Money For Couples with Ramit Sethi - 105. What’s the point of tracking every penny?: Ramit’s 3 Lessons from Ep 104

Episode Date: June 8, 2023

Don’t miss Tuesday’s episode with Stacey and Jesse—where we uncovered severe imbalances in their relationship dynamic. Today, Ramit breaks down three main themes from that conversation, covering their complex budgeting system, covering for a partner’s passing, and spending on health and wellness. This episode is brought to you by: Calm | Go to https://calm.com/ramit for 40% off unlimited access to Calm’s entire library. LMNT | Right now, LMNT is offering 8 single serving packets FREE with any LMNT order. This is a great way to try all 8 flavors. Get yours at https://drinklmnt.com/RAMIT. Nomorobo | To protect yourself and your family from phone scams, go to https://nomorobo.com/ramit for a 14-day free trial. Rocket Money | Stop throwing your money away. Cancel unwanted subscriptions – and manage your expenses the easy way – by going to https://rocketmoney.com/ramit. Links mentioned in this episode • Episode 104. “We’re worth $1.25M, so why is he afraid to get a $15 gym membership?” • Download the Conscious Spending Plan • Get the Podcast Newsletter and exclusive Q&A about the show Connect with Ramit • Get the Podcast Newsletter and exclusive Q&A about the show • Get Money Coaching with Ramit  • Download the Conscious Spending Plan • Get my New York Times best-selling book • Get my no-numbers journal • Other episodes • Instagram • Twitter • YouTube • Submit a question for the newsletter iwt.com/askramit  If you and your partner have a money issue and you want my help, I occasionally select a couple to work with, free of charge. Apply for my help here. Produced by Crate Media.

Let me share some of the coolest ways that my community has recently used money to live a rich life. One member did a month-long honeymoon in Europe after deciding she didn't want a big wedding. Another member bought a VW SUV that was their dream car that they've wanted for years. And another member made a rule that any time she buys a ticket for an event, she always buys a second so that she can bring a friend. These are just a few examples of how my money coaching members have built systems to use their money. Notice that there's no more anxiety, that they have a smooth running system.

They know when their debt's going to be paid off. They can feel comfortable spending on the things they love. They can actually spend less time on their finances while living an amazing life. In my money coaching program, members also get access to live events every month, including topics like money with aging parents and how to create amazing vacations.

That was one of my favorites where I shared how I saw, spend my money on travel, plus Q&A directly from me. If you want to start building your rich life today, join us and get instant access to our back catalog of years of live calls. Check out IWT.com slash money coaching to join now. That's IWT.com slash money coaching to join the program right now. How are you both feeling about today's conversation? I'm feeling hopeful, excited.

We were never really good at talking finances. I feel like I'm getting better. I'm definitely the problem. She wants me to communicate better, but it's become habitual for her to almost gatekeep. This conversation is going to be most helpful for us to continue in the right direction. I'm excited.

Dessie and I talked last night to say, like, you know, are we on the same page before we jump on this call? Like, what are our goals and our expectations? I think I'm just excited. See if you hear something that we can't see or hear our. A couple days ago, we heard episode 104 with Stacey and Jesse, and I want to share a few key lessons from that episode. Recall that Stacey makes a lot more money than her partner, Jesse, and she desperately wants for him to be engaged, but she's also set up a system

where she controls everything financially related in their relationship. I was struck by how complicated of a financial system Stacey has built. She's got 32 categories. They've tracked everything for over 10 years. And I'm just thinking to myself, what's the point of all this? What does it get you? Because their system is actually more complicated than my system. Just guess the average wait time to see a doctor in the United States. I'm not talking about a specialist, just a regular standard family doctor. Do you think it's a week, two weeks? Nope. It's a over 30 days. So a lot of times, whatever symptoms you have are going to be gone or maybe worse by the time you get to that appointment. I don't want you to have to wait weeks to see a doctor.

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Stop putting off those doctors appointments and go to Zocdoch.com slash Rameet to find and instantly book a doctor you love today. That's ZOC, doc, dot com slash Rameet. Zokdoch.com slash Rameet. And I want to thank Zokdoch for sponsoring this message. There's a pretty cool TikTok trend going around right now that I really love. It's called admin nights. Basically, you get your friends together, you get some snacks, maybe some drinks,

and you do all the infrastructure stuff in life that most of us skip over. If you're going to set up an admin night, here's my suggestion for you. Use ZocDoc to book your health appointments and you will be done fast. ZocDoc is a free app and website that helps you find and book high quality in network doctors so you can find someone you love. They have over 150,000 doctors across all 50 states in 200 plus specialties, including mental health, dental, primary care, whatever you need. Just filter for doctors based on insurance, location, ratings, even virtual care

options and Zoc Doc appointments happen fast, usually within 24 to 72 hours. You can look through your options, book an appointment, and you are done. If I needed to find a new doctor today, Zok-D-D-O-C is what I would use. Stop putting off those doctor's appointments and go to Zoc-D-com slash Rameet to find and instantly book a doctor you love today. That's Z-O-C-D-C-com slash Rameet. Zocdoc.com slash remit. And I want to thank Zocdoch for sponsoring this message. So you decided to take control your money. You're on top of it.

