Episode #166:
“I’m embarrassed—we hid $10,000 cash in our closet for 3 years”
https://youtu.be/3plueFFhP3M
Christina is 37 and Noah 35. They’re married with one young son and another on the way. They earn a very high income, but their decisions are clouded by stress over money and over the future. Noah plays dream crusher while Christina spins them down a rabbit hole of negative outcomes.
This episode is brought to you by:
Shopify | Sign up for a $1 per month trial period at https://shopify.com/ramit.
DeleteMe | If you want to get your personal information removed from the web, go to https://joindeleteme.com/ramit for 20% off.
Trust & Will | Secure your assets and protect your loved ones. Get 10% off plus free shipping on your estate plan documents by visiting https://trustandwill.com/ramit
LMNT | Right now, LMNT is offering 8 single serving packets FREE with any LMNT order. This is a great way to try all 8 flavors. Get yours at https://drinklmnt.com/RAMIT.
Next Level Wardrobe | Dress like an elevated version of you. Take a free styling quiz at https://nextlevelwardrobe.com/ramit.
Tools mentioned in this episode
Show Transcript
Download the full transcript PDF.
[00:00:00] Christina: What if I want to buy a Gucci purse for $1,000? I don’t want to feel guilty because that was money I saved.
[00:00:06] Noah: Whereas I’m just like, let me just amass as much as money as possible and just avoid it and just forget about it. It’s for tomorrow.
[Narration]
[00:00:47] Ramit: Meet Christina and Noah. They’re in their mid-30s. She constantly worries about money, and he plays the role of the dream crusher in their relationship. Now, later in today’s conversation, you’re going to hear me get really frustrated when they continue repeating a story about their finances that is simply not true.
[00:01:09] They’re playing small. The question is, can they actually change the roles that they have created for each other and for their money? Make sure to subscribe on YouTube and check out all the behind-the-scenes footage that we air in today’s episode. Now, let’s meet Christina and Noah.
[Interview]
[00:01:28] Christina: I had just toured a facility, and I loved it and I thought it was great. It was everything on paper that I thought we needed for our future kid. So I addressed it like, Noah, can we send our future baby to this facility? And he was like, okay, that sounds great. But I knew that it was alarming because I knew the cost.
[00:01:52] And so then I brought up, well, I’ve done the math of this, and the math is very alarming because not only is our son’s care going to go up, our son who’s already three. His is going to go up a few hundred dollars a month which equates to a few thousand, but now the baby’s cost are several thousand more, of course. And so collectively, we’re spending What, it seems like two thirds of my income on child care, I find that very alarming.
[00:02:20] Ramit: Did you use that word?
[00:02:21] Christina: I probably did.
[00:02:22] Ramit: Okay. And what did he say?
[00:02:24] Christina: I don’t remember that exact moment, but he probably deferred, like, let’s talk about this later. He wants to sit down and visualize the numbers. He wants to sit down and visualize the situation. And so he wanted the details in a separate scenario, not when we’re having dinner, not when our son’s awake, and he’s distracted.
[00:02:39] Ramit: Okay. What do you think about that?
[00:02:41] Christina: I find it very annoying. I only have so much energy being pregnant, and I’m trying to get a lot accomplished in a short amount of time. This facility has a long wait list. We need to jump on our spot and reserve our spot for the baby and for our son. And if we don’t do that soon, we’re going to lose the spot.
[00:03:01] Ramit: So there was a sense of urgency for you.
[00:03:02] Christina: Absolutely.
[00:03:03] Ramit: Did you tell him that?
[00:03:04] Christina: Yes.
[00:03:04] Ramit: And how did he respond?
[00:03:06] Christina: Still let’s wait. So there’s always a sense of like, everything is urgent to you, and it’s not urgent to me.
[00:03:12] Ramit: And what’d you decide to do?
[00:03:14] Christina: Wait, do nothing.
[00:03:16] Ramit: Okay. Is this a common dynamic?
[00:03:18] Christina: Yes.
