263. "We spend 102% of what we make. Will we ever stop drowning?"

Summary

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Podcast Summary: Money For Couples with Ramit Sethi

Episode 263: “We spend 102% of what we make. Will we ever stop drowning?”
Date: June 2, 2026
Host: Ramit Sethi
Featured Couple: Freya (45) & Blake (47)

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Episode Overview

This deeply personal and transformative episode dives into the raw financial struggles of Freya and Blake, a mid-40s couple drowning in debt and emotional stress from spending more than they earn while raising two young children. Through a combination of candid interviews, numbers breakdown, and real-time financial coaching, Ramit Sethi explores the roots of their dysfunction, the psychological history fueling their money habits, and guides them toward making radical changes—both emotional and tactical—to finally stop the cycle and build lasting teamwork around money.

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Key Discussion Points & Insights

1. The Scope of Their Financial Crisis

• Current Situation

  • Negative net worth: -$90,999
  • $96,000 in debt (mostly high-interest credit card)
  • $5,000 in assets, $180 investments
  • Zero savings
  • No regular investment contributions
  • Monthly spending: 102% of take-home pay; fixed costs exceed income
  • Two young children; Freya also has two adult children

• Emotional State: Panic, dread, guilt, anxiety, and a pervasive sense of failure—especially with children involved.
  — Freya: “We are literally broke to the point that I'm worried we will be homeless.” [03:50]
  — “I've always managed to make it work… it's just like, eh, it'll work itself out.” – Freya [04:20], [14:14]
  — Blake: “It's just depressing to look at these numbers… It's brutal.” [28:29]

2. Money Psychology & Relationship Dynamics

• Avoidance and Siloing:

  • Blake avoids confronting financial realities. Freya manages logistics but feels alone and resentful about the lack of partnership.
  • Avoidance cycles: Minor efforts are made, then abandoned when not reciprocated or when emotions flare.
  • “I feel like I have to do it, but then I can't, and then I stop. It's like this cycle.” – Freya [38:18]

• Spending Triggers & Coping Mechanisms:

  • Escapism via spending; using purchases (eating out, trips, activities) as brief relief from stress.
  • Guilt over saying “no” leads to spending money they don’t have, especially on kids to “make up” for their own deprived upbringings.

• Gendered Labor & Roles:

  • Freya handles household, kids, and all financial planning, resulting in burnout.
  • Blake admits: “I'm the classic sort of, ‘I need to just go make more money, so then the budget conversation can be more positive.’” [05:54]
  • Ramit: “I hate this dynamic… emotional labor and he's oblivious… It's just not partnership.” [16:25]

3. Root Causes: Upbringing & Personal History

• Freya’s Background:

  • Religious, scarcity mindset (former Jehovah’s Witness, minimal formal education, kicked out at 17, normalized deprivation).
  • Result: tendency to overcompensate as an adult, fear of saying no, “hand to mouth” normalization.

• Blake’s Background:

  • Privileged “Bible Belt” upbringing (doctor’s son, never worried about money, not taught financial skills or to talk about money).
  • “I never talked to my parents about it… I didn't give it much thought, frankly.” [49:47]

• Patterns Repeating:

  • Both defaulted to “hustle” mentality, fixed on future earning as solution, not changed daily habits.
  • Avoided confrontation as core conflict-avoidant behavior (“Peter Pan-esque”); privileged background meant crisis was always temporarily managed until the safety net was gone.

4. Concrete Examples: How Dysfunction Plays Out

• Notable Spending Decisions:

  • Ski trip: $2,000 spent during a bad financial period despite initial refusal [07:30]
  • Family trip to Mexico: $3,500+ on credit cards, leading to guilt and future arguments [09:46]
  • High grocery spend: Eating “like at a restaurant every night,” groceries/eating out once topped $3,000/month [26:24]
  • Kids’ activities (tennis, dance), books, art supplies persist despite zero financial slack.

• Recurring Arguments:

  • Blame cycles: Using past decisions as “ammo” in future money conflicts [10:18]
  • Guilt about not providing for kids or adult children (paying for adult kids’ phones despite being in debt).

• Missed Minimums & Collections:

  • “We have not been making the credit card payments at all.” – Freya [60:55]
  • “Just hit collections last week or last month.” – Blake [61:10]

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Memorable Quotes & Moments

| Time | Speaker | Quote | |------------|---------|--------------------------------------------------------------| | [03:50] | Freya | “We are literally broke to the point that I'm worried we will be homeless.” | | [07:34] | Both | “We didn’t have [the money] to spend.” | | [28:21] | Freya | “Honestly, for me, it feels like failure… especially with kids.” | | [33:06] | Ramit | “What I can't understand is why you haven't made a radical change.” | | [35:08] | Ramit | “It means you are broke. It means you are spending more than you make every month.” | | [38:18] | Freya | “I feel like I have to do it, but then I can't, and then I stop…” | | [57:05-07] | Ramit & Blake | “You will need to confront the very thing that you have avoided your entire life. Confrontation.” | | [65:23] | Ramit | “Somebody who has multiple freaking notepads knows what it's like to focus their energy.” | | [68:13] | Freya | “I'm frankly annoyed with myself… I am pissed.” | | [70:00] | Freya | “For my rich life, I want to work… have a fulfilling career… contribute more to our family…” | | [71:16] | Ramit | “Our typical goal is to bring that fixed cost number down to 60%. In your case… you are spending 102% of your take home pay. Unsustainable. You will lose your house soon.” | | [79:33-41] | Ramit | “I think you all need to give yourself a round of applause so far. Good job.” | | [92:13] | Freya | “It's like, how did we not do this before?” | | [98:27] | Blake | “How many of those behavioral patterns actually extend into my life in general and not just in the finance world… need to make some fundamental changes in how I operate.” |

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Coaching & Tactical Solutions

Ramit’s Approach:

• Empathy + Reality Checks: Pushed for emotional honesty and partnership; no blame, but demanded accountability.
• Numbers as Wake-Up Call: Broke down spending line-by-line, showing in black-and-white how dire the situation was.
• Radical Action, Not Tinkering:
  “There is no tinkering around the edges that will solve [102% fixed costs].” [35:27]
• Decision Exercises: Forced couple to trade-off, prioritize, and cut—in real time—until spending dropped below income.
• Move from Problem to Solution Orientation:
  “Most of us are problem oriented… very few of us are solution oriented.” [87:03]
• Income Increase as Fire Hose:
  “If you’ve got a financial problem, you may have a solution right in front of you… do I have a fire hose and why am I not picking it up?” [87:47]

Specific Interventions & Recommendations:

• Cut Spending Drastically:

  • Downsizing home: Move for $800+ monthly savings or stay only if new income is found within weeks
  • Sell second car: Save $500/mo
  • End childcare (when possible): +$1,400/mo
  • Slash groceries: Down to $750–900/mo (“I love a challenge!” – Freya)
  • Eliminate dining out, unnecessary subscriptions, kids’ paid activities, and “loosey goosey miscellaneous” buffer

• Increase Income:

  • Freya: “I could work 20 hours/week, bring in $1,000/month…” [80:13]
  • Blake: Aggressively seek full-time creative director role (“Within 3-6 months I could be making $200–250K again”) [87:24]

• Immediate Savings Buffer:

  • Prioritize building initial savings to avoid eviction (“You cannot allow [losing your house] to happen.” – Ramit [83:38])

• Debt Plan:

  • Contact creditors for hardship programs
  • Use Ramit’s debt payoff calculator and book scripts
  • Focus surplus towards savings first, then aggressive debt paydown

• Emotional Reset:

  • Commitment to weekly financial meetings—with both as true partners
  • Get kids involved in budgeting and explaining the “why” of money decisions
  • Break the cycle of avoidance, shame, and blame

Family & Generational Patterns

• Importance of breaking cycles so their children don’t repeat destructive patterns [47:55-58:34]

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Episode Timestamps: Important Segments

• [03:50] — Panic and dire numbers
• [06:34] — Dysfunctional communication and first fight example
• [09:07] — Money conflict over Mexico trip
• [14:14] — “Money comes, money goes” normalization
• [16:25] — Gendered emotional labor commentary (“not partnership”)
• [26:24] — Realization of unsustainable grocery/food spending
• [33:06] — Ramit asks why radical change hasn’t happened
• [38:18] — “Feeling siloed” and lack of team effort
• [57:07] — Need to confront avoidance and practice confrontation
• [68:13] — Self-anger as a motivator; beginning of meaningful change
• [73:24–78:55] — Aggressive, line-by-line spending cuts in real time (“celebrate every $100”)
• [87:17–89:52] — The fire hose analogy: Income is the solution, not just more belt-tightening
• [90:13] — Building positive habits with children, breaking the chain
• [98:27] — Couple’s follow-up video: real-life progress and continued struggles

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Resolution & Reflections

Immediate Results (End of Session)

• Reduced monthly fixed costs from 102% to 57–65%
• Found $4,000+ per month to allocate to savings and debt
• Clear, enforceable benchmarks: stay in current home only if new income is found within weeks; otherwise, move

Follow-Up (Couple’s Post-Session Reflections)

• "Our biggest surprise was how plausible the plan felt once we saw the numbers." [97:09]
• Committed to:
  • Going down to one car
  • Slashing groceries and miscellaneous spending (“Grocery bill down to $817; high-yield savings started.” [101:30])
  • Aggressively pursuing higher income for both partners
  • Maintaining teamwork and scheduled check-ins

Emotional Transformation

• Partnership restored: “It needs to be a team effort, not one person doing all the work.” [97:59]
• Hope replaces helplessness: “There is a light at the end of the tunnel…” [97:47]
• Commitment to breaking generational patterns so their kids don’t repeat them

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Final Takeaways

• Smart people can fall into severe debt—intelligence alone isn’t enough without systems and honesty.
• Avoidance, emotional triggers, and hidden scripts—often from family—are usually at the core of financial dysfunction.
• Solutions demand radical change, not tweaks: cut expenses HARD, increase income boldly, and create true partnership.
• No plan works without commitment and follow-through; emotional buy-in is as important as tactical changes.
• Transparency with kids and partners builds a new, healthier family dynamic around money.

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Rich, Actionable Insights from Ramit

“I don't have any secret magic math formula. What I can do is help you get quiet and still—and realize what the real issues are. Most people never zoom up to look at the bird’s eye view.” [36:50], [93:13]

“Will you actually stick to the plan? That’s the only thing that matters now.” [91:52]

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For Listeners

If you are in—or fear falling into—a similar pattern, this episode is a masterclass in radical honesty, the importance of teamwork, and how facing numbers and psychology with courage is the only path to financial safety, sanity, and partnership.

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Connect with Ramit Sethi:
iwt.com | Instagram | YouTube | Facebook | X

Apply to be on the show:
iwt.com/apply

Recommended:

• Read Ramit's new book: Money for Couples
• Try Ramit's Conscious Spending Plan (CSP)
• Use the debt payoff calculator on his website

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Transcript

[A]

If you are in a relationship where you or your partner cover up spending to avoid big fights, or you get stressed out spending $150 on dinner, even though you can easily afford it if you lay awake at night anxious about money. I want to talk to you. I'm currently casting couples for the next season of the Money for Couples podcast. We only do this a few times a year and I want to hear from you. You can apply today at iwt.com/apply. Being on the podcast is basically a three or four hour coaching session with me. Tons of past couples who have appeared on the podcast have said it is a pivotal moment for them to get on the same page. So if you want my take on your unique financial situation, this is your chance. Apply right [e-mail] apply feels like a joke. It means you are broke.

[B]

Yeah.

[A]

It means you are spending more than you make every month.

[B]

Every month.

[A]

That's the ball game. Tens of thousands of dollars in credit card debt, no savings, investments, two children. What are the real issues here?

[C]

It's dread and anxiety. Poor financial decisions made, 401ks cashed out. We had to ask them, hey, can we borrow 10k because we're about to get evicted.

[B]

It feels like failure, especially with kids.

[A]

I would actually get angry. Angry at myself, angry at my upbringing, angry at each other, angry at the dynamic that we have allowed ourselves to sink into. You are actually weeks away from not being able to pay your rent. Frankly, in order to not get evicted, you will need to confront the very thing that you have avoided your entire life. Confrontation.

[C]

I have to for Freya and my children. Do you want the kids to have a great future?

