Money For Couples with Ramit Sethi - 168. “I’m going to die with student loans. Why should I count them?”

Episode Date: August 6, 2024

Emi, 32, and Antonio, 29, have been married for six years and have struggled with debt for even longer. Credit cards, personal loans, student loans, refinancing—Emi has kept her head in the sand through it all. Antonio doesn’t trust himself to fix it. Can they break the cycle for their daughter? This episode is brought to you by: Fabric by Gerber Life | Protect your family today with Fabric by Gerber Life. Apply today in just 10 minutes at https://meetfabric.com/ramit. ZocDoc | Download the ZocDoc app for FREE at https://zocdoc.com/ramit then find and book a top-rated doctor today. Netsuite | Get visibility to everything in your business one one place. Sign up and defer payments, with no interest, for six months at https://iwt.com/netsuite. Masterclass | For unlimited access to every class and 15% off an annual membership, go to https://masterclass.com/ramit. DeleteMe | If you want to get your personal information removed from the web, go to https://joindeleteme.com/ramit for 20% off. Links mentioned in this episode • Join Earnable Live Connect with Ramit • Get the Podcast Newsletter and exclusive Q&A about the show • Get Money Coaching with Ramit  • Download the Conscious Spending Plan • Listen to my book—now on Audible • 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.

If you or your partner has fallen for a scam, I want to help, especially if you've recently fallen for an email or text scam, or you've gotten bad financial advice from someone who did not keep their promises, or maybe you just have not even told your partner because you are embarrassed. If this is you, I want to talk. Apply for free coaching with me by being on my podcast. Apply today at IWT.com slash apply. That's IWT.com slash apply. 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 a lot. amazing vacations. That was one of my favorites where I shared how I 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. On our episode today, meet Emmy and Antonio. We keep getting into debt and getting out of debt and then getting back into debt. I was in the dark. My head was in the sand 100% overspending.

Antonio always managed the money. I get anxious because I know what's coming next. We're this much more money in debt this month. While Emmy buried her head in the sand. I've never been involved in our finances. I got a free pass to walk away and not take responsibility. Emmy is a therapist and she can't figure out her relationship with money. It's anxiety-inducing. It's overwhelming.

I don't understand it. They've been in a cycle of racking up debt and paying. it off since they got married six years ago. We both knew we were in a good amount of debt, but the amount was climbing. How much did you raid from this emergency fund to pay off the credit card debt? $77,000. It's unrelenting. There's nowhere else to go. After this, we were selling our house and having to move in with one of our parents. What were you feeling as you were asking these questions? Like the walls were closing in? Like I was going underwater. Can they break the cycle of death? What's going on, Emmy? I just need a second.

Let's dive in with Emmy and Antonio. There was one day we were leaving church, and there was like a fast food restaurant, like, down the road, like, on our way home. So we go, and he's like, oh, no, don't use that card. And I was like, why? And he said, because it's almost maxed out. And then I told him, I was like, that's never happened to us before. I, like, spiraled kind of after that for a while, to be honest. I don't remember any of the questions I asked.

It was all kind of a blur. What were you feeling as you were asking these questions? Like the walls were closing in, like I was going underwater. Have you ever felt that before with money? All the time from forever. So it's a familiar feeling to you. Yeah, it just got more. It's like the feeling was always there, but the intensity got like 10 times worse in like a second.

Okay. Antonio, what do you remember about that conversation? almost shame up to that point i was basically the main person in charge of finances and i mean as you'll see we never really figured out a way to make it work for both of us um i've come up with plans in the past and we failed um and in that conversation it it was just like here we go again like before we were married, I always paid off my credit cards in full. And I made one decision that was the first time that I ever knew I wasn't going to be able to pay off my credit card in full. And that was when we got back from our honeymoon, her ring that I got her was a cheaper ring because I got what I could

afford. It actually tarnished in the ocean. And so when we got back, I was like, you know what? I got to get her a good ring. I got to make sure that she's taking care of. So we went to the store, we got her a good ring, one that I knew would last. And that was the first time I made a purchase that I knew I couldn't pay back that month. How much was the ring? That one was, I think, $3,000. Okay. And how long did it take you to pay that specific charge off? It snowballed. I couldn't even tell you. Okay. after the seal broke the next month you charged more the next month and it just never really got paid off for years and years absolutely what do you make of that we felt bad it never stopped basically like the feeling of bad never stopped we never like got past it but there was i don't think

there has been a day since then that we haven't talked about finances or stressed about finances or prayed or like just like it's been a snowball effect since like we never like moved on what do you talk about day to day about finances oh my god everything yes and the thing is that we use so many different copouts and ones that you'll you'll you wouldn't like to hear i'm sure we'll go over it but we've used a lot of copouts tell me what do you say to yourself really i can only think of the most recent one. Most recent one being, being, hey, she's going to have a full-time job soon. What's yours? I physically could not get a job for a while because I was working. So I was like, I just kept my eyes on when I'm working, we can climb out.

Okay. What's next? It wasn't even just like mental things that we told ourselves. Like other accounts that we had used that were saved for things in order to pay off our credit card debt. Okay, so you rated another account to pay off debt. Okay, what was that account for? I had a savings account coming into the marriage that helped us purchase our home, and it was meant for, like, big purchases slash emergency fund. Like, if it hits the fan, like, this is the money that's there, don't touch it. It was actually in the hands of a financial advisor. Okay.

Yeah, I know. We'll get to that. Not anymore. Which mid-tier local financial advisor was it? UBS. Oh, but it's not my fault. It was given, it was handed to me as like a present. All right.

