Afford Anything - Bachelorette Star Jason Tartick: The Truth About Financial Infidelity

Episode Date: June 11, 2024

#513: Jason Tartick, a former banker and TV star from The Bachelorette, discusses finances in relationships. He describes eight crucial questions about money that every couple should discuss. When a couple is dating, but before they get serious, he says, each person should divulge their debt-to-income ratio. This is your monthly debt payments divided by your gross monthly income. Keeping this ratio below 30-40% is crucial for financial stability. Banks consider this when approving loans. Couples still in the dating stage should also discuss their credit scores. If you're thinking about becoming serious with someone, you need to understand their history with debt, and their attitude towards debt, since you'll likely be co-borrowing together if the relationship lasts. A couple with a good credit score can save around $100,000 on a $300,000 mortgage over 30 years. Couples should avoid shaming or blaming each other during these money conversations, he says. The goal is to understand each others' financial attitudes, habits and history -- not to point fingers or make judgments. After marriage or lifetime commitment, Jason emphasizes the importance of having both individual and joint bank accounts. This allows each person to enjoy autonomy, while also contributing towards shared expenses. Regularly reviewing your net worth as a couple provides transparency and helps avoid misunderstandings. He also talks about financial infidelity -- what is it, and how can you spot it? Finally, Jason encourages couples to discuss spending habits, in order to understand each others' values and goals. Here's a great question to ask your boyfriend, girlfriend, spouse or partner: "If you had an unlimited budget, what's the first thing you would you spend it on?" The answer reveals the persons' priorities. For more information, visit the show notes at https://affordanything.com/episode513 Learn more about your ad choices. Visit podcastchoices.com/adchoices

Two of the biggest predictors of your long-term happiness are the quality of your relationships and your level of financial security. Now, when it comes to the quality of your relationships, that means all relationships, but in particular, if you have a significant other, the strength or quality of that relationship is shown and demonstrated in the data to have a very remarkable effect on your level of life satisfaction and self-reported happiness. We also know that while, and the data shows this very clearly, while money cannot buy happiness, a lack of money.

Lack of money correlates with unhappiness. And so both relationships and money have very significant impacts on our life. Well, the guest who we have invited to join us today is uniquely positioned to talk about the intersection between relationships and money. Jason Tartick holds an MBA in accounting and finance and spent a decade working as a banker before he rose to national fame as a contestant on season 14 of The Bachelorette. Since then, he has remained in the national spotlight, appearing on a wide variety of shows, including both The Bachelor and The Bachelorette,

Dancing with the Stars, live with Kelly and Ryan, and Good Morning America. He has used his position in the national spotlight to drive public attention towards the importance of financial literacy. He's done this by publishing books on it and by hosting a podcast all on the topic of investing and being financially sound. And he joins us today to talk about the intersection between your romantic relationships and your money management. Welcome to the Afford Anything podcast, the show that understands you can afford anything but not everything. Every choice that you make carries a trade off. And that applies not just to your money, but to your time, your focus, your energy,

your attention to any limited resource that you need to manage. So what matters most? This podcast is here to help you answer that question. I'm your host, Paula Pant. I trained in economic reporting at Columbia, and I help you focus on what matters. Please join me today in welcoming Jason Tartick to the show. Hi, Jason. Hi, how are you? I'm great. Thank you for being here. Thank you so much for having me. I'm excited. Jason, what are the eight questions that every couple should talk about? I worked at a bank for about 10 years in all different capacities. One of those stops was an underwriter. I had the big rubber stamp where it's at approve or deny.

There's so many individuals that struggle with finances and there's individuals that struggle with love. So if we put these two together, we can help a lot of people. And these eight numbers are connected to numbers I think that individuals struggle talking about, but also eight numbers that the bank system looks at to define your risk. And we know that risk is connected, of course, to interest rate and your borrowing capacity and then your cost to capital. So that was kind of the baseline for what these numbers are. But let's talk about one of them with your debt to income ratio, right? So it's your gross monthly income and that's divided by your monthly debt payments. Right. So you want to divide those. And you want that ratio, according to bank lending system guidelines below that 30 to 40 percent target market. So that's one of the examples. You know, another one, of course, is your credit score. That's it's about as basic as it gets. But we think about credit score, and I don't think we're taught about the impact credit score has on what we're paying for things. For example, right now,

average home in America is like 350K, so if you just take a $300,000 mortgage over a 30-year period, then you look at good credit rating versus a poor credit rating. The difference in that interest rate and structure, the person with a good credit score is going to pay $100,000 less an interest, and that's only on a $300,000 mortgage, right? So those are critically important to think through and talk about. Something like a debt to income ratio, it's a factual exchange of information. Correct. It speaks to the attitudes that people have about money, the values that people hold, the level of risk tolerance that they have. So how do couples really broach that? Because there's the number, or here's my debt to income ratio, but then there's what that number

signifies. Correct. No, you absolutely nailed it. And I think if you just look at that overall ideology in relationships today in America, we've gotten very comfortable with talking about previous behaviors that bring us to where we are today. It's very common in relationships before you get married or cohabitate to talk about what were your exes like, right? Or what was your childhood like? And are your parents still together? Are they not together? What impact did they have on you, right? Those are all things that impacts our childhood, which brings us to who we are today. And we talk openly about those things. But money, for some reason, we just avoid these things. And a lot of of the numbers and stats we'll talk about are built on married and cohabitating couples because we know

once couples get married or cohabitating, that is where we see extremely, extremely red flags. But to get back to your question, I think the biggest thing to say is do not shame, do not blame, do not weaponize, right? We don't want to do that when it comes to money because it's already hard to talk about it. So when people do share things like their debt to income ratio, when they do share things like their net worth or their earnings or their annual spend or their credit score, We first want to go in with, thank you for even sharing that with me, right? Thank you for being vulnerable. Thank you for being honest with me about that.