[A]

Today is a big day for money for couples because we are recording in our new studio now. If you have followed along for the last few years, you've noticed that we are always improving thanks to your feedback. My team and I are listening and one of the things that I've wanted to do for a long time is go from audio only to video and then to even higher quality video. And I love seeing couples in the same room, holding hands, crying, sometimes looking at each other. It tells me so much and I think it's going to tell you a lot. Today I'm kicking things off with Freya and Blake. They're 45 and 47 years old. They have two young children together and they spend more than they make every single month. Freya applied to speak with me and she wrote, we are living with our terrible choices right now. We are literally broke to the point that I'm worried we will be homeless. You can hear the panic almost jumping off her application. Let's take a quick look at their numbers to see what they're working with. I'm looking at their conscious spending plan or CSP. If you want my help with your own CSP, you can join my money coaching [e-mail] moneycoaching. Assets $5,000. Investments $180. Wow. Savings, zero. Debt $96,000. Total net worth negative 90,999. Now let's take a look at their fixed costs. 102%. Okay, that's the ball game. They are spending far more than they make every single month. Investments 1%. Savings 0. And guilt free spending is negative 2%. We know that's impossible. Looking at these numbers, it's no surprise that Freya is panicking about their financial situation. It's actually quite dire. And when you see numbers like this, it is very easy to just take a huge hatchet and say, okay, we need to start doing this, this, this, this, this. Maybe we do, but we need to find out why they even got into this situation in the first place. So we are actually addressing the root problem. That's my goal today. Now let's get started with Freya and Blake. There was something that stood out to me from your application, Freya. I wonder if I can read it to you. You wrote, we're basically one missed rent payment away from an eviction notice. Is that accurate?

[B]

It feels accurate. We don't have, like, the kind of warm, fuzzy landlords that are like, yeah, yeah, we used to have one of those.

[A]

Have you ever gotten any eviction notice?

[B]

No.

[A]

Okay.

[B]

I've never. I've always made it work. And that is, I think, again, part of my issue with all of this is I've always managed to make it work. I've always managed to come up with money somehow or, you know, talk my way out of being a month late in rent and being like, I'll promise, you know, like, things like that.

[A]

My whole life, how long has it felt this dire?

[B]

Oh, my God.

[C]

20, 21.

[B]

Pandemic. Mid pandemic.

[C]

Pandemic hit us hard.

[B]

Yeah.

[A]

And does it feel equally dire or does one of you feel the weight of money more?

[B]

Hmm. I don't know. I mean, I know how I feel. I don't know how you feel. Honestly, I feel like I think about it more and I talk about it more.

[C]

That's tough to call, say who thinks about it more, but I certainly think about it all the time every day and every day late at night, you

[A]

know, because it's interesting that you don't know how each other feels about money.

[B]

He doesn't like to talk about it. We'll do it. But then I'm like, okay, now we need to have our weekly follow ups. And that just, that part doesn't happen. And then I start feeling like a nag. And then we just kind of rinse and repeat.

[A]

When you hear Freya saying, we need to have a budget meeting, what is your initial emotional reaction to that?

[C]

Dread, I'd say, yeah, because it's dread and then anxiety. And it just means like, I need to make more money. I'm the classic sort of like, I need to just go make more money. So then we have that and the budget conversation can be a little more positive.

[A]

Do you want to have a budget conversation? No, it was honestly, I don't want to have a budget meeting.

[C]

Yeah.

[A]

Somebody comes to me, they're like, we got to talk about the budget. I'm like, what the. I don't want to do that. I'd rather be dead. Do you want to have a budget meeting?

[B]

Kind of. I like lists. I like, I like, I like that kind of stuff. I do.

[A]

You like what, like checking things off?

[B]

Yes, I love a to do list. I have different notebooks with different to do lists for different parts of my life.

[A]

What the hell? You have multiple to do notebooks?

[B]

Yes. I have a work one. I have a household one. I have one for the kids. I have. Yeah. One for my personal growth. Like, wow, I do. I'm that. And. But, you know, it doesn't always translate into one of the things I would like to translate it into.

[A]

Now, you also mentioned that you don't communicate effectively about money. Can you give me an example?

[B]

We went. We had just moved. We were kind of like in the same situation we always are. It's like end of the month. Oh, my God. And he was like, look, my friend, we should go up to Bad Mount Bachelor and go skiing for the day. And I was like. I was like, but that's so rich people's sport. And then it literally just would devolve into a fight. Then I was like, well, we can't afford it right now. I was like, it's gonna be thousands of dollars to go, you know, he wanted to get the kids lessons. They've never skied. I don't ski. He's like, you get a lesson, you get a lesson. And it's like, oh, we have lift passes. So it's not that big of a deal. And, you know, it ended up being a fight. He acquiesced and said, we won't go. I feel guilty. He was so psyched to go. Hadn't gone skiing in like 10 years, and he used to go all the time. And so I finally said never. Okay, fine, let's just do it. We'll figure it out. Because I felt bad.

[A]

Did you go?

[B]

We did.

[A]

How much did it cost?

[B]

Probably about 2k at the end of the day.

[A]

Okay.

[C]

We spent money that we should not have spent.

[A]

Okay. Is that true? You shouldn't have spent it?

[B]

We didn't have it to spend.

[C]

We didn't have it to spend.

[B]

Yeah. I felt really guilty for saying no.

[A]

Have you ever just embraced it and said, okay, good, we're not going?

[B]

It depends. I think I was at the moment. We had just moved. We didn't know. We don't know anybody there. And I just. I think I was feeling a lot of that guilt. I have said no, but I probably say yes more than no. I will say.

[A]

And interestingly, you acquiesced, as she put it. Like you said, all right, fine, we don't have to go. But then when she said, okay, let's go, you were like, cool, let's do it. Yeah. Is there a world where you were like, no, you're right, we shouldn't go there because of financial reasons in that particular situation.

[C]

No, no.

[A]

Because you wanted to go. Yeah.

[C]

In other situations, we've certainly made like, you know, hey, let's cancel this. This is not a good.

[B]

Yeah, that's rare.

[A]

Okay, let me understand a little bit more about the relationship. Are you married?

[B]

No.

[A]

Okay. Do you have kids?

[B]

Yes.

[A]

How old?

[B]

Six and almost five.

[A]

And are there other children from prior relationship?

[B]

I have two.

[A]

You have 2?

[B]

A 26 year old and a 22 year old.

[A]

Got it. Okay. And do the older children live at home with you?

[B]

No.

[A]

Okay, so the two young kids live with you. Yeah, got it. Okay. I want to get a little bit more understanding of the dynamic here, so I'm curious about another example.

[B]

Okay.

[A]

Where the two of you were not on the same page with money, lots to choose from.

[C]

Mexico trip with my parents.

[B]

That one's probably a good one for

[A]

you to talk about. What happened?

[C]

It was a summer trip to La Paz in Mexico with the kids. Finances are tight. I was very nervous about that because the vicissitudes of my income are tough. And knowing that end of the summer always gets a little tight because there's nothing as much Work.

[A]

Yeah.

[C]

I felt like Foreo really wanted to go. I mean, I wanted to go too. So I was more in the position of, like, I don't. Saying no. Like, I don't think we should do this.

[B]

Parents were involved. So I think your parents are going, so it's probably harder for you to.

[C]

Yeah. Parents going and. Yeah. And we took a trip to Mexico.

[B]

On a credit card?

[C]

Yeah, on credit card. Ah.

[A]

How much did it cost? Three and a half, Something like that?

[B]

Yeah.

[C]

Three and a half thousand.

[B]

Not sure. It might have been more.

[A]

Okay. And then when you got back, what was the moment where you looked at the credit card receipt and you were like, oh, what happened?

[C]

This just added to the debt. You know, you get back and you're like, okay, that's amazing. Trip. Indelible memories with the family and the parents and the kids. And then you get back and you're, you know, it's a kick in the teeth. Cause you're like.

[B]

And we thought about it, like, you would bring it up in financial conversations. It would be like, well, you decided that we should go and now we spend. Yeah. So it would turn into, like, almost like ammo sometimes I feel like. And then, you know, I'm, oh, well, I did it for the kids and the family and your parents and, you know, so it definitely turned into a sticking point.

[A]

How often does that happen that you did this? You said that a lot.

[C]

Yeah.

[A]

You guys see a therapist? No.

[B]

No, not anymore. We did, but it's been a while.

[A]

Why?

[B]

Money, partially. It's expensive.

[C]

Our therapist was. $175 a pop is expensive, is very expensive.

[A]

And you mentioned in your application you don't even have money for a bankruptcy attorney.

[B]

Yeah.

[A]

In that Mexico conversation where you talked about, should we go? No, we shouldn't. What was the role that each of you played? If you look back at that conversation?

[B]

I was the driver and the planner. 100%.

[A]

You were the one who wanted to go.

[B]

Yeah.

[A]

Okay. And then you planned the trip. Yep.

[B]

This is parents involved.

[A]

Okay. And what was your role?

[C]

Just come along and try not to spend too much while we're there. Really make some money before we go. Make some money when we come back.

[A]

Like, what was the time in Mexico where you were like, let's not order that because it's too much money? Well, I think we did.

[B]

Not once, but we didn't. We were like, we're not like, super extravagant when we do travel, but like, we did have a. Your mom wanted a private chef for the week.

[A]

Did your parents offer to pay.

[B]

They paid for part of it.

[A]

Okay.

[B]

Yeah.

[A]

And was there a conversation where you said like, hey, right now it's not a good time, could you help or we can't do that.

[C]

Yeah, I've definitely, for moments like that it's been, you know, parents have been very generous and like, hey, let us cover the house, ah, or something.

[A]

Even still, you spent three and a half thousand dollars on it.

[B]

Yeah.

[A]

The fact that this couple is clearly intelligent and still in almost $100,000 of debt is a big lesson for everybody watching this show, which is intelligence matters. Of course it matters. But just being smart doesn't mean you're going to be wealthy. In fact, just being smart doesn't even mean you're going to stay debt free. A lot of you are too smart for your own good thinking, oh, we'll just figure it out, we'll just solve it. You know, maybe instead of being too smart for your own good, maybe I'd rather take a 10 point decrease in the IQ and be like, shit, I don't understand this. I better read a book because I won't be able to figure this out unless I learn. So before you come writing a bunch of angry comments, just ask yourself, is there a world where I could be in this situation too? You know, I'm kind of struck speaking to both of you. You're obviously very intelligent. I'm hearing words like vicissitudes, intrepidatious, you know, like you're going to La Paz when we put all those things together. You're obviously intelligent, yet you are, as you put it, a month away from an eviction notice.

[B]

Yeah.

[A]

What do you both think is going on here?

[B]

I've gotten very used to money being here or not here, and I just have to adapt. And that's. I was, got kicked out when I was a teenager, so I've been like on my own supporting myself since I was 17. I'm just so used to being in a state of not having anything that it's just, it's, I guess it's comfortable for me. It doesn't worry me. Well, it didn't worry me that much also because I had like, I felt like I had so long to fix the problem. I had so much time, you know, it was like, so for me it was just like, hey man, money comes, money goes. I've had money taken from me by bad relationships, things like that. So I'm just used to being, even if I have it, not being able to see it as a permanent fixture that could help Me do anything. So I'm just very. I think that's part of my issue where I'm just like, eh, it'll work itself out.

[A]

Okay, Blake.

[C]

Money comes and money goes. However, you know, when you get through periods that are sometimes out of your control and money is not coming, then you're really faced with some dire situations.

[A]

And is that acceptable? Like, are you cool with it? Have you done that before? You can do it again?

[C]

No. There's always been a bit of a safety net or some freelance gigs that I can pick up quickly. In the last few years, that safety net has shrunk. Savings have shrunk. We've used it to cover some stuff here and there, to pay down a card or, you know, whatever. You know, we just had that. Now that safety net is gone. Those savings from all the years 401ks cashed out. Poor financial decisions made.

[A]

But to cover monthly costs, who made those decisions together?

[B]

I think. I mean, I think I definitely suggested stuff like the 401k or whatever. Like. And you agreed to do it. I could tell you were a lot more hesitant than I was, but I feel like we felt like it was in a time during the pandemic when neither one of us was working.

[A]

Yeah.

[B]

And it was like. And I was. I think we had a baby and I was pregnant. It was like.

[A]

Are you always the driver of the finances in this relationship?

[B]

Yes.

[A]

Okay. And your role is you're along for the ride. Is that right?

[C]

Along for the ride.

[A]

Maybe putting up some slight resistance, but basically along for the ride. That's what I'm reading.