So how much did you raid from this emergency fund to pay off the credit card debt? $77,000. Whoa. Yeah. I didn't know that until recently. At what point did you go, isn't this like called emergency fund and we're paying off credit card debt at what point did you say that if ever constantly constantly okay so you said it but didn't change your behavior i guess yeah

all right what other copouts did you use so because she was in school we actually went into student loan debt to pay off a lot of stuff too you took the student loans and you paid off credit cards Okay, how much? Yeah. It was almost 40K for student loans for like actual school. Then we put some of it toward the down payment of the house. Then some was for credit cards. There was maybe 10K of that was for credit cards, maybe.

The last one that I can remember was we opened a personal loan through Bestig. How much? That was 30K. And that's the one that we had told ourselves when we hit, the submit button on that one. Hey, this is it. Last chance we get to fix our problems with money. This isn't, there's no more options after this. And then we got ourselves in way more. We'll be back after this short break. 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 Zoc Doc to book your health appointments and you will be done fast. ZocDog 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, ZockDoc is what I would use. Stop putting off those doctors appointments and go to Zocdoc.com slash remit to find and instantly book a doctor you love today. That's Z-O-C-D-C-com. slash Rameet. Zocdoc.com slash Rameith. And I want to thank Zokdoc for sponsoring this message. 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. You think it's a week, two weeks? Nope, it's 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. I want you to get seen faster by an in-network doctor using ZocDoc. Zoc-Doc 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, Zock-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 Rameh. Zok-D-com slash Rameh. And I want to thank Zok-D-D-K-D-Fons for sponsoring this message. Now, back to the show. Let's rewind back to the incident at the fast food place. So what came out of that conversation? What clicked differently during that conversation was just the fact that the credit card was maxed out.

And that was the first time that that happened. That's it? Basically, yeah, we both knew we were in a good amount of debt, but the amount was climbing a lot. Every month when I do the bills, I basically, I get super. introverted, anxious, because I know what's coming next and I know that, hey, I'm going to have to tell you that we're this much more money in debt this month. It was genuinely like I was in the dark, my head was in the sand, absolutely, truly, 100% overspending. You know, I'm always fascinated with the first time that something big happens with money. Like when he went into debt to buy her

a ring and when a couple realizes they are in serious financial trouble, like when they're at the fast food place. Do you see how mundane these examples really are? A lot of us believe that there are these singular moments where the sky's clear, the trumpets play, and everything changes in our finances. Guys, these are extremely rare. When it comes to our money, the best predictor of our future behavior is our past behavior. And usually what I see is a series of mundane day-to-day decisions, which people make because they're easy and they don't understand how to connect today's decision to tomorrow's consequence. Now, this is true for money, for food, and relationships,

and once you see the pattern, once you internalize that what I do today has a profound effect on tomorrow, sometimes if the stakes are high enough, you can start to make a change. Did you realize the severity of the situation when you were taking out a $30,000 personal loan to pay off credit card debt?

I feel like we realize the severity. I also feel like we still didn't have the appropriate tools. we had no tools but we're panicking every day so the last coping the last thing that we haven't talked about yet is that we refinanced our home and that was like the last thing free money right it's all about equity we've learned who told you that you're broke so much who told you the the agent who told you that everyone actually you know what now that you asked that question everyone told us to do that Okay, hold on, hold on, home. Before we go on, tell me what you thought refinancing meant and what it would get you. I had absolutely no idea, like no clue. Like, I literally had never, I didn't know what a, for, I did not know anything.

I feel like I knew exactly what I was getting myself into. It just felt like the best option. And in a way, I still feel like it was because it led us, believe it or not, it led us. to you. How? The broker that we used was very open, very honest. I told him everything, and I'm like, listen, man, this is

why we're doing this. We're doing it for debt. And I told them about our cycle, too. I was very honest to them. And he was like, listen, man, we don't want to see you going to more debt. I hear you. Look this guy up. And he talked about you. Hold on. This is a mortgage broker?

Yes. He recommended me? He did. The guy who says I trust him as far as I can throw him? Wow, I don't even know what to say. This is insane. Anyway, thanks. I appreciate that from the mortgage broker. And we continued to overspend and dug ourselves in a lot. And we've asked ourselves throughout the past couple months.

What are the habits that we have that really get us there? And I think we have some answers, but we'll get to that in your time. Let's talk about it. I love that you're introspective. Tell me what you discovered. What habits? So I think the biggest one for me is just the fact that I'm overly generous when I don't have. I mean, I'm recovering people pleaser.

So there's that. But I like to make other people happy. And sometimes that's spending them and buying something, buying them something that I know they like. Like, I have a list on my phone of things that I hear people say, I like this. And I will write it down. And I will say, this person liked this. I will do everything in my power to make sure you get that thing. Okay.

So one is you're overly generous. Antonio, when was the last time you said no in your relationship? We don't say no We don't say no We've changed our wording And I'm not going to go down That rabbit hole recently But no no

That's not something that we have You don't say no Because if you said no That would make you what Make me a bad guy Because you're not getting what you want Right So let me give

Whoever's around me what they want I'll find a way Right I am a I'm good And making people feel good And making people feel loved It's my superpower, but I recognize that a lot of the time it's up my own expense.

What do you do for a living? You in hospitality? What are you? I'm a firefighter. Firefighter. That's interesting. Why do you laugh, Emmy? He's a first responder.

Like the stories that he saves people, he saves people. Sorry, it's just the irony of what I do for a living and what he does for a living and what he does for a living in this being a blind spot is just, I cannot see past that. It's just hilarious and crazy. Anyway, sorry, go ahead. So you think because he saves people's lives, it's ironic because what?

He doesn't put this label on him, but other people do. Oh, like you're the hero. Like you are someone that can do this. He'll never say that. And he doesn't put himself in that, but maybe like that connected with the people pleasing, maybe had a little bit of connection.

