Episode #144: “We make $245K. Why do I have to ask my wife for dinner money?”

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[00:00:00] Angie: I’ve been using YNAB for a year and a half and trying to get a month ahead in there, but I just can’t seem to do it, and it doesn’t make any sense to me. I know why it is, because we’re spending too much money, but can’t seem to fix that quite right. When I talked to him about money, he would just blow up, and I know it’s because he’s uncomfortable with the whole money thing.

[00:00:28] Brad: She has a business degree and she’s a spreadsheet whizz-kid. I’m not saying it’s right that I took the easy route and let her handle everything. But that’s definitely what I did.

[00:00:39] Angie: I want to be able to say, yeah, we can do that, we can do that, we can do that, because I figure I make a good living, and I deserve it. But it’s still above our means a little bit. You know what? I go through these things where I think somebody is just siphoning money off my account. It’s just happening. Somebody else.

[Narration]

[00:00:58] Ramit: Meet Brad and Angie. They’re both in their mid-50s. They have six adult children between them. This is a mixed family as this is both their second marriage, and they are empty nesters who describe themselves as excited for the next chapter in their lives. They tell me that they’re a few years away from retiring, and then they want to travel full-time in an RV and see the country.

[00:01:20] Now, what you’re going to hear in today’s conversation is a mismatch in the way that the two of them see money. And I think most importantly, you’re going to hear this fascinating discussion of psychological and cultural values around money. So let’s start the conversation with Brad and Angie.

[Interview]

[00:01:39] Brad: I’m on my way to work and I stop at the gas station to put gas in and my credit, debit card, whatever is declined. And I call Angie and I’m like, what’s going on? How can we not have any money in there?

[00:01:51] And she said, well, we had to use $900 for– it was an emergency. We were at the hospital and the card we had wasn’t working or something, so we had to put it on this other card. And so now we didn’t have that $900 in there, so it was these unexpected expenses.

[00:02:11] Ramit: Okay, so you were at the gas station and you tried to use your card and it doesn’t work. So what’d you do?

[00:02:17] Brad: Well, there wasn’t really anything I could do at the time. I had to get to work, and so I had to have her come and pick me up and drive me to work.

[00:02:23] Ramit: What did that feel like?

[00:02:27] Brad: That’s not so bad, but I was on vacation once with a bunch of guys. We’re out to dinner and I go to use the card and it’s declined. And I had to call Angie back in Wisconsin and say, can you put some more money on the card? Because I can’t pay for my own dinner. That’s a little embarrassing when it happens in a situation like that. But at a gas station, it’s just me and her. I can be embarrassed in front of Angie, but it’s a little embarrassing in front of your friends.

[00:02:56] Angie: Oh, that was terrible. I’ve been using YNAB for a year and a half and trying to get a month ahead in there, and I really like the program, but I just can’t seem to do it, and it doesn’t make any sense to me. I know why it is. Because we’re spending too much money, but can’t seem to fix that quite right.

[00:03:15] So I was embarrassed, and I felt bad. When he was in Florida with his friends, that was worse because it wasn’t just the one time he had to call me. He had to reach out to me three times because I just didn’t have any cash. And I hate that and I just don’t know why.

[00:03:36] Ramit: Can I ask the question that I think we’re all wondering? If he didn’t have any cash, how was he on vacation with his friends?

[00:03:43] Angie: Well, that’s a good question, because I wanted him to go. Yeah, that’s a very good question.

[00:03:50] Ramit: Well, anybody got any answers?

[00:03:52] Brad: I think we had money. I think it’s just that we were trying to keep money in a spend card and then money in more of a buffer or a savings. So I think she was having to dip from that and put it into the spend account.

[00:04:14] Angie: Honestly, I think it’s more like I’m the kind of person, for good or bad, probably bad, that says experiences matter and I tend to think, we’ll figure it out when you get there. And that’s not good.

[00:04:29] Ramit: What do you mean? He did figure it out. He called you and you transferred money.

[00:04:33] Angie: Yeah. But I don’t think I had enough to just make him stop worrying about it or stop being a problem. But I just know that it does happen where we dip down and it’s not comfortable. When I wanted to do this debt consolidation thing, this is when we owed a lot of money on credit cards and I wanted to do that, I could feel the tension rising.

[00:04:55] Ramit: Hmm. And so what did you say to him?

[00:04:58] Angie: I didn’t feel like we were going to be able to pay off our debt the way it was, and we needed to do something different. And then it spiraled into why do we have so much debt. Then I say, because we had to pay for this and this and this. It just gets off track.

[00:05:13] Ramit: So you said we’re not going to be able to pay, and he said, why do we have so much debt? What was your answer to that?

[00:05:19] Angie: I probably glossed over it. When I talked to him about money, he would just blow up and not yell at me, but just get louder. And I know it’s because he’s uncomfortable with the whole money thing.

[00:05:34] Brad: I used to feel like everything was a surprise to me because I wasn’t involved in the finances. It just came out of the blue. I wasn’t really involved. And so when she would tell me, we were hurting that month or something, I would always be like, well, how can this be? Now I’m a little more involved with those things, and I don’t try to put my head in the sand, I guess you could say.

[00:06:00] Ramit: At the time you went into debt consolidation, were you aware that you were in debt?

[00:06:07] Brad: Yeah, because of school loans and things like that. It wasn’t what I would consider severe. When you hear about people with huge school loans and things like that, we weren’t crazy.

[00:06:19] Ramit: How much debt was it?

[00:06:21] Angie: It was about–

[00:06:23] Ramit: No. Angie, Angie, hold on a second. I want to hear from Brad.

[00:06:26] Brad: I don’t remember, actually. I don’t think we’re irresponsible or anything. We just need to figure out why we’re sometimes surprised when bills come due. We both make pretty good money, and we shouldn’t be struggling.

[00:06:42] Angie: Honestly, if I could have done it by myself, I probably would’ve, because I tend to try to do that and that’s not good. You know what? I go through these things where I think somebody is just siphoning money off my account. It’s just happening, somebody else.

[00:07:00] Ramit: What I’m struck by in those stories is not that occasionally there’s some account snafu and one account runs out of money. That happens. It shouldn’t happen, but it happens occasionally. Okay, fine. What I’m actually struck by is the different ways that you talk about what happened.

[Narration]

[00:07:19] Ramit:  I’ve become obsessed with these pivotal moments where people realize something is really, really wrong with their finances. I’m obsessed with it because you can actually go years without actually admitting how bad things are. You’ve heard it on this podcast. People will come on here, I’ll go through their numbers with them, and they will realize they’ve been spending more than they make for months.

[00:07:43]  And I realize it’s not just with money where you can deny how bad things are for a long time. My wife is a personal stylist. She tells me a story about one of her clients who had just gotten a job at a law firm and she was going on a flight in the airport and she saw a very senior partner on the same flight totally dressed up.

[00:08:00] Now, she herself was wearing old gym clothes and she looked away. She didn’t want to be seen wearing those clothes, and she realized, oh my God, I really need to uplevel my style. My wife tells me that when this person landed, she sent her a message saying, I’m ready. These pivotal moments are extremely revealing. They tell you so much about what gets a person to change.

