Episode #151: “Our gas is about to get shut off, but I refuse to sell any of my 7 cars”

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[00:00:00] Peter: We’re a month behind on our mortgage, getting a shut off notice for our gas account. Our electrical account’s in payment plan. Everything is so overwhelming for me. Megan, I’ve asked you multiple times to try to help out more, look at different job opportunities, and I get the same answer, oh, I’m comfortable where I’m at. But we need more, and I just can’t do this myself.

[00:00:34] Ramit: Do you think that Megan understands the severity of your situation?

[00:00:39] Peter: I don’t think so. No.

[00:00:41] Megan: I listen, but I don’t listen at the same time, where it’s become a repetitive conversation.

[00:00:47] Peter: We get by, and that’s just what we’re doing, and I’m tired of getting by.

[00:00:52] Ramit: Peter, what if Megan never changes?

[00:00:56] Peter: I couldn’t deal with it. I’m not doing this anymore. I’m still young. We got no kids. Maybe it’s time to move on.

[Narration]

[00:01:06] Ramit: Meet Peter and Megan. They’re in their mid-30s. They don’t have children, and they are in very serious financial trouble. Peter wrote me in his application saying he was at the end of his rope. He didn’t know what to do. Maybe he would even be better off alone.

[00:01:23] Now, as I go through today’s conversation, I ask them questions to try to figure out what’s really going on. I have a feeling you’re going to be frustrated. I know that I was. But I want to emphasize to you how important it is to treat all of our guests with respect, including on any social media comments.

[00:01:40] That’s what I expect for the couples who are brave enough to come on this podcast and share their numbers and their entire financial lives with all of us.

[00:01:49] Now onto the conversation with Peter and Megan. I started by asking them what would be an amazing place that we could get to by the end of this conversation, and I want you to listen to their answers because they provide a huge clue as to how they both see their current situation totally differently.

[Interview]

[00:02:05] Megan: Just knowing how to properly handle money, how to put it in different areas like bank accounts, like IRA type of things, savings, stuff like that, to better our future to where we’re going to be happy.

[00:02:23] Ramit: Okay. Peter, how about you?

[00:02:24] Peter: I just don’t want to be so nervous, and I’m tired of being overwhelmed about everything. I was hoping for– put a little fire underneath Megan’s ass. I feel like I tried talking to her before, and I feel like I get nowhere.

[00:02:47] Ramit: How come the answers that both of you gave me are so different?

[00:02:57] Megan: Two different minds, I guess.

[00:02:59] Peter: I feel like whatever I say is like, yeah, no problem. Okay. Not getting any help there.

[00:03:08] Ramit: So you feel that Megan is disengaged with money.

[00:03:12] Peter: Absolutely. It’s tough. I feel like I do a little bit of everything myself. So I need help.

[00:03:23] Megan: So it’s like, I want to help him more, but it’s very tough when he’s very like single-minded and him doing it, which I am fine with. If he wants to take full control of it, he can. Because I don’t know how to handle that kind of stuff. For me, it would just be when the bill is due, you pay it whether there’s money in there or not.

[00:03:43] Because I don’t want them to go into like you owe money, like with a credit card, then you start accruing more interest when you miss your payment. Or with the utilities, if you go too long without paying, then you get the shutoff notices. Then that’s a little bit scary. We’ve never had that happen before. I just don’t want to see that little piece of paper that says, final notice. Your utility will be shut off.

[00:04:07] Ramit: Okay.

[00:04:08] Megan: It just scares me.

[00:04:09] Ramit: Why are you willing to go as far as letting your power get turned off before you make a change?

[00:04:15] Megan: Well, I would prefer it not to get shut off.

[00:04:19] Ramit: Okay.

[00:04:21] Megan: Hopefully, I’m going to do something, and I’m going to try my hardest.

[00:04:23] Ramit: Why hopefully? Why try? What is this?

[00:04:26] Megan: It’s me doubting myself.

[00:04:29] Ramit: Take me back to being a kid. What do you remember about your parents and your relationship with them, especially as it relates to money?

[00:04:36] Megan: Nothing.

[00:04:36] Ramit: They never talked about money. Okay. What else?

[00:04:39] Megan: No. Never talked about money. Never showed that we were struggling or anything. Always everything was fine. Bills were paid. So like I said, they never fought about it, never discussed it. So I never knew anything about it.

[00:04:54] My father was self-employed for years. He had a landscaping business. Him, it just never seemed to like money come up or anything. I still remember as a child, and he still does it to this day, he has usually a wad of cash like this in his pocket, so I never thought we were ever poor or anything, because he would sit there and just take it out and pay for something.

[00:05:17] So he never discussed finances with me at all. He just had everything situated. When I was 16 years old, I got my first vehicle, which was one of my father’s vehicles that was a hand me down.

[00:05:31] Ramit: Mm-hmm.

[00:05:32] Megan: Only way I can get it was if I had a job.

[00:05:34] Ramit: Did you like making money back then?

[00:05:36] Megan: Well, I was a child, so I didn’t quite understand it. It was just, okay, it’s in a little box in my room. I need it, I need it. I don’t, I don’t. Because he never set up a bank account for me, never had me go down until I really started, I think when I worked at Blockbuster. This is going back years now where that’s when I had to have a bank account where I was like, yeah, getting the paychecks every week. They got to go in there.

[00:06:04] Ramit: Did your mom work?

[00:06:07] Megan: She did. But when she was in her mid to late 30s maybe, she was disabled. She had a neuromuscular disease, which basically prevented her from working. She would basically be standing up and just fall. So she collected disability, Social Security, and my parents divorced when I was eight years old.

[00:06:28] Ramit: Oh.

[00:06:29] Megan: Again, never had talking about money with either one of them, even when they were divorced.

[00:06:34] Ramit: When did the two of you meet? High school?

[00:06:37] Peter: High school.

[00:06:38] Megan: Senior year.

[00:06:39] Ramit: When you dated, did you talk about money?

[00:06:42] Peter: No, we dated very young. We dated our senior year of high school, and I moved out pretty early and got an apartment, I think a week before I graduated high school. It was all just figuring it out as we go.

[00:07:00] Ramit: Mm-hmm. And you bought a house, correct?

[00:07:03] Peter: Yeah, yeah. We own a two-family house. We rent out one side. It’s a duplex.

[00:07:08] Ramit: Okay. How about when you made that purchase? Did you talk about money then?

[00:07:12] Peter: I did that all on my own.

[00:07:15] Ramit: And what age were you married at?

[00:07:18] Megan: 27, 28. 10 years dating. 10 years married.

[00:07:24] Ramit: When did you manage your own money, Megan?

[00:07:29] Megan: I don’t think I ever did. Not that I can recall.

[00:07:34] Ramit: You think maybe that has something to do with what we’re talking about today?

[00:07:37] Megan: Most likely. I don’t know how to discuss money, how to basically pay bills properly.

[00:07:47] Ramit: Mm-hmm.

[00:07:47] Megan: I need an insight on how to do this. That’s my issue.

[00:07:50] Ramit: What do you think’s behind that, the fact that you’ve never managed your money on your own? What does that tell us?

[00:07:58] Megan: That I’ve always seemed to rely on someone else.

[00:08:00] Ramit: Yes. Who was it early on in your life?

