem that got us here.

[Ramit Sethi]

When was the last one?

[Victoria]

Pre pandemic.

[Ramit Sethi]

Okay, you have the bill?

[Victoria]

I might have the last one, but I think it was sold that I didn't get anywhere.

[Ramit Sethi]

When I called them, what did they tell you? We sold it?

[Victoria]

I don't remember. It was when I spoke to them. This was back in 2022, so I don't remember the conversation, to be entirely honest. I just remember being. Not being successful in getting.

[John]

Well, I know they said, oh, this reference number they had didn't match with someone else's, and the account numbers just led into nowhere, basically.

[Ramit Sethi]

Guys, I'm gonna be really direct with you. You cannot wait to get somebody to message you about student loans when you've already had wages garnished. You cannot wait. You need to be. You need to find it. I know you're resourceful enough, Victoria, because you got a job in three weeks. So apply that same approach to finding out who owns your loan. Trust me, people. People want to answer the phone when you owe them a lot of money. I guarantee they will not make it that hard. Okay, Somebody's picking up the phone when you're like, hey, I'd like to pay you money. They'll pick up. Find them. Set up a payment plan proactively. Do not wait.

[Victoria]

Yes, sir.

[Ramit Sethi]

The whole principle of what I am talking about with you guys is stop waiting for something to happen to you and start going on offense with your money, with your conversations, with each other, with your student loans. Stop waiting. Go on offense. Okay, moving along. Grocery spending. It used to be $1,800 a month. What is it now?

[John]

1350, I think.

[Victoria]

No, that's what we planned, but it's 1300, I think, on the CSP because we replaced the $50 in the CSP for the matcha subscription. So we lowered it slightly there. But in terms of actual spending.

[Ramit Sethi]

What's the number? Please just tell me the number.

[Victoria]

1175.

[Ramit Sethi]

That's good.

Why you bury the lead like that?

[Victoria]

Because in August, it was 368, but that was heavily cash that month.

[Ramit Sethi]

Why do you use cash? Because you don't want to charge it on the credit card.

[Victoria]

When I go to my friend's office, I get paid in cash, so that's one place that I can spend the cash.

[Ramit Sethi]

Yeah, I don't love using cash because it makes it harder to track. But are you tracking it carefully?

[Victoria]

We keep all of our receipts, and I mark the back of the envelope that we keep it in with what store I paid, what store I went to, how much I paid, and what payment method.

[Ramit Sethi]

Fine.

[Victoria]

And then I feed it into ChatGPT and it gives totals.

[Ramit Sethi]

It's not my preferred, but if that works, fine. Fine with it. Sounds like you are either at 1300 or lower than 1300 per month on groceries.

[John]

Is that correct?

[Victoria]

Yeah. The last two months, we've really been. And to that, I've been shopping the store with a calculator.

[Ramit Sethi]

Amazing. Holy. You know, we need to create an I will teach you to be rich calculator. Like, literally, it. It's magnetic, so it sticks to the shopping cart. And then everyone can see. They're like, what is this person doing with a calculator? Looking at thousand island ranch dressing. And you're like, you don't. And then when they come up to you, like, excuse me, ma', am, what are you doing? You go. You look at them blankly. You go. You don't shop to a number. That's the phrase I want spreading across America. Can you guys help me do that? Yes. All right.

[Victoria]

Definitely.

[Ramit Sethi]

I seriously love it, though. Good job. That's amazing. Okay.

Great job.

You brought your groceries down by over $500 a month. Incredible work. Incredible. And that's what helped be able to pay the loan off even more aggressively. I love that.

[Victoria]

All right.

[Ramit Sethi]

You still got 100 bucks a month on clothes. What's that for?

[John]

I think it's just to allocate if we need something that comes up for the kids.

[Ramit Sethi]

Yeah. Do they need it? No. No.

[John]

I'll answer that.

[Ramit Sethi]

No.

Well, okay. Answers. I love it.

Victoria, let him. Let him write. He just gave us a crisp answer.

[Victoria]

I want to correct him, because when we had our Current spending, it was $50 a month and I opted to 100, thinking our dry cleaning was going to like, pick up again with both of us working.