[00:03:19] Ramit: You bring up something. He says, let’s talk about it. You do later, and then you don’t make a decision.
[00:03:27] Christina: Yes. Essentially, like I’m always waiting for him to finally have that conversation. And once we finally have the conversation, it still results in no action.
[00:03:36] Noah: There’s obviously a little bit here, a little yellow flag. Is it too expensive? Can we afford this? And that’s like, all right, well, have we looked at our other options? And it’s more of the analysis paralysis where, hey, let’s have a conversation. Let’s look at multiple options. Let’s not buy the first car on the lot because it’s shiny. That is where the difference is, like, you will come from this, I think we should spend our money. Whereas I’m just like, let me just amass as much as money as possible and just avoid it and just forget about it. It’s for tomorrow.
[00:04:04] Ramit: Why is that?
[00:04:06] Noah: I don’t really value spending money a ton. I grew up frugal parents, and they didn’t spend money. And I think you learn that.
[00:04:13] Ramit: Okay. And what about you, Christina? When it comes to spending money, do you like spending money?
[00:04:18] Christina: I do like it.
[00:04:19] Ramit: And would you agree that Noah doesn’t really need to spend a lot of money?
[00:04:23] Christina: Yes. And I’ll caveat. I think equally we’re almost similarly paired that neither of us is a major spender or a major saver. Or at least I don’t feel that we are.
[00:04:36] Ramit: What’s that word? Feel? What is that? Why are you looking down right now?
[00:04:41] Christina: I don’t know. I don’t know how you’re going to interpret all this, but I feel that we don’t– I don’t know if we save enough. I feel like we spend too much, but I don’t know how other people would view that. I don’t know.
[00:04:54] Ramit: Wait a minute. What? You just said I don’t spend that much, and then 10 seconds later you said, do we spend too much?
[00:05:03] Christina: Yes. How can we afford our life? Have we overextended ourselves financially that we can’t afford our lives? Is something wrong with us? What are we doing wrong?
[00:05:13] Ramit: What do you mean? You don’t know?
[00:05:14] Christina: Okay. So let me give you a great example. I can go shopping and easily spend $200 to $300 on me and my son collectively, or just myself, and I don’t overthink it, and in my head I’m like, we should be able to spend this much money. In some ways, I wish he was less frugal, and then in other ways, I’m so grateful he’s frugal, and I mentally wonder, do I need a change?
[00:05:36] Do I need someone to check me and be like, you’re overspending. You think you have this kind of money, but if you take the amount you make and the amount we make and then you deduct how much it costs to live and taxes in a high cost living area, can you really afford this? When your friend says let’s go to dinner and let’s spend 70 dollars, is that cool, or is that too much money? Because then we’re also spending money in other areas. And I have a beautiful spreadsheet that you probably would hate. Too many line items in my Excel spreadsheet.
[00:06:08] Ramit: How many line items? Just tell us. You know you’re proud of it. Come on. It’s on your phone, probably on a shortcut. How many line items?
[00:06:15] Christina: It’s probably 30 to 40.
[00:06:17] Ramit: Noah?
[00:06:19] Noah: I want to know if my understanding of our finances is oddly skewed towards just not spending money and if that’s more detrimental, or if we can actually afford the life that we’re trying to build right now.
[00:06:35] Christina: And what if we have an off year? We’re only in our 30s. So what if we have some off years in our 30s or 40s? And what if we have an off year in our 50s? Or what if for some reason either of us don’t get to work till 68 years old and then all of a sudden I get laid off at 62 and I can’t get a new job? And then that retirement number is, I’m starting at 62 and not at 68.
[00:06:56] So those are bigger things that I process often that the fear keeps me going. I need to be successful enough that I have a job at 50. I have a job at 60. I’m crushing it. He’s crushing it. And there’s a lack of fear involved.
[00:07:14] Ramit: Is fear your motivator?
[00:07:16] Christina: Yes. Because I’m the driver, I feel like. I feel like I’m off in the driver’s seat.
[00:07:19] Ramit: Oh, okay. You’re the driver. That’s your role.