[00:08:04] Megan: Well, my father for paying bills, but again, he never gave me money because I had a job.

[00:08:09] Ramit: Still provided a roof over your head, right?

[00:08:11] Megan: Mm-hmm

[00:08:12] Ramit: Even though you weren’t earning much back then, even as a teenager, right?

[00:08:16] Megan: Yeah.

[00:08:17] Ramit: And then how about now?

[00:08:19] Megan: Now it’s relying on my husband.

[00:08:21] Ramit: Even though you’re not earning that much, you still have a roof over your head, right?

[00:08:25] Megan: Yes.

[00:08:26] Ramit: See any similarities?

[00:08:28] Megan: Yes. I rely on other people versus myself.

[00:08:32] Ramit: Can you tell me a time where you were not on the same financial page?

[00:08:36] Megan: Probably bills. Basically, it’s just trying to get like a credit card bill or a utility bill paid. But then it’s looking at the bank account, realizing there’s not enough money in there. So then the panic and freak out happens, and then Peter sits there and starts to try and figure out how to get money in there to help pay that bill. And it’s like I try my best to finagle things and be a little frugal with money every now and then, but sometimes it’s just not enough.

[00:09:03] Ramit: What happens then?

[00:09:05] Megan: Then we get into a little bit of a disagreement about it, and we just leave it alone. And I’m like, okay. I’m like, well, what do you want me to do? I’m like, is there anything I can try and do to help? He’s like, I don’t know. He’s just getting overwhelmed and trying to figure it out, and it’s like, I don’t know how to help. That’s the issue.

[00:09:24] Ramit: How long have you struggled with money?

[00:09:26] Megan: Probably a while.

[00:09:26] Peter: My whole life.

[00:09:30] Ramit: Why are we talking now?

[00:09:33] Peter: Things are getting deep.

[00:09:36] Ramit: Like what?

[00:09:38] Peter: We’re just falling behind on everything, and I got letters coming in, my credit’s going down, and Megan said we ‘ve gotten shut off notices. I’m at the point that I’m about to give up.

[00:09:58] Ramit: What does that mean?

[00:09:59] Peter: Yeah. I don’t know. It’s like I’m trying to take care of everything and like I said before, I just need the help, and I ask for the help, and I feel like I get no answer, and we’re just behind on everything.

[00:10:18] Ramit: Do you think that Megan understands the severity of your situation?

[00:10:22] Peter: I don’t think so. No.

[00:10:25] Megan: I listen, but I don’t listen at the same time, where it’s become a repetitive conversation where it’s the same thing over and over and over again, and I guess I just block it out, like, hey, if I don’t hear it, it doesn’t exist type of thing even though it does exist. It’s just I have to change my mind frame.

[00:10:43] Ramit: Because just a few minutes ago you said, it’s not like we’re getting close to any shutdown notices, any electrical thing. That would be really scary. And then what Peter just said is, we’re getting shut notices.

[00:10:56] Megan: Yeah. Which I have not seen.

[00:10:58] Peter: We’re a month behind on our mortgage, getting a shut off notice for our gas account, and our electrical account’s in a payment plan. Everything is so overwhelming for me.

[00:11:17] Megan, I’ve asked you multiple times to try to help out more, look at different job opportunities, and I get the same answer, like, oh, I’m comfortable where I’m at. And that really annoys me. I took the chance and went to a new career, a whole different trade. And that was life changing for me and made a big difference for us. But we need more, and I just can’t do this myself.

[00:11:52] Megan: Yes, you have said that all before, and I do understand it, but like you said, I’m just comfortable there, which I am. I’ve been there for 17 years now. It’s like I know the ins and out. I’m afraid of going someplace new and having to start over again, possibly have a lower pay than what I have now because of minimum wage. It scares me to go to another job. It really does.

[Narration]

[00:12:17] Ramit: Honestly, this is difficult to listen to. They’re in debt. They’re getting shut down notices, but Megan doesn’t seem to care. Her answer is, I’m comfortable there. Some clues that I noticed, Peter basically came on this podcast so I could convince his wife to get a different job. Megan has been subsidized for her whole life.

[00:12:37] She grew up with her dad taking care of the money. Then she got married young. Peter became the person taking care of the finances. We see this on the podcast all the time. One partner, sometimes both, have no real consequences for their financial behavior. What does it really matter? They still have a roof over their head. Power is still on, at least for now. But because they don’t have any skin in the game, they don’t change.

[00:13:02]  Hold that thought. We’ll be right back.

[00:13:04] Now back to Peter and Megan.

[00:13:06] Let’s take a look at their numbers. Their assets, $447,000; investments, $42,000; savings, $3,500; debt, $215,000, for a net worth of $277,700. Peter’s income is about $83,000. Megan’s income is about $31,000.

[Interview]

[00:13:29] Megan: It’s tough. In my mind frame, I’m stuck where I am, and I can’t get out of it. I’ve tried looking at other jobs, seeing what else is out there, trying to better manage our money.

[00:13:43] Ramit: How many applications did you send out?

[00:13:46] Megan: When it was six months ago, it was three of them.

[00:13:49] Ramit: Three?

[00:13:50] Megan: We got into a big, huge fight and I stopped because I got frustrated.

[00:13:54] Ramit: I think you stopped because there’s nothing really at stake here.

[00:13:57] Megan: No, there’s a lot at stake. I just don’t admit it to myself.

[00:14:00] Ramit: And when situations like this arise, Peter, you pretty much handle it somehow.

[00:14:06] Peter: Yeah.

[00:14:07] Ramit: Does that strategy work?

[00:14:11] Peter: Obviously not. We get by, and that’s just what we’re doing, and I’m tired of getting by.

[00:14:19] Ramit: Okay. Can I ask you, do you get by? Are you losing money every single month?

[00:14:24] Peter: Yeah. After I started messing around with the CSP and kept on updating it and like, oh, we forgot this, and, oh, we need to put this in there. And all of a sudden now it’s like, yeah. Yeah, we’re losing money.

[00:14:40] Ramit: Yeah. You’re in the red every single month.

[00:14:42] Peter: Yeah.

[00:14:42] Megan: Mm-hmm.

[00:14:42] Ramit: Okay. So does it work?

[00:14:47] Peter: No. Thank you.

[00:14:48] Ramit: Sometimes the first thing we have to do to make a change is to acknowledge that what we’re doing is not working. It’s really hard to just give a point-blank answer like you just did, so I totally applaud you for that. Megan, is it working?

[00:15:03] Megan: No, because even when he put it into like the calculator, I think we were 70, 80% in the red.

[00:15:10] Ramit: Yeah.

[00:15:10] Megan: It was an eyeopener. Then it was okay, now we really have to figure out where to be a little more frugal with the money, how to cut coupons in a matter of speaking to save that couple of dollars to hopefully help save in the long run or if there’s a really good deal on something, get it type of thing. And hopefully it all works out.

[Narration]

[00:15:32] Ramit: I just want to cut in here to point out two things that I just heard from Megan. First hearing that they’re in the red every single month on top of the debt, on top of the shutdown notices, her solution is, we need to cut coupons. Now, this is a typical response for someone who’s never really engaged with their money before.