How many different Excel spreadsheets and budgets do you have? Tell the truth. One Google spreadsheet, but it probably has 20 hidden tabs over the last 10 years. How did I know that? And how diligent have you been in tracking your spending? Let me guess, extremely. Go ahead. Correct.

We both have used an app that I love for the last 10 years to track every expense. Anytime we swipe our credit card, it goes in. And I train Jesse to do same thing. Jesse, you do that? Yep. I'm not as diligent as her, but yeah, it will track down to the penny, even on cash. And what does that get both of you? It's very satisfying for me to have the data to tell me what we're spending on.

It actually helped us when we were filling in the conscious spending plan. So you track everything. You're tracking like the price of Brussels sprouts over time so you can trend that from 2010. But like how much we spend on groceries per month, you know, clothing, transportation. How many categories do you have? More than we should. How many? Tell me.

Tell me. Hang on. She's going to pull it up right now. This is amazing. Oh my God. Look at that. She's like, finally. It's been 13 years and finally someone asked me a question about my app.

Okay, tell me how many categories. Do you want some categories too as well? Eight high level categories? No, I want all of them. Don't, don't BS me. Oh, wow. She just took like a deep swallows. Probably.

Everybody watch. However long this takes, I'm going to run completely dead air. I will burn literally gigabytes right now, just watching them. Look, he's still counting. This is unbelievable. 32. 32. Wow.

So simple. You ever hear me say that phrase? Fight for simplicity in your finances. You ever heard me? Yeah, she's going, yeah. She goes, yeah, that's a great phrase. I chose not to adopt that. That's great for other people, not for us.

I'm learning. I'm learning. Okay. What kind of emotions you get when you log in and you track stuff and you change the category? What do you get? I feel satisfied or I feel better that I just, played around in the spreadsheet.

Because it feels like work and the work is never done. It feels like work because what is it that you're actually doing? Working to not a lot of outcome or results. Total $3 questions. Tracking a budget for what? Tweaking a spreadsheet for what? I've said it before. I'm going to say it again.

The more successful you get with money, the more you have to fight for simplicity. Fight for it. It's got to be a key priority. It's so easy to get a 401k from that old job and another one over here. A credit card you open up at Express because you literally want to save 10% off of my shirt. Don't ever do that. And all kinds of assorted bullshit in your system.

And suddenly one day you wake up, you don't know what flows where. You don't even know how much money you have because it's all in a million different places. Fight for simplicity. And you know what else? I have to say so many people are obsessed with this idea of. of precision rather than getting the broad strokes right. You know, recently I posted on social media about the conscious spending plan, the four categories, the four numbers you really need to know in your spending.

Fixed cost, savings, investments, and guilt-free spending. I had like 3,000 questions about categories. Ramit, where do car parts go? Remit, what about cavities? I was like, who cares? Seriously, these are minute questions. Use the system, adapted to what you need, and then move over. on. The goal here is not to get everything absolutely precisely right. That's not the point. The point

is that it's simple enough so that you can deeply understand it and move on. Now, there are a couple ways that I account for little details. I add 15% to fixed costs because everybody forgets about stuff. I always am conservative with my numbers. But if you want to put cavities under fixed costs because you get one every year or you want to put it under guilt-free spending because you love candy, it doesn't really matter. Get 85% of the way there and then move on with your life. A simple financial system is one where you track a few key numbers. You have room to account for mistakes, late fees, overspending because your college roommate came in from town, all of that stuff. You build a healthy buffer. You have a couple credit cards, a few bank accounts,

an investment account, and then you get on with your life. You know, I don't have problem talking about death. I really don't. I think sometimes we avoid talking about it as if it's not going to happen. But this is a sure thing. It's going to happen to us. My feeling is we might as well talk about it. You like to worry? Less so than Stacey, but yes, still. What do you get out of it? Out of worrying. Yeah. I worry a lot that if she suddenly is out of the picture for, whatever reason, I am in a lot of trouble. Because if she were hit by a bus, by the way, I love this morbid conversation where we're talking about one person's premature death who just happens to be sitting right in front of

us. We're okay. We're both European. We talk about death a lot. Fantastic. All right. Great. So if she were to get, you know, hit by a bus, you still have $1.2 million.

dollars and your young able-bodied guy, it's not the number that concerns me. It's that everything beneath it, which is you would have no idea how to manage it on a day-to-day basis, no idea how life insurance works, no idea what investments are or how they interact with your savings. None of it. Would you agree? I would agree. You see the issue?