[Ramit Sethi]

And so dry cleans when they have 91% fixed costs. What are you talking.

[John]

I putting off for a while, so.

[Victoria]

But yeah, so I did inflate that number for his dry cleaning. But if we're talking about spending clothes on children, then yeah, no, they don't need the clothes.

[Ramit Sethi]

Guys, am I. Is this like a. Do you not realize the severity of the situation you're in? Like dry cleaning for a couple where you have 91% fixed costs, you do not have enough savings to last. Last time we spoke was a week. Like, dry cleaning is not in the universe of what's possible. I'm sorry, that's just reality.

[John]

My thinking and my validation for it was it saves time.

[Ramit Sethi]

Because what time?

[John]

All I've been putting in was the stuff that needs to be like ironed and you know, has specific conditions that I can't put to and get ruined. Like if I ruin my shirts, I only have a couple of them, then I have to pay more for.

[Ramit Sethi]

Did you seriously think that was going to work?

[John]

Was I close?

[Ramit Sethi]

Not even close. Not even in the same universe. First of all, you're speaking to an ironing master here. Okay. Second, you're speaking to someone who created a 30 minute video on YouTube on how to iron clothes you never watch.

[John]

I'll watch it right after this.

[Ramit Sethi]

Yeah, okay. And third, I'm sorry, guys. Dry cleaning is a luxury service. You cannot afford any luxuries right now. We need to get honest.

[John]

Well, I did, I, I did cut that. I only did the shirts like I mentioned, so. So I have been sort of proactive. But yes, I acknowledge that it can be cut and I'll do it.

[Ramit Sethi]

Okay, I appreciate that. I guess what I'm looking for is instead of me having to pull you to make these decisions, that rather you actually pull me right now. It's like there's a tug of war happening. I'm trying to pull you into financial safety and you keep pulling back with things like Matcha and dry cleaning. Guys, I don't mind if you want to spend on Matcha. If you're making $175,000 and you have no debt, you know, and maybe a mortgage. Okay, you are broke and we're talking about all these luxury services. Do you want to stay in this financial situation for the rest of your lives?

[Victoria]

No.

[Ramit Sethi]

No. Then it can't be me pulling you along. It's got to be you pulling me. I'm going to change your clothing to zero because you can't afford new clothes or any services around clothes.

[Victoria]

Cool.

[Ramit Sethi]

You went from 91 to 90%. Okay. Subscriptions are still at 238. No way. $100. Cut the rest, you're at 89%. Miscellaneous 102. Okay. I'll keep it. Childcare we talked about. And you're going to get the job within three weeks? That's the plan. Great. Fine. Utilities 1008.

[Victoria]

Utilities are. Yeah, they're propane elect, electric, water and Internet.

[Ramit Sethi]

What do you guys keep your air conditioning at? Out of curiosity.

[John]

Nowadays it's usually off, but like when it gets hot.

[Victoria]

It's not what he asked. Yeah, it's usually too low, in my opinion. I don't know, I think it's like 69 if it.

[John]

Honestly, it fluctuates depending on the humidity.

[Ramit Sethi]

All.

[John]

All sorts of things. How it is at night.

[Ramit Sethi]

How come? Victoria's just giving me a number over and over and John's going like this.

[John]

John, I can't give you an answer.

[Ramit Sethi]

Why not?

[John]

It depends on a lot of things.

[Ramit Sethi]

No, it doesn't.

John.

[John]

72, 76.

[Ramit Sethi]

Okay, it depends. I guess we'll depend ourselves into being

[John]

broke, but we'll put it to 70 when we need it.

[Ramit Sethi]

Victoria, what am I really asking when I ask about the ac?

[Victoria]

How much of our electric bill is being overspent on ac?

[Ramit Sethi]

Yes. And if I asking about that, then I'm asking about that for food and for clothes and for phone and for all of this stuff. The real question I'm asking, if you listen to the question behind the question, is how much control do you have over your fixed costs? And I actually think the two of you don't believe you have any control. I think the way you see the world is the world happens to us and we just simply deal with it one thing at a time and we're never going to get ahead. Look at the nods coming from both of you. You don't believe you have control over it, do you?