[00:15:55] They’ll often present very simple solutions to complex problems that have built up over many years. Now, if Megan is serious about changing, I can show her the total picture of the situation. I can show them how they need to cut more than coupons, but I’m not sure she’s ready, and that’s because of another thing she says.

[00:16:16] She says, hopefully it all works out. This is typical of people who grew up religious and/or feel that they have very little control over their lives. They don’t make a plan because in their experience, they don’t really have much control over what ends up happening. They live for today. They rarely think about a plan for next week, much less next month, certainly not next year.

[00:16:38] Personally, I don’t want to use hope for anything important to me. If there’s something that’s important to me, I want to take a candid look at the situation. Where am I today? I want to make a plan, always leaving a comfortable amount of buffer. And then I want to use overwhelming force to get there. Okay, let’s continue. And I have to tell you that this is the part of the conversation where my jaw really started dropping.

[Interview]

[00:17:06] Peter: I got to say that we’ve been pretty lucky with stuff. And I think that’s why she keeps on saying that.

[00:17:14] Megan: The Pontiac.

[00:17:15] Peter: Every time something goes wrong, all of a sudden something works out for us. I’m on the marketplace like crazy. It’s one of my addictions. I hit a big home run, and that’s how I paid off the Corvette. I bought an old vintage car for $6,000 and wound up selling it for 25,000. I sold the car to a guy in France. And yeah, I didn’t put much money into it, and I’ve been a mechanic my whole life, and I consider myself a fixer or I could fix anything.

[00:17:51] Ramit: Can you fix your financial situation?

[00:17:53] Peter: Well, that’s the only thing I can’t fix. That’s why I want the call with you.

[00:17:57] Ramit: Okay.

[00:17:58] Megan: We can fix it. Got to have confidence.

[00:18:00] Peter: Eventually.

[00:18:04] Ramit: Okay, tell me. Megan, I like that confidence. Knowing what you know, how can you fix your financial situation?

[00:18:13] Megan: Goes back to getting a better job.

[00:18:16] Ramit: It’s that simple?

[00:18:17] Megan: Not always. It’s getting a better job, learning how to, again, spend money differently.

[00:18:25] Ramit: Okay. You have cars, I understand. When you bought a car, multiple cars, did you talk about money then?

[00:18:32] Peter: I did. I think we have a total of seven vehicles. Big into cars. I remember going to work, and I bought a Corvette, and so I kept on driving by, seeing this car. And I try to let Megan know everything that I’m doing, and I saw this car. I was so excited about it, and I told her I was going to buy it, and she got a little nervous about it.

[00:19:01] I was like, yeah. I was like, it’s no big deal. I can take care of it. I could pay for it. And next thing you know, I wound up purchasing it. Got a great interest rate on it. At that time, my credit was great. Everything was doing good, and purchased car, no problem.

[00:19:20] Ramit: How much was the car?

[00:19:21] Peter: It’s a older Corvette. I think at the time I purchased it for 25,000.

[00:19:30] Ramit: Okay. What was the interest rate?

[00:19:32] Peter: I was at 1.8%.

[00:19:35] Ramit: Oh, that is a good interest rate.

[00:19:36] Peter: Yeah. It was a home run.

[00:19:38] Ramit: Is that car paid off now?

[00:19:40] Peter: That car is paid off.

[00:19:41] Ramit: So you have seven cars. What other kind of cars do you have?

[00:19:44] Peter: I have a Corvette. I got a Chevy Silverado pickup truck. I got two 1963 Chevy Impalas.

[00:19:56] Ramit: Mm-hmm.

[00:19:57] Peter: I got a 20 Subaru Crosstrek, and Megan has a Jeep Wrangler.

[00:20:06] Megan: And the Harley.

[00:20:07] Peter: Oh yeah, we have a brand new Harley.

[00:20:09] Ramit: Brand new means what?

[00:20:11] Peter: It’s old now. 2022.

[00:20:13] Megan: Two years old.

[00:20:14] Ramit: Okay. How much does a Harley cost when you bought that thing?

[00:20:18] Peter: So that was a CVO, so that was almost 40 grand.

[00:20:23] Ramit: Oh, what’s the CVO? Is that the model?

[00:20:25] Peter: Yeah, yeah. Street Glide, CVO, it’s like the top of the line Harley.

[00:20:31] Ramit: That was 40 grand. All right. So I understand that your transmission just blew out, Megan, since we last spoke, so this is actually an interesting moment for us to talk about it.

[00:20:45] Megan: Mm-hmm.

[00:20:46] Ramit: First off, sorry the car went through that. 

[00:20:50] Megan: Thank you. 

[00:20:52] Ramit: How are you going to handle a situation like this?

[00:20:55] Megan: Me? I have no idea. It literally just happened a few hours.

[00:20:59] Ramit: Did that fall to Peter?

[00:21:02] Peter: Yes.

[00:21:03] Megan: Yeah.

[00:21:03] Ramit: Play this out for me. How would it normally go? Because I’m sure you’ve been married a decade. Things come up, things break. So Megan, in this case, your car broke down. So you come home, you tell Peter, and then what typically happens?

[00:21:18] Peter: I was a mechanic for 14 years. That’s my little side hustle. I have a garage, and I am calling up the junk yard tomorrow to pick up a transmission, swap it out.

[00:21:32] Ramit: How much will that cost?

[00:21:34] Peter: I would probably get one for about three to $400.

[00:21:38] Ramit: Okay. And out of curiosity, why not just give Megan one of the other cars?

[00:21:48] Peter: You got two vintage cars and my Corvette. My Corvette, I drag race, so that’s not even street legal.

[00:21:56] Ramit: Okay. Okay

[00:21:59] Megan: The truck is still lifted to get the–

[00:22:01] Peter: Yeah, she can drive the truck tomorrow. That’s no problem. But yeah, she doesn’t feel comfortable driving it.

[00:22:14] Ramit: Mm-hmm. Okay. So you don’t talk about money that often. You haven’t really talked about it much. When you do talk about it, it’s, hey, I’m going to go buy this $25,000 car.

[00:22:26] Peter: I’ll be honest, I’ve spent a lot of money on my race car, and that was in the past, and I’ve been really good on that.

[00:22:36] Megan: Most expensive.

[00:22:37] Ramit: How serious is this?

[00:22:39] Megan: Extremely.

[00:22:44] Ramit: What would you be willing to do to change your financial situation? I’m going to ask each of you. Peter first, then Megan.

[00:22:52] Peter: I feel like I’m doing everything that I can. Yeah, I can cut back on eating out and–

[00:23:03] Ramit: I didn’t ask you to justify it. I asked you how much are you willing to do in order to change your financial situation?

[00:23:13] Peter: I’m willing to do a lot, but there’s certain things that I can’t do.

[00:23:24] Ramit: Like?

[00:23:26] Peter: I can’t get rid of certain vehicles and stuff like that.

[00:23:30] Ramit: What else?

[00:23:31] Peter: That’s pretty much it. That’s where I was scared about. I’ve listened to one of your podcast, and it really hit home. I was at work, and you were talking to a guy who had a lot of motorcycles, and I’m not willing to sell what I have.

[00:23:48] Ramit: Okay. In your pre interview, you said, I heard the episode where you told someone to sell his motorcycles. It’s my biggest fear. I can’t sell my toys.