You have no fingerprints on your finances at all. you're merely a passive observer in your financial life. And she doesn't like it. And if she gets hit by a bus tomorrow, you're fucked. Actually, he's not. That is a conversation we've had. What do you mean? He can get a big old life insurance check.

That doesn't mean he's going to know how to use it. That's true. I'm serious. You know that I had the same conversation with my wife, right? It's like, look, I could be the money manager in our relationship, but I'm not going to be, we got to both do it. In case I get hit by a bus, because I need a second set of eyes, and because it's just more fun.

You know, I remember talking to my parents about setting up a will, and I was encouraging them saying, look, we might as well talk about this now. You don't want to leave your family with a bunch of accounts where we don't even have login information. You want to come up with your decisions now. Let's just do it. Get it out on paper.

Be clear about it. There's no problem talking about this stuff. I think a lot of us are afraid to talk about money and death because we are afraid of money. We're also afraid of death. And putting those together is absolutely terrifying for a lot of people. I think a lot of you actually believe that if you have some life insurance policy, you're good. Wrong. Handing over money to a grieving family without the wisdom to go along with it is actually doing a disservice to your living family members.

Talk about money now. Get good at money. Build habits and rituals together with your family. That is how you create a rich life for multiple generations. You know, when I was studying persuasion in college, we studied a lot of health psychology. And health psychology has this concept of adherence. How many people actually take the medication that's prescribed to them?

You would think that if it's a life or death situation, 100% of people take their medication. Wrong. The adherence numbers would shock you. Sometimes they're 30 to 40% of people actually taking their medications. Some of it has to do with cost, convenience, some people forget, some people just don't want to take it.

But when I understood this, I became a lot more compassionate. Because if people aren't even willing to take life or death medication, then we realize how hard it is to stick with a gym routine. And that's why my entire life's work has been focused on simplicity and focusing on the high leverage areas, not 300 categories of budgets. A lot of people I know, including me, are drinking less alcohol these days.

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He was debating to get a gym membership. So he's had some physical ailments in the last couple of years. His physiotherapist recommended a gym or rather a treadmill. We don't want to buy a treadmill to fit in the house. There's a gym here, our house, and near Jesse's business that he can easily go to. It's like 15 bucks a month. And he hemmed and hawed about like whether we could afford it. And I was like, we're not poor anymore.

We can afford that. It made me realize, A, he doesn't. understand that and be that such an insignificant amount of money per month, you're not really going to find a cheaper gym. It's already a discount gym. He felt like he had to figure a way around not spending it instead of just talking to me about the expense. We had like a discussion about it. And I was like, we're not poor anymore. You can get this. And I think it still took him two weeks to actually buy the gym membership. I dragged my feet on a lot of like, random expenses because I'm always trying to save money.

Why? I just have it in my head that, well, I mean, I don't personally make a whole lot. So I feel like the household doesn't initially make a whole lot, which is not really the case. About a week later, I did finally pull the trigger, got the membership. And I've been trying to do as much stepping or walking, sorry, as I can to heal my ankles. Cool. I'm glad you got the membership. Thank you. Would you consider that discussion or series of discussions a success?

Yes. Oh, 100%. But I want Jesse to be like, I'm getting this gym membership. It's $15. This is the decision I'm making and just buy it. What you want to do is not depend on willpower because that fades away. You want to build systems so that by waking up, breathing oxygen and drinking water, you are basically doing the right things. For example, if you don't want to worry about tiny little questions, then use my concept

of a worry-free number. Anything below 20 bucks you don't even think twice about, or 50 or 100 or 5,000 depending on your level of net worth. You want to build systems so that if you claim health is important to you, that you actually pick a number and you say, okay, every year I'm going to spend 3% of my gross income on health or 10%, whatever your number is. And suddenly it's not, should I go to the gym or not, it's, I need to spend $300 a month on health. Where am I going to allocate that? If you are interested in health, by the way, we've got two sponsors I want to draw your

attention to. Methodology is this amazing meal delivery service with Michelin quality ingredients. The food comes to you. It's absolutely beautiful and delicious. The second one is Ness, a credit card where you can be rewarded for spending on your health and wellness. You can get access and special deals to these programs at IWT.com slash sponsors. Thanks for tuning in to this Thursday episode of Lessons Learned. Don't forget to go back and listen to the full episode with Stacey and Jesse on any podcast player or, of course, on YouTube.

I'll see you next week and I will also see you on my podcast newsletter this Saturday where I share material that is never shared publicly at IWT.com slash podcast newsletter. Thanks for listening to I Will Teach You to Be Rich. I'm Rameet Sati. Please follow the show on Apple, Spotify, or wherever you listen to podcasts. If you haven't read I Will Teach You to Be Rich, my book,

pick up a copy. You can get it at any bookstore or any library, and it will show you the specific tactics for how to build the I Will Teach You to Be Rich, system into your personal finances.