And then to say that your net worth or your credit score, your debt to income ratio, or your debt burden, that's not your self-worth, right? That's just a history of patterns, kind of like your dating history, kind of like what's made you you. It's just a history of patterns of what have happened until this point. And then, of course, and I think with finance, what you can control is faster than almost anything. so that the future is in a better place. So I think the biggest thing, when you look at like a debt to income ratio, it's more acknowledging why you're there, taking self-awareness to maybe mistakes or challenges that had been done and making sure there's compromise and agreement moving forward to

avoid some of those barriers that we see a lot of people tripping into. So with something like a debt-to-income ratio, let's just imagine a hypothetical couple. Yeah. One partner has a lot of student loan debt. Maybe they spent a long time in grad school. So they're at the beginning of their career, so they have relatively low income. Perhaps you have one partner who has that circumstance. You might have another partner with the, I won't say exact same, but similar debt to income ratio.

But that debt to income ratio was fueled by perhaps a history of consumer spending, a history of buying luxury cars on credit, things of that nature. So you might have two people who actually have similar. stats, but the reasoning behind those stats are different. How do you start to come to that? Yeah, perfect example there. I think it's perfectly well construed. But if you think about it, there's good debt and there's bad debt, right? Especially if someone who's a lender, I had the ability to lend hundreds of millions of dollars of companies, we know that just in general, the idea of good debt is debt that connects to an underlying asset of some nature that will appreciate in value or historically we know we'll appreciate in value given the history that we have.

So when you have someone taking out student loans as it connects to, let's say, the dental industry or the pediatrics industry, we know historically that you are going to be paid a certain amount of percentage and you have a very high likelihood of earning X amount of dollars within a certain period of time. So I would consider in that circumstance, that's good debt. So when you're having these conversations, it's understanding it. We know that when you're spending frivolously and you're spending it on assets that don't appreciate it all. I consider that bad debt. Now, I don't think that people that want to spend on those things

or make it a priority are bad people. I don't think spenders in general should only be hit with the negative connotation bad because there are some good things that come with them too, right? But I think the idea is understanding why the debt is where it is and what that means to you and what's the sustainability of it

and where do you find compromise, right? One good question, you could ask to find compromise or prioritize someone spending or understand their money habits. And I tell people you can ask this on a first date or you can ask it today if you're married. But it's like, you know, unless you literally went completely broke, what is one thing you overspend on? Like you know you overspend on it. What is it?

And why do you spend on it? Right. And just based on your answer to that, I can one understand how you prioritize your spending, what certain things mean to you, where you're willing to compromise, where you're not willing to compromise, et cetera. So I'll ask that question to you. If you were completely broke, unless I was completely broke. Well, let's, let's, yeah, you're, you're an inch away from broke. What is the one thing that you would still spend on, the one discretionary item would still spend on? Yeah, the discretionary item that I know that I overspend on is all connected to experience.

So dining out and travel and lodging. So my hotels, my transportation, and then dining. I know I spend too much on that. But also, like if we let's let's analyze, this, right? To me, like, I'm very social and I want to, when I'm traveling, enjoy it. I feel like I sleep better. I work better. I have a higher propensity of working out when I'm at like a nicer hotel. And I know that experiences are where I want to spend my money. So just in that conversation, whether we're close friends or you're in a relationship, someone could instantly hear like the things that matter to you. Like, to me, it would be more meaningful with a partner to go out to dinner with them as opposed to buy a material item. Like, those things aren't as a high value to me. So yeah,

that's a little, that's a fun little example to have like. And also, notice how we have this conversation. I'm thinking about cool things. I'm thinking about the restaurant we might go to. I'm smiling. The energy's high. You're smiling. These aren't conversations like, what's your network, right? It's not these like, intimidated. What are you going to make right now? What do you know, how are you going to earn more? It's a lot, stop spending with Amazon. It's more of like, let me hear you and let me learn about you. Right. So what I'm hearing then is that the conversation about money really unlocks the conversation

about what your underlying values are. Correct. And even behaviors. What's weird is there are so many connections to therapy and actually financial management and financial conversations. The theory I always live by and stand by is that we weren't taught this stuff in the school system so we don't know how to talk about it. But like basic things and needs and wants in our life, we were always taught about.

Even in kindergarten, I remembered when I had a stomach ache and I didn't feel well, I had to go to the nurse. And when I talked to that professional, I could explain to them things that wasn't working out for me. With health, we've learned it, with all different topics, we've learned it. With money, we haven't. And the other thing with the money conversations is we know that we're married and cohabitating couples, 50% of them say they don't have comfort in having money discussions in any capacity. Then of those 50% we did more research. And it said that 73% of them said that money arguments are a material issue within their relationship. So we know that half the people aren't comfortable talking about it.

And about three quarters of those that actually do have comfort and talk about it aren't talking about it in a healthy way to bring solutions to the table. You said you did this research. Now, this is something that you conducted like a survey of your audience. We had a group of research team for the book. They're all professional groups that did this. Oh, okay. So you had independent. Yeah, independent therapy.

I didn't take like 10 people and then make these. conclusions, we had like very formal research that we took from professional groups that already completed this stuff. Interesting. Yeah. You mentioned earlier that you don't want to disparage spenders because there are actually positive attributes that are associated with the spending tendency. What are some of those attributes?

Yeah. So that's a theme that also connects to money in America, stigmas. We think high earners mean high wealth. We think great credit score. means high wealth, right? We think spenders bad. I know a lot of people that have in the six, 500 credit score range, multi, multi, multi, multi millionaires over and over again, right? I know some people that earn literally $10 million plus have next to nothing to their name. So I think the biggest theme with this question is like, let's eliminate stigmas we process in America with money. I think a lot

of us gaslight through money. I think of a lot of us show assets and things that we have when we don't and vice versa. But I think back to your question, let's talk about some positive attributes with spenders, right? So spenders can see value in taking their asset and deploying it towards something to either make them feel good, make the people around them feel good. Sometimes spenders are often considered generous. I think something with spenders that is a huge attribute is they aren't as risk diverse with their money. We know that you have to properly manage money, but we also know that you have to take on risk to earn money. And one unique quality of spenders is when they see value, they know how to execute. And so one disadvantage or weakness of a saver is that sometimes

their risk-averse behavior gets in the way of them making executive decisions they have to make on investments, on opportunities to grow their money. And so those are some ideas of advantages and disadvantages to spenders and savers. But the idea is we have learned when people say they're savers, they're the best, and when they're spenders, they're the worst. And the overarching theme is like, let's take a step back and stop labeling everything we do with money, because when we're labeled, we know we become defensive. And when we become defensive, we know that in general, it's tough to really find continuity and unity through that. Just to dig into part of that answer, Do you see a strong correlation then between spenders and risk takers, let's say investment risk takers or entrepreneurs?