[00:08:26] We’ll be right back.

[00:08:28] So with Brad and Angie, I noticed this pivotal moment of him being with his friends on vacation and the credit card not working. How embarrassing. The pattern so far seems to be that Angie’s taking control and Brad is taking a backseat, but I think it’s actually a lot more complicated than that.

[Interview]

[00:08:45] Ramit: Would you care to discuss it? Because I think it’s actually pretty interesting what happened in the past, which might shine some light on where we are today.

[00:08:53] Angie: Care to discuss, Brad?

[00:08:56] Brad: Well, of course, it’s easier to just let someone else handle everything. So that’s what I was doing. Angie is way smarter as far as the accounting goes.

[00:09:08] Ramit: Look at Angie’s face right now. What’s she doing?

[00:09:11] Brad: She doesn’t think she is, but I think she is. She has a business degree and she’s a spreadsheet whizz-kid. I’m not saying it’s right that I took the easy route and let her handle everything, but that’s definitely what I did.

[00:09:26] Angie: I like to be the one who knows things. I don’t like it when I don’t know something.

[00:09:34] Ramit: I agree.

[00:09:35] Angie: It’s hard for me to admit.

[00:09:36] Ramit: Uh-huh. Even to yourself.

[00:09:38] Angie: Mm-hmm.

[00:09:39] Ramit: Okay. I appreciate the honesty. Okay.

[00:09:41] Brad: Yeah.

[00:09:42] Ramit: When you did that, which happened over– how many years did you do that for? Again, look at Angie’s face.

[00:09:54] Brad: Since we’ve been married.

[00:09:55] Ramit: Okay. 10 years.

[00:09:56] Brad: Yeah.

[00:09:57] Ramit: You ever go on a boat, like a canoe or something like that?

[00:10:00] Brad: Yeah.

[00:10:00] Ramit: All right.

[00:10:02] Brad: I’m outdoorsy guy. I have kayaks.

[00:10:04] Ramit: Oh, great. Okay.

[00:10:05] Brad: Kayaks, and canoes, and all that.

[00:10:06] Ramit: I’m already outclassed because I don’t even know the name of the boat I’m trying to describe, but the ones with the oars. So you’re on a two person kayak or whatever and you got one person rowing and the other’s just chilling.

[00:10:22] Brad: What’s the cost of that? Is the one in the back is doing all the work.

[00:10:25] Ramit: Yeah. And maybe you don’t go as far as you want it to go.

[00:10:28] Brad: Yeah.

[00:10:29] Ramit: Maybe it’s a lot harder on the one person rowing, right?

[00:10:32] Angie: And maybe you go in circles a lot.

[00:10:35] Ramit: That’s a good point. Can we go back to the part about how you two interpreted the credit debit card totally differently?

[00:10:45] Angie: Mm-hmm.

[00:10:46] Ramit: What’s your take? What happened?

[00:10:48] Angie: Well, why it happens is because I don’t have enough of a buffer in the bank account to support that kind of action.

[00:10:57] Ramit: Why?

[00:11:00] Angie: Probably because I spend more on the house and things like that, that I shouldn’t.

[00:11:08] Ramit: Why?

[00:11:11] Angie: Because I figure I make a good living and I deserve it.

[00:11:14] Ramit: Why do you deserve it?

[00:11:18] Angie: Because I spent a lot of time in my earlier years not having things.

[00:11:26] Ramit: Mm-hmm. And so as a result, now that you make money–

[00:11:31] Angie: I don’t walk around going, I feel I deserve this, but I definitely feel like I do because now I make a good living and I want my children to have things.

[Narration]

[00:11:43] Ramit: I’m sorry, but I have to cut in here. Did you hear that last sentence by Angie? That was one of the most interesting single sentences I have ever heard on this podcast. In one sentence, it was full of rationalizations and double talk, and then the ultimate justification, I’m doing it for the kids. Listen carefully as I play it again for you.

[Interview]

[00:12:08] Angie: I don’t walk around going, I feel I deserve this, but I definitely feel like I do because now I make a good living and I want my children to have things.

[00:12:20] Ramit: And what about Brad? Things like the vacation?

[00:12:24] Angie: I want him to be able to go on those things. We’re not hungry. We’re not homeless. We have the things that we need. We’re Maslow’s. We are above that. So I figure, he can go because this is when they’re going.

[00:12:40] Brad: Even the vacation I took, it wasn’t some extravagant vacation. It was the Florida with some guys. We weren’t doing anything extravagant down there. We were just hanging out and having beer and being goofy guys.

[00:12:55] Angie: But did we plan for it? No.

[00:12:58] Brad: We should have enough money to go for a weekend with the guys down to Florida. And it wasn’t like I was going to Vegas and letting it ride at the casino or something.

[00:13:11] Ramit: And could you afford dinner?

[00:13:14] Angie: Right.

[00:13:15] Ramit: Sometimes you don’t have to be eating at a Michelin-starred restaurant in order to be overspending.

[00:13:23] Angie: Right.

[00:13:23] Ramit: There are a lot of families that never eat out. They just can’t afford it. So I want to be careful who we’re comparing ourselves to.

[00:13:32] Brad: Yeah. I was one of those kids that had a paper route when he was like 12 years old and saved every penny and bought my first bike. Walking past the bike store every day on my way to work, looking at that bike in the window. And I finally said, dad, I got the money saved up. And he’s like, what? And he didn’t even realize that I’ve been saving it. And I went in and forked down cash and rode home on the bike.

[00:13:57] Ramit: How much did you make on that paper route?

[00:14:00] Brad: 20 bucks a week or something

[00:14:02] Ramit: 20 bucks a week.

[00:14:03] Brad: It wasn’t very much.

[00:14:04] Ramit: All right. Well, to save up 300 bucks is very impressive.

[00:14:07] Brad: Yeah, and it was a morning paper route, so I had to get up at 4:30 every day, no matter if it was raining or snowing.

[00:14:14] Ramit: Why’d you do that?

[00:14:15] Brad: Because they weren’t going to buy me a bike. My mom was a stay-at-home mom. My dad was a banker.

[00:14:20] Ramit: A retail banker? What kind of banker?

[00:14:23] Brad: He was a commercial loan officer. We would go to dinner maybe once a year and take a vacation, camping or something like that, not going to Disney or something like that and spending a lot of money.

[00:14:37] Ramit: And when you say you ate out once a year, is that for real? You’re not exaggerating.

[00:14:41] Brad: I’m not exaggerating, no.

[00:14:42] Ramit: Okay. All right.

[00:14:43] Brad: They didn’t really talk about it. I just remember we never really had a budget for food. My mom always thought food was medicine. You eat healthy, and it’s just preventative medicine. She made everything from scratch at home. And that was the only really side financially that I really heard.

[00:15:06] Ramit: Did you remember asking them as a kid, can’t we go to McDonald’s? What would they have said to that?

[00:15:11] Brad: My mom would’ve said, no, we can make a burger at home. It’s way better than a McDonald’s burger. And they were. and You can’t argue with that.