[00:24:00] Peter: Yeah. I think that’s it.

[00:24:02] Ramit: Is that true?

[00:24:03] Peter: Yes.

[00:24:04] Ramit: Is your biggest fear selling your cars, or is your biggest fear running out of money and getting divorced?

[Narration]

[00:24:16] Ramit: Peter’s referring to Episode 78 with Alex’s five motorcycles, but we also heard the same thing in episode 75, the COVID nurses, where Dan used to be working at Walmart, saw a car, and that became his definition of success. Now, putting all that aside, is this a fucking joke? They’re in debt.

[00:24:36] Peter tells me he’s stressed out beyond belief. Megan won’t get a new job. Then I find out he has seven vehicles, and not just any vehicles, not even just a Corvette, but a Harley. All right, let me take a deep breath. I need to calm down here for a second. I understand that in America, cars are a huge sign of success to a lot of people.

[00:24:58] I get that. Just because it’s not my thing doesn’t mean that Peter doesn’t truly value it. It’s totally fine. Your Rich Life is yours. My Rich Life is mine. But to Peter, when I even bring up the topic of cars, he preemptively tells me he won’t sell them because to him, selling one of those vehicles is like chopping off an arm.

[00:25:22] Selling seven of them, in many ways, it’s like his identity dying. Now, I understand that, and I understand these cars are part of a Rich Life. But in order to live a Rich Life, you have to be able to afford the things you’re buying. And I can tell when people are not ready to make a change.

[00:25:41] That’s because when I ask, how much are you willing to do to change your situation, if you notice that he responded with pauses and qualifications and yeah, buts, that’s not promising.

[00:25:53] We’ll be back after these messages.

[00:25:56] Let’s get back to the show.

[00:25:57] Next in the conversation, I moved on to their other expenses.

[Interview]

[00:26:01] All right, fine. Your insurance, 330. Your car payment is 1,198. What is this?

[00:26:08] Peter: Car payment. So that is my Subaru and the Harley.

[00:26:15] Ramit: Why are you breathing so heavy right now?

[00:26:19] Peter: Stressed out.

[00:26:23] Ramit: Why?

[00:26:24] Peter: Don’t know. It’s just overwhelming.

[00:26:29] Ramit: We’ll get through it together. How many years have you been stressed out about money?

[00:26:34] Peter: Since I moved out on my own.

[00:26:36] Ramit: Okay.

[00:26:37] Peter: I moved out a week before I graduated high school. I had my own apartment.

[00:26:42] Ramit: How do you think that stress affects your health?

[00:26:45] Peter: Oh, it’s not good at all. I know that for sure.

[00:26:50] Ramit: All right. I agree. I hate seeing you cry. I hate seeing you stressed out, breathing difficult. I don’t want this. It’s not good for your health. It’s not good for your relationship. The fact that we’re talking about this right now as I’m staring at a $1,200 a month car payment is blowing my mind. It’s like in your head, you’ve created this mental prison, and you’ve put yourself inside of it. And you know what else is inside that prison cell with you? Seven other things. What are they?

[00:27:23] Peter: I don’t know.

[00:27:24] Ramit: You created your own prison cell and you said, I’m not leaving without my toys, and you’re in that prison. Look at that. Wiping away tears as we’re sitting here talking about how stressed you are, how bad it is for your health, how bad it is for your relationship, and you’re just looking out through those bars going, somebody help me get out. You can get out anytime you want. It’s going to take changing the way you look at money.

[00:27:51] Peter: It feels like I got to start all over though, sell everything and–

[00:27:57] Ramit: What’s the alternative?

[00:28:00] Peter: I don’t see that. I see that helping out where we’re at right now, and it’s only going to get back into that same situation.

[00:28:11] Ramit: Two separate problems. One, it’s like the house is on fire. Let’s deal with the fire right now. Let’s put the fire out. That’s problem number one. Problem number two, what are we going to do about the apples that we bought yesterday and now the fridge burned down and we need some new apples? That’s problem number two. Two totally separate problems. We got to deal with the fire first.

[00:28:32] Put that fire out, and then we will deal with all the other problems second. You have to change the way you think about earning, about speaking with Megan, about your expenses. Right now, you built your entire life around a few inanimate objects. I’m not trying to demean the fact that you’ve accomplished something amazing with these vehicles, the Harley, that stuff’s impressive.

[00:28:54] But another way to look at it is if I did it once, I could do it again, but I need to put this fire out. And that’s how I look at it. Let’s keep going with your expenses. You pay $1,000 a month for debt. What kind of debt is this?

[00:29:10] Peter: It’s credit card debt.

[00:29:12] Ramit: How much is the credit card debt?

[00:29:14] Peter: I think it’s about 40,000.

[00:29:18] Ramit: 40,000. Okay. At what, 27, 28% interest?

[00:29:22] Peter: Yes.

[00:29:24] Ramit: Okay, so that’s essentially just growing, right?

[00:29:28] Peter: Yes.

[00:29:30] Ramit: And how much do you pay for your shop?

[00:29:32] Peter: That’s not on there. I pay almost 500 for the shop.

[00:29:38] Ramit: Where’s the money come from?

[00:29:40] Peter: The shop pays for itself.

[00:29:43] Ramit: Does it make a profit?

[00:29:45] Peter: Yes, the shop does.

[00:29:47] Ramit: Where’s that income?

[00:29:50] Peter: I believe that strictly like on the shop.

[00:29:55] Ramit: How much does it make?

[00:29:56] Megan: If I had to say on average, I’d probably say the shop makes about, what, two grand a month, give or take. If we had to average it out month to month, and that’s at high end of it.

[00:30:07] Peter: Yeah.

[00:30:10] Ramit: And is that the money you use to buy the vehicles?

[00:30:12] Peter: Yes. Either to help out for that stuff, or I consider it free money.

[00:30:21] Ramit: What’s that old example of Nero fiddling while Rome burns? Have you guys heard of this example? Someone’s just fiddling on the roof while the entire city is burning behind them. Anybody feel like that’s what’s going on here? Ah, working on these cool cars in the shop. Meanwhile, house is burning down.

[00:30:45] Megan: When you put it in that perspective, yes.

[00:30:49] Peter: The shop is my safe haven. I could have the worst day at work and worst day at home and go there, and it’s like everything’s okay.

[00:31:05] Ramit: Okay. All right.

[00:31:08] Megan: It’s your zen time.

[00:31:10] Ramit: And supposedly, according to this, you can spend up to $521 a month on guilt-free spending. But you and I know that number’s not accurate.

[00:31:20] Peter: No.

[00:31:20] Ramit: How much are you spending on guilt-free spending?

[00:31:23] Peter: I couldn’t tell you.

[00:31:24] Ramit: Mm-hmm. Megan, you tell me?

[00:31:27] Megan: 800 to $1,000 a month.

[00:31:29] Peter: At that point, we’re just guessing

[00:31:33] Ramit: Need to cut your expenses somewhere else.

[00:31:37] Megan: Phone, I guess.

[00:31:38] Ramit: Yeah. Your phone is way too high.

[00:31:40] Megan: Well, we have four lines.

[00:31:42] Ramit: Why?

[00:31:42] Megan: Watches.