[C]

Yeah. I tend to be like, okay, finances are, you know, constantly thinking of them. And I don't. I try to really limit spending. Like, I don't buy a lot of stuff. Right.

[A]

This is common with men.

[B]

Yeah. But when he says, I am a spender, it's also because I do all the planning, I do all the kids stuff, I do the grocery shopping. I do everything. So I feel like. And it's a point of contention, I always say this, I'm like, well, yeah, you're not spending any money because you're not doing any of the things that need to be done.

[A]

I didn't hear him say that. You are a spender.

[B]

Would you say, okay, we've had this conversation before, and I feel like he was like, I'm the spender and he's the not spender.

[A]

I hate this dynamic. In a heterosexual relationship, the woman is the one who's tracking everything. She's worrying because she sees the numbers. And then you have the guy who's like, ah, I don't really pay attention to it very much. It causes an ever increasing rift because she is down in the weeds necessarily. Like, I hate when people are in the weeds taking on all this emotional labor and he's oblivious to it. It's just not partnership. Look, everybody has blind spots. You do, I do. My guests certainly do. And that's okay. What's important is to recognize those blind spots, whether it's on your own or with the help of your partner and, and then make a plan to fix it. Before my wife and I got married, we were having serious discussions about money and we ended up getting stuck. It was pretty hard to have these conversations. One of the things that she suggested was that we go and see a couple's therapist and it actually turned out to be a complete game changer for our relationship. So if you have been thinking about working with a therapist to get on the same page with your partner, check out Growth Therapy to get started very quickly. Grow Therapy makes it easy to find a therapist that fits you, not the other way around. They make it easy to search by what matters, by identity, specialty, availability, insurance coverage, all of those, so you can find a therapist that's the right fit for you. And from there, they connect you with thousands of independent licensed therapists across the US Offering in person or virtual sessions, including on evenings and weekends. There's no subscription, there's no long term commitment. You just book and pay per session with free cancellation up to 24 hours before your appointment. Whatever challenges you're facing, Grow Therapy is here to help. Grow accepts over 125 insurance plans and sessions average $21 with insurance and some pay as little as $0 depending on their plan. Visit growtherapy.com ramit today to get started. That's growththerapy.com ramit growtherapy.com ramit availability and coverage vary by state and insurance plan. Exciting news, one of our longest running sponsors, Element, has just launched their new lemonade iced tea and it's built on the same formula as Elements Core drink mix, but now with a full spectrum black tea extract for a natural source of caffeine. It makes a great blend because you still get that same meaningful dose of electrolytes, but now with a source of caffeine that won't cause you to crash later. Element is a tasty electrolyte drink mix and sparkling electrolyte drink made specifically to replace essential electrolytes lost throughout the day. It's used by professional sports teams, Navy SEALs, Olympic athletes, and my wife loves it. Now Element has launched their lemonade iced tea made with three full spectrum black tea extract, not isolated caffeine added in later. It's built on the same formula as Element's core drink mix with a meaningful dose of electrolytes, no sugar, no artificial colors, no other weird ingredients. Get a free 8 count element sample pack with any [e-mail] Ramit that's drinklmnt.com Ramit try it totally risk free. If you don't like it, they'll give you your money back, no questions asked. Walk me through how money flows in your relationship.

[B]

Freya I have not been working a lot lately with the kids. It's been tough, but usually it's Blake's income that we rely on and it's sporadic. So it depends on how you know, how was the, the month before? Do we even have any leftover? Otherwise it just feels like a scramble. It's like what hole to plug first because maybe we're a little late on rent and a couple of the utilities and like. So it's like, plug those holes up. Oh, but here comes summer camp. What are we going to do? It feels like a scramble. It feels like it comes in and it's gone quickly because we're patching holes.

[A]

So you're making decisions about what bill to pay, including some of your fixed costs like rent or utilities. What about the non fixed costs? So you mentioned summer camp or let's say eating out trips, whatever, the non discretionary. What about that?

[B]

When we have it, we spend it and then when we don't, we panic. And that's literally how it feels. It's just like pure panic. Otherwise I'm like, oh, we have a couple extra hundred dollars, let's just go to dinner this one time, you know, and then it's like, oh, well, so and so really wants to go. We should try to nurture that relationship. And here we are at dinner doing the same thing we always do.

[A]

What do you get out of it?

[B]

Honestly, for me, it feels like just a minute of escape.

[A]

Escape from all the crap that's going

[B]

on financially, which is like completely backwards. I know that's what it feels like. I can forget about it for a minute, enjoy it for a second and then worry about it later.

[C]

And Blake, I'm very similar to that. You know, kick the can down, you know, live in the moment, have that good time, work your butt off to make the money back. A very sort of myopic take on it. And not no real future planning at all, frankly. And it's. Yeah, it's. And that weighs on you, you know, that weighs emotionally. That's. You have that moment, that dinner out or whatever, and then you're like, oh, my God, we spent, you know, $1,000 on dinners this month.

[A]

It weighs on you, but it seems like not enough to make a change.

[C]

Well, only recently have we made those changes.

[A]

What changes?

[B]

We cut down on all of our subscriptions. I got. I bought a software thing to do budgeting. So we've been like, I've been really paying attention. It's only been like a month, but like, I'm very invested in like keep of things now, which isn't the same as saving yet. But I'm like, I couldn't have told you where I was spending money before.

[A]

Has anything in the relationship dynamic changed around money in the last month?

[C]

I mean, we, we have done weekly sit down, save all of our receipts.

[B]

I've tried to do weekly sit downs. We've done it twice and we have not done it in three weeks.

[A]

The dynamic seems to have been, Freya, you drive it, and often you are also contributing to spending without knowing where the money's going. Blake is along for the ride. There's not real collaboration. And so even when you are trying to make a change in the last month, it's just you doing more work.

[B]

That's 100% how it feels. I've done this before. This is not the first time. I've tried to get our finances in order, tried to make a plan, but

[A]

maybe if I try again, maybe this

[B]

time it'll work, it's gonna be better, but it's literally the same thing. I end up giving up because it feels like I'm doing everything.

[A]

Why don't you do it differently?

[B]

I don't know how. I guess I can't figure out, like, I feel like I can't do it by myself. I don't know, I feel like. But yeah, I guess so.

[A]

Why don't you do it differently?

[B]

I get to say, well, I tried.

[A]

And when you say that, what does it feel like?

[B]

It's not my fault. I think it's a definite, like me being able to shift some blame and be like, well, I don't know, I can't do it alone.

[A]

Yeah. And then Blake, she's setting up the meetings. But you have not taken on a role, an active role in this. What do you get out of that?

[C]

Guilt, anxiety.

[A]

You get that, then why don't you change?

[C]

Tough question. I mean, it's not tough. I. Yeah, I need to change. I mean, I. I don't know why I don't think about it. Yeah, I don't. I'm not sure the real.

[B]

From my perspective, I'm not him. Been to lots of therapy in my life, though, and I'm just like, you know, you just. You've had a life when you were growing up where responsibility wasn't really a thing. You know, it's like a very privileged upbringing.

[A]

In your opinion, what is Blake getting out of this?

[B]

Oh, complete avoidance. Doesn't have to deal with it. Someone else will take care of the

[A]

problem, which is you.

[B]

Which is me right now.

[A]

Freya, you called Blake an ostrich with money. I think I get.

[B]

Yes.

[A]

I think I understand what that means. And do you accept that comment? Would you agree that you are an ostrich with money?

[C]

100%.

[A]

Okay.

[C]

I just try to make more money and then not talk about it.

[A]

Yeah. Maybe the conversations will go away.

[B]

Yes.

[A]

If I just make more, then we don't have to talk about this for another month. And maybe one day, maybe never. Classic. That's what's going. That's descriptive. That doesn't tell us what to do about it.

[B]

Right.

[A]

I need to look at the numbers. Can we take a look?

[C]

Okay.

[A]

Okay. What was it like putting the conscious spending plan together?

[B]

You don't know because I did it together.

[A]

Ah, that. That answers my question. So you didn't do it together. Why not? Is that the instructions we did?

[B]

I did share it with him, but I had already done it because I was like. I had.

[A]

You sent the link. You go, here it is, FYI. And then you checked off one of those notepads.

[B]

Exactly.

[A]

Kind of missing the spirit.

[C]

Yeah, we actually sat down on the couch and went through.

[A]

Did you look through it?

[C]

Oh, yeah.

[A]

Yeah. And what was that like for you?

[C]

Shocking. You know that, like, wait, we have 500.

[B]

Whatever, 750 in subscriptions.

[C]

Yeah. Okay. Subscriptions at 7.

[B]

Things we didn't know.

[C]

Insurance on our house, you know, that we rented in Venice. That hadn't gotten canceled with our car. That was bundled a. Bundled. That was unbundled when I canceled. Yeah.

[A]

So you're paying a lot of money. You didn't realize what else.

[C]

You know, shock at the amount of money we spend on food monthly.

[A]

Do you remember how much that was?

[C]

I think we're in the 3,000 range. Above 3,000.

[A]

Okay.

[C]

With groceries and eating out and all those.

[A]

So you saw that number, and what was your reaction?

[C]

Like, we need to figure out A new, new system.

[A]

All right. Did you.

[C]

We, you know, switched grocery stores, talked about the food that we eat.

[A]

What do you eat for $3,000 a month?

[C]

We eat really, really well at home.

[A]

Okay.

[C]

We are not like.

[A]

What does that mean?

[C]

I mean, Freya is a chef. She is an amazing cook, and we eat like we're at a restaurant almost every night. Okay. And it is a luxury, and it's amazing.

[A]

All right, let's take a look at these numbers. Actually, what does it feel like to look at these numbers?

[B]

I'm a little nervous. I don't remember every single number that was on there. I haven't looked at it since.

[A]

So how long has it been since you put this together?

[B]

I guess about a month.

[A]

All right, can you read me the word in bold and the number next to it for this entire box?

[B]

Assets, $5,000. Investments, $180. Savings, 0. Debt, 96,179. Total net worth, minus $90,999.

[A]

What does it feel like to see those numbers?

[B]

Nauseating.

[A]

Blake, what about for you?

[C]

Feels awful.

[A]

Yeah. Did you know these numbers?

[C]

Yeah.

[A]

Okay.

[C]

I mean, especially the. The debt numbers and assets. Yeah, yeah, I know these numbers.

[A]

What is the debt?

[B]

Mostly credit card.

[A]

That's credit card debt.

[B]

Yeah.

[C]

Yeah.

[B]

I think I have some back taxes on my small business that I started. I think that's about it, though. Most of it's credit card.

[A]

What does it mean to you when you see these numbers? Like, when you look at the numbers, what is the meaning that you draw from it?

[B]

Honestly, for me, it feels like failure. It looks like failure, especially with kids.

[A]

What about for you, Blake?

[C]

I was going to say failure as well. Yeah. It's just depressing to look at these numbers for. You know, is hard as, you know, you work to try to get ahead, and then. Yeah, that's where. That's where you are. It's just, like, devastating.

[B]

Yeah.

[C]

And you kind of look back and be like, for decades and be like, what. How. What small shifts could I have made in behaviors and spending or whatever.

[A]

Yeah. And what's the answer?

[C]

I mean, so many things. First of all, you know, credit just made some smart fiscal decisions and. And said no more or said yes to things like the discussion about personal finances or actually embrace the personal finance and look at it. Yeah. I mean, it's. It's just brutal. I mean, it's brutal.

[B]

It's tough because, like, for me, I love my kids, but I'm like, I don't think we were in a position to have Two kids when we did honestly. And like, looking back at that, it's like, that is a decision I could have made differently. But of course, it's like talking about your children. And then when I did, I wasn't working. And I'm like, I could have tried harder maybe to like get more work somehow and just paying attention. Like, I didn't pay attention in, like, in the years where I was working and it was easier for me to make money. I wasn't paying attention to where it was going. I didn't do. I didn't do. I used to say no one taught me what to do with money, but I also didn't teach myself. Like, I know that's a cop out now because I was like, my parents taught me nothing about money. They had a terrible relation. I put a lot of blame on them. And only recently am I like, well, you know, there's the Internet, there's books, there's classes. Like, I could have done so much more.

[A]

Yeah.

[B]

And I just didn't.

[A]

Are you doing it now?

[B]

I mean, I'm trying. It's like I'm like reading a books and I am trying to like, work on getting more skills so I can find more work. But it's like, it feels so late in the game. It's like depressing is like definitely a word that I would use. But I look at this, I'm like, what can I do now? It does feel depressing. It feels daunting.