Definitely a lot. That's a good insight. Antonio, a lot of times what we find, you called it the good guy. A lot of times folks will call it the hero. It makes them the hero when they remembered something somebody said seven months ago and then give it to him for a holiday gift. It really is quite amazing. What I'm getting from this is that it's something that I'm probably going to have to be very intentional about.

And the second I stopped being intentional about it is where we end up in a lot of debt. What else? What other habits are there? It's going to sound like a justification, but I don't think it is. Go ahead. Throw it out. We didn't know what fixed costs were. And so we had no idea that just our necessities was well over 100%.

So every month we were in the red and didn't know why and then kept feeling like crap because we thought it was us. And then we look at each other. We're like, is it us? Like I've never been involved in our finances. I've never talked to him about him. I've been very panicky, very nervous. just never involved on purpose.

Why? I would say a severe lack of knowledge, but that's on my part. I don't put that on him. I just had no idea. I put my head in the sand. And I said it's anxiety inducing. It's overwhelming. I don't understand it.

It's not my thing. Why? I think it was just deflecting responsibility. It's all on you. I trust you. You got this. I support you. I'm going to keep putting my head in this.

hand. You know, Emmy was really descriptive on her pre-screen call when she talked about her aversion to anything relating to finances. And that's when I started watching Remit's videos, but I watched. She had to very aggressively convince me to watch. I refused. I was like, I'm not watching anything financial. I refuse. I don't give a shit. I was like, I don't care what we're doing. I don't want to watch anything. So finally, I was like, okay. And like, it was like a thing and all day he's like okay we're gonna watch it today and I'm like deep breathing I'm okay and like I get my notebook out I'm like okay let's watch whatever like I could not would not want to do it fast enough Antonio why did she deflect responsibility to you I mean I don't know

did cost her anything yeah us ending up in debt again and again but that it didn't it didn't cost me anything I mean I got to put the stress on you. I got to put the weight of the world on your shoulders. I'm so sorry. And say, you got this, you can do it, and I could walk away. What did I put on my shoulders in that? Nothing. It's like, I got a free pass to walk away and not take responsibility. Like, that's completely unfair. And I see that. And I'm, I am sorry that it's taken this long to see that. Yeah, I hear you. And I mean, I forgive you. You're doing way better now. But thank you for acknowledging that. No, for sure.

Emmy, how are you doing over there? Sorry. I'm good. I'm just, I'm okay. No problem. I love you. Love you too. What's going on, Emmy? I need a second. We have all the time in the world. What's it making you feel as you come to this realization right now?

I wish I figured that out sooner. Let's take a second to talk about what is happening when people get emotional on this show. It happens all the time. Women cry, men cry. Couples get mad at each other. They roll their eyes. They get sad, frustrated. They tell me it's hopeless.

They also have breakthroughs. They smile. They laugh. They touch each other on the arm. I have these conversations so that I can help couples, which is why I make it really hard to get on the show. You have to fill out an application, you have to go through screening, we give you lots of off-ramps before you ever speak to me. So the couples you see, the couples who come on this show really, really want to be here. And they are courageous.

Can you imagine going on a show where you and your partner talk about every financial detail in your life, where you reveal it to literally millions of people, this is hard and is really uncomfortable. But every couple on this show does it because they want help and they want to do it together, which I think deserves a lot of respect. I've noticed that people cry the most at two topics. First, when we talk about the habits that they are teaching their children,

and two, when they have a huge realization, like Emmy just had. This is one of those rare moments in life where somebody looks back and sees everything through a whole different light. That's emotional. I don't know about you.

I don't know how it shows up in your body, but for the handful of times it's happened to me, only a handful, I get a tingle that runs from my head all the way down my body. And I'm sharing this because you would never think that talking about money

would make people cry. But if you've listened to this podcast, you know that money goes far beyond the numbers on a spreadsheet. And I think Emmy's realization is just a beautiful example of how money can affect your relationship in a very deep way. What was your interest rate before and after?

We had a beautiful interest rate before. 2.2.99. Yeah. Okay? What the fuck? That was the before? Yeah. Yeah.

Let's take a quick pause to support our sponsors. Let's talk about systems. This is the year you can give yourself the gift of sorting out your business systems. Tons of small businesses are held together by duct tape and 15 different platforms and tiers, but it does not have to be this way. You can simplify your business systems, save time, and streamline your workflows in 2026 with NetSuite. NetSuite is the number one AI Cloud ERP. It's trusted by over 43,000.

businesses. It simplifies your business into a single platform. That's your financials, inventory, commerce, HR, and CRM all in one place. Plus, it uses an AI built system to automate your routines, deliver actionable insights, and help you cut costs with confidence. Whether your company earns millions or even hundreds of millions, NetSuite helps you innovate and improve. If I'd had a system like this, back when I was building IWT, it would have changed everything. If your revenues are at least in the seven figures, get our free business guide, demystifying AI, at netsuite.com slash remit.

That's net suite.com slash remit. I spent over 20 years fine-tuning my core message from I Will Teach You to Be Rich, of living your rich life, which is why I was so thrilled when Masterclass reached out and asked me to teach a class. Because I've spent so many years helping people define their rich life. financial wellness class is now available on Masterclass, where I cover how to automate your finances so your money works for you in your sleep, how to break free from financial anxiety, and how to create

a financial system to live your own true rich life. With Masterclass, you learn from the best to become your best. Plans start at just $10 a month and you get unlimited access to over 200 classes taught by the world's best business leaders, writers, chefs, and now me. Plus, there's no risk. Every new membership comes with a 30-day money-back guarantee, so you can try it out before you commit. I've used MasterClass myself. I've paid for it on my own, and I loved it.