[00:07:22] Christina: I think. I think he would agree.
[00:07:24] Ramit: And if you’re the driver, what is he?
[00:07:26] Christina: He’s the passenger.
[00:07:28] Ramit: Fair, Noah?
[00:07:29] Noah: Yeah, the wheels. I don’t know.
[00:07:31] Christina: He’s in the car.
[00:07:33] Ramit: If you’re deciding to take the metaphor at its face value, why are we here? Because shouldn’t the driver decide where you’re going to go?
[00:07:41] Christina: I mentally wonder though, like, am I making bad decisions? Is this normal? Is everyone spending this much money of their income in their paycheck? It feels heavy. It feels like we’re spending too much. And maybe other people are cool with that and just overspending their budget and not saving and investing a ton, but it feels like we’re doing something wrong.
[00:08:02] Ramit: All right.
[00:08:03] Noah: I’ve never been concerned that I’ll be able to make ends meet, pay my bills. At the end of the day, I think I’ve been fortunate from that angle. I think we started not making very much money. And so now I know what I really need in life. I’m like, I don’t really need a ton. I think there’s that aspect of providing for your family and for your children, and I think that can be somewhat of a gender role too, but I want to be able to provide enough for them.
[00:08:30] But I also want to provide where at least it’s on par if not better as time goes on. So I wanted my sons to be able to have at least as good a life as I had, if not– and I don’t want them to be like, hey, by the way, I have to pay all this money out for college loans or something. Way to go, mom and dad, thanks for setting me up to fail kind of thing.
[00:08:53] Ramit: Did your parents pay for your college?
[00:08:54] Noah: They did. Yes.
[Narration]
[00:08:55] Okay. Some early clues. It’s interesting that Christina describes herself as the driver, but then she doubts herself. That’s not a driver. You can either be the driver and have the confidence and competence to know what you’re doing and where you’re going, or you can be a partner, but you can’t do a little bit of each.
[00:09:14] I notice a lot of circular thinking as well. Did you catch it? The easiest example was when she said, “I don’t feel we spend a lot,” and then just seconds later she said, “I feel like we spend too much.” Also, I noticed that Noah has a different money lens. He simply wants to spend less. Let me keep digging.
[Interview]
[00:09:36] Noah: When we got married, we combined our incomes, and for a while I knew there was another bank account that Christina had one that was sitting out there, but it just was sitting there. And then I think we watch a documentary on Netflix about Wells Fargo or something. And she’s like, I have the sick.
[00:09:56] Ramit: All right.
[00:09:57] Noah: I have this money sitting here. And then I think you went in and you look to your account and you’re like, oh man, I’ve been hit by all of these fee overcharges. And I’m like, well, that makes sense because your money has been sitting there. And I remember finally this money came out.
[00:10:11] Ramit: So what happened?
[00:10:12] Noah: The money sat in a paper bag or plastic bag or some sort of bag. Oh, one of the reusable bags for three years.
[00:10:20] Ramit: What? This is cash?
[00:10:22] Noah: 10,000 in cash.
[Narration]
[00:10:23] Ramit: We’ll be right back after this short break.
[00:10:26] Let’s get back to the conversation.
[Interview]
[00:10:29] Okay. I did not–
[00:10:29] Noah: And it just sat in this bookshelf thing that have there.
[00:10:33] Ramit: Why? Why was it there and not in a bank? And why are you covering your face right now, Christina? What the hell is happening?
[00:10:39] Christina: It’s shameful. It’s ridiculous.
[00:10:41] Ramit: This is your money. And you took it out from Wells Fargo because they suck, but you kept it in a bag.
[00:10:49] Christina: Yeah. It was one of those line items. I know I need to do this. I know I need to do this, but I’ll just focus on our month-to-month spending and try not to spend too much while we’re going through COVID. Was it losing money? Maybe it was losing 35 cents a month, which is dumb. And eventually, let’s call it 2021, I took it out. I was embarrassed.
[00:11:13] Ramit: Ah, all right. So you avoided it. So then Noah, you are at home and you’re like, hey, knock, knock, knock. Let’s talk about this money.