[A]

Okay, let's keep going down the rest of the csp. So let's talk about the income. Blake, can you read off the combined monthly gross income?

[C]

Combined monthly GROSS Income is 11,933 you2

[A]

combined make $143,000 a year. Did you know that?

[B]

I mean, I did.

[A]

You did. Okay. And Blake, did you know that?

[C]

I knew it was around that.

[A]

What do you think about the income?

[C]

I think it's not where we need to be. Not where I want to be.

[A]

Is it a good income, a bad income?

[C]

Depends on your situation and how you want to live. I think how we're currently, how we have been operating in the past seven years, it's not a great income at all.

[A]

You two were living like you made a lot more.

[B]

Yeah.

[A]

How much do you think income the lifestyle you were living was?

[B]

250.

[A]

250.

[C]

That's sort of where we were.

[B]

I think that's before. I think that's part of the problem.

[A]

You used to make that much?

[B]

Yeah, I used to make a six figure low six Figure salary.

[A]

Okay. And then you made money as well. Yeah. So combined you were making what, 250?

[B]

Probably two.

[C]

My salary was 225. And then.

[A]

Well, that's a lot of money.

[C]

Plus bonus. And that's like.

[A]

So you've come down from, let's just say 250 to 140. Yeah. And I'm guessing you didn't change a

[B]

lot of expenses and added two kids.

[A]

Okay.

[C]

It was just a cas. Like an avalanche of expenses and responsibilities and that we didn't. Combined with exterior.

[B]

Yeah.

[C]

The things that have happened with, you know, economy and.

[A]

Wait, wait, wait. What about the interior stuff, though? The decisions that you made?

[B]

We didn't. We. We never talked about it. We just. Things changed, and we just kept doing what we were doing, you know, and just avoiding it. We just avoided it. And there's, like, no way around it. We just avoided it. We also lived in, like, you know, the people that are our friend group and our circle all made way more money even before we started. And I definitely feel like there was a leaning into it and we did not put the brakes on. Like, it didn't matter that I wasn't working. We did the exact same things we were doing anyways.

[A]

I can understand the challenge of going from 250 to 140. That's hard.

[B]

Yeah.

[A]

I don't think many people have experienced what that's like. At 250, you can spend without having to track a lot of stuff. And at 140, with kids, with debt, with additional expenses that you're not in the same ballpark. I can understand that. I can understand avoiding decisions for a while that I can understand. What I can't understand is why you haven't made a radical change. Right now. The only change that I've really heard is we got an app. I am looking through the numbers, but, like, that's about it.

[B]

I did do some stuff. Like, we got. I cut our subscriptions down to. I think we're down to 250. Some of them are for work stuff, so we can't get rid of all of them. I did change. When he said we changed grocery stores, I did research. I didn't know. And I started shopping at different grocery stores. We got rid of our babysitter.

[C]

Okay.

[B]

So I've been doing.

[A]

So you did make changes.

[B]

Yeah, I have made changes.

[A]

Are they enough?

[B]

No.

[A]

When we stop blaming, moving, making tinkering changes, and we just have to be still, it gets very quiet. And then we have to be like, oh, there's nobody Coming to save us. Have you gotten to that point yet?

[B]

I was going to say yes, but I don't think I have because I haven't changed anything.

[A]

Yes. So let's take a look at the rest of the numbers. Investments are at 1%. That's $60 going to a post tax retirement account. Savings are at zero. And then everything else guilt free spending is negative 2%, which we know is not accurate. Y' all are eating out Just that at a minimum, plus any other trips and whatever else. So that's not accurate. Freya, can you read off the fixed cost number?

[B]

102%.

[A]

102%. What does that mean?

[B]

It feels like a joke.

[A]

Like what does it mean specifically?

[B]

Just, it means we're living way beyond our means.

[A]

It means you are broke.

[B]

Yeah.

[A]

It means you are spending more than you make every month.

[B]

Every month.

[A]

That's the ball game right there. Nothing else matters right there. That's everything. It means that whatever money you are bringing in, you are spending more just to keep your fixed costs. In other words, the lights on.

[B]

Yeah.

[A]

There is no tinkering around the edges that will solve that. And when you tell me that you have $0 in savings, what this tells me is you are actually weeks away from not being able to pay your rent. This is the problem.

[C]

Yeah.

[A]

This is one of the worst financial situations that I have seen on this show. And I was shocked that it was almost $90,000 of high interest debt that is just on its face almost impossible to get out of. Then I see the 102% fixed costs. They are spending more than they make every single month with no savings. What can I do here? Sometimes I also think about what the kids in situations like this are going to be learning. Am I going to see these children on my own show 30 years from now they're coming on and telling me. My parents never taught me anything about money. My parents were in severe debt, but they covered it up. I don't want that. I'm trying to change these generational cycles. So when I hear that a couple is in this kind of debt, especially high interest debt because they overspent and they have two kids, like that is a real problem for me. A lot of people come to me with the idea that I have some secret magic math formula. I definitely do not. I can guarantee that.

[B]

Let's go.

[A]

But I think what often ends up happening is this becomes the place that they can finally stop spinning and actually get quiet and still and realize what the real issues are. What do you think the Real issues are now that we are looking at your CSP and seeing tens of thousands of dollars in credit card debt. No savings, effectively no investments, two children. What are the real issues here, Blake?

[C]

Avoidance, lack of proactivity, operating out of a kind of a negative space and just fix it with more income kind of mentality. The constant search for more income.

[A]

Yes.

[C]

And not being as good of a partner to Freya and taking some more responsibility to really sit down and put my really earnest effort into solving some of those issues and really facing, like, tougher decisions that we probably should make in the near future.

[A]

You ever said that out loud before?

[C]

I've said similar things, but it's about action and not words.

[A]

Yeah. Freya, what about you? What's the real issues going on here?

[B]

I think a lot of it for me is feeling siloed. Like we're not in a partnership. And I think that's hard for me because then I feel like I have to do it, but then I can't, and then I stop, and it's like this cycle of just not. I don't know, I just doesn't. I feel like I'm doing it by myself, but I'm not doing anything.

[A]

I mean, as recently as three or four weeks ago, you downloaded an app.

[B]

Yeah.

[A]

You're taking on more.

[B]

I think I feel a little helpless in this situation to do it. Like, I don't know. I just feel. I feel lost. I'm just. I look at it. It feels daunting and overwhelming.

[A]

What about for each other? Like, I didn't hear you mention anything about Blake's complete absence from the finance.

[B]

Yeah, I think that's why. Feeling siloed. Like, I just. I feel like we end up fighting about it, and it's really hard for me to want to push the conversations. Cause it so often ends negatively. And then. Yeah, and then it just. We just go back into our usual, like, mos, and I do all the stuff, and then I get frustrated. But, yeah, I don't know. It's like, I feel like I need a partner.

[A]

You know, Mother and father's days are coming up, and I have a great gift idea for you to give to them. Give them a subscription to Masterclass, this episode's sponsor. They have tons of great classes your parents would love. Like Developing Good Repeatable Habits with Atomic Habits. Author James Clear. Designing Stunning Floral Arrangements with Maurice Harris or People Intelligence with Vanessa Van Edwards. We all love to see our parents focusing on something new. Learning something new. Masterclass is an incredible way to do that. Unlike other platforms, Masterclass puts you in the room with the people who defined their fields. They're not just experts, they are the best in the world. Masterclass has plans starting at $10 a month giving you unlimited access to over 200 classes taught by the world's best business leaders, writers, chefs and and even me. Talking about financial wellness, there's no risk to joining. Every new membership comes with a 30 day money back guarantee so you can try it out before you commit. Masterclass keeps adding new classes so there's never been a better time to get in. Right now, as a listener of this show, you get at least 15% off any annual [e-mail] Ramit that's [e-mail] Ramit head to masterclass.com Ramit to see the latest offer. At this point my gravestone is going to say something like Ramit Sethi, Husband, son and fervent advocate for automated investing Now I do love helping people save for their rich lives and automating your money is the best way to get that system started. Now your automated system gives you the foundation to make that rich life possible. But if you want extra help to make sure that you are on the right path, working with our friends at FASST can be a great option for you. Facet charges a flat membership fee for financial planning, never a percentage of your assets. You'll get access to a team of CFP professionals. Always a cfp, always a fiduciary who help you create a personalized financial plan that meets you where you are today. And they can help you with the big things like figuring out retirement or a cross country move, starting a family estate, planning.

[B]

All of it.

[A]

Your financial plan needs to match up with your rich life vision and Facet makes getting professional financial advice more accessible without charging you a percentage of your assets. As of the date of this recording, Facet is waiving their enrollment fee for new annual members and for my audience, Facet is offering $300 into your brokerage account if you invest and maintain $5,000 within the first 90 days. Head to facet.com ramit to learn more about which membership option is best for you. Offer ends December 31, 2026. FASTT is an SEC Registered Investment Advisor. I'm not a member of FASTT and I have an incentive to endorse Facet as I have an ongoing fee based contract for cash compensation based on this endorsement. All opinions are my own and not a guarantee of a similar outcome. How much do you think you spend on guilt Free spending, or let's call it discretionary spending. In this case, there's a lot of guilt.

[C]

Yeah, I don't think anything.

[A]

How much do you think you spend if you, you know, you eat out? Let's say how many times a week?

[B]

A month? More like three times a month.

[A]

Three times a month.

[B]

We were really pretty good about that, but.

[A]

And then clothes, vacation, personal care.

[B]

I mean, it's got to be at least $1,200. At least.

[A]

least kids.

[B]

A lot of that would probably be the kids stuff, like their clothes and eating. Like, we don't take them to eat out, but, like, they're growing. They have tennis lesson. One of them is in tennis, one of them takes dance, you know.

[A]

Can I ask a question?

[B]

Yeah.

[A]

For a couple that's in almost $100,000 of credit card debt, do their kids get to go to tennis lessons?

[B]

I mean, ours do, and they probably shouldn't. The scarcity thing with how I was raised and how I always made it work, and I think that's part of my problem.

[A]

How were you raised?

[B]

Oh, I didn't get to do anything. I was homeschooled. I was not allowed to do any. No lessons, no fun. Like, it was just not a thing that we did. We did not go on vacations. We did not do. You know, it was not. Money was very. Always very scarce, or I was told, anyways, we didn't have any.

[A]

Was that true?

[B]

Now I know it wasn't necessarily true. They weren't, you know, super well off, but they were middle class and.

[A]

Why'd they tell you that?

[B]

I don't know if it was the religion part of it, I think that might have had a big part of, you know, just not spending. And then there was ups and downs with my, you know, my dad was the only one working.

[A]

Got it.

[B]

And then I was on my own at 17. So it was literally just hand to mouth for a really, really, really long time.

[A]

Hand to mouth. What does that mean to you?

[B]

Like, slept on a train when I first moved to New York. Like, didn't have anywhere to go. Yeah.

[A]

Do you remember any specific phrases that they said about money?

[B]

Phrases?

[A]

No, we can't afford it.

[B]

Yeah, we don't have it. Honestly, we just. I just didn't ask for anything.

[A]

Were you an only child?

[B]

No, one of five.

[A]

Oh, really?

[B]

And I just remember layaway.

[A]

Wow.

[B]

Clothes like winter coats on layaway.

[A]

Are your siblings in similar financial situations? Yes, all of them.

[B]

The one with one exception.

[A]

You mentioned your family was religious. Tell me a little Bit about that.

[B]

Oh, wow. Hardcore Jehovah's Witness. Hardcore.

[A]

Really?

[B]

I did not go to school. I was taken out of school when I was 10.

[C]

Wow.

[B]

So no formal education until I was 17. I applied for fashion school. Like, I got a high school diploma from my home school. I applied to fashion school, got in on my own steam, and did that for a couple years. And that's how I ended up being able to have a career later. But, yeah, no, didn't go to high school. Everything I know I had to learn on my own. Like, I would go to the library and, like, study things because it was just, here's what you have to do to graduate every year. I just. I never got any actual education.

[A]

Are you still religious?

[B]

Oh, God, no.

[A]

Okay. And your siblings?

[B]

Spiritual, but I'm not religious.

[A]

What about your siblings? No, they're not religious either?

[B]

Oh, absolutely. Not even my dad's not in the religion anymore.

[A]

Is that right?

[C]

Wow.

[A]

How do you think your religious upbringing affected your view of money?