[00:15:20] Ramit: That’s true. And what about if you said, mom, I want to go to Disneyland, or I want to go here or there, what would you have said, or what would your dad have said?

[00:15:30] Brad: They would find ways. I had friends that were in like the ski club at school, and they would ski in these really fancy outfits, and they had brand new skis and all the equipment. I didn’t have all that, but my mom found a way to make it work. She would find used skis, and I would ski in my blue jeans and still had fun.

[00:15:50] Ramit: That’s cool. I love that resourcefulness of parents. I love it. It was a middle class life.

[00:15:57] Brad: Mm-hmm. Yeah, I think so. I would do crazy stuff to earn money. I would sneak onto the golf course at night with my friends, and we’d go in the water up to our chins and get golf balls, and we’d bring them home and clean them up. My mom would save egg cartons and we’d sort them by the brand and we’d go out on the golf course the next day, or Saturday, whatever, and we’d sell golf balls to the golfers, sell the same balls, they probably hit into the water.

[00:16:26] Ramit: Wow.

[00:16:26] Brad: And I’d make money doing that. I got a job at a restaurant when I was 16. And I just always had a job, really.

[00:16:36] Ramit: What did you feel when you got that money, whether it’s cash or a paycheck? What did you feel?

[00:16:44] Brad: Independent. I didn’t have to ask my parents for money.

[00:16:48] Ramit: Hmm.

[00:16:49] Brad: They didn’t know where I was spending it either. So that was fun.

[00:16:53] Ramit: Uh-huh.

[00:16:55] Brad: Being able to just get whatever I wanted and not have to ask.

[00:16:58] Ramit: Yeah. Okay, okay. And if we just fast forward 35 years, and it’s you in Florida and you’re calling up your wife and you’re saying, can you please put 50 bucks on the card, what does that feel like?

[00:17:23] Brad: Yeah, it felt like I was a kid asking my parents for money. And I’m not blaming Angie. I don’t want to come across as I’m blaming her. It just felt like I wasn’t in control of my own money.

[00:17:42] Ramit: Yeah. Can’t feel good.

[00:17:44] Brad: Yeah.

[Narration]

[00:17:45] Ramit: I don’t know what to make of Brad’s story about having a paper route. On one hand, he was a very resourceful kid. It’s clear that he loved money and he loved the independence it gave him, but in his adult relationship with Angie, he’s acting the exact opposite. He doesn’t manage the money. Forget independence. He is literally a dependent, as he calls his wife and asks her to put money on the card so he can pay for dinner on vacation with his friends. I’m confused. Let’s take a quick pause for a message from our sponsors

[00:18:20]  Now, back to Brad and Angie.

[Interview]

[00:18:23] Angie: We’re Gen Xers, and so sometimes we’re talking about like the clothes we had when we were kids and I wanted the Gloria Vanderbilt jeans and I couldn’t have them. So his family to me was rich as I look back. We went out to eat more, but my mom was working as a waitress, so we’d eat there, at a supper club. This is Wisconsin. We have supper clubs.

[00:18:46] Ramit: Okay. Hold on, hold on, hold on. What is this supper club?

[00:18:49] Angie: Oh my goodness. Yeah, you go to supper clubs around here, they serve you a delicious dinner, and you have old-fashions. You know what an old-fashioned is?

[00:18:59] Ramit: Yeah.

[00:18:59] Angie: That’s a Wisconsin thing.

[00:19:01] Ramit: Really?

[00:19:02] Angie: Now that’s trendy. So we got to go out to eat there, but that’s because my mom either got us to eat for free or cheap. But yeah, we didn’t do that a lot. My dad was a truck driver, so he was gone a lot of the time. And my mom was raising three kids on her own, essentially, when my dad was gone. And I had no idea we were broke. I shouldn’t say broke. We were able to pay for things to my mind, but I never asked for anything extra. And I couldn’t afford the clothes that I wanted and things like that.

[00:19:36] Ramit: How do you know you couldn’t afford it?

[00:19:38] Angie: I don’t know how I knew because we never talked about money at all. One time when I was a young adult, my mom said she remembers searching through the couch cushions for milk money. And I was like, what? Or every year my mom would say, it’s going to be a big Christmas this year. And it was always a perfectly fine Christmas.

[00:20:02] We had what we needed to live. I was never disappointed. I don’t ever remember thinking, oh, we didn’t get anything for Christmas. It was never like that.

[00:20:12] Ramit: Okay. How is she doing financially?

[00:20:15] Angie: They’re fine. They’re retired for many years now, and they watch their money because there’s no income coming in, but they don’t feel the need to work to bring any extra income in. Yeah, I think they’ve done well for themselves. As I look back, I would’ve liked to have known more about how they did that. And how they got to that point just wasn’t talked about.

[00:20:38] Ramit: It’s a very Midwest thing, you know?

[00:20:40] Angie: Yeah.

[00:20:41] Ramit: Money is for the adults.

[00:20:42] Brad: And she has a very German family too.

[00:20:45] Ramit: Oh, okay. Got it.

[00:20:46] Brad: Bring up emotions.

[00:20:49] Ramit: So did the two of you ever talk about your upbringings around money with each other?

[00:20:56] Brad: Yeah.

[00:20:57] Angie: We have, yeah. The fact that there is nothing really to talk about?

[00:21:01] Brad: Well, Angie makes it sound like she grew up on Little House on the Prairie, and she lived out in the country, and they were happy with a straw doll for Christmas or something. I don’t think it was that bad, but that’s how it sounds.

[00:21:17] Angie: Hey, one year that mom said it wasn’t going to be a good Christmas we got these big TV pillows, me and my sister and brother, and we loved them. So hey, we were happy. It’s not that I didn’t have things as a kid, I just knew that my parents worked their butts off. They were not just sitting around, doing things for themselves. They were working really hard for us, and it was tough.

[00:21:42] So I didn’t want to bother them with things. I wanted to feel like, I’m free to do this now. I want to be able to say, yeah, we can do that, we can do that, we can do that. And I’m not crazy about it, but it’s still above our means a little bit sometimes. But if I was ahead a little bit, then it wouldn’t be.

[00:22:06] Ramit: Okay, okay. Did things change when you started making more money after your master’s degree?

[00:22:13] Angie: Yeah.

[00:22:13] Brad: For the better, I think.

[00:22:15] Ramit: You made a lot more money then, right?

[00:22:16] Brad: I think that’s when we really buckled down, and that’s when we were trying to pay off debt and consolidate debt and get to a better place because now we had the money to do that and play catch up. I’m looking at downsizing and getting rid of clutter, and I don’t need a lot of things.

[00:22:37] I just want the simple life. I don’t want to have to worry so much, and I don’t need a fancy watch and a fancy car and all this. I just want to have a fun adventure with my wife and see this country’s beautiful sights, and things like that.

[00:22:54] Before it was like, okay, we’re racking all this stuff up just to survive basically. And then once she got her degree and got a better job, then it was like, okay, we’re making better money. Now let’s get the financials in order. We didn’t just say, woo-hoo, we got all this money. Let’s go spend it.

