Money For Couples with Ramit Sethi - 195. “Her socks have holes but she's too cheap to buy new ones”

Episode Date: February 11, 2025

Matt (34) and Eliza (32) have spent years prioritizing investments, setting themselves up for a secure retirement—but now, they struggle to enjoy spending money. Matt deprives himself when they go out, while Eliza avoids spending altogether. Their extreme frugality is keeping them from living the full life they could, and with their first baby on the way, the pressure is mounting. Can they shift their money mindset, find balance, and start truly living their Rich Life? This episode is brought to you by: goodr | If you’re looking for new sunglasses, goodr is giving Money for Couples listeners free shipping. Go to https://goodr.com/RAMIT and use code RAMIT for free shipping on your first pair of goodr sunglasses.  Masterclass | For unlimited access to every class and 15% off an annual membership, go to https://masterclass.com/ramit. Wildgrain | Get $30 off the first box — PLUS free Croissants in every box at https://wildgrain.com/ramit. Facet | Facet is waiving their $250 enrollment fee for new annual members, and for my audience, Facet is offering $300 into your brokerage account if you invest and maintain $5,000 within your first 90 days. Head to https://facet.com/ramit to learn more about which membership option is best for you. 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 • I’m looking for couples to work with on my podcast in 2025; please apply at iwt.com/apply • Order my new book: Money for Couples Connect with Ramit • 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 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. Yes, yes, yes. Spoiler alert. This is a wealthy couple, you're about to hear from. And I'm going to tell you right up front, you might get frustrated while listening to today's episode. I know that I did. And honestly, at times, I wish that I would have handled things differently. You'll be able to spot these moments very, very easily.

But I think this conversation is important to highlight for a few reasons. First, how you feel about money is highly uncorrelated to the amount in your bank account, meaning many people are you think that when they finally get more money, they're going to feel good about it. That rarely happens. More money alone doesn't change your feelings. Next, whether you want to change the way you behave with money or you want to get in shape or you want to start a business, this is a fascinating look today into what it really takes to make a change. So I'm going to help this couple, but I want to take this opportunity to remind anyone listening that if you are truly struggling with money. For example, if you make $50,000 to $75,000 in your household and you are feeling stuck,

I want to help. I'm not here to judge you. I'm not going to yell at anyone. I'm going to give you my honest thoughts and we'll work through it together. It's really important that I have the opportunity to work with couples from all parts of life. So if you are struggling financially, if you make less than $75,000, please apply at IWT.com slash apply. On today's episode, Why don't you spend money on discretionary things? You guys are both cheap. Meet Matt and Eliza. Spending money doesn't generally bring me joy if it's extraneous.

I myself am afraid to spend money. Matt is 34 years old. Eliza is 32. They've prioritized investments for years, which has put them on a comfortable path towards retirement, but now they struggle to spend money. I'm very much in the dollar saved as a dollar earned category, regardless of how many dollars you already have. Matt deprives himself when they go out to eat.

I did it last week. I wanted a can of soda at the restaurant and I decided not to do it. Eliza would rather spend almost nothing so she can work towards her ultimate goal. I'm constantly thinking, oh, how am I going to get there? If I cut a little bit here and I cut a little bit there, I'm one step closer to that horse one day. All right, so all you need is 8,333 sprints. Per year. Sounds reasonable.

Their penny pinching is causing them to live a smaller life than they have to. And that frustrates Matt. We're missing out on experiences in life and experiences that are going to be harder to come by later because we are too afraid to spend. Part of me puts the blame on me and part of me puts it on Eliza. Now, with their first baby on the way, can they get on the same financial page and change their money mindsets so they can actually enjoy spending money? In my mind, it's like, okay, maybe I could push past my own frugality, but to push past my and hers, like, that's just, that's a, that's a, that's a, that's a money. Listen up Elba. That's a pain in the butt.

Let's meet Matt and Eliza. Before I talk to them, I'm going to open up Matt and Eliza's conscious spending plan, which breaks down their net worth, income, and where they spend. You can download this free conscious spending plan template or CSP at IWT.com slash CSP. Let's take a look. Eliza and Matt, 32 and 34 years old. Let's take a look. Assets, 683,000.

Investments, 536,000. at 32. Very impressive. Savings 21,000, a little bit low relative to the investments, but we'll find out what that's about. Debt 386 for a total net worth of $854,000. What am I doing here? All right, let me guess. Are they going to be complaining we can't spend money on a candy bar? Let's find out. Income is similar to each other. One is earning 6250 a month. The other is earning $7,900 a month. Total income is $170,000 a year combined. It's a very good income. but wow, their investments are even higher than I would have thought based on that. Fixed costs at what?

78%. What the hell? How do you have 170K income? 78% fixed costs and then over half a million dollars in investments in your early 30s. What's going on here? Hold on. Are they overpaying on their mortgage? No.

It's not their mortgage, which is very reasonable. They have generic home maintenance. I like that. Ah, okay, IVF loan payment, $500 a month, okay? Groceries are only $425, okay? Why do they have like 50 lines? What's going on here? I'm literally down to line 29.

You should not be in line 29 or fixed costs. They have flood insurance, homeowners insurance. Why are they breaking all this stuff out? Just use the CSP the way I designed it. All right. They have health insurance, health insurance, health insurance. Care, parentheses, not insurance premiums. Their health care costs $1,000 a month.

Okay, that's where some of it's coming from. Disability insurance. I don't even know what to make up this freaking CSP. What am I doing on this video? Oh, hey, there's a bunch of numbers. I don't know what any of this is. And then child care is $1,500 a month. Okay, it says starting in roughly two months.

Investments are at 15% of net. Pretty aggressive. That's good. That's nice. Savings are at zero. Okay, that explains why they don't have much in savings. Fine. And then everything else is at 7%. And they actually broke it out.

They have betting, $83 a month. Betting, okay? Horses, $150 a month. Is this like some rich white family from the 1880s? Like going to the horse track. We're going to bet. What's happening right now? Vacation, $208 a month.

Family travel. 133, eating out 120, hair and beauty, $10 per month. Can anyone tell me what hair and beauty you're doing for $10 per month? And then clothing is $62.50 per month. I mean, I actually believe these numbers because they're so type A control freak. I'm a little confused on what's going on.

Oh, let's look at their application. We do not know how to grapple with having a healthy savings and investment account, but less ideal cash flow to expense ratio. First of all, if you're using the word ratio in your application, I can guarantee at least one person in this relationship as an optimizer. We struggle with small and large purchases. Well, I struggle reading your CSP.

We would love to understand how much flexibility we have in our spending slash saving ratio and how we should emotionally approach spending since we are probably both naturally geared towards savings. For example, we do not have Netflix, even though we make a combined income of $175,000. All right, let's see what happens in this conversation. We tend to get very lost in the weeds on both big picture decisions

and then also on some smaller decisions. There are a lot of questions that we need help thinking through. Okay. Eliza, can you think of a time in the last? last month or two where you were not on the same financial page with math? We're in the midst of figuring out what we want to do for child care because we're expecting our first child in about a month. So right now we're deciding between, you know, part-time nanny and daycare and the amount of our coverages that we would get with each option.

And the financial implications, if we take like part-time coverage for a nanny, it's only a few thousand more dollars per year than daycare and hopefully we get somebody to help in the house, but it is still a few thousand more dollars and we don't have an amazingly strong cash flow. So that's definitely one item we're discussing. How do you go about making that decision? We discussed things probably add gnauzum. We probably go back and forth, back and forth. And we'll say we don't know what we're going to do.

Three days later, we'll repeat the same conversation. We'll say we'll figure it out later and then two days later we're back in the same place. Do you like that? I think it had a certain comfort, but no, I don't like it. Eliza? No, definitely easier to move on with life. But you also tend to spin around decisions like that? Probably.