[B]

A lot of it did go to the church, and I. I was very resentful of a lot of it. I think I have a big. I had a big resentment towards that whole thing because I wasn't allowed to be educated. When I was talking about what job I would want to support myself, it was like, be a locksmith. So you can go preach God's word during daytime hours and you can work at night. Yeah. So there was a lot. It was like very deprivation, scarcity, kind of mindset. And I think that had a lot to do with it. And I had realized really early on that I would have to be completely self reliant, which I feel like also translated to me like, well, I'm gonna do whatever I need to do for me to feel good. A lot of that translates to not saving, not denying myself stuff.

[A]

Because you were denied so often as a kid.

[B]

Oh, yeah.

[A]

And what about the relationship here? How do you think that your religious upbringing has affected your relationship with Blake?

[B]

Okay. Well, when it comes down to saying no to one's self, I feel like I found it kind of like my soulmate in not wanting to do that.

[A]

You don't say no to yourself, nor does he.

[B]

Yeah. And I feel like that it felt kind of symbiotic in a way. Like, we both kind of have, like, the same kind of laissez faire, you know, embrace life while you can viewpoint. And I think that's one of the reasons we clicked in the first place. Just like kind of our similar outlooks.

[A]

That outlook being let's say yes, let's take the day on. Let's. Let's enjoy what life has to offer

[B]

and also work hard and hustle. And we both have a really big hustle mentality.

[A]

Hustle mentality. It works until it doesn't. You can hustle. Yeah, you can hustle. When your fixed expenses are low and when you're 25. When you're 25. But when you have high fixed costs, including 90k of debt, when you have two children, hustling stops working.

[B]

We are realizing that now.

[A]

I really feel for Freya, hearing how she grew up in a way that most of us cannot fathom. Kicked out of her House at 17. Just imagine what type of upbringing somebody had to go through in order for that to happen. Being a Jehovah's Witness, having many siblings, none of whom are religious anymore and almost all of whom are in similarly dire financial straits. There's obviously a lot going on when she grew up that causes long lasting effects. Some of you ate pizza two days ago and the roof of your mouth is still burned and you're complaining about it. Oh, so difficult. My life. It is quite illuminating that Freya was kicked out of her house at 17, and here she is maybe weeks away from being kicked out of her house. As an adult, as a mother, the ways that we grow up often show up for us as adults. They are often inescapable unless we make huge changes. What about you? What do you remember your family saying about money when you were young?

[C]

We don't talk about money. We're Southern.

[A]

Okay.

[C]

I grew up in the Bible Belt, man. You know, you don't talk about money.

[B]

Wow.

[C]

You know, talk about emotions, you, you know, sweep it under the rug.

[A]

Right.

[C]

I, you know, grew up in eastern Tennessee, you know, felt wealthy or felt privileged, for sure.

[A]

Why did you feel that?

[C]

My dad was a doctor.

[A]

Okay.

[C]

In a small town, there was not layaway, was not a thing for us.

[A]

Take trips.

[C]

Trips, you know, the annual summer trip. Yeah.

[A]

And what did that teach you? The fact that you grew up privileged. Like, what was your feeling about money?

[C]

My feeling about money was I just didn't give it much thought, frankly. I never talked to my parents about it. In fact, when I confided to my dad that we're going to do this show last couple days ago, he ironically said, wow, it's going to be really nice. Must be nice to be able to talk to someone about that, right? Wow. And I was like, yeah, what it would have been 20 years ago to get a little wish I would have asked, you know, wish I would have dug a little deeper because I know there's information there. I didn't know that they. My parents struggled with their mortgage. At one point, we had to ask them, hey, can we borrow 5k or whatever, 10k, because we're about to get evicted. And they were like, absolutely, we can help you out. You know, it was a band Aid, but it was so helpful, and we're very grateful. But then they confided and let us know that they, too, had a similar issue. There were points in their lives that they, you know, didn't know if they were going to make their mortgage, etc. And I was like. I was like, really? I've been shocked to even to know that. Never heard any of that before. I think the main takeaway from my parents that I can remember was invest Roth ira, like, burnt into the brain. I actually don't think that that's on here. There is a Roth with 18K.

[B]

Oh, I didn't know that in this.

[C]

That I. That I've never told anyone about, because I don't ever want to touch the Roth.

[A]

That's. That's quite interesting. How did that not come up?

[C]

I don't want to cash it out.

[A]

Is that for real?

[C]

Yeah, yeah, yeah.

[A]

You know that if you bring that up into this dynamic, it will simply get drained. Yeah. Okay.

[C]

And I know Roth. I mean, from the little. I know, I know Roth IRA is one thing that you absolutely shouldn't touch. And everything else has been touched.

[A]

So what does that feel like to

[B]

hear that I'm actually not. I thought I would be mad if I found something out like that, but I get it.

[A]

You get it?

[B]

I understand. And, you know, I had a 401k once upon a time, too, and somebody convinced me to take it out, and I never saw it again. And it's so. I get it. And I don't think it's anything.

[A]

I didn't realize that. I was asking if you can blame Blake. I just asked how it felt to hear that.

[B]

I mean, I'm surprised. And I'm also kind of relieved in a way to know that there's still something there. Like, I feel a little bit of relief, honestly, just to know that. That there is something somewhere.

[A]

Blake, what do you think that your lessons about money. What are those? Have you brought to this relationship?

[C]

Yeah, I don't think I brought any good tools to this relationship at all.

[B]

I feel like you're being a little coy about your upbringing. He went to boarding school. What the, like what they went. Their, their, their yearly vacations were like weeks long in Europe. I feel like he's quite interesting.

[A]

How come you didn't bring that up?

[C]

I mean, that was. There was one.

[B]

But you guys, I mean, you went to boarding school.

[C]

Yeah, I went to boarding school.

[A]

It's a different caliber of wealth than we might think. Like small town doctors.

[B]

Exactly.

[A]

Okay, that's interesting. What is the. What are these secret accounts coming out of nowhere when they're down to 180 bucks in their investment account? At first it's like, oh, very comfortable. My dad was a little country doctor. Then the hidden ira. Where did that come from? I certainly didn't know about it. And the boarding school. Two secrets, two things that provide a ton of color but just glossed over. That kind of changes the story. It kind of tells me you have a different view than what I was led to believe. The funniest part of this, by the way, is that I only caught onto this because I glanced at Freya's face. As I've always said, the partner knows best. When someone is not telling the full story, I just look one foot to the left. Boom, there you go. First of all, I'm not okay with people hiding things from me. If you come here, you want help, so why would you lie when I'm trying to help you? But second, it's just another way of recreating this dynamic of Blake not getting into the details, of staying superficial or vague and not engaging with the meat. The real fact of the matter, we gotta make a change on this one. So no lessons from that. Like, let me put yourself. I'm putting myself in your shoes. I grow up in the south, wealthy family. I never really have to worry about money. I get the things I want and we travel and we see the world. And then I grow up and I make six figures, living a pretty good life. And then I blink my eyes and I find myself in $90,000 of debt, potentially about to be evicted.

[C]

Yep.

[A]

I'm kind of like, I don't understand what happened here. But I just need to keep earning money because if I just make money, then I can have the type of childhood or type of relationship that we had growing up. Where did I go wrong on that? How much of that is accurate?

[C]

Very, very accurate.

[A]

All right.

[C]

Yeah, it's. Yeah. I've always had, I've had strong income, good worth ethic.

[A]

I think you didn't need to develop any skill, serious skills around money. I think that you grew up, your family provided. Provided Very well. Didn't teach you much.

[C]

Right.

[A]

When did you start making a lot of money?

[C]

30s.

[A]

30s. All right. Made it, spent it, developed no real skills for saving. Right. Investing. But you know what, a lot of people grow up privileged with their parents, not telling them about money, but they don't get into $90,000 of debt. What do you think happened here differently?

[C]

I was just very Peter Pan esque. I'm on a good role here. Positive outlook, totally naive of, like, this will lead to more. And with each year that salary is going to get a little bigger. Things are on my side. Not thinking about a worst case scenario. Never like imagining like, oh, wow, big things can shift and I have no

[A]

security blanket and life doesn't always go up.

[C]

Yeah. Putting things on, credit card, paying down. I mean, I never. And that whole time I never missed a credit card payment, you know, would pay them down. And then that just became a little more comfortable to put their comfort. Yeah.

[A]

That's a word you mentioned early on.

[C]

Yeah. And not saying. No, I don't. I'm not. Confrontation is not good. Like, I. Confrontation has always been a problem for me. Or really standing up. Even if I think like, this is not a good idea, I'd rather just go with the bad idea and deal with it later.

[A]

What if I told you that in order to succeed with money or frankly, in order to not get evicted, you will need to confront the very thing that you have avoided your entire life. Confrontation.

[B]

Confrontation.

[C]

I had a feeling you were going to say that.

[A]

Yeah.

[C]

I mean, we have to. I have to. For. For Freya and frankly for my children. Because I. Because it's, you know, very emotional. Because you want the kids to have great future and experiences. And I'd rather them know the problems we're having now then, like, try to hide it

[A]

like your family did. I mean, you made the choice to come on here. They're going to see this one day. Yeah. What do you think about that?

[C]

Good. I mean, fine. I'd rather like, you know, strip down naked and tell the truth and let hopefully someone learn from it, them or someone else. To be like, dude, don't make the mistakes that that guy made.

[A]

Yeah. You know, that is the kind of energy that I have not seen today. But that tells me you might be ready to make a change. Yeah. It's very courageous. I think it's a gift that your kids are going to see this one day because look at what happened that your parents didn't teach you. They were very privileged, your family. They could have taught you about when times are good and when times were not. That is an opportunity they did not even today. Your dad goes, oh, must be nice. Like there's an opportunity for a lesson. And they couldn't do it for whatever reason. That was their time and their style. Okay, but you two can.

[C]

Yeah, I think that's my. As we're thinking about coming here, that's my goal. Like, make that. Make that change so the plane lands in a different area for them, you know.

[A]

Yes.

[C]

And hopefully.

[A]

And actually for you too.

[C]

And for us too. Yeah.

[A]

Yeah. This is a really difficult situation. They are going to have to make huge changes that they are unaccustomed to. But seeing Blake stripped down basically say, I'm ready to make a change and crying, that tells me that there is hope. Most people in a bad financial situation struggle to even acknowledge that it's a problem. People will make endless justifications for. It's not so bad. Or at least we're not as bad as our neighbors here. You can see that Blake is actually acknowledging they're in a bad situation. And that is the first step to making a plan that's going to get them out of it. We need to go back to the numbers now. Now that I understand a little bit more about how you grew up. And I want to see what these numbers are specifically line by line.

[B]

Okay.

[A]

Or take a look. So under your fixed costs, Your rent is $3,480, which is 29% of take home pay. It's not bad in and of itself. It's a little higher than 28%, but these days that's difficult to hit. But it doesn't give you any real margin for extra stuff. Did you know that?

[B]

Yeah.

[A]

You knew that when you downscaled from Venice to go to Washington. You chose that.

[B]

I was making more money at the time.

[A]

Okay, got it. So you're making more money and you're making less now. So nowadays you're making $2,200 a month.

[B]

I'm making about half of what I was making before. Okay.

[A]

All right. Utilities, 450. Insurance, 488. Car payment, 636. Does that include gas as well?

[B]

Yeah, one's. It's a lease and it's electric, so we don't pay for that. But then we have another car, a second car that we own outright and that's.

[A]

Do you need two cars? Wow, that's a good answer. Enough said. When you sign, I said goodbye, car. Nice knowing you. No need to tell me. We'll get to that. But Enjoy the last 12 minutes with your car, because that thing is gone. Thank you for the sign. Debt payments are 290. There's no way.

[B]

No, that's because we're. I mean, that's the other part. We have not been making the credit card payments at all.

[A]

Not even the minimums.

[B]

I think late in the last couple of months when it's been.

[C]

That would just stopped.

[A]

So is it in collections?

[C]

Yeah, it just hit collections last, like, last week or last month. Yeah.

[A]

When you saw that, what was your reaction?

[C]

When I saw it, I mean, I knew it was coming, and then I was like, I think bankruptcy is probably the answer. So I reached out to bankruptcy lawyer, and then we learned the cost of that, and it's like, oh, my God, five.

[A]

What was your reaction then?

[C]

To hang tight and figure out how to do. How to cobble the money together for the bankruptcy lawyer?