[00:23:16] Angie: Well, a little bit.

[00:23:17] Brad: We took a trip with the kids because we finally had a little money and we were like, this might be our last trip with the kids because now they’re all moving out.

[00:23:24] Ramit: Where’d you go?

[00:23:26] Angie: That was the Mexico trip.

[00:23:27] Ramit: How much did that trip cost?

[00:23:29] Angie: 10,000, 15,000 probably because we took as many of the kids as we could.

[00:23:35] Ramit: I don’t think it’s that little. I think it’s more.

[00:23:39] Angie: It might be probably. It’s like asking somebody how much they drink. It’s usually you double it, you know?

[00:23:44] Ramit: Oh yeah, I know.

[00:23:46] Brad: Like, when your doctor says how many drinks would you say–

[00:23:49] Ramit: Yeah. They just take whatever. Especially if you’re a guy, they take whatever, and then they triple it. It’s like, all right.

[00:23:54] Angie: Yeah.

[00:23:55] Brad: I’ve tried to ask Angie how much we spent on that Mexico trip, and I don’t think I’ve got a straight answer.

[00:24:01] Angie: No.

[Narration]

[00:24:02] Ramit: Okay, here are four things where nobody ever knows the actual cost of them. Number one, a house. Number two, a car. Number three, a wedding, and number four, a vacation. Do you know why? Because you don’t want to know. People pick some arbitrary number for their wedding, like the couple we heard from last week, and then as the costs start creeping up and it’s too late to cancel, they simply shift those costs to some black hole where you’ll never have to think about it again.

[00:24:30] Well, I don’t know. It’s a little bit more than I thought. Oh, well, can’t do anything about it now. This is the power of systems and psychology that I teach in IWT. You’ve got to be humble enough to admit that you, me, and all of us, we are all human.

[00:24:48] This idea that I don’t want to know the truth, okay. You don’t want to know the truth, neither do I. Now let me build a system to make sure that I can still function. I can save up ahead of time. I can add a healthy buffer, and then I can try as much as possible to stick to a number. But the trying part is the least of it. Building in the buffer and the systems, that is the real magic here.

[00:25:10] Okay. Back to Brad and Angie. Angie got her master’s, which triggered some changes in their money dynamic, and they’re talking about potentially simplifying towards an RV life. Recall that they are in their mid-50s. Let me dig into their numbers for you right now. Their assets are $494,000, investments are $394,000, savings is about $3,000, their debt is $433,000, for a total net worth of $458,700.

[Interview]

[00:25:41] Ramit: All right. What do you think about that number?

[00:25:43] Angie: I don’t like it. I’m happy with it in the sense that it was way lower a couple of years ago, but I still am not happy with it. When I project it out, we need one and a half million.

[00:25:58] Ramit: Okay, good. Just the fact that you used the word projected is impressive to me. That’s great. Okay. Brad, what do you think about those numbers?

[00:26:05] Brad: I don’t really know what they all mean.

[00:26:08] Angie: We have about 11,000 in various credit cards.

[00:26:13] Ramit: Uh-huh.

[00:26:15] Angie: And then the car loan is about 30.

[00:26:19] Ramit: Uh-huh.

[00:26:19] Angie: That’s my Bronco. The HELOC 39.

[00:26:25] Ramit: Okay.

[00:26:26] Angie: Student loans, 107, and our mortgage about 243.

[00:26:37] Ramit: What’s the interest on the student loans and the mortgage?

[00:26:43] Angie: The student loans, on the bulk of it, on 105,000 of it, it’s six and a half percent.

[00:26:50] Ramit: Okay. And what about the mortgage?

[00:26:52] Angie: And the mortgage is 3.125.

[00:26:55] Brad: We took out a HELOC not too long ago to do some projects around the house. We went through that pretty quickly on some of these projects. And then Angie said, oh, that’s pretty much gone now. And I’m like, what do we spend all that on? And she’s like, well, we paid off the car, and we did this, and we did that, and we did all these landscaping projects.

[00:27:14] And yeah, I guess it did go faster than I thought it would, but we got a lot done. So I think we’ll be in a good place when we go to sell the house. We put a lot of sweat equity into it.

[00:27:26] Ramit: All right, cool. Let’s continue down here. Income. Did you know that you made a $245,000 household income?

[00:27:37] Brad: Not really.

[00:27:39] Ramit: Okay. Angie, did you?

[00:27:41] Angie: Yes.

[00:27:42] Ramit: Okay. Well, you two fits statistically perfectly because about 50% of the people I speak to do not know how much they make. So here we go, 50%.

[00:27:52] Angie: This is only because I was using your conscious spending plan, though, before, so it’s helped.

[00:27:57] Ramit: Before that, you didn’t know.

[00:27:59] Angie: Not really because– I know what I make. I know what he makes. I wasn’t really figuring it out, though.

[00:28:06] Ramit: It’s crazy, isn’t it? We spend our entire lives talking about work, thinking about work, being at work, and 50% of us don’t really know how much we make.

[00:28:19] Angie: Yeah. I don’t think that I put that kind of thought into it all the time because I was just trying to get through the months paycheck to paycheck to paycheck to paycheck that I just didn’t– the only time I thought about it was when you have to fill in a little scrolly thing when you’re doing something online.

[Narration]

[00:28:42] Ramit: A lot of us believe very simple stories about money. You can hear it with Brad and Angie over and over. We needed to renovate, so we took a home equity line of credit. That just rolled off their tongue. When in reality, a home equity line of credit is an extremely complex financial instrument.

[00:29:00] And even their comment that they’re just trying to get through the months paycheck to paycheck, a lot of people just roll that right off their tongue as well. A lot of people genuinely believe that most Americans live paycheck to paycheck. Number one, that is not true, and number two, that is meaningless since you have personally heard people on this podcast who make multiple six figures, they max out their 401Ks, their 529s, and then they complain that they are living paycheck to paycheck.

[00:29:31] Please stop with these simple stories that make you seem helpless around money.  If you look up what the actual status of American finances is today, it’s better than ever. Yes, housing is expensive. Yes, healthcare is expensive, but you’ve got to stop repeating these phrases that not just coincidentally disempower you.

[00:29:55] So if you’re going to pick a story to follow, why not pick one where you’re empowered and strong? Leave a comment below if you’ve ever told yourself a disempowering story about money before and what it was. I am curious. I’m going to read every one of those comments.

[00:30:10] We’ll be right back.

[00:30:11] Now back to the show.

[00:30:13] Listen to how Brad describes his feelings about money.

[Interview]

[00:30:17] Brad: I worked at a very toxic company for a very long time and didn’t get a raise for probably 10 years. And so now I’m at this really great company that treats me well. They give me a nice bonus every Christmas. I don’t really think about how much they’re paying me because they treat me so well.

[00:30:33] I feel appreciated. I don’t feel stressed coming home. At the old place, Angie would say, you got to get out of there. So now I’m out of there and I feel great. I guess I just put it in the back of my mind because I feel so much better mentally and emotionally and everything now.