[00:31:47] Ramit: Why is it that everyone I talk to who’s in financial trouble has watches? What is this? And then they have iPads with cellular connections. You have that too?

[00:31:57] Peter: Yes.

[00:31:58] Ramit: Wow. So this is a new thing now. Everyone who has tens of thousands of dollars of credit card debt has Apple watches and iPads with cellular connections. Never fails. Do you all know why you have those things?

[00:32:14] Megan: For me, it’s nice to see the time and who texts me, because if I’m at work, talking to a customer and Peter texts me, he needs me to call him or something, instead of me being rude and flipping my phone out, I just flip my wrist real quick, see it, respond back, and continue on with my conversation. I’ve done that plenty of times.

[00:32:31] Ramit: That’s interesting. How come I don’t have that? And I have a company with employees and people texting me all over the place. How come I don’t have that?

[00:32:41] Peter: I feel like it’s one of those gratification things, just something to have.

[00:32:54] Ramit: Something to distract you from the mundane life.

[00:32:57] Peter: Yeah. I’ve heard you say it before.

[00:32:59] Ramit: Yeah. What else do you spend money on that distracts you from the mundane life? Watches?

[00:33:09] Peter: Yeah.

[00:33:09] Ramit: What else? iPads.

[00:33:13] Megan: Mm- hmm.

[00:33:13] Ramit: What else?

[00:33:16] Megan: Going over your friend’s houses.

[00:33:18] Ramit: Okay. Where is the money in that?

[00:33:22] Megan: Buying beer to bring over.

[00:33:24] Ramit: Yeah. Eating out?

[00:33:27] Megan: Mm-hmm.

[00:33:29] Ramit: What else?

[00:33:32] Megan: Spending stupid money on dog toys.

[00:33:34] Ramit: Definitely. What do you have in your house? What kind of stuff do you have? If we looked at the living room, the closet, what would I see?

[00:33:43] Peter: Honestly, not much. No.

[00:33:45] Ramit: No? Just a saltwater tank?

[00:33:46] Peter: Yeah, the saltwater tank’s a big expense there.

[00:33:50] Ramit: How much did that cost?

[00:33:51] Peter: I don’t want to say.

[00:33:54] Megan: The tank and stand were free, so that helped.

[00:33:57] Peter: Yeah.

[00:33:58] Ramit: Is anyone going to tell me the answer? I find it hard to believe this. A guy with seven cars does not want to tell me the price of a freaking fish tank.

[00:34:04] Peter: I think we going to have at least three to four grand in there.

[Narration]

[00:34:09] Ramit: This is a new one. We already know from this podcast that 100% of parents who have credit card debt cannot say no to their children. That is a done deal. It’s documented. We know it. But today I finally crystallized the fact that almost everyone in credit card debt has multiple Apple watches and also an iPad with a cellular connection.

[00:34:30] Why? It’s mass luxury. It’s the feeling that you’ve bought something really nice. But also, it allows you to disguise your luxury purchases with functional reasons. You heard Megan do it when she said, I can use my watch to respond to texts instead of being rude using my phone. Same thing. When parents tell me their kids need an iPad with a cellular connection so they can stay in touch. Look, if you can afford it, fantastic.

[00:34:58] I want you to spend extravagantly on the things you love. But many of the people that I talk to simply cannot, period. Look at this. This is my iPad. It’s five years old. Works perfectly fine, gets the job done, but even if I had a brand new one that I bought yesterday, I can afford it.

[00:35:17]  I couldn’t stop thinking about this example, and the other day I was thinking about how so many people on this podcast overspend specifically on cars and housing, but I never, ever hear someone overspending on things like luxury hotels, which happens to be something that I like to spend money on.

[00:35:34] Ramit: Why? I was thinking about it. Number one, houses and cars are visible. Deep down, we want people to look at us and think that we are doing well. And in America you do that with your house and your car. If others cannot see it, what’s the point?

[00:35:54] Number two, it’s what people around us do. There’s mimesis at work. It’s not satisfying to buy the most luxurious custom-made umbrellas in the world if no one else is doing it. And this is where culture and class come into play. If like Peter, everyone else growing up around you idolized cars, you’re probably going to idolize cars as well.

[00:36:16] And number three, you can finance houses and cars. Almost everyone does. But very few people are financing a 2,000-dollar a night luxury hotel. Here’s my point. We mostly buy what other people around us buy. We mostly value what other people around us value. That’s fine. That’s human nature. I don’t mind it.

[00:36:37] But in order to buy these very nice things, you need to make sure you can afford it. And to speak to a couple where they’re getting shut down notices, wages are being garnished, but they are unable to even contemplate selling these luxury vehicles, this is mind blowing.

[Interview]

[00:36:56] Ramit: I guess what I’m asking for is for either of you to draw a line in the sand, because what I heard from the two of you was a lot of kicking the can down the road and a lot of, I hope things change. I know they won’t get like that. I don’t mind. You go to Vegas, you want to play a game, you hope you win the slots or something.

[00:37:17] All right. Have fun. 20 bucks, great. I don’t hope that my power’s going to stay on. I’m not leaving that up to chance. I want to plan. I want to know, what is the line in the sand where we are going to make a change, a serious change. I’m begging for that from either of you.

[00:37:40] Megan: I don’t know. Yeah. I really have no idea.

[00:37:49] Ramit: What is the real issue here?

[00:37:53] Megan: I don’t want to change. I’m stuck in my ways.

[00:37:59] Ramit: You sound very confident saying that to me.

[00:38:03] Megan: It’s unfortunate, but I am.

[00:38:05] Ramit: Doesn’t seem like it’s that unfortunate. Not unfortunate enough for you to change.

[00:38:10] Megan: No, but it’s getting there.

[00:38:11] Ramit: When will it be there?

[00:38:13] Megan: Hopefully soon when it actually clicks in my head and after this conversation. It’s going to really start to sink in and it’s going to make me think of, shit, I suck. I don’t know what I’m doing.

[00:38:25] Ramit: Are you guys happy with the way your lives are going?

[00:38:30] Peter: No.

[00:38:31] Ramit: Because if you are, I will give you a couple of small tweaks. You can save a couple hundred bucks a month, and we can go on our ways. You tell me. If you tell me, I’m almost 40 years old, I’m getting shut off notices. I’m spending more than I make every single month. We can’t get aligned on money, and we need to make a big change, I’ll help you make a big change. I will go where you want me to go, but you tell me.

[00:39:05] Megan: We do need the help.

[00:39:07] Peter: Yeah, we definitely do.

[00:39:10] Ramit: I’m going to ask the question again. What are you willing to do in order to make a change? 

[00:39:19] Megan: Anything.

[00:39:20] Ramit: Be honest. Don’t feel pressured by me.

[00:39:25] Peter: I’ve worked so hard to have what I got, and I don’t want to lose it.

[00:39:29] Ramit: Mm-hmm.

[00:39:33] Peter: I grew up not having anything, and it just beats me up getting this far. I’ve changed jobs, and I got a great job now. I’m in the union. Great pay, pension plans and everything, and I got an annuity. Stuff that I’ve never even known what was, and I’m still learning about, and it’s tough to give up the stuff that I work for.

[00:40:10] Ramit: And Megan, you said you’re willing to change anything. Tell me more about that.