[00:11:22] Noah: And a lot of it stems back to that, we have this bag of cash here that somebody could steal. If our building burned down, that money’s gone. At minimum, let’s put it in some ability to make money in some way, shape, or form.
[00:11:38] Christina: What if I want to buy a Gucci purse for $1,000? I don’t want to feel guilty because that was money I saved, and I want to spend that thousand dollars on a nice Gucci purse and not feel any negative feelings about it.
[00:11:52] Ramit: Okay. That’s fair. Did you ever have that conversation?
[00:11:55] Christina: I think I did. Yeah, we did.
[00:11:56] Ramit: And?
[00:11:57] Christina: So I was the one who was hesitant, wanted to spend it, but also what to do with it, I guess.
[00:12:02] Ramit: Christina resisting putting it in the bank?
[00:12:05] Noah: Yes.
[00:12:07] Ramit: Why? How long did this conversation go on back in the–
[00:12:09] Christina: Oh, probably a few years.
[00:12:12] Ramit: Do you see any similarities between you waiting and having conversations for years with Noah waiting and wanting to talk about childcare in a different conversation?
[00:12:28] Christina: Yes.
[00:12:28] Ramit: What are the similarities? Did you just realize that for the first time?
[00:12:34] Christina: Yeah. I like to not see that side of myself.
[00:12:37] Ramit: Really? What side is that?
[00:12:40]
[00:12:40] Christina: Not addressing a big concern.
[00:12:44] Ramit: Mm-hmm.
[00:12:44] Christina: It’s the avoidance side of my personality. I think I usually like to hit things head on, address sit, fix it, and move on to the next problem.
[00:12:52] Ramit: Except for when?
[00:12:54] Christina: I don’t see a solution being made.
[00:12:56] Ramit: All right. If you had to describe the primary financial challenge that both of you face, what would it be in one sentence?
[00:13:13] Christina: Decision fatigue.
[00:13:14] Ramit: Are you confident with money?
[00:13:16] Christina: No, I’m not. I almost wonder like, oh, I should pull it back. Maybe we can’t afford 1.1 million-dollar house. Maybe we really should max afford a 900k home.
[00:13:28] Ramit: So if that’s the case, why not just do that? Let’s pull back a little bit.
[00:13:31] Christina: Because that’s not the home I really want. So it’s like I want the Gucci purse. I want the nicer home. I want to be able to go to shows when I want and to go on the vacation, not a crazy, but I want to be able to live this Rich Life, but then I feel guilty for it. And then I also wonder if I’m overspending in my Rich Life area that I really should be saving and investing for because if I run the numbers, there’s a lot of money that needs to be made to live our life like down the road.
[00:14:05] Ramit: Would you say you know your numbers?
[00:14:09] Christina: Yes.
[00:14:09] Ramit: Great. If you know your numbers, then you’re asking me, can we afford this couch or this childcare or this house? Technically, shouldn’t you be able to find out the answer from CSP?
[00:14:19] Christina: Absolutely.
[00:14:20] Ramit: So what’s missing?
[00:14:23] Christina: What’s missing is the variables of, for one, our rent just went up, not a grand, but if you add utilities and all that, that just went up very recently. Let’s call it a grand a month. That’s 12k a year. Then you add in another child in the mix, that’s another 30k a year. So if I’m calculating for the next six months alone, that’s 42k more.
[00:14:49] So what we might’ve been spending on a vacation or clothes or whatever, that’s 42K allocated more towards other fixed expenses, so to speak. And it makes our fixed expenses a really high portion of our income, and then it makes me go, okay, we have to cut back. Okay, so we have to be people who go to garage sales, buy used toys, or buy used clothes, or we don’t buy a lot of new things in this season of life. And that’s okay. And I think we can be frugal.
[00:15:16] Ramit: I’m with you so far. What’s the problem? Everything you’re saying sounds right.