[00:30:50] Ramit: I’m glad to hear that. Honestly I want everyone to have a great job where they feel respected, appreciated, compensated well, but I’m happy to hear that. You made that move. Great job. But I just want to say it’s extremely interesting that the two of you make certainly in the top 10% in your area, probably the top 5%.

[00:31:17] Angie: Mm-hmm.

[00:31:18] Ramit: Do you feel rich?

[00:31:20] Angie: Mm-mm. I feel fortunate. I know that we make that much money. I don’t feel rich because I still worry about money.

[00:31:34] Ramit: Okay. Do you feel wealthy?

[00:31:39] Angie: Hmm. See, that’s a term I can’t apply to myself, I guess. I don’t know why.

[00:31:44] Brad: I feel rich for what I have in life, but not in a monetary standpoint.

[00:31:51] Ramit: Listen, Brad, this’s not a Hallmark movie. Oh, the angels come out.

[00:31:55] Angie: Just watch out. His hippie’s going to come out.

[00:31:57] Ramit: I know. Listen, Brad, thank you. That’s very pleasant. I love hearing that. Do you feel wealthy?

[00:32:05] Brad: Do you mean financially?

[00:32:07] Angie: Yes.

[00:32:07] Ramit: Yes.

[00:32:09] Brad: No, I don’t feel wealthy.

[00:32:10] Ramit: Okay, hold on, hold on.

[00:32:13] Brad: I’m still driving a crappy car to work.

[00:32:15] Ramit: Hold on a second. What’s that number on screen right there? What’s that? Read it out again, Brad.

[00:32:22] Brad: 245,916.

[00:32:24] Ramit: That’s your household income in Wisconsin.

[00:32:26] Angie: Mm-hmm.

[00:32:28] Brad: If somebody in California saw the size of our yard, they’d be like, that’s a 5-million-dollar piece of property in San Francisco or something.

[00:32:36] Ramit: Maybe more. Yeah. I love this beautiful example where you make an extremely high household income, which by the way doesn’t even factor in some bonus. We’ll get there. And you live in Wisconsin, so all the excuses are out the door, and yet here we have the two of you who still don’t feel wealthy.

[00:33:00] Angie: Yeah.

[00:33:01] Ramit: What does that tell you?

[00:33:04] Angie: We’re warped.

[Narration]

[00:33:06] Ramit: No, they’re not warped. They’re just like everyone else who realizes that the way you feel about money is highly uncorrelated to how much you’ve got in the bank. I especially love this example because they live in an affordable area. Listen now as they do mental gymnastics to make sense of their wealth.

[Interview]

[00:33:25] Angie: Honestly, I don’t know because I do make enough money. I can buy this really cool composter for my little pantry so I can compost things, but I just feel like, no, that’s too much. I can’t do that. I can’t do that. I don’t know. It’s a little– because why don’t I have this money left over in my account every month? What’s up with that? Why is my savings so low if I am so rich, or wealthy, or whatever?

[00:33:56] Ramit: Yeah.

[00:33:56] Angie: I’m not handling it well or something.

[00:33:59] Ramit: I think that’s very candid. I wish more people would just be honest about that.

[00:34:02] Angie: Mm-hmm.

[00:34:03] Ramit: What does it tell you about your feelings, Brad, the fact that both of you are utterly resistant to define yourselves as wealthy, even though your income is in the top four or 3%?

[00:34:16] Brad: It tells me that we have the means, but we’re not managing it the way we could be.

[00:34:24] Ramit: If you managed it, would your feelings magically change?

[00:34:28] Angie: Oh. Oh, I see. No, probably not.

[00:34:31] Ramit: Hell no.

[00:34:34] Brad: Well, when I think of rich, I think of people just spending extravagantly, and I don’t think we’ve ever done.

[00:34:40] Ramit: But didn’t you tell me you took a HELOC and you do all this renovation around it? Sounds pretty extravagant to me.

[00:34:45] Brad: I did all the work myself, though. I was moving boulders that were 300 pounds.

[00:34:51] Ramit: I went to pick out the Vicuna sweater that I bought myself. I felt 10 different Cashmeres.

[00:34:56] Brad: Instead of paying a landscaper though, is what I’m saying I could have–

[00:35:00] Ramit: Fair enough.

[00:35:01] Brad: I did all the work myself. So I feel like that’s the compromise that I make in my head. Like, yeah, we took out this loan, but I’m going to do all the work myself, so it’s not as bad. It’s not–

[00:35:15] Ramit: Because what does bad mean to you?

[00:35:19] Brad: If you’re doing that work and putting the sweat equity in, then it’s not so bad to rack up that debt.

[00:35:24] Angie: Mm-hmm.

[00:35:24] Ramit: But I guess I want to ask you, Brad, what if you could live your life without having to rationalize what you do with your money? For example, there are certain things I love to spend money on. I know my numbers.

[00:35:37] Angie: Mm-hmm.

[00:35:39] Ramit: If I can’t afford it today, I save up for it in a disciplined way. And when I go buy it, I don’t need to justify it by saying, I’m sweating and pushing a wheelbarrow. I bought it because I love it and I can afford it. Does that sound like a possible identity for you, Brad? Or does it sound totally opposite of who you are? Be honest.

[00:36:07] Brad: That would be hard for me. Even now, Angie tries to get me to buy new clothes and I’m going to the thrift store and buying– she’s like, you don’t need to do that, honey. We have money. You can go buy new clothes.

[00:36:20] Ramit: Do you know why you do it?

[00:36:22] Brad: It just seems extravagant when I can buy a really nice shirt that is $5 versus a $40 shirt.

[00:36:32] Angie: This sounds very normal to what he says. I come home with some new clothes for him and he is like, I could have gotten that at Goodwill. And so he says that a lot. I just bought one of the little Roomba vacuum– not Roomba, but one of those things around the house, and I felt totally guilty about it.

[00:36:55] I didn’t even tell him I did it, not because I’m afraid he is going to be upset about the money at all, but because it feels like a shameful purchase, even though, I don’t know. We have a hard time with it. I agree. I still judge somebody who’s wealthy by an eighth grade experience of me sitting in a social studies class and this girl that was in my school that we all knew was the rich one.

[00:37:23] Ramit: Laura, the rich one.

[00:37:26] Angie: I would write it down in my notebook what shoes she was wearing because I was so shocked that she had 30 different pairs of shoes that she didn’t have to wear the same pair of shoes. I was just like, this is crazy.

[00:37:39] Brad: And you talked about the kid that had the round driveway.

[00:37:42] Angie: A circle driveway always meant you were very rich too.

[00:37:45] Ramit: Let me make an observation. Financially speaking, the two of you are wealthy.

[00:37:54] Angie: Mm-hmm.

[00:37:55] Ramit: I’m talking about income-wise.

[00:37:56] Angie: Yeah.

[00:37:57] Ramit: And when I hear you talk about the way that you think about money, behave with money, feel about money, I notice that you’re both still playing very small. And in fact, you have the worst of many worlds because you’re playing small, meaning you’re still talking about Goodwill, not because you enjoy Goodwill, but rather because it’s just inconceivable to you to change your identity and to recognize that you can actually spend more. I hear this eighth grade reference, which was 40 years ago. It deeply sticks with you. I appreciate you–

[00:38:40] Angie: Yeah.