And conversely, do you see a correlation between savers and people who are a bit more conservative in the way that they invest? Yes, that is precisely the theory. Like when I iron out some of the advantages and disadvantages of spending and saving, it's precisely exactly that. Right. But I also think that it's so hard to do cookie cutter labels with anything finance related. And I think what we have to do is individuals is really looking at. at our patterns and our behavior and understand them, right? So I could sit here and say, my thesis is that spenders have an ability to see an opportunity, investment opportunity, move quicker than savers.

But there could also be spenders out there. They're like, that ain't me. And that's okay. I don't want to put a cookie cutter label to you. What I want you to do is go through your spending, understand your behaviors, and understand why you're doing what you're doing, right? So bring the conversation back to what I said about the therapy comment. So we know that therapy connects to financial behaviors. We know that when people are in pain, there's a few things that they'll do. One thing they'll do is Medicaid. Medicaid, you think about taking a pill or something. But medicating could be a lot of things. Medicating could actually be, you just work out and exercise more. It's a form of numbing. But I think a lot of people actually will experience pain in their life or financially, and then they

will go to how they channel that and they'll medicate through numbing, through spending, through self-sabotage with their money, et cetera. So the only people that can truly answer this are the people listening being self-aware of exactly what they're doing with their money and understanding their behaviors. And I think I call that behavioral-based budgeting. I think that's much more effective than taking out spreadsheets and crunching every number and be, okay, you got $17 and $21 to spend tonight because you already spent $124. Can you elaborate more on behavioral-based budgeting? because it sounds as though that the root of it is a strong self-awareness as to the underlying why behind each expense.

Correct. Yeah. So I started doing this. I was 21. I'd print out my credit card statements and I would just scan them. And at 21, I was scanning and scanning, okay, everything, I'm looking for outlying things. Well, then I put together, I'm like, wait a second. I am spending a lot of money at bars.

And I know I don't drink as much as I'm spending there. So what is going on? So I took a step back and I started like, really think through it. And I'll tell you what was going on. I was coming off senior year of college where I was at like all-time highs, now in this new work area, in a city I don't know anyone, don't have much family, trying to like figure myself out. And because of my insecurities and my lack of confidence, what I did was I would go to a bar, try to open a tab to be the cool guy, to be the people pleaser to feel good about myself because I was lacking in other areas of my life. And when I

recognized that, I knew I had work I had to put on internally. And as a result, that work I did internally impacted where I was bleeding financially. And so I think that's a baseline example. But some others might be like, think about where you're spending and why you're spending. Print out two statements of your recent credit card history and just see what you bought and why you bought it. And think, be honest with yourself. Why did you buy it? That nice fancy bag, was that for you? Did that make you feel good?

Or was that for someone else to be impressed? Do you find that maybe you go out to dinner and you're the self-sacrificer? So you're picking up the meal for everyone because you just feel uncomfortable? Think about where the money's going and why. And through those behaviors, you can actually save yourself a lot of bleeding in the future. To your example about you buy the bag because you wanted it or did you want to impress others, one of the litmus tests that I often use and that I often tell my audience to use is if you were on a desert island, if nobody could see it, if nobody could know about this purchase,

would you still make it? Ooh, I love that. That's a really good one. That's a good one. Right. Yeah. So I had that conversation with Emma Chamberlain and she said, if I were alone on a desert island, I would still want my nails done.

Yeah. She was like, I'd still want that done even if no one could see it. Yeah. She was like conversely my hair, I don't care at all. Yeah. And I was like, that's perfect. I'm the exact opposite. Yeah.

If no one could see my nails, I don't care. Your nails look great, though. Oh, thank you. Thank you. No, I think that's great. And I think that question right there is another one because people always say, when do you start having these conversations? You could have today or tomorrow, right?

And another fun one I'll say is like you'll win a million bucks now or you put any dollar amount to it. You could say 10,000, 500,000, a thousand. And you've got to spend it within a certain period of time. Every penny's got to be spent where you're spending it, right? Because that kind of helps people think through like, where would the money go? What's meaningful to them right now? What's a priority?

Are they going to spend it on non-for-profit? Are they going to pay off mom, dad, crams, credit card, or mortgage? Like, what are the priorities? So your question, these questions, they're all really good to have. And it's introducing money and talk. And that's what I think we need to do more of. The holidays are right around the corner. And if you're hosting, you're going to need to get prepared.

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In particular, when you've got a couple that's trying to commingle a portion of their finance, but one person is just generally a little bit more avoidant than the other. How do you, how do you assuage that? I love to take financial issues and bring it down to analogies we're comfortable with and we know. So let's think about it. If I am getting ready for, let's say I'm getting ready for a date, but I'm cooking dinner for myself before I go out to a date and that knife slips and I cut my finger and

it's bleeding bad. I have a pain point now that I have to immediately go take care of that. I got to go to the hospital. I need stitches, right? If I wake up tomorrow and I have plans to come on your podcast and do all these other cool things, but I have a toothache that's killing me. I know I got to go get that fixed immediately. It's a pain point that creates so much issue.