[Victoria]

Not entirely, no. I like to think we have control over it, but I don't think we have full actual control. One thing I would like to say about the electric though is I feel like this summer in New York, at least I don't know how.

[Ramit Sethi]

It's not about New York, it's not about air conditioning. It has nothing to do with that. It's not about that. It's about the way that you look at your relationship to the world. Do you believe you have any control over it or not?

[John]

We can, yes.

[Victoria]

No, I mean, historically, I think you deal with what you're dealt, and if you think that way, then you don't think you have control.

[Ramit Sethi]

Which way do you think? Victoria.

[Victoria]

Well, that is how I think.

[Ramit Sethi]

Victoria just said something that actually shines a really powerful light on what's going on. She said, I deal with what I'm dealt. That is the belief that that has been keeping them stuck. When the AC is expensive, they deal with it. When groceries are $1800 a month, they deal with it. When they rack up credit card debt, they deal with it. The world happens to them and they just react. In psychology, this is called having an external locus of control. It's the belief that your life is controlled by outside forces. The economy, the weather, circumstances, things just happen to you. But. But you have very little control over what happens. The opposite is an internal locus of control. The belief that you control your future through decisions and actions. And here's what's interesting. Victoria and John actually do have some control. They just proved it. Victoria cut groceries from 1800 to 1300. That's over $500 a month. She shops with a calculator now. She did that. The world didn't force her to. She did it. So they can change their behavior when they decide to. The problem is they don't believe they can. And the moment something feels hard, like giving up dry cleaning or setting the thermostat to 72 instead of 69, they retreat back to, well, we need this. And it depends. Do you see the pattern? Make a change, Hit resistance. Justify why they can't do more.

It's hard.

I've never seen it done. It would threaten my identity. These are all manifestations of their money psychology, that external locus of control. It's actually a lot easier to believe that the world controls you because then you're not responsible for it. You're just a product of circumstances, high grocery costs, hot summers in New York needing dry cleaning for work, shirts. To be really blunt, they control the thermostat, literally and figuratively. They can set it to 72 and save money. They can iron their own shirts, they can cut their Matcha subscription, and they can be proactive about their student loans instead of waiting for someone to contact them. You guys actually don't realize how much control you have over your life. Even things that you think are solely biological. You can change what you like to eat, you can change what time you wake up, you can change your energy level. But none of this happens. If you don't believe you can change. So the real question is, will they choose to take control or will they keep believing that life just happens to them?

Do you think that you deal with what you're dealt?

[Victoria]

Yeah.

[Ramit Sethi]

Yeah. I think that's really honest, and I think that is the fundamental issue going on here. You look at your spending, you both have a litany of reasons why. You're very good at explaining things. Well, we need this, and then there's that. And then there's this one thing, but this exception because of summer in New York. When I look at this, I say you have 89% fixed costs and you are broke. And you've already experienced what happens when bad things occur. Wage garnishment, all kinds of stuff. If it's me, I take a freaking hatchet to this spending. If it's me, I go, wait a second. We can change everything in our environment. We can get rid of some of this spending. We can increase our earnings. We can change the air conditioning even.

[Victoria]

I do feel like I tried this summer to actually turn the AC off a lot. That I was home, and it was one way that I tried to help not make the AC cost us as much money as it had been in the two summers prior by keeping it on 24 7.

[Ramit Sethi]

Okay, so I don't think this conversation is really about the ac. This conversation is about, do you believe you can control how much money you spend? If you told me we care about AC and we want to keep it at this temperature and we're going to find other ways, I would say, fantastic. It doesn't matter to me. But I'm not hearing that. What I'm hearing is a lot of justification for why you cannot change things. I can't change that. It's not my money. It's not my family. You decide. What you can't do is simply relitigate all the decisions you made which got you here. You can't do that and expect to change because it's not going to change.

[Victoria]

Right.

[Ramit Sethi]

What about your savings? Last time we talked, your savings were at $1,155. That's one week's worth of savings for John. What is it now?

[Victoria]

It hasn't changed.

[Ramit Sethi]

How come?