How long do you think that you will be discussing the child care option before you make a decision? Until he really needs to be in a child care situation. Okay, so basically until the decision needs to be made. Yeah. So this is our first child. Both of us work from home. we've been told that they sleep a lot, but we are not experienced child caregivers. So if we find that he's sleeping a lot and we can both work from home comfortably,

then we'll let the system keep going, I think. And if we find that he's disrupting our workday a lot, then we will figure out a solution. So figure we're probably about one to three months away from needing to really make that decision. And how long have you been talking about this decision already? At least two or three months, at least? So we're talking about like six months for a decision. And what's the dollar value for this? Daycare could be between 19 and 22 for the year, 1922,000. And the nanny could probably be between 20 and 30. Okay. So let's say it's an $8,000 difference and discussing it for six months. What do you think about that?

$8,000 to me is like a decent amount. Like it shouldn't take six, eight months. That's crazy. To me, the more crazy part is that we're not getting any new. information. It's more like Albert Einstein. So insanity is doing the same thing over and over again. I'm like, not getting anywhere. So what are you getting out of it? I think it makes us feel like hopefully when we do make a decision, it's been the right one. Okay. And does that mean that the longer you spend deciding in your mind, the more correct

of a decision you're making? Not necessarily. He's nodding. And you're saying no. Go ahead. Tell me. Yeah. I mean, I think we're both like we view ourselves as analytical people. I think part of that is like we do research and we learn things and we figure out what's best. And so in our mind, it's like, oh, if I thought about it for so long and talked about it for so long, I'm more likely to come to the right conclusion, which like might be true on some basic level, but we'll right past any practical value here.

I think it does give us confidence in knowing that we've really thought about it and put together both like the qualitative and the quantitative components of a decision. Okay. Well, it's pretty clear Matt and Eliza are not decisive. They're stuck in this cycle of agonizing over small decisions, which adds tons of unnecessary stress to their life. For example, yes, child care is a massive decision. It's worth deliberating over.

But this isn't the only money issue that they struggle with. There's also an issue concerning how much they're comfortable spending on household items. We got married about six years ago. We got a fancy coffee maker off the registry. It broke. And so we're debating what to do next. and Eliza bought a Mr. Coffee, you know, something you might see, you know, in like a Motel 6, for example, to which I said, you know, we have coffee every day and we can do a little better.

And so I went out and got nothing too crazy, but not super cheap either. We're at $100 on an espresso machine to make lattes. That sounds pretty decisive. You saw the thing, you didn't like it, so you went out and bought something else, right? I think he feels frustrated that I would have been completely. completely satisfied with the $20 Mr. Coffee, even though, you know, upping it to a $50 other coffee maker

might have felt more in line with what we could theoretically spend on something we use every day. But I like the value of Mr. Coffee. So is that the primary disagreement between the two of you? Is that Matt, you prefer to spend a little bit more on things. And Eliza, you prefer to be economical or spend less on most things. Would that be a fair characterization? I'm probably very much in the dollar saved as a dollar earned category, regardless of how many

dollars you already have. And I think Matt feels like we have enough dollars sometimes, or maybe we have enough dollars. And if we spend a few extra dollars to get something that we'll enjoy a little bit more, maybe that's worth it. Whereas I look at it and say, know we could put all of that away. Is that fair? Yeah, I think in a generic sense that that is the main issue. I think there are also times when I myself am afraid to spend money and I think I'm too cheap or frugal.

So I don't think it's just on Eliza. I think it's on both of us some of the time and other times I think it's more on her end that I get frustrated. But what's the problem today? Why are we here? My big hobby that I like to do is sports gambling. And we have an agreement that every year I get $1,000 to gamble on sports. If it grows, it grows.

And if I lose it, I lose it. And so we've had that since we got married. And overall, I've done pretty well. And I've about doubled the money that I've had. And so comes football season and I want to take some stuff out of the bank. And Eliza says, whoa, whoa, whoa. You can't do that. you didn't have a job for a few months, which was true. Our cash flow isn't where it needs to be.

Our savings, our high-yield savings aren't where they need to be. And I say, well, what do you mean? Like, A, we have this agreement. B, you know, this is like something that I really enjoy and, like, has a time component. Like, if I don't do it now, then, like, I kind of miss out on what I want to do. And I also look at her and say, it's only a few thousand dollars. We know we have in the bank. it's not even 1% of what we have. It's totally fine. At that point, I just started a job, but we're starting to bring in income. And I said it's very obvious it's going to replenish itself in our bank accounts over the next few months.

And I would say it took a long time of bothering her and pestering her and kind of making compromises and figuring out where to get a few hundred here and a few hundred there to kind of get her to allow me to do some of it. And, you know, I think it was frustrating for her not to recognize the big picture that we're going to be fine. I characterize it as the circumstances change somewhat, and so she didn't think the agreement applied in the same things. And do you see her perspective? I see it. I just think it's short-sighted. She's thinking way too much about our literal cash flow right now. Okay. Eliza, what's your take on that scenario?

We shouldn't have to touch our savings to make it month to month. That's my perspective. And with him not having had a job for a few months, it was getting dangerously close. And I didn't think we needed to be taking money out of savings vehicles to go to gambling. Okay. This is actually quite interesting. I could see both perspectives, right? What would you two do if you were listening to my wife and me and we were in this same scenario

and I like to gamble and same thing. What would you tell us? I would tell you that if gambling is your preset guilt-free spending and it's not going to kill the budget, it's okay. Okay. Eliza? I would have said we're not doing so much guilt-free spending period this last period of time. So why is this so different?

Matt, when you lost your job, Did you all have a discussion about how that was going to affect the family finances? Yeah, we talked about that we were going to cut back in a lot of areas, or certain areas. Okay. Did you? I think so. We basically cut all discretionary spending. Part of, I think, our issue is that we look at what we spend on and we don't see a lot of fat. We don't see lots of extraneous purchases.

So we have trouble figuring out, like, where else to cut? Okay. Why is that? Why don't you spend money on discretionary things? Because we're both cheap. And I don't think we feel like we have a ton of extra cash flow to just go spending extra. Can we go to the cheap thing for a second? Matt, you're cheap? Both of you? Yeah, to different degrees. Yeah. What does that mean? Classic examples. Ever since I was little, I can remember looking at a menu and being like, well, you know, the burger is like 1699. But like the chicken burger is only 1399.

So I'm just going to get that, even though I wasn't even paying. And you still do that today? Yeah, I mean, I did it last week. I wanted a can of soda at the restaurant. I decided not to do it. What do you feel when you make that decision not to get the thing that you want? What do you feel? A little sad.

What else? Sometimes I feel good about it. Like, I'm strong and I now save $3. that could go to something else that I really care more about. For me, it's not the can of soda, but whatever my equivalent is. Right. That's common. The idea that I am strong enough to stand up to the worldly consumer engineering that has been levied against me.

I don't need it. I'm strong, right? Almost feel a little righteous. I did it. I don't need that Coke. Sure, I could have it. I don't need it. And what do you end up doing with the money, Eliza?

You said you could save the money for something you'd rather spend it on. What do you spend it on? Hopefully the AMX savings account. Wow, that's romantic. I think part of it is that the things that I really want that would really bring me the most joy are more expensive than $100. It's not an $100 purchase that I'm interested in. I love riding horses.

But we go from a $3 purchase to like a $25,000 purchase. just really quickly. Yeah. So that would be where, you know, I'm constantly thinking, oh, how am I going to get there? If I cut a little bit here and I cut a little bit there, I'm one step closer to that horse one day.

Okay. Is that true? That you can cut $3 here and there to a horse? Probably it would take a very long time to get there. Okay. You know horse owners? Yeah. Okay.

Do they uniformly cut back on Sprite? I don't know. Okay. What's more common about horse owners? They're high net worth individuals to begin with. Yeah. What do you all think about this? Yeah, I mean, I think that the amount of money, the amount of sprites it would take to save for a horse would be tremendous. Maybe if like one shoe on one horse so far saved up. Did you say a horse cost $25,000? Is that true?