[00:38:41] Ramit: But at the same time, you’ve convinced yourself that you’re just simple people. We’re not spending extravagantly. Meanwhile, you have $11,000 of credit card debt. You have a home equity line of credit at $40,000. You have a car loan for $30,000, student loans for $107,000, and a mortgage.

[00:39:01] Angie: Mm-hmm.

[00:39:02] Ramit: So you’re actually getting the worst of both worlds. You’re playing small and you’re telling yourself, oh, we’re simple people, but you’re deeply in debt.

[00:39:12] Angie: Right.

[00:39:12] Ramit: Wouldn’t it be much better to simply acknowledge, we make extremely high incomes. We probably need to change the way that we treat money.

[00:39:25] Angie: Yeah.

[00:39:27] Brad: If I’m playing the comparative thing with people I know, I know people that have a second vacation home, and they have hunting land that they go to, and they have a boat and a Harley, and they have all these toys. I don’t feel like we’re spending on– I don’t know. I don’t feel like we have all these toys that guys have my age that I know. We don’t do that.

[00:40:00] Ramit: Brad, who said anything about comparing yourself to someone?

[00:40:04] Brad: I don’t know if it’s a Midwestern thing, people don’t share what they make.

[Narration]

[00:40:08] Ramit: We’re just simple people. We can take a home equity line of credit and spend it on expensive home renovations, but because I pushed that lawnmower myself and I hammer in the nail myself, that’s not extravagant. Meanwhile, they’re actually living the worst of all worlds because they have to concoct these fantastic justifications and they’re still in debt, for a couple making $245,000.

[Interview]

[00:40:34] Ramit: A rich life does not have to mean ATVs and a hunting ground lodge or whatever. It doesn’t have to be that. It can be what you want. What is that like for you and Brad? What’s the thing you do in your life where you see it, if you can afford it and you want it, you get it? What is it?

[00:40:54] Brad: Oh, it’s usually something stupid, Star Wars related. If I see it, I just get it.

[00:41:00] Ramit: Mm-hmm. Why does that have to be stupid?

[00:41:01] Brad: Because I’m a 55-year-old man buying toys.

[00:41:07] Ramit: So what? I think cool.

[00:41:09] Angie: Yeah.

[00:41:10] Ramit: Honestly, it’s pretty refreshing to see a guy having a hobby. I don’t think it’s stupid. I think it’s interesting you describe your own hobby at 55 as stupid.

[00:41:18] Brad: Well, most people would call it stupid.

[00:41:22] Ramit: You see what I’m doing with my head right now. I’m not trying to minimize your life. I actually think it’s cool. And Brad, what I wish is that you would find your own interest cool as well, because they don’t need to be minimized. I think it’s really interesting and cool that you’re an artist.

[00:41:44] This guy has clearly thought about what he loves. He has a little hobby, a little routine, and then he is got this beautiful office where he puts his things, memories. It’s fucking cool. So if anything, Brad, I’m impressed. And the money part is irrelevant to this. It’s just the fact that I like seeing people unapologetic about what they love. That’s what I like.

[00:42:09] Ramit: But what it would take would be changing the way you think about your money. Because right now that’s really focusing on three-dollar questions, lunch, should I get this shirt? Should I get this Star Wars thing from Goodwill? That’s not the question anymore. The question is, why do you make $250,000 and have only $2,900 in savings? That’s the question we should be asking. Why do you have all this debt when you make $250,000? That’s the question we should be asking. Those are the 30,000 or even 300,000-dollar questions. And that’s the kind of questions wealthy people concern themselves with. Okay?

[00:42:45] Angie: Mm-hmm.

[00:42:47] Ramit: That’s what we want to do. The theme of today is elevating. We’re not going to play small anymore. I just won’t allow it. Cool?

[00:42:56] Angie: Yeah.

[00:42:57] Ramit: Let’s put the numbers back up.

[00:42:58] Angie: Okay.

[00:42:59] Ramit: Your fixed costs are 70% of your take home pay. That’s a little too high.

[00:43:05] Angie: Yeah.

[00:43:05] Ramit: Your housing cost is extremely low. That’s fantastic. So I calculated that. So I combined your mortgage and your utilities and you’re at 7.3%. God bless Wisconsin. Fantastic.

[00:43:20] Brad: We refinanced at a good time.

[00:43:22] Ramit: Good. How many kids live in the house now?

[00:43:24] Angie: Zero.

[00:43:25] Ramit: Oh, okay, so two of you.

[00:43:26] Angie: Yeah.

[00:43:28] Ramit: They look so happy. All right. Good for you. God bless empty nester. Especially after six kids, you really deserve all the peace you can get.

[00:43:34] Angie: Yeah.

[00:43:35] Ramit: Your clothes are $100. Fine. Debt payment is $3,316. All right, so I’m going to guess that you were overpaying on your debt, and I’m guessing, because, Angie, you seem pretty savvy with money that you’re overpaying ton get your credit card debt fast. Is that correct?

[00:43:54] Angie: Yeah. I have a snowball thing going on.

[00:43:58] Ramit: All right, fine. All right, so are you maxing out your 401K?

[00:44:01] Angie: Yeah, we’re doing 20% on Brad’s.

[00:44:06] Ramit: 20% of his income at 60,000 a year.

[00:44:10] Angie: Yeah.

[00:44:11] Ramit: Uh-huh. Oh good. Okay. So you’re maxing it out. Fine.

[00:44:13] Angie: Yeah. And mine’s only at 8% because I was too scared to do too much.

[00:44:19] Ramit: Hold on. We need to correct this real quick. This is one of those things that will change. Angie, the key thing that I would say is a couple making $250,000 a year, who’s savvy with money would never say I am afraid of investing too much.

[00:44:37] Angie: Yeah.

[00:44:39] Ramit: Particularly when they had not been investing aggressively for a long time.

[00:44:43] Angie: Yeah.

[00:44:44] Ramit: Fair enough?

[00:44:45] Angie: Yeah.

[00:44:46] Ramit: So that’s a mental shift I want you to start making. What would a couple making 250k plus per year, who savvy with money, what would they be doing? This is changing your identity along with increasing your knowledge. Okay?

[00:45:02] All right. Your savings goals are at 9%, which is about $1,000. If you were 25 years old, I would be like, this is good, but you’re 55 and you told me you want a RV in 10 years. Especially because you only have 3000 bucks in savings.

[00:45:20] Angie: Yeah.

[00:45:21] Ramit: Who’s tracking all this stuff?

[00:45:23] Angie: Oh, that’s me.

[00:45:23] Ramit: Uh-huh. Anyone see the costs of having Angie do all this stuff for the last 10 years?

[00:45:32] Angie: Oh yeah. I just bought another book for my passwords and stuff because I’m afraid– I don’t know. I don’t know what would happen.