[Victoria]

Actually, that's a lie slightly. Right. Didn't we open that High Yield Savings Account and something's going there?

[Ramit Sethi]

Tell me.

[John]

I think it's $100 every two weeks is going to the High Yield Savings Account that we opened. Upon reading, I think your first book.

[Ramit Sethi]

Good. Yeah. Repeat the number again. How much.

[John]

$100 every two weeks.

[Ramit Sethi]

Great. So you have about 13 or 1400 bucks total.

[Victoria]

Correct.

[Ramit Sethi]

Okay. It's going the right direction. I really like that. What do you guys think about that? Were you when I told you last time you have less than one week's worth of savings, how did that strike you?

[Victoria]

I mean it wasn't surprising. I, I know that, I know that we don't have any foot to stand on.

[Ramit Sethi]

Okay.

[Victoria]

But it's scary. Yeah. I mean I just have to hit the ground running with the steam energy that I did the last time when we got off the call the first time and have a job within the next three weeks so that we can get that savings number to be higher.

[John]

I think. Yeah, we were very,

[Ramit Sethi]

a lot of energy.

[John]

I think we can keep it going.

[Victoria]

I think another thing that I was trying to plan out in some of our number planning and discussing was how long will it take to build up like a 6 or 12 month savings plan?

[Ramit Sethi]

What was your gut? What did you initially discover?

[Victoria]

If we were to do it like after paying off debt and we have money like that, $3,000 to put towards it. I think it was just over a year, if I remember correctly, to get to six months.

[Ramit Sethi]

I think it probably take a bit more than that because if you're saving $3,000 a month and you're trying to get to six months, that's $66,000. Take a long time. Years. I don't mind it. I don't mind. It usually takes years to get to six months of emergency fund savings. It's totally normal. I do mind that right now you still only have a week's worth of savings. It's really scary to me. I will tell you what I would do if it were me. What I would do is I would take all the savings that we just did. Taking a look at this, you now have $1,172 a month that has flowed all the way down to guilt free spending. And what I would do is I would redirect a lot of money towards emergency fund. So right now it appears you're doing about 220 bucks. I would put 500 bucks towards savings, leaving you with $672 in guilt free spending. That's pretty low. That's 5%. But the fact is you need savings. I would furthermore probably reduce the amount I paid towards debt.

[John]

Reduce it?

[Ramit Sethi]

Yes. Shocking, right? Yes.

[John]

Yeah.

[Ramit Sethi]

Why do you say that? Why is it shocking to you?

[John]

It's, I mean everyone, everyone fears debt so.

[Victoria]

Well, not fears, but it's okay.

[Ramit Sethi]

Improper.

[Victoria]

We shouldn't, we shouldn't be in debt. If we don't have the cash to pay for it, then we shouldn't be buying it at the end of every month. We should be paying the statement balance if we are carrying debt.

[Ramit Sethi]

So here's why. I think that you should consider reducing the amount you put towards debt. I certainly would. You have a family expenses come up. You two have shown repeatedly over many years that you are not properly planning for the future. Like simple things, expenses come up and

derail you and you haven't come up

with an effective solution for it.

You need savings.

You need it. So I love the fact that you're being super aggressive about paying off debt. But my question is why? Why be so aggressive that you're putting all this money, almost $3,000 a month towards debt to pay it off in one year.

Why?

[Victoria]

Because they're paying $845 a month in interest on the Amex.

[Ramit Sethi]

I understand that it sucks.

[Victoria]

Yeah, that was why.

[Ramit Sethi]

But what about if something happens? What about if John loses his job?

[John]

Yeah, I think to your point, you know, if we paid off the Amex, for instance, in extended three more months, at least the limited payments amount that's going towards saving now would be more beneficial than that. 3 extra months. So will eat the 3 months but have a cushion.

[Ramit Sethi]

That's the way to think about it. It's like, yeah, we're gonna have to eat some and pay extra interest. That sucks. We need to take accountability. We messed up in racking up all this debt and so we're gonna have

to pay for it.

Fine. But we need to protect ourselves as well.

[Victoria]

Right?

[Ramit Sethi]

That's how we think about it.