So it's the horse maintenance. That's really the issue. The horse you could get for like somewhere between free and a million dollars, depending on what you're looking. for, but they all cost the same amount to maintain. 25,000 per year. Yeah, roughly. All right, so all you need is 8,333 Sprites per year. Sounds reasonable. Every couple of days, I get a bunch of emails from people with the subject line,

Cheap Person's Story. I think in one of my books years ago, I must have written, Hey, I love cheap people's stories. So if you have one, just email it to me. I don't even remember. doing this. But every couple of days, I get these emails from people sending me the most insane stories about cheap people, which I love. So if you have cheap people stories, send them my way. Just note that I'm going to share them publicly because I fucking love them.

Anyway, the reason I bring this up is I can help a lot of people change a lot of things, but I can't fix cheap. And I am curious with Matt and Eliza to know how they feel about being We'll find out 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.

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That's ZOC, doc, dot com slash remit. Zocdoch.com slash Rameet. And I want to thank Zococ doc for sponsoring this message. Okay, welcome back. Let's keep going. Okay, so Matt, you said you're cheap. Do you like being cheap? No.

When I like pass on the $3 item, I feel like it's more like I have a rule in my head, but I'm not a rule breaker. So like I'm not going to do that. Okay. And then Eliza, are you cheap? Probably. What does it mean to you? By the way, Matt's nodding like a lot.

If I'm cheap, she's definitely. Oh, wow. Okay. Tell me, Eliza. Spending money doesn't generally bring me joy if it's extraneous. What does that mean? extraneous. I'm learning new words today. Like clothing.

Why do we need to spend a lot of money on clothing? We need to look professional and good, and then that's sort of it. Eliza's some socks that have holes, like, the size of like a mouse? Hold on. Can we see these? Eliza, get up the socks. Let's see. No, I can't have to go digging.

He made me throw out a bunch of them already. All right. I do love seeing like an old, big old hole of them. You know, and you're just like, yeah, I still wear it. Okay. So you don't care about clothes too much. Fine. What else is extraneous free?

Well, is it definitely the big example where there's like a sense potentially in society of like keeping up with the Joneses that we just don't care about. But I think that's like the biggest example or like Netflix. Right now, we both enjoy watching TV at the end of the workday and hanging out together. And we've gotten kicked off of the family Netflix plans by Netflix. Okay. But the $8 a month that Netflix cost. we've decided is not in our budget.

And so we've been going without and continuing on with whatever we have access to. If you don't think it's valuable enough, what's the big deal? I think we both enjoy Netflix. If you enjoyed it, then wouldn't you sign up? People often display what they value by what they purchase or what they do. Maybe it's just not that important to you. I would say if it was just me making the decision, we'd probably have Netflix. Okay.

How did you have that discussion about not paying? I think at first, it was like whatever. like we have other streaming services. And then as time went, and we kind of running low on things interesting us on those services, we were in our spending freeze when I didn't have a job. And therefore, I wasn't going to bring it up because I didn't feel comfortable in that scenario.

Obviously, I knew that our cash flow issue was more on my side. So just kind of let it ride. And now we're here today. Okay. And when you got a job, did you have another subsequent conversation about changing your spending, the same way you had had that discussion when you lost your job?

Yeah, not as in depth, but yeah, we did. Okay, what did you decide in that second conversation? We would loosen up a little bit. Like, there's one or two items around the house that we put off purchasing that we've since decided we could purchase. But also, by the time he got a job, I was seven months pregnant, so now we're focused on future child expenses and needing to save for that again. Whereas when he lost his job, I was not even pregnant, so it was not as much of a concern.

Okay. So what happens if like nothing changes? Like you have a high net worth, you're about to have a kid. It sounds like it's going to be fine, honestly. I think we'll feel stressed. I think that this child will inherit probably some money scripts. I think that there's certain things in our life that we think maybe could change, but like don't know how to change and don't know how to approach thinking about changing. One other example is like a second car or trading in our current car because this

year with Matt having not had a job, we qualify for the used EV tax credit. And I've always wanted an EV. And we have until the end of the calendar year to make that decision. But we look at that and go, eh, you know, like $20, $21,000, $18,000 plus having to install a charger. Is that worth it? Like, we don't have the cash flow, but we have the savings. And so we've been, this is another item where we've been circling for months. Like, do we buy this EV or not? I guess it doesn't really answer my question. Like, nothing changes. You're just going to circle the same way you circled about this and that.

And it actually doesn't seem like it's harming you that much. It seems like you actually like the stress. Like, it feels comfortable, as Matt put it. So what's the problem? Yeah, I think that it is comfortable on some levels, especially to Eliza. I think it makes her feel like she is doing what she is supposed to do. Which is?

Making sure she crosses every T and dots every I. And saves every dollar. Right, and saves every dollar. Okay. Yeah, and we'll probably go in a lot of circles and have a lot of similar conversations and probably at times get a little more frustrated than others. And probably, honestly, on some level, just not enjoy ourselves. Just be one of those people who can never get over, you know, buying the soda or can never get over getting the Netflix, even if they understand that.

Why are you talking in third person? You yourself don't order the soda or the hamburger. I don't understand. I guess part of me puts the blame on me and part of me puts it on Eliza. In my mind, it's like, okay, maybe I could push past my own frugality, but to push past mine and hers, like, that's just an uphill battle. That's a pain in the butt. Do you notice that when they talk about saving money on small things,

like foregoing Netflix for eight bucks a month or having water with lunch instead of soda, do you notice how they take a lot of pride in their frugality? it almost seems like they came on this podcast to brag about it or to get my approval and a high five for their frugal choices, which I'm not going to do. I think being frugal can be beneficial, but I think that often people who are cheap and they have admitted they are cheap,

they take pride in living a smaller life than they have to. I don't find that impressive. If anything, I find it depressing and uncreative. And this is a red, flag for me because it tells me that they've gotten comfortable living this way. They actually enjoy it and take pride in it. But if that were really true, why would they be here? The real question is, do they want to change? Let's find out. Listening to the two of you, I am looking for a reason that the two of you would want to change. I'm not sure I hear it.

I'm open to it. Maybe I'm missing something. But both of you take a sort of play or comfort in not spending money. It's become part of your identity. I can't change that. If you want to, I could help you, but it's not really clear what you're looking for from me, at least to me. The two of you have a lot of money.

You have these questions about cash flow, but really that's not the real question here. It's not that. You know that because you know how to read the numbers. So what is it that you really want? I mean, permission to spend money sounds so simplistic, but maybe it's like help understanding our money psychology and how we could get over our frugality. You'll never get over it.

I'll give you an example. What's the type of food you like to eat? Pizza. Okay, me too. What if I told you you need to get over liking pizza? What would you say to that? Well, that's impossible. Yeah, you legitimately believe that.

Not only would you not get over it, it's part of you. you actually don't want to get over it. You like it. So why would I tell you that you can get over frugality? It's part of you. You actually like it. How am I going to come and tell you time to get over the very thing that makes you who you are and you actually like it? Can't do it. Well, to go with the pizza analogy, if somebody likes pizza and they eat it every day, my guess as a dietitian would be like, it's great that you like pizza. We probably shouldn't have it every day. Okay, and then what would they say? They would say, okay, how do we moderate you so that you can have what you enjoy, but still keep your body in shape? How would they do that with food?

Maybe it's at a plan. You could have pizza every Tuesday. Great. And what would you be eating the other days? Salads and vegetables. Great. Veggies, bread, whatever, lots of other stuff, right? I can't make you get over a taste that you love.

I can certainly introduce you to a new way of thinking, but I can't make you get over something that is who you are and what you like. So you tell me what would it look like if you were to add a new taste to your palate? What would it look like, Eliza? Maybe being more comfortable going out to like dinners. Our Sunday afternoons have become, Matt's he said, he's a very big football person. So we got to watch some football. But then after some football time, we'll go out for ice cream and call it a day and come back.