[00:45:43] Ramit: Can I tell you first of all– it’s not the passwords that are going to save him. Trust me. You could sit him down right now and log him into your accounts. Brad would have no idea what’s going on. Brad, fair to say?

[00:45:55] Brad: Yeah.

[00:45:57] Ramit: It’s a problem for a 30-year-old married couple, but it’s a much bigger problem for a mid-50s couple.

[00:46:05] Angie: Yeah.

[00:46:07] Ramit: We got to get real. You know people in your 50s, your friends probably who have gotten sick, maybe even some who’ve passed away.

[00:46:12] Angie: Mm-hmm.

[00:46:14] Ramit: I’m not afraid, and I don’t think any of us should be afraid of talking about mortality. We’re all going to die. Let’s just talk about it. So part of that is, that’s one of the reasons I insist that both couples get involved with money. But I’m going to get hit by a bus one day or something, and you think I’m going to leave a grieving wife at the mercy of some Goldman Sachs fuck face, who’s going to try to circle her like a vulture and charge 1.25% AUM? No.

[Narration]

[00:46:42] Ramit: We listed off some categories in the CSP to give Brad ownership of them. See, when you’ve got one partner who’s been ignoring money for a long time, they need to take ownership. And you can start off small. Groceries would be one, things like that. But I wanted to really dive into the RV that they want to get and travel around the country in.

[Interview]

[00:47:05] Ramit: Don’t you guys say you want to retire and do the RV thing in 10 years?

[00:47:11] Brad: We were talking like two.

[00:47:14] Ramit: No. What? Two years? Are you serious?

[00:47:19] Angie: Mm-hmm. But I’m not going to quit working. I’m going to keep working.

[00:47:24] Ramit: Oh, all right. Are you going to sell your house?

[00:47:28] Angie: Yes.

[00:47:29] Ramit: How much you going to make from that?

[00:47:31] Angie: I’m hoping just under– the market’s still good in a couple of years. Around 200 or just under that

[00:47:43] Ramit: 200. That’s all in or minus transaction fees, updating, painting, all that stuff?

[00:47:49] Angie: Yeah, that was without all those things.

[00:47:53] Ramit: Uh-huh. So maybe let’s knock off 50k?

[00:47:58] Angie: Yes.

[00:48:00] Ramit: So 150.

[00:48:01] Angie: Mm-hmm.

[00:48:03] Ramit: And then do you have to buy an RV?

[00:48:04] Angie: Yes.

[00:48:06] Ramit: How much does that cost?

[00:48:07] Angie: Well, I’m hoping around 80 or 90,000 because we get a used one. We wouldn’t get a brand new one.

[00:48:15] Ramit: Okay. All right. Fine.

[00:48:17] Brad: A new one would be extravagant.

[00:48:20] Angie: See?

[00:48:21] Ramit: We’re simple people. We’re just getting an 80,000-dollar RV. Where’s the money for all this?

[00:48:27] Angie: We’ve already discussed. I tend to say it’ll all work out. And I just want to have my eyes more open before we get there.

[00:48:40] Ramit: Well, step one is that it’s not your eyes alone that need to decide this. It’s Brad’s.

[00:48:46] Angie: Yes.

[00:48:47] Ramit: You alone cannot carry the load anymore. So that’s number one. How much have you spent on renovations?

[00:48:54] Angie: A lot.

[00:48:54] Ramit: Like how much?

[00:48:57] Angie: Well, we built a pond in our backyard, so that was about 15, $20,000 probably.

[00:49:05] Ramit: Simple people. Simple people with a pond. What else?

[00:49:12] Angie: Did a lot of tree removal, and so over the last two years, that’s been about at least, I think 10,000

[00:49:20] Ramit: 25. What else?

[00:49:23] Angie: We remodeled our bathroom. I keep thinking about wanting to redo my laundry room, but–

[00:49:30] Ramit: How much?

[00:49:30] Angie: I can’t.

[00:49:31] Ramit: So far that’s about 40k. What else?

[00:49:32] Forget about the fact that you want to do a RV thing two years from now. If they go, we’re 55, we have less than $3,000 in savings, and we want to drop 40k on home renovations, I’d be like, no way.

[00:49:46] Angie: Yeah.

[00:49:47] Ramit: There’s no way. It makes no financial sense. Second, I want to point out that this whole story about, I don’t need all this other fancy stuff, 40k in home renovations is actually quite fancy. It’s just politically acceptable where you live.

[00:50:04] Angie: Mm-hmm.

[00:50:05] Ramit: We don’t need all this fancy stuff. We’re going to just renovate our house. We’re going to do it ourselves. We’re people of the earth, and it’s going to come back to us because it’s an investment. So when we sell it, da, da, da. Story upon story upon story. But the fact is, we’re looking at the numbers.

[00:50:23] Angie: Mm-hmm.

[00:50:23] Ramit: There’s just no savings. $3,000 a month being paid for debt. So the stories are not lining up with reality. Okay?

[00:50:32] Angie: Right.

[00:50:32] Ramit: Now, would I say you have to sell your house today? No, but would I say if it stops you from renovating more, you should? Maybe. Or just stop renovating.

[00:50:41] Angie: Mm-hmm.

[00:50:42] Ramit: Do y’all see that you have been overspending, even though you’ve told yourself you haven’t?

[00:50:49] Angie: Yeah.

[00:50:50] Ramit: So this story that you tell yourself is totally incongruous with reality.

[00:50:55] Angie: Yeah. Agreed.

[00:50:57] Ramit: There’s no reason to take a HELOC. There’s no reason.

[00:51:00] Angie: I know.

[00:51:01] Ramit: Brad, are you aware that as it currently stands, you cannot go in the RV two years from now?

[00:51:07] Brad: It wasn’t a set date. It’s a goal. If it takes three years, if it takes five years–

[00:51:13] Angie: That’s not the question, though.

[00:51:19] Ramit: You can’t do it in five years either.

[00:51:26] Brad: All right.

[00:51:28] Ramit: How do you feel about that?

[00:51:29] Brad: Well, I would’ve liked to have done that. I don’t want to wait until I’m 65 to go and do these things, and then I’m too old to hike up that mountain or something. I don’t want to wait until I’m– you hear about people, they retire and they’re literally dead in five years. I’d rather do it now when we’re still relatively healthy and can do those things.

[00:52:01] Ramit: It’s interesting that I’ve asked you several times, Brad, like, how do you feel about something? And I’ve never once gotten an emotional answer. And as a guy who, probably like you, was not raised talking about feelings a lot, I totally understand it. I completely understand it.

[00:52:16] When I ask you how you feel about certain things, I’m not just asking for no reason. I notice your response is typically to minimize it. Oh, it’s not so bad. Oh, three years is actually fine. Maybe five, maybe nine. It’s not that big of a deal.

[00:52:30] And if you were to actually access how you feel about it and you were to actually rip away the shield of armor and maybe get really honest, maybe really vulnerable in a way that you haven’t been too often around money, I think that might actually connect with Angie and make her understand the effects of what is going on, particularly the overspending. Look at Angie’s face right now.

[00:52:54] Angie: Yeah.