[John]

So like offense is a good defense.

[Ramit Sethi]

Is that the place? Go on up. Yes. Okay, let me show you what I mean. I'm not going to tell you the exact numbers because you need to decide for yourself. But take a look. Right now you're paying 2837amonth in debt. Okay, maybe that's a good idea. Maybe not. I don't know. Let's say we take it down to 2,000. We got 837 extra dollars to put in. So just to simplify things, I'm going to put $1,000 here, 220 plus 837. We'll just call it a thousand bucks. I just added it straight here into your savings. Now you are saving $1,500 per month. That's a lot.

[Victoria]

That's a lot.

[Ramit Sethi]

So by the end of the year

at least you will have one month worth of fixed costs. Yeah, guys, you need it. You need it.

You need savings.

You are too exposed right now. How does it feel?

[Victoria]

Feels wrong.

[Ramit Sethi]

You know why it feels wrong to you?

[Victoria]

Why?

[Ramit Sethi]

Two reasons. Number one, you've been taught that debt is bad, which is ironic because you actually ran up a ton of debt. So what kind of lesson is that? Second, it feels wrong because you are used to only tackling the thing directly in front of you. You are not used to planning further out. Look at John nodding his head.

[John]

That makes sense.

[Ramit Sethi]

So I will say kudos to you for creating this debt payoff plan because it's very, very sophisticated to be looking ahead and planning a year. But what you did was you basically said like, this is bad, debt is bad. I want to make the bad go away as quickly as possible. That was essentially what you did, right? Yeah, exactly. And so what I am encouraging you and challenging you to do is like, hey, yes, debt is bad, but we also need to look even longer. We need to look bigger. We need to realize that we're going to have to pay interest. It's going to suck. And also, the worst case that would happen for us is not paying an extra 500 bucks in interest. It's that we get laid off and

our family is destroyed.

That is the worst.

[Victoria]

Yeah, that definitely works.

[Ramit Sethi]

All right, so that's up to you. But that's something. I would consider the difference between paying off debt in one year versus two or two years versus three in the grand scheme, negligible. But having a fat savings account so that you can sleep well at night, especially as parents, very, very powerful.

John and Victoria are learning to think bigger. Not just about paying off debt, but about building real financial security. If I can be really honest here, there has to be more to life than just getting by. So when do they actually get to live? When does this stop being about survival? Let's talk about their rich life right now.

When do you get to think about a rich life?

[John]

When I have the funds where I'm not, you know, worried about debt. So I don't know when that would be.

[Victoria]

Well, why don't you know when that would be? Because if we have a debt payment playoff payoff date, why wouldn't that occur in a year?

[Ramit Sethi]

That's a good point.

[John]

I mean, yeah, I mean, two years was the plan, I guess because we just. We haven't gotten there yet. So for me, that wasn't. That wasn't real.

[Ramit Sethi]

So you can't think about a rich life until you're debt free.

[John]

I was able to think about it before, but, I mean, my rich lifestyle right now is, sad to say, being debt free.

[Ramit Sethi]

And.

Wait, that's not sad. I think that's cool. That's very mission oriented. Hey, we got. It's taking accountability. Hey, we got ourselves into this situation. We are creating an aggressive plan to pay it off. We are being thoughtful. So when we get this gift money and when we have these monthly transfers, we are being very thoughtful. Do we need to pay it off in one year? Can we extend it to 16 months? 18 months, 24 months?

What is right for our family?

So I actually find this very exciting to think about. What is our rich life? It's being debt free right now. But how are we going to get there in a way that's right for our family?

[John]

And I guess my rich lifestyle, I guess to go on that, now that we're talking about it, is kind of a little bit more clear, is being able to have these things in progress where I can know, okay, we've got this plan for to be, you know, have the property tax paid and be doing it by ourselves and have those motions going. And knowing that all that is set, I think. I mean, I don't know if that could be a good rich lifestyle, but

[Victoria]

knowing that that's available, it doesn't do anything for you. That is just things that need to happen, but it doesn't give you anything. There's nothing about you specifically in that statement.

[Ramit Sethi]

Victoria, you want to elaborate?