But maybe we could elevate that to a dinner instead of just an ice cream. Could be. Did that what the two of you would want to do? Well, I think that there are times when I feel like we pass up doing things like going to concerts, going to sporting events. And I think that right now we're missing out on experiences in life and experiences that are going to be harder to come by later because we are too afraid to spend. What do you tell yourself when you pass those experiences by?

I can't afford that right now. Do you believe that? Sometimes depends on how much it was. And what about the other times? Maybe that particular experience doesn't mean enough to me. Like, for example, I think Wicked was in town. And Matt's always wanted to see Wicked. But tickets were like $100 each.

And that felt like a steep price to pay. So we didn't do it. Okay. So what? He still wants to see Wicked. What's going on right now? You guys are adults. You earn a lot of money.

You have a lot of money and savings. Like, what is this? Is it that you want me to come here and say, like, you can spend money? Because truthfully, that's not going to change a single thing for you. It's not. I guess we want you to work your magic because I've heard you do it with other people. I can't change you. I'm not even sure what you really are looking for.

I'm not sure you know what you're looking for. Here's what I suspect. I suspect that the two of you, your identity is forged in not spending money. I suspect it's from your families. I think that it's become comfortable and it's become part of your identity to not spend money. I think that you fear if you spent a little bit more money, who would you be? You would trip and fall and suddenly be spending $500 a day eating at the fanciest places. You wouldn't be able to go back.

Look at the smiles on your faces. And I think that you have a tiny glimmer of are we missing out on things? But that glimmer is quickly covered up by, let's not think about that because we don't have enough money, whether it be net worth, cash flow, somebody lost their job, how can we spend this much? It's one thing after another. And truthfully, you'll probably just persist in moving the goalpost for the rest of your life. How does that strike you? Accurate?

Pretty sad? Yeah. Limiting, I would say. I think so. You know how much you're going to have if you just leave your investments growing, right? About $4.5 million without adding another dollar. Which you will. What happens if you're going to have?

you do add another dollar the way you currently invest. How much will you have? About eight. What are you going to do with $8 million? Hopefully buy a horse. You need $8 million to buy a horse? Why don't you go on a pony ride? Not quite.

It costs like $100. Oh, beautiful pony. I guess adults ride horses. Nice horse ride. Bye. What about that? That wouldn't feel as satisfying. But you're right that I don't need $8 million to do that.

That's also you don't need 40 years to wait to enjoy the things you love, right? I hope. Who needs 40 years? Yeah, it's a long time to wait to get your horse. Also, is a horse the only thing that would be like a rich life? Surely there's got to be more than that. We purchased what we think of as like a very adequate house for where we are right now with a nice plot of land.

And the idea of being that like right now it's meeting our needs, but maybe one day we'd really like to expand onto the house because there's is more that we could see doing with our home. And that would be another thing that we would both like to feel comfortable doing and get to one day well before 40 years. That sounds cool. Are you on track to do that? I mean, we could take all the money out of our investment account and do it very easily,

but that sounds like a stupid idea. Yeah, I don't think I would do that. But in general, are you on track to at some point make an addition to your house? Is hard to say? Maybe yes, but not in the time frame. that we may want? Maybe you guys need to save more money. We think so.

We're sorry, I think so. Maybe you should stop eating out ice cream. Maybe you should cancel all the other streaming services too. Do you see how by setting these two goals, you have now created an umbrella under which you can justify cutting back on everything. In fact, it actually makes you mission driven. Like, we don't need that pizza. We have a mission.

Do you see that? You've almost perverted the way people think about. living a rich life. You're now effectively hoarding money for this goal, which you don't even know when. It's not really clear what. It's like maybe we should expand our house, but we don't know, but it's going to cost a lot of money. So therefore, we need to save every last penny. Do you see that? Yeah, we know we do that. Okay. That's good. Self-perception, realizing what's happening is actually a big part of it. The question is, do you want to change? We do want to change. And I think we, like, just don't even know how. Sure, you do.

I have an idea. We can send more money now for things you want and worry less about what's going to happen in 30 years. What do you think, Eliza? He's right, but like the cash flow situation feels scary. It doesn't feel like we could both save and spend a little bit more on things that we enjoy in the moment. First of all, anyone who uses the word cash flow, it's usually a red flag. Okay? Two kinds of categories of people use the word cash flow. One is real estate fraudsters. And the second is people who over, over. complicate their finances. Now, I'm glad you use cash flow. It's a technical term, whatever, but I can tell by looking at your CSP, there's a lot of fingerprints of the way the two of you think about money. As you heard me rant at the beginning of this episode, Matt and Eliza really took a turn when they filled out their conscious spending plan. They added a ton of extra lines, which you can probably tell by now, drives me insane. Guys, the conscious spending plan is designed to be simple.

When you start adding 5,000 lines to it to articulate how much you spent on pernips last month, you're actually destroying the entire point of it. The point of the CSP is to structurally focus you on the key numbers, not to focus on these tiny, minute parts of your financial life that actually make no material difference. So basically stop messing with my format. If you're going to use my stuff, use it. Otherwise, go get a budget from somewhere else that's not going to work. I'll see you back in six months when you decide to make a real change.

change. Okay, okay. Calm down. I'm here to help people. All right. What's really happening here is a clue about their money dynamic. It says a lot about the way they view money, the way they feel about money. The idea that we need to get every single line item out on paper really illustrates playing small. You see, it's very difficult to think about key numbers, 40-year investment strategy, guilt-free spending when you are tracking tiny minute expenses. That is why I designed the CSP the way I did. And that is why I encourage you to live your rich life while saving and invested. We're going to dig into the CSP after this break. 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

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Masterclass.com slash Rameet. All right, let's get back to our conversation with Matt and Eliza. How do you feel when you look at your CSP? I feel like it reflects where we are right now in life and that we probably need to earn more money. No. When I look at your CSP, I feel overwhelmed. There's no clear focus.

There's so many expenses. It's not really clear to me what's going on. The point of the CSP is that at a glance, you can instantly tell what the key drivers are. And it's not clear to me on this. What I can see is that health care is expensive, but healthcare is what it is. If you tell me you can't change it, I believe you.

I see that child care is expensive. It will be starting in two months. I see that you're investing quite aggressively post-tax. Are you doing some pre-tax as well? No, neither one of us have the option. Okay. So you're putting away about $1,100. I see that you have whole life insurance for $5.83. I was a little alarmed at that. I see zero savings, which surprises me, considering you only have two months of savings, two and a half months. That surprised me. And then I see that your guilt-free spending is quite low. Why do you have no savings? We had savings and then when we purchased this house about two-ish years ago, at the same time we started IBF and the house needed a new roof, which was about $30,000. IBF is about $50,000. We were able to get an interest-free loan

to cover a portion of IVF, but to cover the drugs, which ended up being recurring expense, that are in the several thousand dollar range just for people who don't know. It's a lot. And so the combination of the roof and IBF drained our savings. Gotcha. Okay, got it. That helps me understand. Before we move on, I just want to acknowledge how difficult their IVF journey has been. And for any couple listening who has had any sort of fertility challenges, that is emotionally draining, financially draining, and very few people talk about that. So I love that we can start to shine a light on these topics that are hidden behind closed doors. We can start to reduce the stigma around fertility treatment and mental health. This is really one of the big reasons that I

started this podcast. So I appreciate Matt and Eliza for sharing. And from a financial perspective, hearing that Matt and Eliza went through their savings for IVF helps me get a clear picture of why their health care costs were so high. So I'm doubly glad why they shared that with me. I still have questions now, why they are prioritizing investments over savings. Let me ask Matt what he has to say about their current savings strategy. My viewpoint a little bit on the savings thing is that it's very easy to move money in and out of like a Charles Schwab account. So to me, if I think the Charles Swab account is going to benefit me more than a savings account, a high yield savings or whatever bank account, I'd just put it in and then I can take it out when I need.