[A]

The pattern here is a very superficial engagement with money. It's like, don't pay any attention to it. I'm fast forwarding a lot. Get a collections notice. And just like, all right, what's the fastest way out of this? Call a bankruptcy attorney. No engagement with the numbers. No. I guarantee you have not picked up a book or done something differently because of that collections notice. Not even doing your regular meetings. Just like, what's the most surface level thing that can get this away from me? Because it feels bad. Do you notice that pattern?

[C]

Yeah.

[A]

You cannot delegate your way out of this. You can't. You cannot stay at the service level. And actually, the hardest part of this transformation is in the weeds, and it's the only way out. Groceries are $1,200, and that's down from over 3,000.

[B]

That is down from. Yeah, it was a little over 3K.

[A]

Clothes, 50. Phone, 260. Subscriptions are 375, and that's down as well.

[B]

Phone's gone down too. I kicked my kids off the phone plan. I've been paying for my adult children's phones for since they were 10.

[A]

Get in tight on this. What the is wrong with all these parents in credit card debt paying for their adult children's cell phones? Are you kidding me? When I moved to New York, you know, I lived in this building. It was a nice building. And my very nice, naive parents from California came to help me move in. And, you know, they're like, helping me push the cart up the elevator. And they're looking around. They're like, wow, there's a lot of young people in this building. They must do very well. And I Just laughed at them. Like, mom, these kids parents pay for their apartment. And they were like flabbergasted because this doesn't happen on the west coast as much as in New York. They're like, how can the parents afford to pay for their apartment? I'm like, oh my God, it's so adorable. They don't know how this works, but yet here we are in debt paying. Now this opens up a whole can of worms. What else have you paid for for your adult children?

[B]

Not a lot, honestly. No, I did and that is why I kept doing it. Because I had a lot. I felt guilty that I couldn't do more for them. This was like, for me. It was like, oh, it's like the bare minimum I can pay for once.

[A]

You feel guilt about having, you know, almost being evicted, why not that, right? I don't even like guilt, first of all.

[B]

No.

[A]

So I'm being a bit facetious here, but like the guilt of not going on a trip, the guilt of not paying for my grown kids phones and

[B]

my au pair's phone too. I had to kick her out. My old au pair. That does not work for us any longer. Yeah. No, I was like, this is insane. I don't know why, I don't know.

[A]

I was like, what?

[B]

I mean, I think it is because again, when I was brought, I got nothing from my parents. I mean, I got kicked out. They gave me negative thing. They gave me negative.

[A]

But you're about to get kicked out yourself.

[B]

Yeah.

[A]

So while I understand that your background has influenced the way that you give and perhaps even give when you can't, you're about to lose it all.

[B]

Yeah.

[A]

Like I would actually get angry. Angry at myself, angry at my upbringing, angry at each other, angry at the dynamic that we have allowed ourselves to sink into. Why not take that? Why not decide what emotion you're gonna bring to bear and then channel it like a freaking magnifying glass till it lights this thing on fire? Why? Not that?

[B]

I like that. No, I like this. This is. I feel like I like that with so much of my rest of my life.

[C]

Yeah.

[A]

Somebody who has multiple freaking notepads knows what it's like to focus their energy.

[B]

I'm so like that with the rest of my life. And it's just, it's been a weird. I don't know how like it got here or finance. Except for like I do psychologically. I know I've been used to people taking from me. I've been used to not having. I've been used to being Able to make it up.

[A]

Yes.

[B]

And it's just like. And it's not working anymore.

[A]

You made decisions over and over and over again that brought you here.

[B]

Yep.

[A]

Like, we can. We can catalog them. There was Mexico. There's paying for adult children. There's not saying no. There's not having meetings. There's not even knowing that you're spending thousands of dollars a month on groceries. These are compounding over time. Right. And they're certainly not adjusting your expenses when you cut your income. All of these things worked in tandem like a magnifying glass. And they lit a fire, too. The fire just happened to be $100,000 of credit card debt. Okay, continuing along, we have childcare for 1,400 and kids activities for 173. And then miscellaneous, which is $1,320. Would that be fair?

[B]

Pretty close.

[A]

Yeah.

[B]

Yeah.

[A]

Childcare. Can you just walk me through that? So you have childcare.

[B]

The youngest one is still in preschool. There's no free pre K where we live.

[A]

How long until that changes?

[B]

August.

[A]

And then how much will you save?

[B]

$1,400. That's good. Yeah, no, that's great.

[A]

Good. Let's keep going. Investments. You have $60 going. All right. Savings are zero. And then y' all have. What else? For guilt. We talked about eating out. What else?

[B]

Books and art supplies.

[A]

What's art? That's an Indian person's answer. What's art?

[B]

I mean, I do sell my pieces.

[A]

Don't do that. Let's be intellectually honest.

[B]

I would say I spend at least $100 a month on books.

[A]

Go ahead, Blake.

[C]

I would say at least.

[A]

Can you get an accurate number? Give me the ceiling, not the floor.

[C]

Between Ross Michaels and books and machines that make things there.

[B]

It's probably. If we averaged out 300, 300, 300amonth.

[A]

Okay. What do you make of me going through these numbers, Blake? What are your surprises?

[C]

I'm not surprised by a lot in here. Yeah. I mean, I'm surprised at how little we have in a certain situation, but

[A]

are you surprised by anything? Yeah.

[B]

Our inaction. I am so shocked that we can look that we looked at this, and we're like, cool, let's go to dinner next week. It doesn't even feel like myself, like. You know what I mean? It's almost like it's happening to somebody else. That's kind of what it feels like to look at that and be like. I just feel like there's, like, this huge chasm between me and those numbers for some reason.

[A]

Yes.

[B]

And it's annoying. It's. Honestly, I'm frankly annoyed with myself.

[A]

Good. You should be pissed.

[B]

Pissed? Yes, I am pissed.

[A]

So in order for me to help you make a change, I need to know right now you are essentially just. You're still spending the way you used to spend us. Cutting this down by $200 is going to make no difference. We got to start. Blank page. So I want to know. Rich life. But rich life, starting from where you are today, what is your rich life, in other words? It can't be. We're gonna retire in five years. That's not gonna happen. What is your true rich life based on where you are today?

[C]

I think rich life would be keeping our kids in some extracurricular activities.

[A]

That's the first part of your rich life is spending money on your kids,

[C]

letting them do some things.

[A]

Okay.

[C]

You know, not taking all that because I get so much joy out of that. What else? Yeah, Family trips, Whether that's camping or whatever.

[A]

What role does the debt play in your rich life?

[C]

It would feel great to start just addressing that head on, just so I can sleep at night and not have to worry.

[A]

It's quite interesting that kids came first, then trips, not a mention of debt until I brought it up. What does that tell you?

[C]

That it's not forefront.

[A]

Yeah.

[C]

That I'm avoiding it.

[A]

Yes. You're not there yet. Until you actually confront the reality that you probably have to pull your kids out of certain activities if you want to get out of this debt, then we're stuck.

[B]

Yeah. I was actually shocked you didn't say get rid of our debt first and start saving towards our retirement. Like, that's. That's what would be my rich life is to know that.

[A]

Tell me, what is it that we

[B]

pay down this debt and we have a savings account for the months where we know it's going to be light on income. And also, you know, for my rich life, I want to work. It's not because I don't want to. I've worked since I was 15 years old. And it's like, so for me, having a fulfilling career where I'm getting paid to contribute more to our family so we can do all that stuff is definitely high on my list.

[A]

Okay. So increasing the income, paying off the debt. Okay.

[B]

I just don't want to have to, like, worry about it every waking hour. That's like. Honestly, that's all I need is I'm not, like, stressed out by it. Every waking moment.

[C]

Every waking hour.

[A]

The way that you will begin to Stop feeling this ever present anxiety is by making a plan, okay? Oh, I know you have no plan.

[B]

We have no plan.

[A]

Even when I asked, the plan was like, well, we gotta put the kids in these activities. No, we gotta make a plan for that debt. We gotta make a plan for savings. Like, we have made almost a decade's worth of decisions that got us here. We gotta make rapid, big changes to shift it. Okay, so do we agree on that? We have to make big changes and they have to be fast. Yeah. Great. I'm gonna put the CSP back up on screen.

[B]

Okay.

[A]

When I do that, we know that our typical goal is to bring that fixed cost number down to 60%. Okay. In your case, it's going to be a little different because you have debt, which means that 60% is going to go up. We'll deal with it. Okay, here we are. As a reminder, you're spending 102% of your take home pay on fixed costs, unsustainable. You will lose your house very soon. So we're gonna do an exercise where each of you bounces back and forth and you make a change to your csp. So the goal here is to make big, bold changes fast. We don't want to get stuck in the weeds. Who wants to start? Actually, I already know who wants to start.

[C]

Can we.

[A]

You're starting.

[C]

We're gonna sell some of her art supplies. The biggest change I feel like would be the house.

[A]

You want to rent a smaller house?

[C]

I just don't know if that makes sense. If it. The cost of moving. If we save a thousand dollars a month on a smaller place that we have talked about it and I know

[A]

that you talked about it.

[B]

I have talked about it and brought it up a lot.

[C]

Yeah.

[A]

And what was your reaction?

[C]

My reaction was just concerned that the cost of moving will mitigate any savings throughout the next year.

[A]

You were concerned.

[C]

Yeah.

[A]

This is your way of not making changes. You express concern. Now, concern is fine, but concern is just like a way to put the brakes on any changes. I can tell you right now your moving costs, especially because you can economize. You not get these fancy movers. Move it yourself. Okay. Saving $1,000 a month is huge. It compounds over time. Huge, Massive. In your case, do you think that realistically you could find a place that you would save $1,000 a month on?

[B]

Close to it. I've been looking and I want to stay in the same school district for the kids. And we can.

[A]

Great. How much? 1,800. What's realistic?

[B]

Let's say 800 to be conservative.

[A]

All right. Okay. Wow, that's a big change. Take a look at this number. The 102%. We're down to 94%. Going in the right direction. Well done. Nice. Freya, what do you got?

[B]

Big changes. Well, like I said, the car. We could probably be fine with one car. It's hard, but it's very suburban, so it can be tough, but we could do it.

[A]

How much are you going to save?

[B]

$480.

[A]

You serious?

[C]

484? Yep.

[B]

484amonth. And actually more too, because then our insurance will go down.

[A]

Yes. Let's call it 500 just to be 136.

[B]

Our gas prices will go up though.

[A]

Look at the number. What's the number say?

[C]

89%.

[A]

89%. Well done. Keep going. What's next?

[B]

Childcare will be gone.

[A]

Yeah, childcare. Let's mark it off.

[B]

Cuz that.

[A]

I mean, August.

[B]

Unless we have occasional.

[A]

Yeah, take the win. Zero. Watch the numbers. We're down to 75%. This is actually going way better than I thought. I am. I got to take a second. Celebrate. This is crazy. Okay.

[B]

I mean, this feels so much better. Oh, my phone already went down. It's only $80 a month now.

[A]

Oh, really? Are you serious?

[B]

Yeah. But I also found out we can go on a family plan and It'll only be 120 on my phone. I just need to move you over.

[C]

Let's do that.

[A]

120 watch. We're down now to 73%. Okay. Wow. What else? Keep going.

[C]

Kids activity.

[B]

Sorry, I was waiting for that one.

[A]

Yeah. What do you want to put it at?

[C]

0.

[A]

Can I make a suggestion? I'm always for cutting kids activities when you're in debt, but there's some other stuff here that's quite obvious that we could not.

[B]

Miscellaneous.

[A]

Miscellaneous. Like in what world is a Couple in almost 100k of debt spending $1,320 a month on miscellaneous? No way.

[B]

Literally.

[A]

Yeah. I'm like, I'm sorry to get mad, but this is crazy.

[B]

Like, what even is it?

[C]

Yeah, what is this?

[A]

We add that because couples don't. They. They're loose. They don't track it. And we know this because you used to spend double or triple on your groceries. A couple in this kind of debt cannot afford to have this loosey goosey buffer. They are meticulous. Okay, in your case, like we're talking about meticulous down to the level of we're not spending an extra 30 bucks out eating because the kids are crying. No cry. We're going home.

[B]

We're big snack packers.

[A]

Is that planned?

[B]

Yes.

[A]

In your grocery.

[B]

The eating out is us, 100%. And that's something we need to just say no to.

[A]

Love it. And can we. Can we just flip that instead of we need to, because we're not doing that anymore.

[B]

We are going to.

[A]

We will not be eating out anymore.