And a big part of my rich life is learning from the best. So MasterClass makes perfect sense for me, and I think it will make a lot of sense for you. Right now, our listeners get an additional 15% off any annual membership at Masterclass.com. slash Rameet. That's 15% off at masterclass.com slash remit. Masterclass.com slash remit.

Now, back to Emmy and Antonia. What's the after? Oh, 5.99. What the fuck? Why'd you do that? Wait, now I understand why this mortgage broker loves you. Why did you do that? Well, okay, so we initially ended up buying our house during COVID.

So at the time, it was a pretty decent interest rate. And then afterwards, the 5.99 was what we figured would help us, you know, get out of the 29% that we were paying in credit cards. So you refinanced from 2.99% to like 5.something percent. Right. To pay off all of our debt. You paid off all the debt. So now it's all rolled into 5. percent. How much were you paying off from the credit card debt?

The credit card debt alone ended up being 50, a little over 50K. We paid off credit cards, we paid off our car. And so wiping everything clean and then being able to build our savings and all that, just it seemed like everything weighed out pretty well. So you now have like a 29-year loan at roughly 5.3%. At that point, once you sign the deal, your debt was all paid off, blank slate. Not bad. Not bad. There is an asterisk there. Oh, okay. Go ahead. Tell me. The student loans. Those aren't paid off. How much is that? Yeah. That's 60K. It's kind of interesting, right? You took out that $30,000 personal loan. you said, this is our last chance.

And then a short while later, you refinanced your house to pay it off. So what do you think about the fact that it wasn't really your last chance? Yeah, that was the problem that we weren't able to figure out any other way to crawl ourselves out of. Aren't both of you married contributing to the financial picture? Yes and no. I was working full time up until maybe about three years ago, two years ago, something like that. My master's degree program was about three years. And unfortunately, my internship was unpaid.

So I wasn't contributing financially for about two years. And that I think that's a significant piece to this as well. And now I am. So now I'm in my career. And now I'm working. And now I'm contributing financially. Got it. Did you both go into debt during that time?

Yes. Okay. Had you been in debt before that time period? Yes. Okay. So it wasn't just that unpaid time. No, but it got significantly worse, very much, like much quicker. Like it like sped up times like 100, like during that time.

Okay. Like we did the math and like we know the number of how much we were hemorrhaging each month now. But at that point, we didn't know. Oh, okay. It sounds like you learn to live with being in debt. Am I reading that right? Yeah. Okay, so as a mental health therapist,

you know about tools for coping and stress and overwhelm, a variety of different things, right? Very much. Yeah, what do you think hearing yourself describe, your relationship with money. I get so frustrated because it's that one blank space I have gone through inner child work

and I help other people go through real healing and I'm confident and proud of who I am and what I've gone through and worked through but when it comes to money I do not know I cannot I can't self-analyze

I can't you're sitting on top of my DSM. Like, I can't figure it out of why my relationship with money is what it is. There's a blind spot there. I think that this is something that I'm even just hearing and learning about myself too. Like, it's nice to have the trust in me, but I thought I had the trust of me and I don't even think I did. That's profound. She trusted you with money and now you're realizing you didn't even trust yourself. Yeah, I mean, I, looking back, I mean, our track record speaks for itself. Yeah, I mean, the results showed that for one reason or another, even I was in charge of the finances

and whether it be assertiveness, whether it be my overspending or not making enough, we still ended up in debt again and again and again. Now that is honest. Yeah, I just, I don't think I ever was able to admit that. So why is it that bad? I mean, technically, you all could go the rest of your lives. You did this refinance, da-da-da-da-da. What's the problem?

No, that will not be happening. It's the stress. The stress? Oh, really? I mean, having that loom over you every day knowing that you can't technically really afford anything because you're... Technically, what's that? I mean, how many tens of millions of Americans are in credit card debt? Yeah.

I mean, you all did it for many years. right? Absolutely. You're still here. Still alive, still got a nice Netflix subscription. No, we don't. No, we don't. Wow, okay.

We canceled it. All right. Whoa. We haven't gotten there yet. You destroyed my own punchline. Okay, I'll take the win on that. Good job, you guys. That was good.

Big kudos to Emmy for admitting she has a blind spot. And for saying, our track record speaks for itself, referring to their poor financial situation. This is a great example. of what I mean when I say to live a rich life you have to be honest honest with yourself and honest with the people around you.

Emmy is a therapist and she can't figure out her relationship with money. We've had people who are quote personal finance experts or instructors on this show they can't figure out their money. It doesn't surprise me. Just because you are an expert in one

domain does not necessarily translate to something even adjacent. It would be like asking a bodybuilder to give you tips on Pilates. To an outside observer, they both seem like fitness experts, but in reality, they are totally different skill sets that are also inextricably tied together. The good news is that Emmy and Antonio are here asking for help,

which I totally admire. It's one of the best skills you can possibly have. Listen now as I ask them about their childhood experience with money. My mom was always great with finances, and she was the one who always talked to me about them, and, you know, taught me, hey, this is how you use credit cards, pay them off. You know, squeeze them for what they're worth. Up to the point of us getting married, I followed all that.

Wow. What's your mom do for a living? She worked for a supermarket. Okay. How's she doing financially now? They're doing great. They just remodeled their home. Whoa.

Okay. All right. What do you remember learning about money as a young kid? I learned that money is serious. I believe that money is one of the big reasons my parents are separated, my biological parents. They always argued about money. Like what they say? Honestly, screaming matches.

Really? To the point that I would lock myself in the bathroom. Yeah, I never knew exactly what the issues were, but I knew that they disagreed a lot about money. and I always I always thought that was one of the big reasons that they separated. You remember any phrases they use as a kid about money?