[Victoria]

He says in the book that moms and dads don't ever do anything for themselves. So right now, you're being dad and you're being a provider, and you're making sure everything's being counted for. But like I did last year after having Luca, I went to ballet class on Wednesday nights once a week, and that was mine. Like, that was something that I got to do. That was me. It was something I enjoyed, and I'm grateful that I got to go. I do think it was money well spent, because postpartum depression is real. But what Ramit is saying is that everything that you just said doesn't give you anything in return.

[John]

I may not have said it enough or at all, but for me, knowing that you were able to do that

[Victoria]

stuff, there's nothing specific that you were saying. You need to find something specific.

[John]

Oh, I really can go into savings for all I'm concerned. Hold on a sec.

[Ramit Sethi]

This is very interesting. So, John, you're getting emotional talking about Victoria being able to do ballet classes. Right. Why?

[John]

Because I love her and that's what she likes to do.

[Ramit Sethi]

There's something pretty beautiful about that. Like you are working hard. You want Victoria to be able to do that or whatever she wants. There's something beautiful about that. Do you hear what Victoria is saying?

[John]

Focus more time on myself.

[Ramit Sethi]

Why do you think she's saying that?

[John]

It's needed. Think about your son, I guess, yeah. If I'm being a role model for them and then that's all they see. I mean, I've thought of that, but right now it's just. Business is business.

[Ramit Sethi]

Can I gently push you on that? This idea that right now I'm just going to be heads down, I'm just going to focus on the thing in front of me and later I will deal with this vague, ambiguous, rich life stuff never happens. And men, particularly men who find control in systems and numbers, men like you and me, who are optimizers. We are the ones who, who end up living only for some distant future. And the loved ones around us are like begging us, please be present right now.

[John]

That's. That's the. The family I grew up in. That's all I know. My uncle passed away before he got to enjoy retirement. And it's one thing his wife keeps mentioning is, you know, they were just about to get to enjoy that part of their life and he didn't get that far.

[Ramit Sethi]

How does that apply to you? How do you take that in?

[John]

That's something I have to just accept in terms of just how I've seen things. So it has been pretty tough. But I know this family that he's given up so much for,

[Ramit Sethi]

we all

[John]

hope, so much benefits, it may just be worth it.

[Ramit Sethi]

Take your time. Take your time. We're in no rush.

[Victoria]

Sorry.

[Ramit Sethi]

I actually really appreciate you being so open. Money is very emotional. I really appreciate you being this candid with me. Keep going.

[John]

That's really all there is to it, is he put in the hours and I mean my grandfather put in the hours till the day he died,

[Ramit Sethi]

had

[John]

this same clothes, same minimal lifestyle, but they've given up so much for, I guess, allowing our family to have things. That's. That's a rich lifestyle.

[Ramit Sethi]

That's a hero. That if they work hard, if they buckle down, if they provide for their family, that's a good man. Is that what you're telling me? Yes. I agree with you. I think that being able to help your family, being able to be solid, being able to be there for your, I think that's a great man. I agree But I also hear Victoria saying something in addition. Victoria, what are you asking for?

[Victoria]

For him to go find time to work out. I know that's something he wants to do. If it means spending some of this less debt payment money on a gym membership because it gets you out of the house, it gets you away from the kids, it gets you concentration to actually work out, that might be worth it.

[Ramit Sethi]

What do you think, John?

[John]

I. I mean, I appreciate that. And an adjustment that I don't know

[Ramit Sethi]

if

[John]

is gonna be so easy because, you know, at the. It's still something that's going to preoccupy my time wherever I am.

[Ramit Sethi]

What does that mean? You're. You're at the gym doing lateral raises and you're like, this could be my AmEx bill paid off three days earlier.

[John]

In a certain sense, yeah. It just may be a distraction, you know, if you're distracted, you don't enjoy things or you can't get the full experience.

[Ramit Sethi]

John, are you all or nothing?

[John]

Yeah.

[Ramit Sethi]

Like if I, If I don't have. If I'm not perfectly debt free, I can't enjoy my time at. I'm pretty extreme.

[John]

I usually am. 0 or 100.