It impacts my behavior. I think what we need to know in people listening is that the financial system is set up almost so that we don't feel that pain point, almost so that we don't feel that toothache. and have to take action, almost so that cut doesn't require stitches immediately. Because the profitability associated with the mistakes or avoidance that individuals are making is so material that they have given us so much room to continue the slow bleeding process. And I think it takes comments like that and it takes identity like that to say, we need to jump on this stuff because if we don't, that slow bleed out is happening by the second. Imagine a cut that's just slowly bleeding,

slowly getting infected. You would eventually treat it. That's your finances. And when you're not taking advantage of it, someone else is the larger corporation is taking massive advantage of the profitability from your slow, slow burn. And so that's something I think that we really, really have to think about. I also think about this, because I always try to think like, how do you motivate people to do so. How do you motivate them to not have avoidance? And I think it's examples like this. Another one would be like, think about retirement. Retirement is a 1500 plus week vacation. We all love vacations. This is why we work. Our life's work. We could do all these things when we retire. And think about what goes into planning one week vacation, right? I'm looking up the restaurants.

Did I book my flights? When do I land? What's the hotel I'm staying at? Did I pack my outfits? My SBF? Who's watching the dog? Who's getting my mail? Who's taking the trash out? There's so many things that go into planning one week. Now, imagine a 1,500 week vacation. I would ask anyone that's listening to this, are you doing now what you need to do for a 1,500 plus week vacation, and that is your retirement? So I think taking pain points that don't exist because the system is set up to not create them, but trying to create them through analogies we understand helps people with avoidance start to take action. What you're describing is acute pain. Yes. That acute pain, we have to respond to it right away, but the financial system right now is set up to keep us in a dull background

pain. Yes. Rather than a sharp acute pain. Precisely. And so what we need to do is then move from the dull background to a sharper acute pain. Yes. What are some mechanisms that allow us to really feel the sharpness of that sting? Yeah. And I think the challenge with that question is what motivates me to get healthier when I need to get healthier, right? What motivates me to eat healthier when I need to? What motivates you. Those are going to be totally night and day. So this is where I think the consumer has to take ownership and say, hey, I hear what's being done. I hear that I need a acute pain. I know that I need to do it. What is it that motivates you, right? Is it the fact that you need to prepare for your retirement and you're behind? Is it the fact that you don't have nearly what you need in an emergency saving and health

savings account to take care of yourself and your loved ones? What is it going to be for each individual? Because everyone is going to motivate us differently. And I would say whoever's listening, you've got to really think about what is it that motivates you? What are the things that drive you? I could tell you when I talk to my parents about money and preparing for the next step. I know if I go to my mom and dad and say, mom, we need to start talking about what your long-term picture looks like. Do we have your assets in the right place if you guys have to go to long-term care, et cetera? Are we prepared? If I start talking like that, it doesn't create acute pain for them. I know what does. create acute pain. Mom, dad, I really want to have kids one day. You guys have moved six times. You've

made your career the focus while being great parents. What do you want your legacy to be with your money? Do you want to potentially contribute to one day, hopefully my child's school? Do you want a non-for-profit? Do you want that bench in the park? So when I talk to them about things like that, they get motivated in different ways. And I think everyone at home is going to, they're going to have different things that's going to really get them going. And it's hard to pinpoint that other than saying, kind of having those conversations with one another to understand it. It goes back to the earlier conversation about values, find the thing that you value the most and then recognize where the pain is associated with that. Exactly. It's like a priority probe. Like understand what is the biggest

priority to you. And then I think based on that, adjust accordingly. And I think, think like thinking about like what does money actually mean to you like you can think to yourself right now if i thought about like three words what does money mean to me to me it means it me i think about legacy i think about freedom and then i think about leverage so those words like a lot of my financial behaviors are connected to i have the freedom to work in a place that i want to work how i want to work So I know for me when I'm spending or when I'm kicking things to the curb, I need to go to my priority of that's fine. You could do that. But do you want to be back tied to the desk eight to five?

Or do you want this freedom that you have? I want this freedom. Okay. Now I have to make finance a focus today. How do you define freedom? To me, freedom is having the flexibility to kind of do what you want, how you want, the way you want. And although sometimes it comes at a cost pursuing passions. It's like the old Steve Jobs quote of when he talked about.

Passion is like everyone talks about passion, passion, but the real truth is when you're working in something that's aligned with passion is that you are willing to do things that don't logically make sense. He's like, I've been fired from this company, kicked off the board, this company was broke. And if I wasn't passionate about it, anybody with a logical mindset would have been gone five times over. But when you're doing something that's passionate, you're not thinking about the logic. You're pursuing with emotion and ego and everything that you have, your whole soul. And as a result of that, I think the financial freedom gives me the ability to do that even when and if financially it doesn't make sense. You've mentioned legacy and leverage also, as two other words you associate with money.

We'll talk about legacy last. I'm curious how you define leverage. Leverage is a big one. And it matters in, like, I would say almost all circumstances, but I'll give you one example, right? One of the places that I earn money is through content creation in brand partnerships. If I know that my rate should be held at a certain value, and I also have a pretty good pipeline, but I've been responsible with my money that I have a good cushion in that space. I can negotiate harder. I'm not chasing the next deal. I don't have to get the next deal because I've been responsible with my money.

So my money gives me leverage to negotiate in things like brand deals, right? That's just one instance. But we also know that money can provide negotiating power in almost any form of consumer purchasing or consumer decisions. And I think that it's a big, big tool. The more money, I think it's a leverage mechanism for a lot of things. So what's interesting is so in that definition, what I heard leverage almost as a synonym for power. Yeah, I think it's purchasing power. I think it depends on specifically, you know, know, what the resources being used for and how. But, you know, for example, like, let's talk about just retail investment, advisement, or working in, like, a higher net worth, like a private

banking scenario, or like an ultra-high net worth or a hedge fund, right? We know that in those circumstances, the more money accumulated, the more value and money and profitability you're creating for others, therefore, as a result, the more accessibility you'll have to certain things. That's just a basic example that connects to like investment options. But yeah, I think in this world, the more money you've accumulated, it can give you leverage to do what you want. It also gives you a lot more purchasing power. Anyone here listening to this, have they gone against a cash offer when they're trying to buy that first time house or that second home, right? You know that you're, you're kind of in a tough place when there's no contingencies cash only, right? So like we know that

having accumulated wealth can help with purchasing power. and therefore gives yourself leverage. Right, right. All of 2020, it seemed like every home offer was all cash, no contingencies. All that. And I think even like when I worked at the bank, like when we were doing deals left and right, we were looking at the holistic relationship of the consumer. So even if that consumer was a, let's say they were the CEO and 50% owner of their company,

they would get massive advantages like if they had their other opportunities that we could capture at the bank, even though it had nothing to do with commercial or corporate lending. So in those circumstances, we were pricing according to the potential value of that customer. And as a result of that, they got decreased fees, decreased interest rates, etc., better structures. I mean, that was a big part of the selling point to credit officers. Let's say a new customer or new client comes into the bank. They own a small business. They're interested in doing their first deal on an eight-unit small apartment building.