I don't think like that, and I'll tell you why. It's sloppy because what you're doing is you're basically co-mingling different funds for different things. And not only are you co-mingling funds, you're co-mingling different types of assets. Ash is for savings. Most of the time you don't need savings, like especially an emergency fund, but when you need it, you need it right now. And often the times you need it right now are when there's a recession. So you lose your job, the market's down, you're in double trouble. This is why. what we want to do with money is we just want to create some simple rules and never violate the process. It's like really simple black or white, right? You need more than two months of savings, especially if you're going to have kids, which you are. So, okay, I understand why. You work your way up, but investments are separate. Those are long term. That's how I think about it. And I think it's a pretty good guideline. Why are you paying $583 a month for whole life insurance? I've had it since I was 18. I look at it as another tax advantage savings vehicle. Okay, that's not a good idea.

Do you ever look at the fees of that? No. How can you be worrying about $3 expenses and not look at the fees on this larded up whole life insurance policy? Like you're paying thousands. I think that when I signed up for it, I learned about the growth potential over the years

and the tax savings and the dividend and so I got it. Yeah, but okay. Maybe when you were 18, you didn't know that much, but you're pretty smart now. But now I feel like if I stopped paying the premiums, I'm going to lose what I put in. Some cost fallacy. You hear that? There.

Yes. And you're going to pay $5.83 a month for how long? Ever. You know what I think about Whole Life Insurance policies, right? It wasn't in the book that I got from the library, but I've heard you talk about it on the show before. They're like one of the worst products out there. Your insurance salesman made a ton of money off you. You've been paying tons of money for like 20 years.

years. And if you just simply calculate how much you would have made, if you just put in an S&P fund or a target date fund, it would be like tens of thousands of dollars more, right? Again, I'm not here to beat anybody up for one-off decisions. Things happen. You make decisions. Okay. What I'm trying to help you understand is part of developing that new taste is starting to focus on what's important and what's not. A $5 Coke, not going to be material to you. Fixing your whole life insurance policy worth tens of thousands of dollars to you. Maybe more over the course of your life. So that's important to know. I think right now you probably treat every expense roughly the same, whether it's $3 or $30,000. Would that be fair?

Yes and no. When we went out to dinner and he decided not to get a Coke, I decided to upgrade my soup from a cup to a bowl. Wow. But like we're stuck on this EV decision. No traction there. Do you want to make the decision right now? Yeah. Okay, go ahead. The EV would end up costing to purchase roughly $20,000 to $21,000. We then have to install a charger, which is somewhere between $600 and $3,000, depending on if we change our electric panel at the same time. And then the six-month insurance rate on an EV is about $1,700. So that seems like a lot of cash coming out of our pocket A up front.

and then be on an ongoing basis. And like we haven't been saving as much as we should over the past year. So maybe we don't deserve this now, even though we'll benefit from the $4,000 tax credit, which we can't use any other year. If you said that we don't necessarily need the second car now, there are certain expenses, insurance, and whatnot, fine. I think that there are other places we should be looking to open up.

I don't feel the need for it right now. But I don't want this to be just be another thing that we say we don't need it and then just keep on saying we don't need things, I guess. Does anybody feel like they made a decision? No. Oh, I thought we did. Do you see how you two don't actually make decisions? Yes.

So make it. Maybe right now we should be focusing on building up towards the savings goals and one of the savings goals down the line. Notice that you're still not making a decision you've already pivoted to something in the future. Make the decision. Matt, I think now might not be the time to get the EV. You agree? Yeah. I think that's totally fine right now.

Done. Take a round of applause. That's how you make a decision. What changed right there? Just say it and move on. Yeah. It's easy when you understand the dynamics. The dynamics of the two of you, the way you talk, is what?

Talking around. Yep. Talking around it. What else? I don't think either one of us wants to push the other. And so we feel like we're being respectful by not telling the other one what to do. you're all about to have a baby. Like having a conversation where you clearly can't afford an EV anyway.

It's so obvious on the numbers that if you can't have this type of discussion, how are you going to have discussions about who's picking up the baby and all that kind of stuff, right? This is like training. That's the way to look at it. Okay, so you are dancing around each other. You don't want to be definitive because it feels like you're hurting the other's feelings or being too specific. No one actually says what they think directly. I think this.

And then no one asked the other person. It's a lot of statements. There's no ball tossing. I often say toss the ball. Toss the ball back. What do you think? I'm not sure. What do you think?

Here's how I think about it, but I could be wrong. What's your opinion? That's tossing the ball back and forth, right? And then finally, one thing you both do to avoid making a decision is you simply pivot to talking about some other financial thing you need to do. It's really depressing because it's never fun, right? It's always like, all right, well, we need to save for this and that.

and it's just never fun. So not only did you not make a decision here, you're now talking about a depressing thing like 10 years in the future. What do you guys think? There's a lot of accuracy there. Yeah, the talking around, I think I knew, I guess it's just like the lack of interest in confrontation,

which I think for me is more natural than Eliza. You avoid confrontation? Yeah, like always, yeah. Do you guys see a couple's therapist? In the context of fertility, we did. Okay, that's good. Would you ever see one? going forward?

Honestly, I don't think it's so necessary. Okay. Eliza? I don't think it's so necessary. Of course, it's your choice and stuff like that, but considering there's a baby coming, considering a lot of stuff is going to change, sometimes the best thing you do is get ahead of it, right? And it's like, hey, we're coming in here

because we know life is about to change in many ways we can't even predict. We also know that we have these little inklings that maybe we're not communicating effectively, and we sure would love. to get some tools to communicate, because soon is going to be a lot of stuff about childcare and waking up at night,

whatever it may be, something to consider. And remember how you're all talking about wanting to spend money more effectively? What could be more important than spending it on the two of you? That's fair. See, for me, when I look at money, I don't simply look at how much it adds up to in a savings account. I know my numbers.

I know compounding. Yes, I know all that stuff. but I look at it and I go, that's a night nurse. That's therapy so that the two of us can be really effective. That is a date night every two weeks, every week, every month. That's what I look at it as. And I start to say like, what's my rich life, vivid, specific details, and then how is my money going to help me get there?

Some of it I can do today. Ice cream cone, I can do today. I don't need to think twice. Orce, okay, I can't do it today. but I want to know what it's going to take in order to get there. And though it may take many years to get a horse, certainly at the very least I can go rent a horse or I can go work at a stable, whatever,

because I'm not going to wait 40 years to have this thing. I'm going to start to touch it today, even though it may not be the full vision until tomorrow. We'll get back to Matt and Eliza's Rich Life Vision after this quick pause to hear from our sponsors. Here's some of the most creative I will teach you to be rich businesses that my students have created. Nate turned his love of chess into a chess coaching and training business and started a legal strategy business for online entrepreneurs and creatives.

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dot com slash remit. Let's get back to the conversation now. When I'm not pregnant, I ride pretty regularly, but some of that really resonates. Maybe we need to figure out how to work in more concerts

into our life or shows or whatever it is or upgrade a little bit on our travel because we both enjoy that without getting bogged down by the 10, 20 years from now question. Yeah, I think what resonated with me from that is you're presenting money as, how do I utilize it to do things that make me happy? We don't look at money like that.

We look at money as like, what do I need to spend in order to get what I want? It's like, it's not so different, but you're using it in positive. How do I use this to be happy? And we're like, how do I use this to get by? It's kind of the difference. It's almost like the difference between a subsistence farmer and somebody who has money, very much like you two. But the difference is that you treat your money like a subsistence farmer.