Yeah, excuse my French, every f***te month. That's what they said? That phrase is ingrained in my head. What does that mean? That this keeps coming up. Why is this always an issue? Every fucking month. What lessons do you think you learned about money

looking back to your childhood and your teenage years? Money is serious. It's a big tool. And there are ways to work the system to your benefit. Don't let them work you. Credit cards, for example. Exactly. In your own personal finances with the two of you,

as it relates to credit cards, who got worked? Did the credit card companies or did the two of you get worked? Oh, we got worked. Absolutely. Both of our, I think a cultural aspect is also important. Like his mom and my dad were both came here from other countries and like built themselves up and are doing very well. And they pride themselves on we did this. I want to teach our kids, the kids being us like to do well. So my dad was also a supermarket, worked his way up just like his mom. And I remember one time there was a huge fight and this is also burned into my brain. I must have been me. be like on 12 or 13. And I remember my dad was at the door waiting for my mom. And they had a very toxic relationship. I need to clarify with that.

They're no longer together. They're both doing fantastic. But growing up, not healthy. And my dad told me to go to my room and to not come out. And I don't remember ever coming out. And they had a huge, huge, huge, bad argument because my mom had spent money that my dad I didn't know. I don't know how much it was. I don't know. I don't know anything about it. But that's the only thing I remember about money talk was that fight.

What was your mom's relationship with money? My mom trusts the financial advisor with everything, with all of her self, basically. Like not a good weird way. She just like fully trust, like all her money's with him. And like she fully trust him because, again, it's intimidating. My mom can spend and she doesn't feel guilty. about it and I envy that about her. Was your mom engaged with money? No, not even, not even, no. Until recently, were you engaged with money?

Not even a little bit. You said your mom trusted her financial advisor. Who do you trust? Yes. My husband. Emmy follows her mom's pattern by burying her head in the sand and trusting someone else with money. In her mom's case, a financial advisor who's almost certainly charging

A-U-M plus a bunch of dog-shundies and whole-life insurance. She does the same by simply trusting her husband. Antonio follows the script of his parents' phrase every fucking month, where they always felt behind the same way he feels with Emmy. Think about the power of that phrase every fucking month. Like it's unrelenting, like you can never get ahead because something always comes up. Of course, there are a lot of the law. lots of other details and nuances, but at the core, their stories are remarkably similar

to the examples they saw modeled for them. You've got a double whammy here. Not only have you been in debt for the majority of your marriage, but you've actually felt bad about all the things you were doing. Oh, yeah. I mean, if you're going to spend all this money, you might as well feel good about it. We never did. And I think that's where, like, I'm getting hung up on.

I'm like, oh, if we're like spending frivolously, it's like fun. And it never was ever. And I'm like, damn. We'll be right back. All right. How many of you have a parent or a loved one that clicks on every link they get in their old email inbox? I have a friend that is constantly having to go over to her parents' house, wipe out whatever random pop-up is appearing on her dad's browser because he basically just clicks whatever

comes in his inbox. And the thing is, it's very easy, especially for older people to get targeted and have their data compromised by clicking on the wrong link. Just a single button. That is why I personally use Delete Me. Delete Me is a subscription service that removes your personal data from the internet. We're talking about things like your full name, email, phone number, address, even your parents' names, all found and removed. They've been the leading expert in personal information removal for the last 15 years. They were recently named wirecutter's number one data removal service,

and I personally use and pay for Delete Me. And I love it. And I know you will too. Start this year smarter and safer with DeleteMe. You'll get 20% off all consumer plans when you go to join DeleteMe.com slash Ramit and use promo code Remit at checkout. That's Join DeleteMe.com slash Ramit. Code Remit for 20% off.

Let's get back to the conversation. The two of you just kind of got on this escalator and just started riding it. No one thought to ask, are we on the right escalator? Are we going the right direction? Are we even on the same escalator? Do you understand why until just now you have been avoiding the debt? Do you guys get why that's happening? I have a very negative word that I don't ever like to say in my head.

What? I don't like to say the word stupid because that's self, it's not a good word, but it's just stupid. Okay, so you, yes, so you feel shame, embarrassment, and you want to avoid it. I agree. That's part one. What's the second part? Not sacrificing enough. Yeah, that's true. But what I think is going on here is you have two major feelings about debt, both of you. The first is that shame, guilt, embarrassment. The second one is you don't actually believe you can make a change.

What happens if this pattern doesn't change? I fear what happens to us. I mean, I saw my parents argue about it. We end up having to sell our home, move out, put ourselves in an uncomfortable situation. I mean... How old will your daughter be at that point? 10, 11. What do you think she'll be?

seeing an instability sort of the question what messages will she be learning from her parents about money my parents aren't good of money i mean probably i'm sure there'll be many times that we can't get her something that she wants or we'll get it anyways and then i can't think of if this pattern continues i can't imagine you ever saying no to your daughter no once yeah yeah she'll get whatever she wants you're right yeah yeah there's no way you would ever say no. You're right. What would she learn from that?

That she can get whatever she wants. And maybe she shows no restraint in her buying. Hmm. Yeah. So when she becomes your age, what would she be doing? Getting herself into debt. She'll tell herself that she's not good at it. She'll put her head in the sand.

She'll avoid it. And she'll say, that's for my partner. That's for my dad. That's not for me. and I don't want that for her. Sounds familiar. Of course it does. What's going through your head right now, Antonio?

I feel like there was a little light bulb to switch there. Every single couple who has credit card debt struggles to say no to their children. It's exactly the same thing. And that is because if you can't say no to yourself, how are you going to say no to your kids? Yeah. So it's really up to you to internalize. What are the stakes we're talking about here?