[Ramit Sethi]

How's that work out for you?

[John]

I mean, right now, not well for work, it's going well.

[Ramit Sethi]

I. I like the honest answer.

[John]

I mean, people, I'm. I do my work pretty well. It's, you know, like I said, I've stuck to that. And yeah, John, you do the work

[Ramit Sethi]

well for other people. But the question is, what about yourself? What I would really love for you to internalize is you can create a powerful debt payoff plan. No doubt you need to pay off your debt. I agree. You can create a powerful savings plan. You definitely need more in savings. Okay.

Yes.

And you can go to the occasional gym or like, I like chips. So if I were in your situation, I would say once a week, I'm going to go out and eat chips and salsa. Five bucks. But it's just something I enjoy.

Whatever.

The point is not about spending 50 bucks or 5. It's not about that. It's about you not grinding yourself into the husk of a man that so many men turn themselves into. And it's not just about you. It's about your wife. It's about your kids. It's about everyone seeing that you are not going to do the same exact thing that your uncle and your grandpa did.

You can pick and choose.

Victoria, what do you think?

[Victoria]

I would love it for him to go do something because I feel like he would be a little stress free, a little less stressed if he did something that wasn't just the everyday always has to be done, hustle around, working and a family.

[Ramit Sethi]

If the two of you did not make any more changes after we talked today, where do you think you would end up?

[John]

Not in his house?

[Victoria]

Well, we would probably end up eventually back in the same place because we're not dealing with, I think the initial problem. Right. If we're sole focus right now is paying down debt so aggressively and getting rid of it and everything can be dealt with after. Are we going to deal with it after? No. That's the whole point of making the rules now while we're in the thick of it. So that once we're out of it, we have a plan for our money and that we know what we're going to do and that we're not in the same spot again in three years, two years, whatever time frame that works out to be.

[Ramit Sethi]

It's powerful realization. Victoria, if I were in your situation, I would never want to be back in this situation ever. And it would not just be a desire, it wouldn't be like oh, I hope we never end up back here. I would put systems in place to guarantee that we are never back in this situation. I would build up a fat emergency fund. I would have automated transfers going here and there. I would have rules on spending and owners for different categories. I would be talking about money on a weekly basis until we became extremely comfortable and then maybe moving it to a monthly basis. And I would be using money not just to save and invest, ensuring that we never got back into debt, but also be taking a little bit of that money for guilt free spending, modeling it for each other and for the kids. That's how it becomes systematic. It's not about hopes, it's about building a system.

[Victoria]

So I think if we just commit to a weekly meeting then things will change because every week we're going to be discussing thoughts and money and bringing things up that maybe the other has done that we want to talk more about like how did this, how did we get here? How did this happen? How did that happen? Why did this happen? So obviously you can't name all the specifics to that right this second, but just taking, like John said, more accountability for everything that's going on.

[Ramit Sethi]

I like it. I think it's a good start. Until now, a lot of your financial life has just been one game of whack a mole after another. That's it. One game of whack a mole. Whether $10 or 10,000, just whack. Whack a mole. I would create rules so I never have to play that game again. I just hate it. I refuse to play it. And because I know that I have control over my life, if I don't want to play a certain game, I'm not going to play that game. I will create rules so that I can play the game I choose to play, not the game that the world assigns me. That's something I would think about. Since you both said that you would like accountability, then here's what I would like to see from you. I would like to see updates from you over the next month. In fact, I'd like to see him after each money meeting. We're trying to stop playing whack a mole, start living a rich life. I would be very interested to see your revised csp, which I think we made some pretty interesting changes to. I would be very interested to see any rules that you create to make your life easy. Remember, you create the rules, nobody else. So the rules are meant to make your life better and easier. I'll be very interested in all that. I think that's going to be absolutely incredible with that. I'm very excited to see what the future holds for you. Very excited. Trust me when I say that if you do this for four weeks and you both show up, you have an agenda, each of you contributing something to the agenda beforehand. You show up with a plan and you practice your communication. You will be shocked at how much you can improve in four, four weeks. All right, John, Victoria, I want to thank you both. It's a real pleasure to get to chance to follow up with you and to talk more. Keep me updated. Okay?