[00:52:59] Ramit: Brad, you do that thing, which is, you say everything’s going to be okay. And as a provider in all these gendered ways, that’s what a lot of people, particularly men, are taught to do. It’s going to be fine. Any of this sound familiar?

[00:53:17] Brad: Oh yeah. When Angie was going through her cancer, I said, it’s okay. Chemo’s only going to be one season. It’s going to be winter, and by spring all that’ll be behind us and we’ll be onto a new chapter in our lives. And that’s just how I handle– trying to handle things.

[00:53:34] Ramit: Thank God, because, thank God, Angie, that you’re okay. I’m thankful for that. I know you two are thankful. Sometimes you have to be that, just the person who can stay positive because someone else is going through something really tough like you did, Angie. Thank God for that. But this is not the time for that, Brad.

[00:53:53] Angie: Yeah.

[00:53:54] Ramit: This isn’t the time to put your head in the sand. It’s happened for 10 years. And it’s not the time to say it’s all going to be okay. It’s actually the time to say, you know what? I really want to go on this RV trip with you, Angie, and if we don’t do it next year, okay, I could wait two years. I can even wait three, but I’m going to be pretty disappointed if we can’t.

[00:54:15] It would actually make me regret a lot of this stuff we’re doing. Or Angie, it confuses me when I come home and see a rug because that’s money that could be going towards our RV excursion. And it hurts because I thought we were focused on the same thing. Now, watch this, Brad. Angie, if Brad said that to you, how would you react?

[00:54:42] Angie: Well, just hearing it makes me feel– well, it makes me feel a little guilty at first, but it releases some pressure from like, I have to make everything perfect. And I can’t do that because I’m spending the money doing that and it’s derailing our other plans.

[00:55:03] Ramit: And you can’t do it alone.

[00:55:04] Angie: And I can’t do it alone. And it just feels like– yeah.

[00:55:07] Ramit: You can’t get where you’re going unless the two of you are both rowing in the same direction. Here’s what I would be doing. I would first sit down and have a serious conversation with each other about this RV thing we’ve talked about.

[00:55:24] Angie: Mm-hmm.

[00:55:25] Ramit: Let’s revisit it. How serious are we? And everything’s on the table. Maybe it’s the thing we want to do, maybe not. Maybe we want to try it for a month. We’ll rent an RV. Let’s just play it all out. What does it look like? Because right now it sounds like you’re burning the boats. We’re going to buy an RV and all this stuff. Maybe. I don’t know that you can afford to buy an RV at age 55 with $3,000 in savings.

[00:55:51] I think you could rent one. I think there’s a big surplus of RV owners who realize it’s a lot more expensive than they think. I’m sure you know plenty of them. You go, all right, your misfortune is my great luck, and I’m going to happily rent for a little while. And another way might be, no, we want to buy one. Okay, fine.

[00:56:09] So what’s it going to take for us to buy it? And you start to go down each of these paths and you’re having these connective conversations. And one of you is going, I don’t really feel that good about this option, the rental option for example. Gosh, this is making me uncomfortable because I always imagined us having our own RV.

[00:56:29] But if it was the choice of not doing it at all or renting it, I could probably get on board to rent it, at least try that to start with stuff like that. You’re talking honestly. And then you’re looking at the numbers and saying, what do we need to be doing?

[00:56:43] Angie: Okay.

[00:56:44] Brad: I’d just like to spend my later years with Angie doing fun things now that we’re empty nesters. It’d be nice to just go on some adventures with her. Doesn’t have in a RV.

[00:57:00] Ramit: Love that. Love the flexibility, Brad. That’s cool. Angie, what are you hearing?

[00:57:07] Angie: He said some of these things to me before, but I’ve been solely down this one path. But not really because I’m not planning properly for it. I like that feeling of having these meetings and talking about it and having someone else to help me because I don’t know all the right things to do. I try to educate myself, but it feels like relief to me, honestly. It feels like relief. I can change some things and we can have more of a combined effort to get there, so that makes me feel encouraged.

[Narration]

[00:57:48] Ramit: Okay, let’s check out their follow-ups and then I’m going to share my thoughts. First, Angie.

[00:57:52] Angie: I learned that I am giving away a lot of my income, whether that means to things that I probably didn’t need, things that I felt like I deserved, that kind of thing. So I’ve really reevaluated that and will continue to do that. What surprised me is that I did not know how to ask for help from my husband. I didn’t know that I was keeping that all inside so much. I just thought I was just doing the bills.

[00:58:26] What changes will I make? I’ve been working on our conscious spending plan and was able to move our fixed costs down from 70%, along with Brad’s help, down to 59%. So it’s still a little high, but it’s in the range that you created. So I think that’s good. And the thing that most resonated, I think, is that my rich life means that I want to do this RV experience with my husband and my little dogs and travel around the country and see all of our kids and all of the places that they are and see our country. So I want to do all those things. So we’re going to make this happen.

[00:59:06] Ramit: And now Brad.

[00:59:07] Brad: I learned from our talk that Angie and I, if we want to pursue this goal of ours of selling our house and doing the RV life that we need to buckle down a lot more and focus on the bigger picture instead of tiny things like small amounts of debt, and things like that.

[00:59:36] So we went through our spreadsheet and looked at some things that we could cut out. Managed to get to a good starting point at least. We still need to find some other areas where we can make up for some investing and things like that. What changes will I make? There’s some simple things I could be doing like not going out to lunch so much and putting premium gas in my car, or things like that. I think that’s about it.

[01:00:11] Ramit: First off, I want to thank Brad and Angie for coming on and discussing their finances. It is incredibly courageous for anyone to come on this show and open up what may be the most intimate part of our culture, our finances. With that said, candidly, I’m disappointed in these follow-ups. I think there were a couple realizations, like Angie asking for help from Brad. Brad taking a little bit of ownership over a couple of categories. But when you’re in your mid-50s making 245,000 and you have essentially no money in savings and  debt, there’s some big realizations to be had.

[01:00:47] Now, I do know that for a lot of people it’s difficult to think ahead. It’s difficult to make a long-term plan. I get that, and I have a lot of compassion for how hard this is, especially with money.  But when I spend several hours with a couple who applies to be on this podcast, of course, my ultimate hope is that they make a big change.

[01:01:09] Unfortunately, that’s just not a reality for everyone. It’s very possible in life to go through making more and more money simply looking at what’s in front of you, a new car, home renovation, RV, and you chase that feeling bad the entire time. And that is not a rich life.

[01:01:31] I want you to feel good. I want you to feel confident, competent, and I actually think if you put a little bit of planning into it, you can live a much richer life than you ever thought possible. Anyway, that’s my philosophy.

[01:01:45] I want to thank Brad and Angie for coming on the show, being so open with me. I do wish the best for you, and I would love to hear an update from you a year from now. For everyone who watches and listens to this show, thank you so much for being a part of it, for listening, for leaving comments, for sending me feedback, all of it.

[01:02:02] This is one of my favorite things I’ve done in 20 years of running my business. And a lot of it is because all of you in the community are with me every single week. Thanks, and I’ll see you next week.