[00:15:18] Christina: There’s a disconnect of wanting to be hyper frugal. Okay, if we make this amount of income now. Again, the fear of, like, we don’t know what’s to come in our late 30s, and 40s, and 50s. What if we spend the max now of our income? We save, invest, but we’re spending a lot, and then we get to a point where I lose my job at 55, and now we don’t have enough money amassed for that future. So then I would regret, did I really need that Gucci purse? Did I really need to send my kid to that top daycare? Did I really need to send my kid–
[00:15:52] Ramit: Do you find that you talk in circles a lot?
[00:15:54] Christina: Probably.
[00:15:55] Ramit: Are you decisive about money?
[00:15:57] Christina: No, I don’t think so.
[00:16:01] Ramit: It’s frustrating, right?
[00:16:02] Christina: Yeah. Because we spend a lot of mental energy, a lot of mental energy. I’d like to feel that what we make is enough, enough to live the lifestyle I want to live. I practically, on paper, when we live it out, it feels like we’re not living the life I want to live.
[00:16:20] Ramit: Maybe you don’t make enough money.
[00:16:21] Christina: Right. That’s what I mean.
[00:16:22] Ramit: Is that the problem?
[00:16:23] Christina: I think so.
[00:16:24] Ramit: Okay, so make more money.
[00:16:26] Christina: Right. But easier said than done getting the raise, and then like, okay.
[00:16:29] Ramit: Do you think that that’s really the problem, that you’re just making $50,000 too little?
[00:16:35] Christina: I think I was conditioned to think this is normal life. Here’s the normal life on the platter. This is what a normal lifestyle looks like. And here I am becoming an adult, or I’ve become an adult. I’m now in my mid to late 30s. And I look at it. I’m like, it’s really freaking hard to attain this. I’m proud of myself in some ways, and I’m proud of my husband, and many other ways, I’m like, I feel like we’re just skirting by.
[Narration]
[00:17:04] Ramit: Money is deeply emotional. It’s deeply political, but sometimes you just need to take an honest look at the numbers. Here they are. Assets, $50,000; investments, $653,000; savings, $160,000; debt, 0; net worth in their mid-30s, $863,815.
[Interview]
[00:17:28] I don’t think you’re just skirting by. You have over half a million dollars invested.
[00:17:32] Christina: Yes, but for our age and our incomes, it’s not three times. I’m supposed to have three times my income at 40.
[00:17:37] Ramit: Who told you that?
[00:17:39] Christina: My portfolio.
[00:17:41] Ramit: What?
[00:17:41] Christina: Anything online would say that. They’d like, by 40, you should have your income times three and that much invested.
[00:17:46] Ramit: Who said that?
[00:17:47] Christina: Fidelity.
[00:17:50] Ramit: Fidelity did not say you specifically should have three times your income.
[00:17:55] Christina: They have a little car, and it says, here you are, and here’s where you should be at 40. And 40 is in two and a half years. So at two and a half years I should have X amount, and I’m going to be way behind that.
[00:18:07] Ramit: And then, if you are truly way behind that, a cartoon car that Fidelity put on their website, did that car take into account cost of living? No. Did it take into account single or dual income? Probably not. Did it take into account when you started earning that money, whether it was at 25 or 40? No. And on and on. So let’s just keep going with the example. Let’s say you get to 40 and you haven’t met the car goals. What then?
[Narration]
[00:18:38] Ramit: Before we hear her answer, I need a quick favor from you. If you’re enjoying this show, please hit the Subscribe button. It really helps me, and it helps my team.
[Interview]
[00:18:48] Christina: I think it’s feeling like a failure.
[00:18:51] Ramit: And then? If you feel like a failure, what–
[00:18:53] Christina: I feel like I shouldn’t be spending.
[00:18:55] Ramit: Okay. And then?
[00:18:57] Christina: I’m overspending.
[00:18:58] Ramit: And then what do you do?
[00:19:00] Christina: Save, leave money in the bag.
[00:19:03] Ramit: Keep going.