Because it's not just about a vacation you all want to take. It's not that. It's not even about, oh, my gosh, I'm worried about going back into debt, which is a legitimate fear. I understand that. But it's so much bigger. It's what is the culture we want to create in this family? That's bigger than any financial decision.

Speaking of that, let's take a look at your numbers. that's what I want to get into. All right, I'm going to put this up in a second. What was it like to go through your conscious spending plan together? I will speak for the first time. The first time was painful and long. And emotional. Long, like how long?

Eight hours. What, eight hours? We're at 75% when we first started this. Still under 80. When we were first under this, it was, first of this was, We were out like 102%. No, we were like 10, 70%, 108%. Yeah.

We were close to 110%. The fixed cost alone. Because it's always. Oh, the miscellaneous, but it's okay. It's not even here. There's not even on there. Post-tax retirement savings. That sentence would have used to give me a banierism.

Why am I losing my mind every month if we're at 75%. I shouldn't be distressed. Like all month, you and I have been hardcore stressing. Yeah. That's some good shit. We should not be stressing. See, this is the cycle issue. We need to go deep into this.

I'm ready for some insight. Let's go. What's my problem? I'm surprised. Honestly, you've been doing really good with this stuff. I know, but this is stressing me now. I'm surprised. It's okay if it does.

Now let's take a look at their numbers. Assets, 387,000. Investments, 16,700. Savings, $1,500. Debt, $362,000. net worth $43,200. You can get a copy of my free conscious spending plan which will help you calculate all these things for you

at IWT.com slash CSP. Again, it's free, IWT.com slash CSP. So you two collectively make $114,600. Did you know that? We figured that out together, and she was like, no way. And Emmy, why did you say that can't be right? Is it higher than you thought or lower than you thought? It was much higher than I thought.

Ah, even more interesting. So, you know, when you all kept talking about like, one day she's going to get a job and one day we'll make more income and that will solve all our problems. And then you discover you actually make more than you thought. And it did not solve the problems you thought. What does that feel like? at first it was

thinking that it was a simple answer money I personally knew that we were making over that but I remember her and I sitting down doing this and she was talking about like oh you know one of my goals is making over six figures and I'm like personally or as a as a couple and she's like as a couple I'm like we're already doing that and she's like what How much did you think you made before you did the CSP together as a household?

Under 100,000. Like what? 90. Between 80 and 90. Okay, let's say 80. Yeah. So you make $34,000 more than you thought you made. Yeah.

That hasn't solved your financial problems, right? So what do you make of that? That's behavioral. It's more behavioral and more emotional. that I ever gave a credit for. Yeah. It's not about a number. Maybe it's about a number,

but it's definitely more complicated than that. Absolutely. Your fixed costs, after, I'm sure, a lot of changes are 75%. How'd you bring it down from 110 to 75%? Honestly, it seemed like a miracle, but that's the whole point, right? I don't agree with that. So logically, it makes sense, right? We cut a lot of fixed costs down,

but it felt like there was such a blockade there and that's why it took eight hours because we went through every single subscription, every single thing and it was like, oh, I really don't want to get rid of that, but okay. And I guess at the end of the day, for me, not realizing that going, that cutting so many fixed costs down, so many subscriptions really added up to 35%. Okay. All right. What were some of the biggest things you cut?

Phone bill. Shout out MinnMobil. We were subscribed to probably every streaming service you could think of. So we had a Peloton that we were subscribed to, cut that out. That's 5%. Not 35%. Yeah. Maybe I'm missing the big things.

Okay, Emmy? I don't see it as a miracle because a miracle doesn't, I don't think, encapsually the fact that we took like a machete and like set on fire like we like we slashed we slashed every line you could think of other than the house got slashed is the credit card debt finally zero now yes how long has it been zero for two months all right and you're both like really nervous about going back right oh yeah yeah people who pay off debt are extremely petrified about going back they worry more after paying it off than they worried all the years they had it. Did you all use to tell yourself something like, once we get our debt paid off, then,

like, there'll be a rainbow at the end. Did you all say stuff like that? We'll be happy. It'll all be okay. That kind of thing. But not just once we get our debt paid off. Once you get a job, we said that all the time. Once you get a job, that was a daily, a daily phrase. So you got the job. That didn't change the way you felt about money. You paid off the debt. Did that change the way you feel about money? No.

Are you telling me that the way you feel about money is highly uncorrelated with how much you've got in the bank? What a shock. It's crazy. It's crazy. Can I bring something up? And this is going to be very raw. And it's just that the student debt, it doesn't come to mind because I think that this is the first conversation that we're actually counting it.

So true. We, we have talked about it and I haven't necessarily agreed, babe, but we, when we talk about it, your, your verbiage has been that you just don't think it counts. No, you're absolutely right. And you're like, ah, people just have student debt. And so, I'm going to die with it. I wasn't taking the responsibility needed. to say, hey, this is debt.

This debt is bad. Whether debt is debt is debt, whether it's credit card or whatever, we should be being aggressive about it. I'm like, oh, I'm going to die with it. Everyone dies with student loan debt, and I justified my way out of it. And I see that now. And that's, I'm sorry, again.

Like, I don't want to justify my way out of things anymore when it comes to our finances. I appreciate that. Very, very healthy, very mature. conversation right there about money. It's great. Foundational stuff. So $62,000 at a 7% interest rate, let's just assume, and your expected monthly payment you're currently paying is about $198, correct? All right. Okay, well, at the current interest rate, you cannot pay off the debt with that payment amount. So you'll basically be paying this forever. It's actually quite simple. We're looking at the

numbers right now. We're either going to make it work or we're not. They did their CSP based on last year's numbers. Since then, Emmy has gotten a raise, which added an extra $600 to their guilt-free spending. So where do you want to put it? You have approximately $600 of money that we're going to take from guilt-free spending. I'd like to put it toward the debt. Your debt is currently at $198. I'm going to add $600. Now you're paying $798, roughly $800 a month towards debt. That's a good change. You'll pay that debt off in just under nine years.