Like, what do I need? And that's it. And the thing is you have half a million dollars. And you make $170,000 a year. You are far from subsistence. Yet the way you think about money is equivalent to somebody making $40,000 a year. Yeah, I would say that. That's accurate. When we got married, Eliza was in school. She got a stipend. And I had a much lower paying job. We probably made about half of what we did now, maybe even less. And I don't think we've changed anything. Some of our fixed costs have gone up, but our mindset hasn't changed.

But the thing is, you don't see it as a problem. I think I do see it as a problem. Yeah, I think there are things I would like to do. Like? More travel, more experiences. Like, we should have seen wicked. Like, I want to be able to also. I want to be able to go to Super Bowl one day. I know that's going to cost $10,000. We probably need a housekeeper. A housekeeper would probably alleviate the main thing that we fight about, which is my lack of loneliness. For me, experiences, and for Eliza,

I would say having somebody to help around the house and then putting money and savings for building out our house would probably the things that make us happy. So what are you going to do for the next two years? New baby, new things. to do as it relates to money? I think that we probably realize we need help in the house in some fashion to cope with us both working full time and having a child. Otherwise, we will definitely need the therapist then. So that's probably one thing. And then the other thing is we

probably need a fine time to make sure that we maintain our relationship, even with having a child and time meaning experiences, whether that's going out to dinner or traveling. Do you think it's surprising to talk about that when even when you had no kids, you struggled to maintain the relationship with traveling experiences? I don't think we've struggled. We've taken a lot of trips. We're very into the credit card points and we'll utilize those points to get like airfare or hotels. But we definitely don't do things locally.

Okay. We'll do things when we're traveling. If I look at this and I think to myself, here I am a couple who has 500, $136,000 invested, $170k annual household income, and a baby a couple months away, the things I think about are, I'm not going to wait to get childcare. We're going to get it. Like, let's start looking right now. Let's start interviewing right now before things get busy. Because the day that baby comes home, I want child care here. Like, why would you not get ahead of the game? Why wait until your back is against the wall? We're hoping that those who talk about,

hold us that we can have the baby around and need minimal care, minimal help, we'll be right. And therefore, we know when you need help or we're hoping that we'll be able to just pay for less help. That's the truth. But do you see how that is the sort of approach that you take with all of your money? We hope we can get it cheaper. A cheaper hamburger, a cheaper coffee machine, cheaper childcare. I can't help you fix that because you don't actually want to fix it. I feel like I do, but I get where you're skepticism comes from. If you did, I would see evidence of it. I don't hear any real stakes here.

It sounds like you slightly differ on money, but not really. Both of you call yourself cheap. So if both of you are cheap, that's a self-reinforcing cycle. It's like tying a knot and pulling it tighter. That's who you are. At least that is who you have defined each of yourselves to be, plus the relationship together. I don't hear anybody expressing any real frustration about, oh, like, I'm sick of this.

I want more for us. I want more for our kid. It's like minor inconveniences. And in order to change, you'd have to change a lot. You'd have to change who you are from the inside out. And that's really hard. It's much easier to go back to maintaining a spreadsheet with 50 different cells and then tell yourself, we are doing this because one day we want a horse and a house.

I just want to cut in right here because this is a moment that I would love to go back and redo. I'm not loving the way I'm showing up in this conversation. I got frustrated because it seemed to me that no matter what we talked about, we were spinning in circles and they weren't really willing to make a change.

So at a certain point, I just mentally switched off and said, this is not going to actually change, so I'm not going to really pry that hard. That sucks. That sucks. for Matt and Eliza, who put a lot of work into coming here. It sucks for me because I'm just coasting on autopilot here.

I'm not showing up in the best way, and they're not getting the best version of me, which is what they expected. If I could go back in time, instead of being such a naysayer, I would have been more encouraging. I would have gotten more curious about what drives their need to be so frugal,

because if I actually understood that, then it would have been clearer what to do next. I would tell Matt and Eliza that, yeah, change is incredibly hard, but with the right tools and mindset, they can do it. I try to do that as much as I can on these podcast episodes, but I didn't live up to that with them. And I got really frustrated, and I wish, looking back, that I could have changed that. I wish I would have taken a five-minute break and said, look, I'm not feeling this energy.

Do you all want to change? Do you want to make a difference today? And really recalibrated it. That's what I wish I would have done. Now, let's hear from Eliza on how she wishes she felt about money. We could probably be more relaxed now, and I think that that's the impetus for this conversation. Okay, so be relaxed.

Tell me what it looks like. Getting a massage once a month. Okay. Having a housekeeper so that we have those minute details taken care of. it means being able to pick a restaurant and just go to dinner. Those are probably like the daily slash monthly items. And then like having a vision and saying, you know, when we accumulate X number of dollars,

like we're going to just build out on our house. We're going to do it. And we're not going to wait until we're, you know, have $8 million in the bank to do that. Okay. Can we zoom in on the housekeeper? Can the two of you talk about it and make a decision? Yeah.

I think that we can afford a housekeeper. I don't think we can afford them to come twice a week. How much Elijah do you think it is per day? No more than $150. And that's if you go through a service as opposed to just finding somebody directly, and maybe we could do that once a month to start. Would that alleviate the things that you find annoying? I feel like the things that you find Erksum are not once a month things.

I mean, it would at least alleviate them on a once a month basis and get the ball rolling. And then we would have a baseline of cleanliness that we could maintain. easier. Sure. It would help with certain things, but knowing that the shower got cleaned out, help you be less annoyed if there's a little... Poss. Yeah. Pause. So notice what's going on here. This is a great conversation. Matt, why don't you just propose what you want instead of asking these open-ended questions? She already proposed once a month, which I think is a great place to start. Move the conversation forward by saying, hey, I hear you. Instead, I want to propose X. Go ahead. I think you're right.

We should do it once a month and let's see where it gets us. And if it's not enough, let's revisit this and say if we want twice a month. That sounds great, Matt. Great. Love that. You all see the little intervention right there? Yes. Matt, you're so avoidant.

You're so afraid of confrontation that you will open up actually 10 cans of worms instead of just making a proposal. This is where a therapist can come in helpful. Eliza, one tool for you is to simply say, Matt, my proposal. is once a month, do you have a different proposal? Okay, but really, Matt, this is your responsibility, not hers. Okay. I can almost guarantee that right there, that dynamic is the source of, like, so much conflict because, Matt, you want to avoid just saying what you really want.

And in fact, even in that case, you just agreed to hers. When I think you were making a very good case, hey, once a month isn't enough. Let's do it twice a month. But I think the way you compromise on it was great. I do think that's an area of opportunity for you to work on. Next question, where does that? the money come from? I think realistically, and Eliza is probably going to have a heart attack, it's got to come from that savings or investment bucket. I don't see where else it would come from.

Matt is probably right, given the current situation. And probably if we don't save $19,000 a year and we save like 18, it'll probably be fine in the long run. What? Okay, first of all, do you all realize that savings and investing are different things? Yeah. Yes. Okay, you're not saving $1,000 a month, you're saving zero. So let's use our terms correctly. Second of all, you're both saying we have to take from our savings account, your savings account has two months of emergency fund. You're about to have a baby. And you're saying there's no other place you can see to take the money from. I don't believe that. Probably that whole life insurance. That's for sure. That needs to be figured out right away as to what would happen if you stopped

canceled that policy. That's one. But what else? I see so many other places. What's everything under guilt-free spending. There's my current horse budget. Yeah. There's a vacation budget. There's a lot of things that, in my opinion, if you're about to have a baby, are going to change. One of the benefits of having a baby is you really get to get realistic about expenses changing. Like for me, if I'm having a baby, I'm probably traveling less, at least for the time being. I'm certainly going on horses less, and I probably need more help around the house. Why not just admit that? That's a given.

Why not make your life easy? Here's my philosophy. You ask about how to change your money psychology. If I'm going through a major life event, marriage, kids, illness, whatever, I immediately go, how can I use money to make this easier for me? I worked hard. We continue to work hard. What do I get?