[00:40:14] Megan: If I have to change my job, I have to change my job. If it’ll make things better, it’s just trying to find a field, which only thing I’ve ever done since I was 16 years old is retail. So it’s trying to find a job that’s not retail is what scares me because I know non-retail jobs pay better than retail. I only have some college. I never completed college.

[00:40:37] So it’s like I found a field that I like, have to have previous experience in it, have to have a college degree in it. And I’m like, well this doesn’t do any good. I know I can probably apply for it, but I don’t want to go for it and then get heartbroken because I don’t get it. It’s like, I want basically a guaranteed job, if that makes sense.

[00:40:58] Ramit: No, it doesn’t make sense.

[00:41:00] Megan: Well, I just don’t want to quit my job and then go to another job where I’m only going to be there for, well, say a couple of months before I don’t like it and then not be able to get my old job back.

[00:41:11] Ramit: Megan, I still don’t think it’s the field that’s the problem. I think you just don’t want to change jobs. You told me that, right?

[00:41:18] Megan: Mm-hmm.

[Narration]

[00:41:20] Ramit: Peter doesn’t want to give up any of his seven vehicles. Megan doesn’t want to get a new job because she’s comfortable. But there’s also another part of this story that you don’t know. Let me rewind and tell you how we got here.

[00:41:32] Peter and Megan really wanted to talk to me. They wanted help. The first time we got on a call, they had a number of AV problems. It wasn’t working out, so I finally said, you know what? We’re going to call it, and I ended the call.

[00:41:45] Now, after that, they specifically reached out to my team asking for another conversation with me. Please note that in Peter’s application, he wrote, I’m only 37, and I don’t want to lose our home. I’m getting to the point where maybe I’m better off by myself. He also wrote, it’s causing me to not want to be home.

[00:42:04] I’m working crazy hours just to pay minimums. It’s been a problem for over 10 years and has only gotten worse every year. I just want to give up. I can’t keep going on like this. And when Peter wrote asking for a second chance at talking, he said, I’m desperate. I’m now getting my wages garnished.

[00:42:21] I was happy to get on another call with them because I want to help them, which makes our conversation even that much more puzzling. How can they be so eager to get my help, but then when we get here and we start talking, they’re not willing to change a single thing?

[00:42:36] We’ll move on right after this quick break.

[00:42:39] Okay. Let’s jump back into the conversation.

[Interview]

[00:42:42] Ramit: Peter, you filled out the application, correct?

[00:42:45] Peter: Correct.

[00:42:46] Ramit: What was going through your head when you filled out the application to speak to me?

[00:42:51] Peter: I was extremely overwhelmed, didn’t know what to do. I listened to the podcast like crazy at work, just panicked, and I was like, I need help. I have no one else to ask for help.

[00:43:07] Ramit: So if you change nothing, we end our call and the two of you change nothing, what happens? Fast forward for me a month, six months, and a couple of years.

[00:43:16] Megan: We’re screwed. It’s going to be living paycheck to paycheck, struggling, not being happy, trying to figure out how to pay bills, have utility shut off, have the electric shut off or the gas shut off.

[00:43:30] Ramit: Then what?

[00:43:31] Megan: More credit card interest, and then it goes into collections, and then it hurts the credit score.

[00:43:37] Ramit: Who cares about a credit score?

[00:43:39] Megan: I do, because I want to buy another house. Don’t you need a good credit score for another house?

[00:43:46] Ramit: Yeah. But what are you talking about a new house? You don’t even have enough money to pay your current bills.

[00:43:51] Megan: No. When we actually can do it once we get ahead.

[00:43:56] Ramit: So what else happens if you don’t change anything? Power gets shut off, electric gets shut off. What else?

[00:44:02] Megan: House gets foreclosed. Then we have nothing.

[00:44:06] Ramit: Where do you go?

[00:44:09] Megan: If we’re lucky, a family member’s house, where we can stay until we get back on our feet.

[00:44:15] Ramit: What would that be like?

[00:44:17] Megan: Very uncomfortable. Dogs, we’ll have to figure out what to do. The cars, if it’s a worst-case scenario, sell them. If worse comes to worst, live at the shop. Won’t be comfortable, but it’s a roof, if we can’t find a family member.

[00:44:33] Ramit: Okay. Peter, what do you think? What happens in a couple of months or 18 months?

[00:44:40] Peter: This is where I get so frustrated. None of that would ever happen. I refuse to let that happen. And it’s just me hustling and putting in more hours and doing everything possible to change things around.

[00:44:56] Megan: No. It does make sense though, because putting it on paper with, again, we’re 70, 80% in the red, and seeing that, it’s like, no, I don’t make enough money to help get us out of that with the credit card debt and the shutoff notices and utilities and the mortgage. Paycheck basically covers all of that. Mine’s just play money, the little extra, if we need something for a bill.

[00:45:21] Ramit: Okay. Peter, what do you think hearing this?

[00:45:24] Peter: I don’t even know what to say. I get so upset because, like I said, my side hustle is my shop, and I’ll one Saturday– Megan gets paid biweekly– I’ll make her whole paycheck and it just beats me up.

[00:45:43] Ramit: Did y’all see what the application said?

[00:45:46] Peter: Megan has it. No.

[00:45:48] Ramit: We never have any money left, and my wife needs to make more money. She went to school and has a dead-end job. She gets mad at me because I call it a high school kids’ job. I probably think that calling her job a high school kid’s job is not doing any favors, right?

[00:46:09] Peter: We got into a huge argument over that, and I realized that was really beating her up. And I do apologize, and I’ve told her that before, but yeah, it’s tough.

[00:46:25] Ramit: You grew up poor, right?

[00:46:27] Peter: I grew up very poor.

[00:46:29] Ramit: Where? Midwest? East Coast? Where?

[00:46:31] Peter: Buckle, New York.

[00:46:32] Ramit: Yeah. All right. So hustling. How many times by the time you were 18 did you hear the word hustle?

[00:46:42] Peter: That was it my whole life.

[00:46:43] Ramit: Mm-hmm. Still have that, right?

[00:46:45] Peter: 100%.

[00:46:47] Ramit: I’ll hustle. I’ll work harder. I’ll never let it get to that position because I’ll just keep working. I’ll work 24/7 as hard as I need to, right?

[00:46:53] Peter: 100%.

[00:46:54] Ramit: Mm-hmm. Does it work?

[00:46:56] Peter: It gets us by.

[00:46:58] Ramit: Yeah. You said something interesting. You said, we get lucky. We fall down, then something comes up.

[00:47:05] Peter: Yeah.

[00:47:06] Ramit: But then you also said, but I’m tired of it.

[00:47:10] Peter: It’s exhausting. It’s very exhausting.

[00:47:13] Ramit: You’ve kept it up until now. You want to double the grind and hustle twice as hard for the next five years. Can you do it?

[00:47:22] Peter: No, I’m getting old.

[00:47:25] Ramit: When you both play out what’s very likely to happen in the next 18 months, what do you both hear from each other?

[00:47:33] Megan: Nervousness, questioning the future. What could happen, what can happen.

[00:47:44] Ramit: What else?

[00:47:45] Peter: Scared.

[00:47:46] Ramit: Mm-hmm.