Wow, that's a big difference, don't you think? Being fully debt-free with no asterisk. That's that moat life that we talked, or when we talked about. about. Yeah. Like, that's, that's patch in a big hole. That does not factor in any salary increases. And of course, you could create a money rule where if and when your salary increases,

you know, 50% of that salary increase goes towards investments. 25% goes towards debt, making that debt paid off even faster. and the remaining amount goes, you know, between savings and guilt-free spending. That would be highly effective. All of, in our, if I'm looking at, if I'm being analytical and our marriage is a pie chart, in all other aspects of our marriage, like we kick ass, I'm proud of us and I'm proud of my husband. Like our communication is typically very solid in every other aspect. It's not being put in finances.

It's not being put in money. It's not being put in this area of our life that I just want to bring the good into the the good dynamics into the finances. Sometimes it can become intoxicating to constantly talk about problems. People with problems love to talk about their problems. And one of the things that I can help you do is to refocus on talking about what is going to happen when you make these positive changes. We're going to take all of the skills and resources and positive perspectives and all

of the genuine skills and positive things that we have in other areas of our life and in our marriage that we know we do well, we're going to apply it to this piece of the pie chart, to this piece of our marriage. I like that a lot. I love that. It's positive. It acknowledges that you're already successful in tons of areas. And it just says, in so many words, we know how to do effective stuff. In all these other parts, let's just transfer those skills over to this burning area here. And just because we haven't done it before doesn't mean that we can't do it. We've done a lot of things in our marriage that we've never done in our life that we, babe, we're doing good.

We can do this. We can do this. I love that. Babe, when we first started, when we got married, we never owned a food scale. That food scale is out four to five times a day. That's true. We put it in a drawer specifically that's easy and convenient to grab. We make it easy for ourselves to do this.

We set systems in place. so that way it's easy for us to make better choices. We can do this. We've done this. Like I'm seeing it. What about the vision for the two of you? You talked about two things you're not yet skilled at. What about for the two of you?

I want us to become, we are going to become. I want us to be dialed in. I want us to just completely be on the same page with everything. money related and I feel like we're so close. Okay. How do you feel saying that? It feels relieving. Having had all of that on just my shoulders basically throughout most of our relationship.

And again, I see it. It's right there. She's the most involved in finances that I've ever seen her. And I'm very proud of her for it because I know it takes a lot. And I just feel like we, and that's why I kept going back to, I think we just need to be honest with ourselves. I feel like there's still gaps. I noticed that you still struggled to ask for what you need. I think that's a skill you need to work on individually.

Because if I were in your position and I had the ability and skills and I'd work through some stuff, probably with somebody third party, I might say something like, you know, until now, it's felt like I was taking on the responsibility of money in this household alone. And it felt really lonely.

And I don't feel that I'm particularly skilled at it. I want us as a team to become really good with money. I want us to be debt-free. I want us to learn how to spend money effectively, I want us to build a huge financial moat that is savings, investments, so that we are safe and we are growing for the future. But in order to do all that, I'm going to need a financial partner in this Emmy.

Yeah. Right? You didn't say that. Yeah. That takes a lot of skill and a lot of introspection to be able to say, here's what I need from you. But notice Emmy's response. Emmy's nodding the whole time.

Emmy, how do you feel if he had said that? He says it about so many other things. He can do it. He can say no about food. He can whip out that food skill. He can share that he wants to go on a family walk if I want to stay home. He can do that. And I know that he can when it comes to finances.

But in all those other aspects, we've done it as a team. And in finances, we haven't. So that's going to be new. Guys, if you want hope and you want peace, the only way is straight through the fire. That means paying off your. your debt first and acknowledging we did this and we can fix it, but only if we go straight through it together. It's so funny.

We've done this about other areas in our life, about taboo subjects, in our, we have done this. I'm like, just, I can't believe this mirror in front of me that I have not seen. Like, I'm like. So many fascinating threads in that last exchange, like the very common invisible script that Student debt doesn't count, I'm just going to die with it. There's a lot of morbid student debt holders who love to talk about how one day they're going to die with it. It happens all the time.

It happened to Frank on my Netflix show. A lot of people repeat this same phrase. Also notice the challenge in asking for what you want. That's something I'm personally working on. And my favorite part, when a couple realizes that they excel in one area and they can actually transfer those same skills to money. Money is not mystical. It's not limited to only a few high priests. It is accessible to everyone. And that's why I do what I do, because I think all of us should have access to save and invest and spend our money on the things that matter to us. There was one other thing I wanted to talk about,

this time with Antonio. And I want to hear him ask for what he wants. I mean, look, savings are a little low, but what can you do? It makes me nervous that you have only 1,500 bucks. That number really theoretically needs to be at least 15,000. I agree with that. But I feel like this is something that we've had deep conversations about his savings because for, I'm so focused on that emergency fund and I'm like, man, I want us to have at least three months. And I think that the that 300 was actually a compromise that we came to of like, okay, 300 savings, 300 emergency fund. And if I could put more, I would put. Can I, can I jump in? Yeah. Okay. So remember what we just did like 10 minutes ago about like being direct and like you calling me out

and holding me accountable and I responded and threw the ball back to you? Can you do that about this? About the compromise? I can, but I feel like we've already had this conversation. But my mindset honestly has changed. And I'm not just saying that to, like, I feel like there has been a mirror with a giant freaking black construction paper on it. And I'm like, get it off. And I have not been able to get it off. And I feel like I'm getting my head above water trying to take the freaking paper off.