And Eliza, you've said cleaning the house is important to you. Why would you not pay for a house cleaner? Especially because you have the money. I guess it doesn't always feel like we have the money. and looking at the guilt-free spending current allocation, it doesn't feel like there's so much wiggle room there to take something away. What are you talking about? $150 for the horse.

Just take it away. That sounds crazy to me. I don't know exactly the comparison to make, but whatever is right under necessities, I need a car to get to work, need food. It's like taking away therapy. I'm not sure I agree. I understand that a horse is really important to you

and that you rode before. and I'm sure you will ride again. You're probably not going to ride for the next six to eight months. Would that be fair? No, not fair. Okay, when are you going to start riding again? I don't know, a month postpartum, six weeks postpartum. All right.

You want to keep it? Fine. What else? Probably vacation is the bucket that could change realistically with a child. Even though we've talked about my parents are very happy to hopefully watch the child and let us travel, it's going to be harder. Okay. So acknowledge that. Simply take the money and use it for the house cleaner.

Honestly, for me, that feels like a lot to give up. Like for me, travel and like seeing new things is important. How much do we have there? $208 a month. So $208. Not that much room for that, but you could probably cut it in half and do a domestic travel instead of international hypothetical. That's a realistic option. Obviously, I'm not living your life. So things are naturally easier for me to make decisions. But do you see the way that I talk about this is so different. than you. You literally could not see any options. I'm looking at the same page as you, and I see $767.67 of options per month. One of the peculiarities of my conversations with couples is that they come on here and they tell me this, you know, this really serious challenge they're having. Like in your case, we're cheap. And I go, cool, like, let's look at the numbers. And then immediately when we try to change to something they themselves claim that they want to do,

They fight tooth and nail to change nothing. I can't change that for you. It's your money. If you wanted me to run your life, I could, but you probably wouldn't like how it ended up. You set your life up this way. You control your money. You two are very intelligent, able-bodied people.

If you wanted to, you could change your life to be focused on health or childcare or a clean house. You could do any of that stuff. It's not that you have a lack of money, but you don't have the ability to be decisive you have a cloud that's in front of both of you. And it's not just a cloud in front of you. It's actually all around you.

It's your identity. We don't have enough. We need to scrimp and pinch forever. Scarcity. We need to save $3 here and there and $5 here and there so that 40 years from now we can actually enjoy life. That's that cloud. It's a ghost.

The only way people clear the ghost is if something big enough happens to make them want to change. Otherwise, it's too hard. What do you think? You're saying that you think people in the middle, it just is for them. I'm saying that people don't change their identities unless there's a pressing reason to. What that looks like for you is perhaps you have the baby. Maybe one or both of you realize you can't work as much as you used to.

You realize your job's kind of at risk. You realize your house is a mess. You start fighting more. And then finally after all of that, months of agony of not sleep, of all this stuff, you go, we should get a housekeeper. For $150 a month, you spent four months fighting and not sleeping, all for that when you could just make the decision right now. Now extrapolate that to the rest of your life. You spend 40 years fighting and arguing and waiting when you could have just made a few key decisions and actually enjoyed your entire journey. You all enjoy money?

Definitely not. Sometimes I felt very proud when we bought the house. Cool. But? No but. sometimes the smaller things, like my Mr. Coffee seems totally sufficient. That's fine. I don't mind that in a couple, one person might not care as much about certain things like hotels

or coffee makers or whatever. That's normal. That's not a huge deal. There's lots of ways around that. It's the big things. Like, do we want to spend money to make our life easier? Do we love to travel? Do we care about seeing our family?

Those kinds of things. Those are important. Matt, your intro was pretty interesting. You said definitely, I don't enjoy spending money. See, I can't make these changes effectively with you because the end goal of where we're going is something you actually don't like. It's like me feeding you rotten meat.

I'm like, let's do all these life changes which are going to be really difficult and change your entire inside out all so that you can eat rotten meat every day. And you're like, I don't even want rotten meat. I view it as something I don't like, but I view it as a means to an end. I don't like working out, but I know I should do it in the order to get in shape.

So it's like I might not enjoy the process, but that doesn't mean I don't think the goal in the end is worth it. Okay, I respect that. And I resonate with that because I felt the same way when I started working out. I felt that way for about four years. And then I realized I got frustrated because I was working out. And I was working out. I thought pretty hard. I didn't look the way I wanted to. And I got really frustrated.

This was kind of when Instagram was starting to come up and I would see all these guys on there and I'm like, why don't I look like them? Truthfully. And I took a hard, honest look at myself, like a very deep hard look. And my honest assessment was, I work out, but I don't work out particularly hard.

And I eat like, I was ordering seamless three times a day. And I had to sit down for like days and days and days and then look inside and be like, wait a second, this is my fault. I'm not actually taking this as seriously as I could. Now, the thing is, I did that only because I realized I'm never going to get really good at this unless I find a way to enjoy it. And I think that's the same for you. You can go through the rest of your life saying, like, it's a means to an end, I don't really enjoy spending it, etc. It's fine, but you'll never actually truly enjoy it. That is why you will continue looking for

points for trips, which is fine, but you'll never simply say, let's go to Paris. We can afford it. We should do this. Let's create some memories. It will always be like holding your nose, oh, I got this Chase Sapphire, you know, you can't get good at something that you don't actually enjoy. Like really good. And in my opinion, money, so important, like the equivalent of parenting, that you've got to find a way to get good at it. You all want to be good parents? Yeah. Yeah. All right. What if one of you was like,

I don't really like parenting? I mean, I do it. It's the end result so this freaking little kid can get off on his or her own. Everyone would be like, that's kind of weird, right? Yeah, that'd be pretty weird. That would not set itself for success. Bingo. And isn't that exactly what's happening with money? Yeah, I think that part of what's like a little bit sinking in slowly is instead of thinking about, money as like what you said, a means to an end, is thinking about it like a tool. What can I get that makes me happier or makes life easier, which makes me happier? And I think that the housekeeper is like a really good practical, achievable example in the here and now that would make a difference in our day to day. I like that. You said somebody need to enjoy it to get better at it,

which makes sense. What does that mean to enjoy it to you? What does that mean like on a deeper level are like more specifically. That's a great question. And for me, it's profound. It is, what is my rich life? Individually and with my wife, what is our rich life? And that is as deep as it gets. What are we here for?

What would make the next 10 years profoundly impactful bond? And we create this vision together. And I also have my own. because one thing in a couple, especially with a new baby on the way, is it's very easy to lose yourself, and you have to fight to maintain your own interest. That's why I like hearing about the horses and the bedding. I think that's cool.

I want to paint this beautiful tapestry of what our life can be. And some of it is immediately achievable today, and I should do it right away. There's no virtue in living a smaller life than you have to. It's actually tragedy. Some of it is medium-term. it is going to take consistent saving. Maybe it'll take five years.

No problem. I actually love that. Every month I check in, some of it is really big. It's going to take decade. At least I know it's coming. So I create this beautiful detailed vision. It's always changing. It's not set in stone.

And then I start to figure out how I can use money to live a rich life today and a richer life tomorrow. In your case, like, a housekeeper to me is a complete no-brainer. If I were about to have a baby, I would completely reorient our family finances. and I would say, look, we're about to have this baby. What is going to make this a magical experience for us in the next 12 months? Magical. Not like we're credding water.

No, I want this to be an incredible experience. What's it going to take? Well, we probably want to get the house clean because we fight about that. And this is just a no-brainer. Let's do that. Let's get childcare. Let's carve out a date night once every two weeks. That's our baseline.