they seem sort of like an up-and-comer, but they're not yet highly established. They're getting their feet wet. I'm kind of giving a profile. Yeah, yeah, yeah. Many of the people are listening to this. Yeah. How easy or difficult would it be to look at a given person and think that person is just doing a deal in isolation because they're new versus that person is right at the beginning of something

that could be a lifelong relationship? And what were the distinguishing factors between the two? There's two big words I heard there. So one, of course, was profiling. And then one like getting the idea and thinking about the idea. The biggest thing you learned in banking is that story shifts, context changes, but numbers just don't lie. And any idea of like profiling it in the bank, you always found yourself surprised when you made assumptions of like what someone could have versus what you assume they have. I was almost always, always, always incorrect.

This also ties to there's a lot of financial infidelity that happens in relationships. And so we know that married and cohabitating relationships, there is one person, 43% of the time, committing financial infidelity, which is material stealing, cheating through money. There was an example of an individual that did kind of this thing. They assumed they saw the person was making good money. Their husband, who they married quickly at the time, had told them that their credit struggled so they didn't want to be on the mortgage, but he would Venmo half of the money or Zell half the money for the mortgage because he had good earnings.

So because he had good earning, she had confidence in it, she gets the mortgage, both of them go on the deed. The day they close, literally the day they close, the IRS owns the entire house because of his back taxes. And so this was one of many examples that we saw. This one we wrote about it because we could prove all the moving parts of it to put it in the book. But I think when we assume or when we profile, it leaves everyone up for gray area. And we know gray area and money in relationships or someone walking into the bank, creates a higher risk. And so I think it's always like, especially with the bank, like how, you know, signed PFS, getting tax returns, getting as much accumulated data as you possibly can to understand, like,

what is the true profitability of this customer. And if you're someone that's going into the bank to negotiate, bring your statements, you know, have a PFS ready to go, have your tax returns ready to go. PFS is a personal financial statement. Yeah. Have everything that you can, possibly bring to the table to showcase, I am of value to your bank. How badly do you want me? Especially in a time where banks are clawed at assets and lending's getting a little tougher. Right. Yeah. Yeah. Yeah, lending is getting both more expensive and more difficult to qualify. Right. One thing I often tell the audience or remind the audience is there's a distinction between capital being more expensive to access versus capital being more difficult to access. Yes. One is qualification and the other is cost.

Yes. In this case, both. All the above, which makes for like a top, especially small businesses looking to grow, like you need capital to grow. So it makes it even more challenging. Right. Right. Now, I remember that story of the woman who took out the mortgage in her own name. Yeah. But she put her husband's name on the deed. And boom, that then made it his asset, which the IRS could then repo. They divorced because he had lied to her about his finances. Right? That's extreme financial infidelity. And she and her new husband now have to pay $100,000 to the IRS to cover his back taxes. Unbelievable. And that's the crazy thing about money is like if the contracts are done the way that you think they're being done versus the way they must be done, it doesn't matter.

I don't know if anyone here had seen the Netflix show, the Tinder swindler, but it was an international trending story. show in all countries. And so in this, if you haven't seen it, essentially it's a Netflix documentary of an individual who's a fraudster who manipulates his predators, his victims, to take out credit card debt and then give him the credit card to pay for certain things. It sounds crazy. Anybody would be like, what? But if you watch the show, you'll see how incredible his tactics were. And we interviewed one of the girls who got over $200,000, I believe, of credit card debt in 50-some days approved. And even this circumstance where internationally, this gentleman is known as a fraudster, as a most wanted individual in some areas. And still to

this day, she can't live in her country because she had to clean bankruptcy. And every single one of those banks and creditors are still coming after her. So there is no leeway in this game of financial infidelity. There is no, we feel bad for you. The law of the land are the numbers and the words, and unfortunately we know a lot of people lie and manipulate through those things. So we have to be that much more cautious and that much more diligent. Right. The law of the land are the numbers and the words and spoken promises don't account for anything. Don't account for anything.

That's why interpersonal loans are the number one defaulting loan in the country right now. Loans that are made to friends and that are made in relationships are the number one most likelihood to default. Right. Right. Because those are done on handshake agreements. and handshake agreements in 2024, unfortunately don't exist. Right. Or shouldn't.

Exactly. Exactly. And so that brings us back to the topic of couples because couples often have a lot of handshake agreements between one another when it comes to everything from how they split the rent or mortgage to whose name goes on to what asset to. I know you with your ex-girlfriend, there was an issue about the dog. Yeah. Yeah.

It's crazy about this whole thing with the dog. So we rescued two dogs. from a non-for-profit that does a really, really good work and getting dogs that are in these kill shelters abroad and into the states, and then we were able to rescue them. Now, one of the issues I've learned through this breakup is that there are, oh my God, there are attorneys in this country making their entire careers off dog custody battles. You would never think that. It's crazy, but it's a real thing.