[00:19:04] Christina: Yeah, it’s a lot of guilt ridden for spending money. In my 20s, I barely made money. So to go from a place of below minimum wage, a point in my life, and eating terrible food, and eating free food, and not having money to then doing well for myself and working my ass off, multiple jobs, feeling confident in my career, confident in who I am and what I bring to the table, I was right there.
[Narration]
[00:19:40] Ramit: Fidelity actually does have a webpage where they suggest you aim for three times your income by the age of 40. Look at this page. I’m going to show it on our YouTube channel. You’ll notice Fidelity bends over backwards to remind you that these are just guidelines and they depend on tons of variables, but people will literally go their entire lives feeling bad about money because of a cartoon image on some random webpage.
[00:20:08] If you want to live your Rich Life, you have to know your numbers, not just the guidelines, not just a cartoon car, substantive knowledge of your numbers. This is one of the most important topics in your life. You have to know your numbers.
[Interview]
[00:20:24] Christina: Financially, things can change like that, and I’m in a situation now where I wouldn’t call myself high in the totem pole. I wouldn’t call myself bottom of the barrel, but I’m not middle high. I’m like middle, middle, middle low even in my mind. I feel like I had a very late start professionally, and so it’s hindering me, like, okay, well, I’m only here, but my peers are making double what I’m making.
[00:20:50] And I just feel incompetent, and I feel like I’m not making enough. And so as a family, are we really making enough to have two kids? I want three. Are we really making enough to even afford the two? It feels like–
[00:21:09] Ramit: It feels like a lot.
[00:21:10] Christina: It does feel like a lot. And I’m not going to say who said this, but I had someone say when I got pregnant with my first child, like, you should be focused on getting a job and not getting pregnant. And I think that weighs on me from the angle of, have I just been irresponsible my whole life? That’s not a story I’m telling myself, and I’m telling myself like, no, you’re not irresponsible. You’re a saver. Yes, you spend, but you save.
[00:21:34] But it’s like I’m fighting this voice of other people saying like, you’re a young, irresponsible person who has no care in the world and is not investing your finances. You don’t have finances to invest, and you’re not making thoughtful decisions. And so I’m trying to make thoughtful decisions.
[00:21:54] Ramit: Can I ask you a question? That person who said that, are they in the position that you want to be in?
[00:21:59] Christina: No.
[00:22:02] Ramit: But you, the two of you, are making a lot of money.
[00:22:07] Christina: I think that’s relative to where you live.
[00:22:10] Ramit: Really?
[00:22:11] Christina: I do. I really do.
[00:22:11] Ramit: Are we going to do this? Are we going to do this whole thing? All right. Do you know how much you make?
[00:22:15] Christina: Yes.
[00:22:16] Ramit: How much?
[00:22:17] Christina: 300 gross.
[00:22:19] Ramit: Can you just say the full number? I wasn’t sure I caught that.
[00:22:21] Christina: 300.
[00:22:22] Ramit: $300?
[00:22:23] Christina: $300,000.
[00:22:24] Ramit: $300,000. It’s all relative, my friends.
[Narration]
[00:22:28] Ramit: Hold that thought. We’ll be right back.
[00:22:30] Let’s get back to the conversation.
[Interview]
[00:22:32] Ramit: Do you think it’s possible that the way that you feel about money doesn’t have anything to do with how much you actually make?
[00:22:40] Christina: Yes, yes. I guess yes.
[00:22:42] Ramit: So is it possible that if you made 400,000, or 450,000, or 500,000, that you still wouldn’t feel like you make a lot?
[00:22:52] Christina: I think if we made those numbers in this year, in this city, I’d feel like we’d make a lot.
[00:22:58] Ramit: And then next year you would go on a nicer vacation and you would buy nicer food and nicer XYZ.
[00:23:05] Christina: I don’t know if we would do a ton of lifestyle inflation. I think we would invest more.
[00:23:09] Ramit: Oh. You know how much you invest per year?
[00:23:13] Christina: We were aiming for 60k a year.
[00:23:18] Ramit: That’s a lot of money.
[00:23:20] Christina: Yeah, but it has to grow. We have to spend a lot of money down the road.