How do you feel about that? To me, that would allow us time to connect and to have a lot. a nice meal out, et cetera. Right now, in exchange, what are we going to trade off? Well, let's take a hard look at our CSP. We're not going to be taking vacations, not for the next year. We're not going on a horse, maybe for six months. Who knows? Hair and beauty, et cetera, et cetera, and certainly that whole life insurance. Let's make this magical. And then at the end of a year, let's put a time in the calendar, and we will re-review, see what it's like with this baby, and we can make changes. That's how I'm.

would do it. What do you think about that? I think that sounds inspiring. Yeah, that makes sense. I think I have to shift what I want, not what is it taking out. Yeah. Eliza. You've mentioned a few times, guys, you kind of are rich, maybe. We have a lot of investments. That should translate down the line to not having to worry so much. But our fixed costs right now are high, and a lot of that is health related, like health insurance and then health care. And so that doesn't leave us with a lot of guilt-free spending money. So I think I really struggle to find the balance between juggling higher fixed costs when they really don't seem like luxuries.

It's not like we're buying stuff on Amazon with also building out a vision for a rich life and acting on it. So what do you think the answer is? Maybe identifying opportunities to build out a rich life that are achievable now, like the housekeeper. Yep. I mean, I know making more money isn't always the answer, but part of it is probably making more money. Matt's current job doesn't offer health care, which is part of why health insurance is a hefty line item on the CSP.

But hopefully a future job will or they could compensate him accordingly, which is a current conversation. And that would go a good amount of ways to defraying some of the imbalance. So for me, the thing that I would do is, I, I, I, I took out your child care out of fixed costs just to see what would happen. It dropped your fixed cost to 65%, which is not bad. Not bad for a couple with new baby and some health costs. I then put that number down into guilt-free spending, just to see what would happen. Your guilt-free spending jumped to 20%, which is not bad.

It's the lower end of the recommended 20 to 35%. So you have 65% up top. You have 15% in investments, and you have 20% percent. 20% in guilt-free spending. What do you think about that? I guess I don't think of child care at guilt-free spending, but... Why not? Isn't it a luxury? It's an investment in our careers. It's not an investment. It's a luxury. If it was an investment, it would be an

investments. Investments provide financial ROI. That's why I would put it theoretically in guilt-free spending. And again, we're just moving money around here and there, but it actually is quite instructive. It tells you that child care is important to us. If one of you got laid off, what's the first thing you do? You cut all guilt-free spending, right? Including child care. So it kind of makes sense. You could make the argument that it's in fixed costs. It doesn't really matter. It's all technically coming from your paycheck. But when I look at it, it sends a signal. It sends a signal that we're spending $1,500 a month on child care because that's important to us as a family.

You two don't talk about money like that. It's all like, oh, what's the minimum we can get away with? I like spending money. When I spend money, nobody's tricking me into spending money. I'm spending $1,000 on this or $500 on that. I like it. It means it's important to me. Why?

Because I respect my own decision making. If I go to a hotel that's very expensive, which for me is the thing I like, I like every dollar I spend there because I chose it and I can afford it. Same for you. I saw that look in your eyes, Eliza, when you talked about the horse. You're like, I like to ride. In fact, I'm going back in six weeks. Why don't you have that with everything you spend money on?

I don't know. I've loved horses since I was little, and it's so ingrained in me. It's so apart. Love that. Well, can you love a housekeeper because they give you a clean bathtub and a clean shower and a clean window? I think I would love it, but I think it hasn't been something that I've felt like we're up to yet, or that I've wanted to push Matt on because maybe we love Netflix

and we've decided Netflix isn't part of our rich life but I think Netflix would matter more to Matt than a housekeeper matters to him and so I think part of not pushing the housekeeper is feeling like a compromise but maybe it's building our relationship because then it's just one less thing we have to worry about. Do you see the way you talk about spending money

versus the way I talk about it? He used words like pushing it with Matt, convincing him. Do you notice that? Yes. You see how deep the changes you'll have to make really are? Yeah, that doesn't surprise me. So some thoughts, some further final thoughts, your fixed costs at 65%. It's not bad.

It's a little high, but it's not a killer. Investments at 15%. Well, first of all, that whole life insurance is dragging you in a huge way. That's 5%, which could be better allocated elsewhere. And you kind of could use the money. $583 a month. If it were me, I would look into the whole life insurance policy. Chances are you're going to lose some,

but the amount you could get over the next 30 years is way more. So you need to do that diligence. That $583, in my opinion, if it were me, I would put it into savings, okay, most of it. You're already investing like $12,000 a year. I'm sure you've already calculated how much, you know, it's going to make $4 to $8 million. So in many ways, you don't need to invest more, right?

You've already set yourself up quite advantageously with investing. Sure, if you want more, you can, but it's cooking. Just let it cook. Meanwhile, that $583 or so could be better utilized now. Things like building up an emergency fund, which you do not have, and I would recommend. Understandably, you spent it on things that were important to you. I totally respect that. Let's go ahead and rebuild it.

And that's pretty solid. That would be 10% investing, 5% savings, 20% guilt-free spending, and 65 fixed costs, it's not bad. It's not bad. What do you think of that? I think that that makes sense. I think I have to rip the Band-Aid off probably with that whole life and figure out what that results in and then just get term. But that makes sense. And I think that thinking about how you put childcare into the guilt-free spending while we put it into the fixed costs, that like mentality shift,

is also helpful to think about because realizing that it's something we're prioritizing and care about as opposed to like, oh, it's something we just have to do is helpful to realize how we're just approaching where we're spending.

That's really the crux of it. Your money is not something that's begrudgingly taken from you. It is something you spend joyfully. You spend it willingly and you spend it to build your rich life. So why wouldn't you feel happy about it? Even taxes, even health and health

insurance. I don't particularly find like a joy in paying for health insurance, okay? But I also know that it is part of my rich life to be able to go to the doctor. And that part feels really good. So I am appreciative when we talk about gratitude, I'm appreciative that I can pull out my insurance card and go somewhere. And I honor that, which is like leaning forward and saying, yes, in our family, we have health insurance. In our family, we have somebody to help around the house. That's that you're creating that culture. I want to thank Matt Eliza for sitting down with me today. As you heard in this conversation, breaking out of that frugality mentality is incredibly challenging. And my wish for them is to get rid of the idea that being cheap is a virtue. It's not.

It's actually playing smaller than you have to. You don't get any points in heaven for being the cheapest person on earth. So I really hope that they can find joy in spending money meaningful. And I think with some substantial changes, they can do it, but it will be up to them to do the work. Fortunately, we have some follow-ups. Let's listen first from Eliza. One of the things that I think most surprised me was that Matt's tiptoeing around some of the financial conversations is probably holding us back from making decisions together and succeeding in our financial. communication. And so following our conversation with RMeet, we realized that we needed to rethink a

little bit about how we're like mentally categorizing some of our spending to focus on the things that bring us joy and to prioritize things that really advance us as a family and that make us happier. So one of the changes that we've immediately decided to make is that we're going to hire a housekeeper and the first person is hopefully coming this week. And we're also looking into cutting that whole life insurance, reallocating that into just our long-term savings bucket so that we could get back for a three to six-month cushion. And those are probably some of the biggest high-level changes in addition to just thinking more about bringing joy with our spending. And some amazing news. Before Matt had a chance to send his follow-up video, their baby arrived. Now, obviously, Matt and Eliza are busy as all new parents are.

but Matt still found a few minutes to send me an update. In it, he wrote, We are in the midst of hiring a nanny to help take care of our newborn. Although this is somewhat more expensive than daycare, we love having our son around and want to balance work with seeing him as much as possible during these early days. He also wrote, Our takeaway I had was that if I wanted something

but was uncomfortable to pay for it, I would use Eliza as a crutch telling myself and maybe others she wouldn't go for it. This is unfair to put on her. If I want something, I need to voice it and push myself to make the right choices, not just hide behind an excuse. I have to tell you, I'm very happy to hear these updates. I'm so happy that their new baby was born. And I'm really happy to hear that they are willing to spend on a nanny so they can price.

prioritize their time together as a family. That is a beautiful piece of a rich life vision. Honestly, I'm very impressed with the changes they made in such a short time. Great job. And congratulations on the new baby.