[B]

I was a private chef. I cook. We'll have people over for dinner.

[A]

Okay, great. Miscellaneous. I'm taking that down to 200 because I'll give you 200. A buffer, but that's it.

[B]

Oh, my God, my books.

[A]

200. Yeah. Goodbye to books. Like, ever hear of a public library?

[B]

Actually, I actually do that, too. I read a lot.

[A]

Yeah, Go to the library. I do 200 bucks. Watch the number. We're down to 62%. I actually cannot believe this.

[B]

Me neither, actually.

[A]

And we're not even done. Keep going. Don't stop. What else?

[C]

Trim groceries a little bit.

[A]

Yes.

[C]

We could try to 900.

[B]

Oh, okay. I would. Yes.

[A]

With four people in the family, that's a little challenging.

[B]

That's a little.

[A]

But you're a chef.

[B]

Yes.

[A]

So, like, come on.

[B]

No, I'm like, I can be more economical than I am.

[A]

Can you make it 800? I wouldn't say this to a normal, like, family, but you're a chef. It's like, come on.

[B]

Yeah, I have to just take the chef part out.

[A]

Exactly.

[B]

And do the production part only because that's where it gets me. I'm like, oh, grass fed, you know? No, I'll do a good budget and I'll do the shopping and end of that, one day.

[A]

Yeah, we can't do that anymore. It's. It's really like, the difference in, you know, a luxury hotel versus, like, we're just here for a clean room and that's it.

[C]

Yeah.

[B]

Chicken breast and broccoli. It is.

[A]

Exactly. How much?

[B]

Tell me the 900.

[A]

And, like, I want to show you the reaction that you're giving me, which is you mentioned it earlier on. For so much of life, I have gone through basically trying to, like, I'll figure it out or how much can I get away with? And I think that's the energy you're bringing to this decision right now. And I would like to encourage you to flip that. That energy of, like, how much can I get away with? That actually does not work because look where we are.

[B]

How much can I add to paying off our debt by changing that?

[A]

So tell me the number for groceries.

[B]

Let's do 850.

[C]

No.

[A]

Go more aggressive. You're way too smart.

[B]

More aggressive.

[A]

You're way too smart.

[C]

Does that include wine? And.

[B]

No, I'm guaranteeing you it does not.

[A]

Did everybody catch that audio? Does that include wine? What's wine?

[B]

Well, it's not even what's wine, it's what. Yeah, no, obviously this is. No, I. He knew the answer.

[A]

Include wine. Oh, my God. This is. I couldn't script it.

[B]

No, it doesn't. It doesn't. Yeah, it doesn't. And it doesn't include grass fed beef, and it doesn't include Y' all.

[A]

Ever hear of Safeway? Lucky?

[B]

Yeah. I actually stop at Winco now.

[A]

Winco. Love it.

[B]

Yes.

[A]

Bag your own groceries. I know it well.

[B]

I discovered the bulk section.

[A]

They're so good. They're cheap. Okay. So I've been.

[B]

That's, like, how we got it down to the 1200.

[A]

850 is not enough. You need to go more aggressive. You're in serious financial straight. What is it, 750? Yes, 750. And that's a peak. That's a peak. It will be no higher than 750. And if you can bring it down to 700 or even 600. Wait. I love this.

[B]

I love a challenge.

[A]

Yes.

[B]

Let's see how long we can get through everything in the pantry before I even go back to the bingo.

[C]

That's one of our bingo.

[A]

If you can defray spending money or simply avoid it for, like, the equivalent of three weeks or four weeks, that's literally thousands of dollars that you saved. That money can go right towards debt. That's how you do it. As you can see, we're making changes on the csp, but these are actually lifestyle and attitude changes. And I can be creative enough to provide for this family using my skills and paying the debt off aggressively. Well done. The number at 57%.

[B]

Come on.

[A]

I think you all need to give yourself a round of applause so far. Good job.

[B]

I can't even clap because I'm like, really?

[C]

Can I? I really don't want to move.

[B]

Okay, that's fair.

[A]

We've moved a lot.

[C]

Like, we've moved our family so many times.

[A]

So what are you gonna do then? Cause we need the number to be lower.

[C]

Can we just see what it looks like if we keep the old ran.

[A]

Yeah. What was it? 30? 34.80. All right.

[B]

Good question.

[A]

I like that you're asking. Hey, can we talk about this? Or that? That's great. Takes you back up to 65%.

[B]

Okay. It's still not good. I also feel like I could make more money. Like, talk to me right now. I am working 10 hours a week.

[A]

How much can you make?

[B]

I mean, realistically, I could work 20 hours a week. I'd have to find a new source of that income. But I don't think it's an impossibility. I think I should be at least. At least able to bring that up to 3200amonth.

[A]

3200amonth.

[B]

Right. It's another thousand dollars a month. Yeah, I could do that.

[A]

Okay. And you're just have to be more.

[B]

I have to be more aggressive about the job search.

[A]

So I'm gonna hard code this in to be 10,800.

[B]

Okay.

[A]

It's not accurate, but it's in the ballpark.

[B]

Yeah.

[A]

Watch the number on fixed costs. 60%. Not bad.

[B]

That's not bad.

[A]

Here's how I might think about it. If I were in your situation, I might say, okay, we prefer not to move. However, we need to get these numbers aggressively down.

[B]

Right.

[A]

If you can find a job in the next five, four weeks that generates $1,000 a month.

[B]

Okay.

[A]

Not 600, not 800, $1,000 gross, we can stay. If not, we move like that is the level of decisiveness that you bring to this problem.

[B]

I like that.

[A]

Okay.

[C]

All right.

[B]

I'll be very motivated to. I also don't want to move. I've moved 20 times in my life.

[A]

Okay, then it's very clear what needs to happen, and your roles are very clear, which is like, you have to provide the. You have to hit the numbers on the groceries, and you have to find a job if you want this plan to work. And if not, you know exactly what it's gonna. What you're gonna do.

[B]

Can I have an ask, please? Can you help with the grocery stuff? Can we do that together?

[A]

Yes.

[B]

I hate doing it by myself. And then being also, it feels like a lot of pressure to be like, I am the only one to have.

[A]

Does it need to be both of you, or can you just delegate that? Can he bring it and you cook?

[B]

Let's make the menu together. At least.

[C]

What I would propose is that we make the menu together, use our skylight and plug it in there so we have all that stuff.

[B]

And then there's planning.

[C]

There's less.

[B]

Less loosey goosey. I'm like, oh, I didn't plan today.

[C]

Yeah.

[A]

What's the skylight?

[B]

Oh, it's our scheduling. It's like a digital calendar.

[A]

Oh, it's like the family. Okay. Yeah, but who's going to pick up the groceries?

[B]

I'll do. I don't mind doing it. I just feel like the planning part I would like to do together.

[A]

Okay, great. So you all need to make a time when you do it. It needs to be on the schedule. And there's no more unscheduled, like random.

[B]

Yeah, go run and get this. Oh, I decided I'm making this today instead. And I. Because I get. I do get tired of doing it sometimes. I like that happens. So it would be nice and it might be nice to do it together.

[C]

All right, great.

[B]

Let's get the vault.

[A]

Let's look at the risk. Investments at $60. All right, fine. We can keep it. That doesn't really do anything, but. Okay. Savings are at zero debts. Gotta change. I just wanna point out. Look at the. Look at the bottom of the CSP. You currently have $4,000 a month.

[B]

That does not feel like a real number.

[A]

Yeah, it's real.

[B]

How.

[A]

Look at he. Blake's face. He's like, what the how? You know how.

[B]

By budgeting. And I'm sorry, by having a csp.

[A]

Because you cut dramatically.

[B]

Yes.

[A]

You cut a lot. You cut $1,000. You increase your income. You may or may not cut the rent. You cut thousand bucks off of miscellaneous and. And then hundreds and hundreds of dollars from various things. It's very impressive. That means you have 4,000 bucks a month to distribute. How do you want to use that money?

[B]

Debt. Savings.

[A]

Good. Which one comes first?

[B]

Debt. No, savings. With the kids, I think it's really hard to have that. Like, oh, wow, they might not have a roof over their head.

[A]

Yeah, that's a big problem.

[B]

Yeah. So I feel like savings.

[A]

I do agree that savings is more important right now. I can't believe I'm saying that to a couple in almost six figures of credit card debt. But the fact is you have two kids and you are almost out of your house. You cannot allow that to happen. Do you see why I am moving so quickly? You don't have time to decide about this or that. You need the money now, which means any groceries that you were going to spend on, don't because you have the pantry, the car, get rid of it as quickly as possible. All these other changes, immediately stop and go back and double check the subscriptions because even an extra hundred dollars that you were about to spend, like the phone, you need it for savings. Yeah, that's it. It's as simple as that. You have to attack it with ferocity.

[B]

Yeah, Okay.

[A]

I think that we would want to look at a debt payoff plan, but in your case, you can call the credit card and talk to them about you're in hardship. You need to make a plan that works with them and what can they do for you.

[B]

Okay.

[A]

Okay. So there's several things. Your credit is going to be in trouble.

[B]

Yeah.

[A]

It's already gone to collection. So even moving is going to be challenging for you.

[B]

That's.

[A]

Yeah, that's what's happened.

[B]

So my credit is good.

[C]

Yours. Yeah.

[A]

Okay.

[C]

Right now.

[B]

But we're trying and we're trying to keep it that way.

[C]

Yeah.

[A]

So. So yeah, call them. Use the scripts from chapter one of my book. You're going to have to spend at least a couple of thousand bucks a month to pay that debt off. I shouldn't say at least you can spend less. They will let you. You can use the debt payoff calculator on my website and that will allow you to see how long until your debt is paid off. Right, guys? With thousands of dollars a month, you could pay that relatively quickly.

[B]

Yeah.

[A]

Especially if your income goes up, even.

[B]

And I, I love that idea. I love that idea.

[A]

You might have noticed that I didn't allocate the perfect amount for them to put in their debt payoff plan. Why? It's kind of like you buying one of those take and bake pizzas. You know they're made, but you take it home and put it in your oven. You get a sense of satisfaction from doing it yourself. There is something to that here. I need them to go through the calculator themselves. I need them to realize that it's going to take months, actually years to pay off this debt. And hey, if we put an extra 200, it will shave that down by six years. It is important for them to get their hands dirty, to get tactile, to get involved. And that is true for so many parts of money. We're not just looking for some AI tool to do the whole thing for us. I want you in there feeling it, baking it. Even if you need a little help so that you know what it takes to be successful.

[C]

The real game changer would meet in full time.

[A]

Can you do it?

[C]

I can, I can go full throttle

[B]

trying to find a full time position.

[C]

I run my own company now with a partner. Yeah. And. But it is, you know, it is a hustle and it's some good months, some bad months and so we tried to come up with the number here, but when I go in house as a creative director.

[A]

Yeah.

[C]

You know, it's Usually, you know, a 200, 250 salary.

[A]

Can we just do this now? Like, send a text message right now, lock it down. That is the biggest thing you could possibly do.

[C]

Yeah.

[B]

Especially for 401k and all the things that come with it.

[C]

I've never made this little money in my life. And so now it's like, I just. I think that's, for me, is the. The fastest sort of thing.

[A]

Yes. What are the possibilities? Knowing the economy and your space, how likely is it that you could get a job like that?

[C]

I mean, if I go, I think probably 75, 80%.

[B]

In, like, within, like, how long do you think? Six months? A year? I think.

[A]

How long?

[C]

Within three to six months. Wow. Yeah. I mean, that's really, like.

[A]

Is that surprising? Shocked.

[B]

Yes.

[C]

I mean, everyone says it takes, but I'm, you know.

[A]

Do we all agree that that is the route to take?

[B]

Yeah.

[A]

You agree? Do you agree?

[C]

Yeah.

[A]

Okay. Done. Amazing. Okay. Blake can go out and seemingly earn tens of thousands of dollars more in a new job. That doesn't happen very often. That's not for everybody. But it is for them. And the fact that they haven't done that yet, that he hasn't done it is actually what I want you to take away from this. Oftentimes, people's houses are burning down and there's a fire hose right there, and they don't even pick it up. You want to know why? Most of us are problem oriented, meaning we love to talk about our problems. We agonize over them, we elaborate on them, but very few of us, I would estimate fewer than 5% of people are solution oriented, meaning we look for solutions. We try one, we try another. The interesting thing is we can be solution oriented in one part of life, but not in another. And for whatever reason, money tends to be one of the primary areas that people are problem oriented, but not solution oriented. If you've got a financial problem, you may have a solution right in front of you. Forget about the fact that he can make $50,000 more. That's not the point. The question to apply to your own financial situation is, do I have a fire hose right in my front yard and why am I not picking it up? Going full throttle on that would allow you to increase your income. Your income, Freya, your income would go up. Your household income would massively skyrocket. And here's the key. Here's where you will likely fail unless you make a change. Can you tell me what it is?