And I think the takeaway for me is that you have to think about, What assets are meaningful to you in the place you reside and ask yourself, do you have a solution in place if things don't work out? A written. Yeah, I was going to say. And do you have a solution? And is that binded by the law? And so I say that because you never think of these unbelievable fur babies that give you so much love as an asset, but according to the state law, they are an asset. From dogs to anything that is material to you, do you have a binding plan that is contendable?

trachially executed. And if you don't, it's something to think about. I also think that these conversations, and just a little update, we've been able to work through everything. So there's no, no quarrels or qualms with the dogs or anything. I want to make sure I'm not leaving people wondering or assuming. So everything is, is good. But we also know that it's hard to have those conversations. It's hard to be like, okay, I bought this $6,000 TV. If things don't work out, who gets it? That's challenging. But I also think having the conversation, shows you your cards, hopefully allows to some form of compromise. And if it's done in a healthy way, I actually think it unifies the relationship. Because as opposed to wondering what if or the gray area

of the unknown, you now have certainty. And when we leave things up to certainty, we know that the cost of it is material, especially if it leads to divorce. Right. And so how do you approach that then is if you have a partner whose position is, we trust each other. Why does it have to be in writing? Yeah, I mean, that's a tough one, right? I think it's a tough one, but I also think we know statistics historically. And I think when we know statistics about anything as individuals and humans, we adjust things, right? Like when we know that, and this is no shade to anybody that's a cigarette smoker, but we now have more information than we did 30 years ago about. the impact of smoking cigarettes habitually, and it's not good. And what's happened, right? We consume

less cigarettes, right? There are so many examples of that as humans that we consume less of or make adjustments. And as a result of that, we're living longer, et cetera. But for some reason, we know divorce rates at 50 percent, and we can see the history, but we all still kind of run from it. And there's also this thing right now called the gray divorce. And people that are over 50 right now are getting divorced at a 2x multiplier from 1990. People over 65 are getting divorced at a 3x multiplier from 1990. So it's happening. It's happening often. And the other thing I'll say is the laws are in place already, right? Like everyone listening, if you're married, you have a pre-nump. The pre-nump is just whatever your state laws are. And I know the Tennessee laws are different than New York and

different than California and Florida, et cetera. So the idea is like, why not customize this stuff for the benefit of both, not one, both individuals where they have assets and just things at stake. Like even whoever's providing for the family, if someone is staying home, think about the career that they're putting on hold. Think about the income potential they're putting on hold. Like those are things that they should be protected by. And so I think they're tough conversations, but we know historically they need to happen. So I mean, personally, I agree with you, but I've seen a lot of people on Twitter. Yeah. I should not go on Twitter. Twitter's talk. That's the toughest one, I think. Be careful on there. I guess X, as they call it now. I've seen a lot of people on X who will argue, oh, that's like you're just planning to break up. You're just planning to fail. Yeah. I mean, my response to that would be like, okay, well, if you do fail, then you're going to go to laws you haven't even looked at. So why not just go look at what's there and say, okay, just in case we know what's there, right? You know the speed limit, so you don't drive over the speed limit. Why not it?

at least look at the laws that currently exist. You're agreeing to a contract. Would you agree to a contract? If you didn't see it, probably not. So why don't you at least look? That's one. And the second thing I would tell them is that historically we know that 50% of relationships don't work out. And what I would put on top of that is we know that from the research and everything that we found is that money arguments are the second leading reason for divorce. And so if you are talking about this stuff. You're not actually setting yourself up for failure. You're not manifesting a negative connotation. You're actually doing the opposite. You're looking at the fact that people that don't talk about money in married and cohabitating relationships are severely impacted by divorce rate,

are impacted by money arguments. And another stat I didn't even put out there is those 73% that said that money arguments create material tension in the relationship. Over half of them that it impacts for intimacy. So we know that having these conversations is positively impacting all areas of our relationship. And so I think avoiding them is not putting off a potential failure.

I think stepping into them is actually creating unity through conversation. Now, you mentioned earlier that when you know statistics, you can make more informed decisions, but I will just pose the counter argument. Yeah. We also know that the majority of

would-be, entrepreneurs, the majority of small businesses fail. Yeah, true. The stat is something to the effect of four out of five small businesses fail. And yet, we all, I mean, I actively encourage my audience, go start a small business. Sure, sure. You do it, despite the fact that four out of five fail, right? So there does have to be a certain level of looking at the stats, we'll use in the context

of starting a small business, and saying, you know what, I know that's what the stats say, but I'm going to be the one out of five that succeeds. Yeah. Yeah, I think my counter to that would be the equivalent of not starting a business because value rate is high is apples to apples compared to not getting married because divorce rate is high. I'm not saying don't get married. I'm saying if you get married, have contracts in place to protect you and your significant

other. Similarly, all five people that you encourage to start their small business, I too would say absolutely start that business, give it a shot. But what I would tell them is if we know four or five fail, contractually make sure you're in a good position with an operating agreement and insurances and protecting yourself before you decide to go in with a partner, before you decide to start the business. So you're creating a protection mechanism should those statistics that we know become a reality. That's a very good answer. Yeah. Yeah. Excellent.

Let's talk about cohabitating couples. Okay. Because oftentimes cohabitating couples, because they're not married, don't have formal agreements in place. I heard you on the Girl's Gotta Eat podcast. And one of the two hosts described an incident in which her boyfriend cheated on her. They lived together, but only her name was on the lease. His wasn't. And so she just locked him out.

It's weird. And I loved her at the rate. I love her. But I was like in that worst circumstance, I'm like, oh, he got hustled there. Yeah, and he was like, I live here and she was like, prove it. Yeah, truly, though, right? And I was like, ooh, that's cold. Yeah.

Oh, wow. Yeah, I know. I was like, oh, damn. I don't want to give my opinion, but I was like, see, this guy should listen to this episode. But that stuff happens all the time. It's nonstop. I even said on that podcast, I put out, you know, I've done a lot of weird things of social media in six years from dating shows to personal finance stuff.

And the number one most replied to still to this day is when I said, shoot me a message or email me a story of you or someone you know that has experienced some type of financial fraud or some type of financial heart like material hardship with their significant other that was the most amount of volume that we got from feedback and insight and storytelling and I think everyone has a story similar to that one and I think unfortunately with finances or most things in life we only learn through other people's mistakes and I just think if you're putting yourself in any position where you are living with someone else, and especially someone else who is a loved one, all of these T's and these eyes have to be crossed.