[00:23:25] Ramit: I think you have a dramatic miscalibration with what a lot of money means.
[00:23:31] Christina: Okay.
[00:23:32] Ramit: And because of that, you are always going to feel bad about money.
[00:23:37] Christina: Well, I was just calculating my retirement the other day to 102.
[00:23:41] Ramit: Okay.
[00:23:42] Christina: Here’s why. We don’t know. I could have a heart attack and die. I could get hit by a bus. We don’t know. But what if for some reason modern medicine gets even better? Which it should. What if this healthy lifestyle I’m living and I’m trying to live, I keep it up and I get to live?
[00:23:57] What if I get to live through my 80s and my 90s? What a blessing. I don’t want to undercalculate. Let’s be real. I don’t want to undercalculate my retirement to 85 and then I live beyond it. So I thought, well, 102 seems like a reach, but it’s possible. So I calculated it to 102. I need 9 million. Now you might go, how do you need 9 million? 9 million seems insane.
[00:24:18] Ramit: No. I understand. And I like that you’re being not just conservative in your calculations, but extremely conservative. The average life expectancy, there’s a few years difference, but it’s like basically in the 70s in America.
[00:24:31] Christina: That’s right.
[00:24:31] Ramit: Yeah. Now, education changes things, etc. But conservatively, most people calculate, let’s say, 90, if they want to be really conservative. You were like, no, 12 more years. Fine. But your conclusion from that is what I find most interesting. I need nine million. I’m not going to have enough. I should feel bad. I feel bad because I looked at this Fidelity website. I’m not doing enough, and that person who said that mean thing to me, maybe they were right. And so I need to second guess everything I’m doing because ultimately, I want to feel bad about money. Why?
[00:25:13] Christina: I don’t want to feel bad about money.
[00:25:15] Ramit: You don’t?
[00:25:16] Christina: No.
[00:25:16] Ramit: But you do feel bad about money, correct?
[00:25:18] Christina: I feel bad about my part in the money-making process. It’s not enough.
[00:25:23] Ramit: I don’t know about that because you told me that your husband is really frugal and his parents are extremely frugal. It didn’t seem like it was just about you. Because you’re here talking about Noah as well, right?
[00:25:33] Christina: Sure.
[00:25:33] Ramit: His inability to spend and to plan things.
[00:25:37] Christina: Yes. I think I’m genuinely confused, like, am I trying to spend too much and he would keep us on target to save and have 9 million when I’m 100?
[00:25:47] Ramit: This is not a math problem because people who make $300,000 a year, invest $60,000 in a single year, have over half a million dollars invested in their 30s, and still feel anxious and fight about money and disagree for years about $10,000. That’s not a math problem. What kind of problem is it?
[00:26:12] Christina: I don’t know. I don’t really have an answer.
[00:26:14] Noah: Probably more of psychological habits, like why do I not want to spend the money problem.
[00:26:21] Ramit: Yeah. It’s the dynamic between the two of you, of course, and it’s an individual challenge as well. And I can tell you that. I can show it to you on the calculator, but until you internalize, oh my gosh, we’ve actually been investing a lot. If we actually calculate our numbers, we’re going to have more money than we know what to do with.
[00:26:45] All that stuff is great, but more importantly, we’re doing a really good job. If we’re going to arbitrarily choose how to go through life, why don’t we just choose to have a good time? Why don’t we choose to know our numbers, which you do, and then choose to be confident and have fun?
[Narration]
[00:27:08] Ramit: I think that everything you just heard from Christina is really just storytelling to cover up fear. She worries she won’t have enough. She berates herself for spending too much and not saving enough. She actually gets a lot out of feeling worried about money, even though she claims she doesn’t like to worry.
[00:27:25] That’s it. The rest is irrelevant details. The idea of needing to calculate, living until the age of 102, the Fidelity website, the Gucci bags, it’s all irrelevant details. The single factor that matters here with Christina is that she’s afraid. And no amount of money in the bank, no spreadsheet, no income, no net worth number will solve that emotional problem.