[John]

Thank you.

[Victoria]

Well, dear, thank you.

[Ramit Sethi]

John and Victoria are learning that changing your relationship with money isn't just about budgets and spreadsheets. It's actually about building new systems and having hard conversations and shifting how you see yourself in each other and money. If you want help doing that work, whether you're buried in debt like John and Victoria or you just want to get to the next level, my money coaching program can give you the structure and accountability to make real changes and make them fast. Go to iwt.commoney coaching to sign up. I will see you in the program. Now, here's what I think is going to happen with them. I think Victoria will get another job. She's proven that she can hustle. She did 61 applications in 21 days.

So that's not the issue.

The issue is what happens when they hit their next obstacle. I'm talking about when the car breaks down or when one of the kids needs something expensive or Christmas rolls around and they're tempted to make it just a little special day. That's when I'll know if anything has actually changed. I noticed that John cried when he was talking about his uncle, A man who worked until he died and never really got to enjoy his life. I think John is starting to recognize the trap that he's been building for himself. But we have to acknowledge that he's been building that trap since he was a child. And I don't think Victoria is going to let him off the hook. She's also pushing him to have a life beyond just grinding. Personally, I'm rooting for them, but I also know that change, real change, is hard. Now let's check out their follow ups.

[Victoria]

Hi Ramit and team. It's Victoria and Virtual John. Just checking in with a quick update since our filming. Some of our biggest takeaways from our first filming in August was for me to find work, which we updated in September that I very quickly found work within three weeks. After 60 something applications and one interview, I was ultimately let go after three weeks from that job. It wasn't the right fit for either of us. I realized after that that a full time job may not be the best thing for our family right now. And so I ended up accepting a office manager role at my friend's medical practice. I work there three days a week and then the other two days a week I do stuff for the family and the kids and it's been working out quite nice. One of the other assignments for us was to do weekly money meetings and we'll be honest, we did not hit that goal. Since the end of September we've had about three meetings. Not weekly, but it did start a habit of trying to sit down and talk about money instead of avoiding it. One of the responsibilities was for John was to be taking over some of the mailed bills, which was an idea that was great in theory. Just with him working a full time job out of the house and being the one who cooks dinner mainly it did not come to fruition.

[Ramit Sethi]

So.

[Victoria]

So I basically reorganized our filing system because I realized it was a heap of a mess and there was papers all over the place and backlog. As I said, I'm terrible at opening mail. So I took care of all of the backlog, I took care of all of organizing. We take care of all the mail as it comes in now. And also another takeaway was to work on our grocery spending. But we have realized that food, food is one of our yes dials, which is something that we tried to say in our update. We do like cooking, we like eating well. We buy wholesome ingredients. So one of our yes dials is food. And we are becoming more intentional rather than trying to drive the number as low as possible. We did see a big savings initially. As we said, we used up a lot of our stock pantry. We do continue to use ChatGPT for our grocery plan and meal prep and so that does help. Sorry I had to pause the videos when woke up. Part of our takeaway was to make a debt payoff plan and without a full time second income it's hard to execute. So we were still treading water till December. So we have decided as a family that we are going to make better decisions this year. And so one of those better decisions is we put our house up for sale and we are listed. We have had open houses, we have had scheduled showings, we've had offers made, we've had an inspection done. So we have contracts on the table. We are basically almost at the signing point. So we are looking to put about 550 down on the house. We are looking to stay in district for a teenager. Depending on the final house that we end up, you know, securing and having a winning bid for will determine what our final all in housing costs and percentage of income looks like. But I'm bearing in mind the property taxes trying to keep it under 10. We're not looking to go over our max budget. Our max budget does include, I believe our debt currently, which we are looking to obviously wipe clean when we switch houses. Money talks will have to happen weekly in our new house, twice a week, more than twice a week, just to get into the habit so that we can keep on top of making sure that we stay debt free. All the things that we have to bear in mind, habits that we have to continue to forge. The dreamer mentality and the overspending is an old habit that will die hard. We are still learning our lesson, but we're learning it and we're growing.

[Ramit Sethi]

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