And I think if we can look at them, it's crossing them, not as a means of like preventative hardship, but more as a means of like, hey, it almost forces my hand to have healthy conversation that we know it's hard to have. And we know that 50% of merit or cohabitating people aren't having. You talk about conversation, but again, this can't simply be spoken word because spoken word is unenforceable. It has to be in writing. Correct. Exactly. But I think it has to, you can't have the conversation. You can't put things in writing until they have the conversation, right? So my, my takeaway, or my biggest piece of advice is start with the conversation and then make sure, you know, the most valuable thing you own is your signature. And also there, if you don't

have the affordability to do so, there are non-for-profits out there that where you can get an attorney to legally review anything for you. Or you can use a, affordable resources. I'm not sponsored by them, but I'll tell you, legal Zoom is a great affordable option. There's just no reason today why you should put yourself in a position with a contract without having a professional oversee it if you don't feel like you're in a position to do that. Period. End of story. Yeah, NOLO. I'm not, I'm not sponsored by them, but NOLO. Yeah. That's another great one. Yeah. We deserve two sponsorships. I know, right? We should call on them. Yeah, exactly. You want to sponsor our show. And we can negotiate with them because we have leverage because

We've saved their money. Exactly. We have a price tag. Exactly. Nice tie back. You mentioned some of the most frequent stories that you get. The biggest responses that you get are stories of financial fraud, people being scammed, people being betrayed.

Yes. You know, so much of fraud, the foundation of it is trust. You know, you trust a might be a loved one. It might be somebody in a business context. our whole society operates on trust. And when that trust is betrayed, that's when fraud and scams emerge. Can you share some other stories you've heard? I could share one.

I just got the other day, actually. Before I share that one, I also want to say that I think we have learned that betrayal and lies and deceit happens. I think we've become accustomed to that. Actually, so much that I had a FBI negotiator on the podcast. Chris Foss. Yes, Chris Foss. And Chris, he says, whenever you want a yes out of someone, right, ask them a question where the answer is no, but you still get the same result.

So like, would you be opposed to getting sushi tonight? Exactly. You know, right? So I think, so with that one, I think we were so trained to say no to things that clearly we know betrayal exists. But I also think when you think about like someone who's being cheated on or if you think that your relationship is in disarray, you think there might be cheating or there's an affair. I don't know about you, but like I know a bunch of people that I could call and talk to and vet and they'll understand it. I think when it comes to financial infidelity, we're kind of handcuffed. I think most people are like, I don't even know where to start.

I don't even know how do I call an attorney? Do I call the police? Do I call my mom? Do I call my dad? Do I say nothing? So I think that's one of the biggest things. But I just got one recently where this girl told me that she was with her fiancee for seven years, seven years and felt something was off with his money habit. and they were on their way to getting engaged.

And she went through some of the accounts and learned that he had over $250,000 of gambling losses. And the only way that she found out was by actually catching him, by going through the numbers and calling him out. And now she's in this predicament where she's like, he was honest with me once I called him out. And he definitely has a problem and acknowledged it. She's like, but I don't know if I can get married to someone who is lying and like pretty much cheating on me through money the whole time and now is taking ownership. And so that was that was a tough one because she's about to say I do and now she found all this out.

Right. So that's that's a big one. Another one is like, you know, people's spending and what are they spending it on? Some people have hidden accounts and they're using those purchases for things that their significant other one to prove of more like aligned with infidelity stuff and we found some statistics out there too that showcase those who commit financial infidelity have a high propensity to commit infidelity and infidelity is another leading reason for divorce so a lot of these things connect and I think the biggest thing with finance and I said this on the girl's got a podcast is like

everyone like hides all the red flags we don't show them so one thing I always like to tell people is like shows you a red flag, like give that person a hug. They've done something that most people don't do. Most people are hiding and lying and deceiving. Financial errors can be fixed and they can be fixed, as you know, so quickly. Like small adjustments could have a huge small adjustments with commitment and discipline could have the biggest impact in such a fast forum. So, yeah. Well, you're saying when somebody shows you a red flag, meaning when they volunteer, Yes. Non-flattering information about themselves.

Yes. For example, if that guy had simply volunteered, like, hey, I need to talk to you, I think I have a problem with gambling. Yes. Had he just volunteered that? The difference there is so immense. It's taking accountability. It's acknowledging its self-awareness and having the vulnerability to talk about it.

And those things can be fixed. So, yeah, that's a perfect example. If someone tells you, like, you know, you start to have these conversations. They have terrible credit or their income's not where they want to be or their annual spend is too high. They haven't saved anything for retirement or they have a huge debt burden. The fact they're willing to talk about these things is so important. Embrace it and know so many solutions can be put in place with super fast results. Should couples entirely co-mingle their finances or should there be a yours, mine, and hours distinction in the accounts?

It's, you know, it's an really another tough one. because everyone's situation is so unique. I have a theory that it should be based on what the earnings look like. And I think if you have two couples that earn within 15 to 20 percent of one another, you should determine how much you want to contribute to a fund. And in that fund, it should be a joint account. And then you guys should contribute equally to that account and then use it for things that you think makes sense. I think if there's a big income disparity, but you're both working, you can do the same thing

and then just pro rata what you're putting in based on the earning level and use that money towards functions or food or bills or whatever. So I'm a huge believer in the joint account. And then I think it's just how you contribute, how you use it, and then figuring out what makes most sense for you. But I think everyone should have individual accounts and a joint account. Why is that? So one of the things I think is that having ownership of your money come in and what you're earning and how your spending is so important, but also having the ability to contribute to the relationship based on how you decide with your partner, it makes sense. I think that's why it's really good

to have individual and joint accounts. And I think at the end of the day, whether in a relationship or not, you have to be held responsible for what you do and how you do it with your money. And that's why I think having individual accounts is great. But I also think going over your net worth either four times a year or bi-annually is a really good practice to do with your significant other. I think the beauty of net worth is that it captures everything, every account, spending, earning, all the things. And I think if you have your own individual accounts and then you have a joint account, so you're taking individual ownership of what you want to do and how you want to do it, how you want to spend your money, but you're still being open and transparent about it,

you can capture that in your net worth with your partner. And ideally, especially as two working individuals, you want that net worth to be increasing, you know, there's going to be material outlying circumstances, but in general, overall, your net worth should be increasing. So getting a barometer for that four times or two times a year to capture all accounts with your significant other also will still provide visibility while operating independently and jointly. If you have both individual and joint accounts, should you view your net worth through a joint lens, or should you have different net worths? Should you have like, you're in each of you have, an individual net worth and then you also have some type of a joint net worth.