[00:47:47] Megan: Yes. Petrified at times because I don’t want to lose anything, because he did work hard for it all.

[00:47:57] Ramit: You are both scared. You even describe it as petrified, but you’re also both very comfortable. Have you noticed that?

[00:48:08] Megan: I guess, to an extent, yes.

[00:48:10] Ramit: Not an extent. You’re comfortable in your job, which you’ve stayed at for over a decade. Peter, you’re stressed out. You’re telling me phrases like, I just can’t keep going on like this, but you’re so comfortable. You just do what you know, which is to hustle. You tell me point blank, I won’t sell the cars. That’s everything I’ve worked for. So you’re scared, even petrified, but also comfortable.

[00:48:34] Peter: If it came down to it, I have no problem selling the car.

[00:48:38] Ramit: When does it come down to it?

[00:48:40] Peter: I don’t know.

[00:48:44] Ramit: What needs to happen in order for you to be like, holy shit, this is serious? Does the power need to go out?

[00:48:52] Megan: For the house to be foreclosed.

[00:48:54] Ramit: Okay, so the house needs to be foreclosed before you go, oh my God, we need to make–

[00:48:57] Peter: Yeah, it would not get to that point.

[00:48:59] Ramit: Okay. I’ll tell you what, why don’t we look at your numbers, and let’s talk through it. Maybe it’ll shed some light on this. What happened when you did the CSP?

[00:49:11] Peter: Did the CSP together, and I felt like Megan was more focused on the games on her phone than the actual numbers.

[00:49:25] Megan: Because I play my games a lot and I don’t pay attention to a lot of things.

[00:49:29] Ramit: Why is that?

[00:49:30] Megan: The games are my outlet on life, and it helps me calm down, relax, and get my mind going straight from going everywhere. But even when I did look at the papers, it was very, very confusing to look at and just see all of the red and the black, and I’m like, I don’t understand any of this, unfortunately. It was very confusing to me. But again, seeing all the red kind of put it into perspective, we’re screwed in a weird way where it’s a lot of debt.

[00:49:59] Ramit: Do you want to understand it?

[00:50:01] Megan: I do. I’ve tried looking at it, and I don’t understand much of it. I’m trying to look and see like, what does this mean, and I’m not very good with finances and understanding numbers.

[00:50:16] Ramit: All right, let’s take a look. Let’s take a look at your gross monthly income. Megan, what is this number here, the combined gross monthly income?

[00:50:25] Megan: That’s the numbers before taxes.

[00:50:27] Ramit: Yeah. What is it? Read the number up.

[00:50:29] Megan: 9,486.

[00:50:31] Ramit: $9,486. So did you know that as a household you make $113,000?

[00:50:42] Megan: No, I figured it was like 70,000 a year or a month type of thing, or a year, whatever you want to call it.

[00:50:49] Ramit: Peter, did you know that you make $113,000?

[00:50:51] Peter: I honestly thought I was under, I thought we were about 80,000.

[00:50:57] Ramit: And let me guess. A few weeks ago, you were like, if we just make 25,000 more, all our problems will vanish, right? Well, here you go. The Lord has delivered. What do you say?

[00:51:11] Peter: We’re screwed.

[00:51:11] Ramit: Did the problems vanish? Are you telling me that maybe, just maybe, the way you feel about money is highly uncorrelated with the amount in your bank account? Is that what you’re telling me?

[00:51:22] Peter: I knew this was coming.

[00:51:24] Ramit: Hmm. That’s so shocking. So seriously, though, what do you make of the fact that you didn’t know how much you made, and it actually turns out to be more than both of you thought, and yet you are still in financial trouble?

[00:51:38] Megan: Scary.

[00:51:40] Ramit: What’s the lesson here?

[00:51:44] Megan: That I have no idea what I’m doing when it comes to money and finances.

[00:51:48] Ramit: What else?

[00:51:49] Megan: I just assumed it was all sunshine and rainbows and everything works out.

[00:51:54] Ramit: Are you willing to get a new job?

[00:51:56] Megan: Yes.

[00:51:58] Ramit: All right. That’s good.

[00:52:00] Megan: My income doubling or tripling would make a big difference.

[00:52:07] Ramit: What is your job right now?

[00:52:10] Megan: I work at Petco, so I just work on the floor, cashier, stock.

[00:52:16] Ramit: How long have you done that?

[00:52:16] Megan: Maybe 17 years.

[00:52:19] Ramit: You make $30,000 a year.

[00:52:21] Megan: Mm-hmm.

[00:52:22] Ramit: What do you think about that?

[00:52:24] Megan: No, it sucks. I admit that it sucks.

[00:52:29] Ramit: Why are you still there?

[00:52:30] Megan: Because it’s a nice job.

[00:52:34] Peter: It’s comfortable.

[00:52:36] Megan: Mm-hmm.

[00:52:37] Peter: It’s a little frustrating for me because we’ve done this before. I feel like she’s like, oh, yeah, I’ll look at a couple of jobs, and then it’s the same thing again.

[00:52:51] Ramit: Do you know why she doesn’t change?

[00:52:55] Megan: Because I’m stubborn and stuck in my ways.

[00:52:58] Ramit: And?

[00:53:00] Megan: I’m a moron.

[00:53:00] Peter: Comfortable.

[00:53:02] Ramit: No, you’re not a moron. I don’t believe anyone who comes and talks to me is a moron. I think you’re actually responding very rationally to the situation around you, Megan. Peter, do you know why she’s has not made a change with her career?

[00:53:18] Peter: Yeah, I feel because I just wind up taking care of everything.

[00:53:21] Ramit: Yeah. There’s no consequences. Why would anyone change? Roof is still over the head. Food is still coming in. Still eat out. Why change? Got the phone working, got the games. You know the job market is fantastic right now? Are you aware of that?

[00:53:39] Megan: No.

[00:53:40] Ramit: Why don’t you take this seriously?

[00:53:43] Megan: I do. I just, like I said, when he talks about it, because we’ve talked about it so much, it just gets frustrating and annoying that when I get frustrated, annoyed, I shut down. I don’t talk. I don’t acknowledge. I sit there and quiet.

[00:53:56] Ramit: Peter, what if Megan never changes?

[00:53:59] Peter: I couldn’t deal with it.

[00:54:01] Ramit: Well, it’s been over 10 years?

[00:54:03] Peter: I’ve told her before, so I was like, I’m not doing this anymore. It’s tough saying it again. But yeah, I’ve been at the point that it’s like, I’m still young. We got no kids. Maybe it’s time to move on.

[00:54:22] Megan: I want to stick it out with him and go from there because I love him to all ends of the earth.

[00:54:28] Ramit: You love him enough to engage with money?

[00:54:29] Megan: Mm-hmm.

[00:54:32] Peter: I get frustrated because I tried talking to Megan and she comes out and says that she’s worthless and everything like that, and I reassure her that that’s not it. It’s just going to try a little more. But yes, I absolutely love her, and I know she knows that because not that long ago, we almost got a divorce and we worked through it.

[00:54:58] Ramit: Was that related to money?

[00:55:00] Peter: No.

[00:55:01] Ramit: What I want you to see is that you have delegated the responsibility of money and probably other parts of making decisions to somebody else in your life. Almost like when somebody’s injured in a wheelchair and they can’t walk for a while, and then they finally get up, their legs have atrophied.