So, like, I want to revisit these conversations if that's okay with you. Yeah, absolutely. Right now, if something happened to one or both of you, you have enough. money in your savings to last you for about one week. You see that, right? Mm-hmm. And you have a young daughter. Incredibly risky.

Yeah, absolutely. Say what you want, Antonio. I feel like... I want... Yeah. I want us to have a good savings account. How much? I want it.

Honestly, I wanted it at all. Say that again. Say it slow and... really listen to yourself? I wanted to put all of it in the emergency fund. Okay. Is that a past tense or is that present tense? I mean, I'm, I guess, present.

Say it in a full sentence. Look directly at Emmy. I would like to put the $600 into the emergency fund. Emmy? I hear you saying that you, You want to put $600 and not split it. I'm with you. We're a team.

Let's put $600 into our emergency fund and get to $15K incredibly faster. That's it. All we got to do is ask for what we want and we oftentimes get it with our partner. Is that what you're telling me? Yes. Whoa. Take a win. Good job, you guys.

That was really good. That was really good. Antonio, take a breath. This guy looks like I just ran a marathon. What are you feeling, Antonio? A lot. Like, I don't know. My eyes rolling up a little bit.

I don't know why that's so difficult for me. Yeah. Okay. Yeah. First of all, great job. That was actually awesome to watch you go step by step by step to ask for what you wanted for. You're right. By the way.

You are right. I'm so proud of you. I love this. I know we're over on time, but like, I have to hug him. I don't care how much time this takes. Okay. Okay. You did so good.

I'm so proud. I know that was hard you think of all. You always have to be. That single conversation right there has the potential to completely redefine Antonio's relationship with money. Now, I know we left their fixed costs at 80%. and the fact is all of their easy options are gone. So I told them point blank, your incomes need to come up. They can use my earnable program to learn how to start a side business,

which you yourself can check out at IWT.com slash earnable. I told them that guilt-free spending needs to stay at that $500 mark, no new car, no vacations, no more credit cards, focus on earning a side income to cover tithing or to help pay down debt, and create money rules for unexpected windfalls. Please remember, this is one conversation we have. It takes years to get into a situation like this. Sometimes I see comments from people who are disappointed that I didn't chant some magic incantation

and somehow fix people's financial situation in four hours. That's not how it works. It was a long process to get into this situation. It will be a long process to get out of it. Emmy and Antonio have serious work to do. but they have finally connected on money. They have become a team. They've realized they can do this together.

Even if it takes them nine years to pay off their debt, they can do it side by side. Truthfully, my guess is that they'll do it a lot faster than that. Let's check out Emmy's follow-up. Hi, Ramit, it's Emmy here checking in. So for the follow-ups, what did I learn? Definitely learned that we were lacking in the communication and taking responsibility and that there needs to be actual concrete behavioral

changes that needs to be made and it's time to dip into our toolbox and learning how to adapt other communication skills to finances and it's time to do that no more time left it's the time is now second thing being what surprised me it surprised me that i was looking for hope in a spreadsheet knowing especially how faith is so important to me that hope doesn't come from this spreadsheet comes from the Lord. That was a big thing for me, definitely processing that. The second thing was, man, the elaborate narrative, I am telling myself to avoid. No more it was put in front of my face. I appreciate you bringing that to light. And I was forced to look in that mirror and it's time to change that.

No more avoiding. Okay, changes. We have a lot. So changes being, we're increasing our debt payment being more aggressive at $600 a month. We are increasing emergency fund to $600 a month to get that $15,000 number. We are increasing my Roth every month by $50. We updated the CSP to reflect all of these things so that we have something concrete to look back on. As far as increasing salary, my husband has some opportunities for overtime that he will definitely be trying to utilize and I will be potentially opening up my hours at work. This has the potential to bring in, bring in an extra four to $800 a month. So that's something that we are going to be intentional about. And the last thing is the money rule. I love that you brought that up and I realized we didn't have any. So a money

rule being 50, 40, 10. So this is for any increases or like unexpected income. 50% toward debt. 40% toward emergency fund and then 10% toward gilfree spending so whether that's $100 or $1,000, anything, that's what we're going to go by.

And now, Antonio's follow-up. So I learned a couple things. First was how much I am not good at speaking up and saying no. In this case, specifically when it comes to money and money decisions, I think that we're

surprised me was how much my household dynamics need to change. In terms of, yeah, my marriage and finances, but also even in parenting, what this has shown me is the need to be more unified with my wife and just to have a firm stance and a firm opinion and to say no and to say yes. The money rules. We have money rules now. at least one, and we also are being very aggressive with a student loan, and I'm very happy about that. Lastly, we're adding more toward our emergency fund. Also very happy about that. So thank you to you and your team.

You guys are awesome. Really appreciate you. There's one last thing. I just wanted to share this moment from their screening interview because it personally means a lot to me. And I want to thank Emmy. I want to thank Antonio. and I want to thank every single one of you for watching, listening, and reading my material. Is there anything else that you think is important for him to know?

For me, it's important to tell him that, like, he's really helped me and changed a lot of our dynamics already. And that's not something I ever thought was possible. And so I'm very thankful. And it seems so stupid. It's like, just a podcast, just a YouTube channel. But, like, what he does matters. and it's been very, very impactful. So, you know, even if we don't get pictures,

so he knows that, like, what he does matter is, you know. Thanks for listening to I Will Teach You to Be Rich. I'm Rameet Seity. 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 this specific, tactics for how to build the I Will Teach You to Be Rich system into your personal finances.