I think looking at three numbers is really important. I think looking at each person's individual and then, so that's obviously two, and then the overall units net worth. I think it gives you a good barometer of individually what you're doing is working and how you're growing. And I think it then shows as a couple how you guys are growing is a unit. So I think looking at each individuals and then the overall net worth of the couple is just, it is such a healthy exercise that literally will take one hour. You think about all the time you throw away doing certain things, one hour and you both have complete visibility without blame or shame just for the purpose of being constructive for your overall financial health

and wealth. You can see what's going on, where it's going on, and how it's impacting the family. Think about how many conversations and arguments could be avoided if that transparency was there. Yeah. Well, thank you for spending this time with us. Where can people find you? They'd like to hear more of you. Yeah, thank you so much for having me. This was fun.

My book has Talk Money to Me. You can get it on Amazon, Target, or Barnes & Noble. It's funny because it hit the bestseller list in love and romance and in finance. So there's a little something for everyone there. And then my podcast is called Trading Secrets. We really focus on financial transparency. So people that you look up to follow or learn from, what we get into is where they make money, how much they made, where they lost money so that through those dollar amounts, we could learn lessons from those that we praise and hopefully take some of those takeaways into our life. And then my handle on Instagram, TikTok, Twitter, whatever it X, whatever you call it out, is all Jason underscore Tartik.

So that's a little bit about me and where I'm at. Oh, fantastic. Yes. Well, thank you again for spending this time with us. Thank you for having me. I appreciate it. It was fun. Thank you, Jason. What are three key takeaways that we got from this conversation? Key takeaway number one. Conversations around money can be incredibly emotionally charged. People often feel judged or shamed or embarrassed. And so the first step in having a healthy conversation around money is to create a space where both partners feel comfortable.

In this first key takeaway, Jason shares pointers around precisely how to do that. The biggest thing to say is do not shame, do not blame, do not weaponize, right? We don't want to do that when it comes to money because it's already hard to talk about it. So when people do share things like their debt to income ratio, when they do share things like their net worth or their earnings or their annual spend or their credit score, we first want to go in with, thank you for even sharing that with me, right? Thank you for being vulnerable. Thank you for being honest with me about that. And then to say that your net worth or your credit score, your debt to income ratio or your debt burden,

that's not your self-worth, right? That's just a history of patterns, kind of like your dating history, kind of like what's made you you. It's just a history of patterns of what have happened until this point. And then, of course, and I think with finance, what you can control is faster than almost anything

so that the future is in a better place. That is key takeaway number one. Key takeaway number two, understanding your patterns and understanding the why, the motivation behind some of your past financial behaviors can shed insight into your spending habits because sometimes spending is a form of self-medication. Sometimes spending is not that you want that item itself. It's that you want the feeling that that item gives you. And the reason that you want that feeling that that item gives you is because you feel deficient in obtaining that feeling in other areas of your life.

That doesn't mean you are deficient. It simply means that that is an emotional need that is not being served. So in this second key takeaway, Jason talks about how developing that deeper self-awareness can help you understand your own spending behaviors and it can help you understand your partner's spending behaviors. We know that therapy connects to financial behaviors. We know that when people are in pain, there's a few things that they'll do. One thing they'll do is Medicaid. Medicaid, you think about taking a pill or something. But medicating could be a lot of things.

Medicating could actually be, you just work out and exercise more. It's a form of numbing. But I think a lot of people actually will experience pain in their life or financially, and then they will go to how they channel that, and they'll medicate through numbing, through spending, through self-sabotage, their money, et cetera. So the only people that can truly answer this are the people listening, being self-aware of exactly what they're doing with their money and understanding their behaviors. And so that is the second key takeaway. Finally, key takeaway number three,

when couples are co-mingling their finances, there's always the question of how should this co-mingling take place? To what extent should each person have some degree of independence or autonomy and to what extent are we in it together as a team? In this third and final key takeaway, Jason shares some strategies around how a couple can merge their money. I have a theory that it should be based on what the earnings look like. And I think if you have two couples that earn within 15 to 20 percent of one another, you should determine how much you want to contribute to a fund. And in that fund, it should be a joint account.

And then you guys should contribute equally to that account. and then use it for things that you think makes sense. I think if there's a big income disparity, but you're both working, you can do the same thing and then just pro rata what you're putting in based on the earning level and use that money towards functions or food or bills or whatever. So I'm a huge believer in the joint account, and then I think it's just how you contribute, how you use it, and then figuring out what makes most sense for you. But I think everyone should have individual accounts and a joint account.

having ownership of your money come in and what you're earning and how you're spending is so important, but also having the ability to contribute to the relationship based on how you decide whether your partner makes sense. I think that's why it's really good to have individual and joint accounts. And I think at the end of the day, whether in a relationship or not, you have to be held responsible for what you do and how you do it with your money. And that's why I think having individual accounts is great. Those are three key takeaways from this conversation with Jason Tartick, an MBA banker who rose to fame on The Bachelorette and has now leveraged that fame to draw attention to the intersection between relationships and money and how to navigate that, well, wisely. Thank you so much for tuning in. If you enjoy today's episode, please do three things.

First, share it with a friend or a family member. That's the single most important thing you can do to spread the message of great financial health. I can follow us on YouTube, on Apple Podcasts, on Spotify, in your favorite podcast playing app. Follow us in all of the above. We deeply appreciate it. And in any podcast playing app like Spotify or Apple Podcasts, you can leave us up to a five-star review. Please do so. It enormously helps us as we book other amazing guests.

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