[B]

Sticking to the CSP and not be like now we can spend $3,000.

[A]

Because when you get back into 175, 200, you're like, oh, let's like, loosen up. Let's not.

[B]

No.

[A]

Usually couples, I go, yeah, you're spending. You're making more. Go ahead and spend a little bit more. In your case, it will actually be pure to just be like, we're not those people anymore. For now, we are going to only focus on debt and savings.

[B]

Yeah.

[A]

We are not. It'll even seem nonsensical at points.

[C]

Yeah.

[B]

What I would really love to do, too, is get the kids involved. Even this little.

[A]

Tell me. Yes, tell me, how would you do it?

[B]

My six year old's been asking for a bank account. Like, he has a little notebook that he keeps all his little change in. And I was like, okay. You know, but I would, you know, even when I said, with the meal planning, let them help. Let them pick out something that we can cook and they can like, I'll even take them to the grocery store.

[A]

Yes.

[B]

One at a time.

[A]

But the only choices they have are like, broccoli or rice.

[B]

I mean, you'd be shocked with. My kids love broccoli and rice. But. Yeah, but literally getting them involved. And then when we say no, we can show them why.

[A]

Yes.

[B]

And they can have like a little savings account and be like, no, let's put this dollar here and now look at your bank account. And I feel like that's something that you didn't sound like I certainly never got. Doesn't sound like you did.

[A]

You all have a gift of an opportunity here, which is to let them in on what's going on. Of course, they may not understand what $99,000 of debt is. Maybe they don't even need to hear it at that age. But to tell them, look, right now we realize we need to make a change and we need your help. Can you help us?

[B]

Yeah.

[A]

They'll be like, yes.

[B]

Okay, make them a sticker chart. They can help us.

[C]

Exactly.

[B]

They can be like, we didn't spend it. You guys get a gold star, mom and dad.

[A]

And when you do that, yes, you're helping them, but actually you're helping yourselves because your new identity as a couple who will not allow yourselves to stay in debt, You've now publicly told your kids that.

[B]

Yep.

[A]

So how can you go back on it?

[B]

Yeah.

[A]

I think you have a very viable plan. And I have to say, I am pleasantly surprised and even shocked. The reason for this is twofold. One, on the income side, you both have the possibility and Skills and you are willing to make more money. That's not easy. If, if your kids were a little younger, that wouldn't be possible. Yeah, but you're in this place where, wow, you, you both can do it and you're willing to do it. That's amazing. That's teamwork.

[B]

Yeah.

[A]

Now the only thing that matters is will you actually stick to the plan?

[B]

I mean, I want to stick to this plan. I'm going to stick to the plan.

[C]

Me too.

[B]

I feel it's going to feel so much better.

[C]

Yeah.

[B]

I mean, even if, like, there's just no way it can't feel better than this.

[C]

Oh, no.

[B]

And if we're all about comfort, let's not be miserable every time we make a. Put our head on a pillow and start having racing thoughts about this. Like, this is so stupid that we've been doing this.

[A]

I'm putting, just for sample, $2,500 a month in savings. Okay. And still have 17, 28 y' all can have. How much do you think you should have in guilt free spending? Just a ballpark per month.

[B]

Per month. Like in our situation right now?

[A]

Yes.

[B]

250.

[A]

Great. What do you think?

[C]

250. Yeah.

[B]

Totally doable.

[A]

Okay. That's an amazing answer. That's kind of like what I was thinking, like 250. That's like, you know, one or two. One thing with the kids and maybe one thing for the two and that's it.

[B]

Yeah.

[A]

Can you do it? Because this is a different life than the kind you've been leading.

[C]

Yeah, yeah, yeah.

[A]

You can do it. Do it. Then what that allows you is to have like roughly 1500 bucks a month, even more to put between debt, payoff and savings. Oh, okay. That's a lot.

[B]

It's like, how did we not do this before?

[A]

Yeah. You know, part of this, what's happening here is that when you are in it with your money, most people never zoom up to look at the bird's eye view. And even to be able to zoom up requires you to work through a lot of psychology and emotions and relational issues.

[C]

That's the thing. Because you get into it and then it becomes a you or you. And like, why did that was, you know, and to have this, like you said, bird's eye view and an objective viewpoint. Also wanted to ask you if you wanted to move in with us for a little while.

[A]

Yeah, getting a little extra red would be smart. I do love to rent. Okay. I want to say that I'm so impressed at how far you've come on the csp, the reason that we're able to make this plan, which just seemed to kind of breeze by in part is that you were willing to acknowledge certain change. The way you were brought up, the way that you need to relate to each other and the focus that it's not you versus you, it's. We have a plan as a family.

[B]

Yeah.

[A]

This is our plan. What are we both going to do so that we can accelerate this plan?

[B]

I love a plan and I love. The goal is so helpful because I feel like we didn't have. There wasn't a even goal really out loud said to work towards. So when it felt like we were saving or trying not to spend it, I was like, why?

[C]

Yeah.

[B]

What for? What's the end goal? Is it going to look like if we do this? And we never did that.

[C]

Yeah. And I, you know, I wanted to say thank you to you for.

[B]

Oh, thanks, babe.

[C]

Pushing me into here and getting us.

[A]

It was your book.

[C]

Yeah. And I feel, you know, emotional about. And about, you know, where we've been and how trying that is.

[B]

Yeah.

[C]

But I feel good walking out of here. Maybe a good cry after all will be nice, but like, to. To see the future selves that I know we are. We're good partners and we like each other and we have great kids and we can, you know, in a year or two, like look at what is that richer life, you know?

[A]

Yes.

[B]

I felt like I came in here very hopeless and helpless. Yeah, I felt helpless with a lot of this and just like small changes, big changes, but like that on a grand scheme of things, small that we can do this.

[A]

Great. Yeah, great. How about you?

[C]

I feel quite emotional, to be honest. I mean, I'm on the brink of tears.

[A]

How come?

[C]

Just. Yeah, because feeling helpless and just being, you know, like you mentioned being siloed and it's not a fun place to be, you know, to like be knowing you both have somewhat of the same vision or goal, but then you're just kind of working at it in two different ways. So just having that, you know, that idea of partnership is a kind of a beautiful thing.

[A]

Yeah.

[C]

Yeah, it is.

[A]

It's beautiful to see. I'm actually very confident in this couple. I would not have expected that looking at the severity of their situation, but their reactions really give me a lot of confidence. The fact that they both moved through the fixed costs aggressively that they are both suggesting earning more money, quite amazing. Quite rare even on this show. When they walked in to talk to me today, they were not on the Same page. They were siloed. Not partners. Quite remarkable that by the end they were encouraging each other, they were smiling, they were a team. I've shown them how to do it. Now it's up to them.

[C]

Hi, team.

[B]

Hi, team.

[C]

A little follow up video here. We wanted to discuss our biggest surprises from the day. Now that we're back at home.

[B]

Yeah.

[C]

And I think for me one of the biggest surprises was just how doable, how plausible the plan is now that we have it in place or that we have the information that we need that we've looked at everything globally from a top down level.

[B]

Yeah. I think that my biggest surprise was how accessible it felt when we went through the numbers with Ramit and like line by line we're like, okay, we can make this change, this change. And at the end of it I was like, oh, there is a light at the end of the tunnel. I'll say that was my biggest surprise. There's a light at the end of the tunnel. It doesn't feel insurmountable.

[A]

Yeah.

[B]

It feels doable. Yeah.

[A]

Yeah. Not easy.

[C]

Not a cakewalk.

[B]

No.

[C]

But doable.

[B]

Yeah.

[C]

Especially if there's partnership involved.

[A]

Yes.

[B]

I think that was another big take. A takeaway, I would say is that how much of it needs to be a team effort and not one person doing. Trying to do the work, the other person avoiding. Like we really have to figure out a way to do this together. We're getting there. It's going to take time. But I think that was one of my biggest takeaways and that. Yeah. Just to attack it like one of my to do lists and just line by line, go down, make the changes.

[C]

It's just interesting to look back at that experience that we had with Ramit that day and then see how many of those behavioral patterns actually extend into my life in general and not just in the finance world. So big takeaway there that I need to make some fundamental changes in how I operate behaviorally on a day to day and big picture. So that was a real awakening and you know, thankful to have had that moment and that clarity there.

[B]

Definitely have decided on some changes to make. Going down to one car in probably in like the next month or two.

[C]

Yeah.

[B]

Grocery bill. I have. I'm taking on the challenge of getting that down really, really like in half almost of what we were spending. So that is two goals that we have right now.

[C]

Another specific change is just to really be more mindful of our miscellaneous spending.

[B]

Yeah.

[C]

It's so easy.

[B]

The little things that just creep in

[C]

the Little things to grab the little thing here when you're shopping and a little $20 here and $30 there. So really trying to hone that in.

[B]

I almost feel like we need to do like a jar, like a swear jar, but except it's where it's like when we buy something miscellaneous, we have to return it. Or if we want to buy, we could put that amount in a jar.

[C]

Not a terrible idea. Not a bad idea.

[B]

Oh, my God. It's like children. Yeah. I think those are the big changes that we've decided to make. We decided not to move. Gonna stick it out here, and we're open to that.

[C]

We still look on Zillow all the time. All the time.

[B]

For the time being, though.

[C]

For the time being.

[B]

Oh, and work.

[C]

Work.

[B]

I mean, I. I personally have, you know, did all the things I need to do with my portfolio and my LinkedIn and my resume. So I'm ready to like jump in and really start trying to find what work and increase our income. So.

[C]

Yeah, increase income. Yeah, that's a big priority, which will really help. Everyone knows that. And I've even started putting out the. The feelers and saying out loud that I am aggressively pursuing opportunities rather than

[B]

just putting out feelers.

[C]

Rather than putting out feelers. Actually saying it out loud and contacting people started that. So that is. Feels good. Be.

[A]

Continue.

[C]

Will continue. But just saying it out loud and letting people know has been. Yeah. A good first step.

[B]

Yeah. Thanks.

[C]

Thanks so much.

[B]

Thanks.

[C]

See you soon.

[B]

Hi, guys. We're back to report on our financial journey since we met with you guys last. Talk about some small wins and areas we still need to work on.

[C]

So Small Win has been really busy. Have won a lot of jobs recently, so income has been coming in. That feels right.

[B]

Yeah. Small wins for me or my checklist because all the wins are for us. I do have a job interview next week which checks all the boxes for our schedule that we needed and will help with the income. And I got the grocery bill down to. Not 750, but I got it down to eight. Was it 8:17 or 8:18, something like that. Which I thought was almost impossible that I did it and, oh, I managed to get fifteen hundred dollars and sock it away into a high yield savings account. Not touched. To kind of build on our savings.

[A]

And. Yeah, the car.

[B]

Oh, the car. Yep. So we have to finish out our lease, which is in October, but after October, we will become a single car family. We've already been trying to practicing that and it's tougher than I thought it would be, but we're really going to try and stick it out for now. Yeah.

[C]

What else?

[B]

Oh, we paid our last month of preschool payment this month, so that's off the decks as well.

[A]

That's off the decks.

[C]

Things to work on my debt I need. That is on my list of things to do. I've read the chapters. I googled some stuff. I've talked to a lawyer. I have put the list down of everyone need to call. So that is on my list. Tomorrow morning, 8 o', clock, my phone calls.

[B]

You heard it here.

[C]

Hold me to it. Hold me to it. And then also need to work on the weekly financial check in.

[B]

Yeah.

[C]

As well.

[B]

It's been hard with the scheduling, but we're working on it. Thanks again for all of your help and kind of like the nudges that we needed to get it go in the right direction.

[C]

Keep nudging.

[A]

Thank you.

[B]

Bye guys.

[A]

Listen up. If you want my help with your specific money questions, there are only two ways to get it. First, you can apply to be on this [e-mail] apply or second, you can join my money coaching program [e-mail] moneycoaching in that program, you get access to live virtual events, monthly group coaching calls, live Q&As, and an amazing huge community of other people like you. Check it [e-mail] moneycoaching.