[00:55:23] They need to rebuild those muscles. Well, your ability to make those decisions and to manage money has atrophied. It’s actually never been built in some cases, and it actually makes perfect sense because Peter’s over here saying, I’m overwhelmed. I need help. But you are not picking up the ball that he’s tossing to you.

[00:55:46] Megan: No, I’m more or less dodging it.

[00:55:49] Ramit: Exactly. And do you know why you are able to dodge it?

[00:55:55] Megan: Because I do.

[00:55:56] Ramit: You do. But why are you able to? Let’s say Peter, God forbid, got hit by a bus tomorrow, what would you do?

[00:56:05] Megan: Probably have to sell everything in order to survive.

[00:56:07] Ramit: Oh wow. So you would suddenly– Peter, what’s that reaction you just had?

[00:56:12] Peter: Yeah, it’s frustrating.

[00:56:14] Ramit: Why?

[00:56:15] Peter: Because I work my ass off.

[00:56:17] Ramit: Peter, in this example, you’re fucking dead. Who cares about your shit?

[00:56:21] Megan: Exactly.

[00:56:23] Ramit: Is this a joke right now? Peter’s looking down from heaven going, no, not the Corvette.

[00:56:32] Megan: Oh, he would haunt me.

[00:56:33] Ramit: Who gives a shit about the Corvette? It’s gone. Scrap that thing.

[00:56:38] Megan: I would be haunted by him.

[00:56:40] Ramit: What is shocking to me about that is for the first time in over 10 years, Megan would be taking action and being decisive with him. None of this hopefully, none of this trying. It’s like, this is what I need to do. Why is that?

[00:56:59] Megan: Because I have nobody else to rely on.

[00:57:01] Ramit: Wow.

[00:57:02] Megan: It’s all me.

[00:57:04] Ramit: So you’re telling me you could turn on a dime like that, sell everything, basically fix up all your finances in a matter of three or four months. All it takes Is your husband dying in a grotesque death? Is that it?

[00:57:15] Peter: It’s super frustrating to me because–

[00:57:18] Ramit: I don’t want to hear the same old, it’s frustrating story. I’ve heard it. Let’s talk about the future. I know you’ve told her. I know she didn’t listen to you. I don’t care about that anymore. I’m focused on the future. Can we make a change without you having to die or leave?

[00:57:32] Peter: Yeah, I hope so.

[00:57:33] Ramit: Then how are we going to do it?

[00:57:35] Peter: I don’t know what to do. I did everything I could myself.

[00:57:40] Ramit: No, you didn’t.

[00:57:41] Peter: Yeah. I changed jobs. 

[00:57:46] Ramit: You didn’t do everything you could think of, not even close. In your head, you have an invisible box around your vehicles that doesn’t count. How much could all your stuff be sold for if necessary?

[00:57:56] Peter: Probably about 40,000.

[00:58:00] Ramit: You’re telling me you’ve done everything you can except for selling $40,000 worth of items.

[00:58:08] Peter: It would kill me.

[00:58:11] Ramit: Mm. That’s not what’s going to kill you. Losing power, losing electricity,

[00:58:15] Peter: I would find it another way.

[00:58:18] Ramit: What way? Tell me.

[00:58:19] Peter: Like you said, I do side jobs. Yeah, I couldn’t sell my vehicles. It’s not fair.

[00:58:28] Ramit: Fair to whom?

[00:58:30] Peter: It’s not fair to me.

[00:58:31] Ramit: Okay. Well, I can’t change that.

[00:58:34] Megan: No.

[00:58:35] Ramit: Why are you so content to live so small? I don’t understand why. Why are you so content that your entire life is all about a bunch of random vehicles you buy, stuff? Just stuff. I’m sure these vehicles are meaningful to you. I’m sure you dreamed about cars since you were a kid.

[00:58:53] I have nothing against cars. Good, inanimate objects, you’ve bought. These freaking vehicles that are sitting there, they’re costing you your health. They’re costing you your marriage. They’re costing your financial security. I don’t understand how you can be content to let vehicles be the whole purpose of your life.

[00:59:16] Peter: I’m just nervous that, get rid of them, it fixes something for a little bit, then it’s back at the same situation.

[Narration]

[00:59:27] Ramit: You can tell that this isn’t about cars at all. Earlier I said that selling one of these cars would feel like Peter cutting off one of his arms, and now you can see what I mean. He’s breathing heavily. He’s talked about divorce. He has late notices. But he won’t even entertain the idea of selling one of his seven vehicles.

[00:59:49] This goes a lot deeper than it appears. And what is especially frustrating to me is his focus on the second order effects. You’ll see that when he says things like, I’m worried we’d get back into this situation again. They’re in grave danger right now– personal danger, physical danger, financial danger.

[01:00:09] You can’t worry about what might happen later when your house is on fire, but he can’t think that far ahead. He’s living in the moment, retelling the same old stories, unwilling and unable to make a change. He says that he’s tried everything, but he hasn’t really tried anything at all.

[Interview]

[01:00:26] Ramit: Another way to say it would be, oh my God, Megan, I’m so excited by this. I didn’t realize that we actually have a path out of being stuck. If you can get a job, which I would love to see you do, and I have total confidence in you, I can start selling vehicles, put that towards our debt, and we could pay it off even faster, start to save more, invest more, take trips, do the things we love. We could actually get out of this black hole that we’re in. Megan, you look a bit disconnected.

[01:01:03] Megan: Well, the only tricky part is with the phone, which I know we need to get rid of the watches. I know it’s frustrating, but with his shop, he needs the internet down there because of the security cameras.

[01:01:16] Ramit: Megan, you’re about to go bankrupt. Your husband has talked about divorce multiple times, and you are stuck on $50 a month for internet. Are you sure that’s the right place for you to focus your attention right now?

[01:01:29] Megan: No.

[01:01:30] Ramit: Where would you two like to go from here?

[01:01:37] Megan: I’m just at a loss for words right now.

[01:01:40] Ramit: I want to help you guys. I’m just not sure if you really want my help.

[Narration]

[01:01:49] Ramit:  I’m sensitive to the fact that money is political and there are systemic forces that make it extremely difficult for lots of us to succeed in our culture. But they’re almost 40 years old. They’re on the verge of divorce. Their wages are being garnished. Their lights are about to be turned off, and they’re not doing anything about it.

[01:02:12] I believe that you can acknowledge the need for systemic change and simultaneously acknowledge the need for personal responsibility. And Peter and Megan are not taking any responsibility whatsoever.

[01:02:24] In order to make a change, here’s what they would need to do. Number one, get honest with the situation. They’re in the red. It’s getting worse every single day. Number two, what are the fastest ways to alleviate pressure? Sell the watches. Sell the 4,000-dollar saltwater fish tank, and immediately begin redirecting all the money from those sales and the garage towards their living expenses.

[01:02:45] Number three, finally, the bigger changes, sell the vehicles. Megan focuses on getting a new job that pays more, and both of them start to spend time and attention on rekindling their relationship.

[01:02:59] I wish I could share their follow up, but we reached out multiple times and never heard back. Peter and Megan, I wish the best for both of you, and I still invite you to share an update from our conversation.