[Interview]
[00:27:49] Ramit: What do you get out of fixating on small expenses?
[00:27:55] Noah: Entertainment. It takes my time.
[00:27:58] Ramit: Yeah. She comes to you saying we should do this, and then you, your role is what?
[00:28:05] Noah: Let’s slow it down a second here. Let’s make sure. What is the right thing to do?
[00:28:09] Ramit: Right. You go like this. Well, wait a second. Explain to me how this is going to work. It’s that kind of like, hold on, slow it down. Let’s not get crazy. Any of this sound familiar?
[00:28:23] Christina: Yes.
[00:28:24] Ramit: And so you get entertainment out of that. That is true. I think that’s actually one of the most honest things I’ve heard on this entire podcast. Entertainment. It is entertaining to be like, wait, wait, wait, justify it. What else do you get out of it, Noah? [00:28:40] Noah: Stress.
[00:28:41] Ramit: Yes.
[00:28:42] Noah: A lot of that.
[00:28:44] Ramit: You like stress?
[00:28:45] Noah: Not really. I’m not a big fan.
[00:28:47] Ramit: You’re sure?
[00:28:48] Noah: I think we get the dopamine hit from the disagreements and arguments.
[00:28:52] Ramit: I think that’s really true. You both like it a bit, right?
[00:28:55] Christina: I think for sure. I’m not going to deny it.
[00:28:57] Ramit: Both of your parents have a similar dynamic?
[00:29:00] Christina: Different.
[00:29:00] Noah: Not mine.
[00:29:02] Ramit: Do they have a dynamic where they snipe at each other a little bit?
[00:29:08] Christina: Mine do.
[00:29:08] Ramit: It doesn’t have to be the exact same, but where they disagree almost comically. It’s quite entertaining to watch or listen to. Any of that?
[00:29:17] Noah: Mine aren’t exciting like that.
[00:29:18] Ramit: Oh, your parents, they were very frugal, right?
[00:29:21] Noah: Correct.
[00:29:22] Ramit: Think about it. What do you get out of this, saying, hold on, slow down, when you connect how you grew up with your parents?
[00:29:32] Noah: I’ve always looked at it as the hold on to why they’re financially well off or–
[00:29:36] Ramit: Ah.
[00:29:37] Noah: Stable.
[00:29:38] Ramit: So they’re wise and financially stable because, what?
[00:29:41] Noah: The frugality
[00:29:42] Ramit: Because they said, hold on, let’s not make any rash decisions. And so by doing this, by pulling out your chalkboard and saying, wait a second, slow down. What are you doing?
[00:29:53] Noah: I’m trying to avoid the rash decisions. And I definitely will look at myself as that like, I don’t know if the ying to the yang, but Christina will be like, I want to buy this, and I’m like, whoa, whoa, whoa, slow down. Let’s make sure this actually makes sense. Because there’s a passion, and I’m like, I need to keep her in check.
[00:30:08] Ramit: Right. Keep her in check means what? You are who?
[00:30:12] Noah: My parent.
[00:30:13] Ramit: You’re being responsible. You’re being calm, methodical. The way you interpret your behavior is I’m doing a good thing, right?
[00:30:26] Noah: Yeah.
[00:30:27] Ramit: And Christina, what do you get out of fixating on small expenses?
[00:30:34] Christina: Feeling like I’m right, maybe satisfaction.
[00:30:39] Ramit: What does it feel like when you finally convince them that it’s okay to spend money on something?
[00:30:44] Christina: I can breathe and be like a free spirit.
[00:30:46] Ramit: Right. Uncaged.
[00:30:48] Christina: Yes. That’s a great way to put it.
[00:30:53] Ramit: All right. What was it like doing the CSP together?
[00:30:57] Christina: Contentious?
[00:30:59] Ramit: Really? What happened?
[00:31:00] Noah: It wasn’t as hard. Anytime we have a conversation about money, we have a lot of feelings or a lot of thoughts on it.
[Narration]
[00:31:09] Ramit: Listen into a few moments from a video that they took at home after they put together their conscious spending plan before our meeting together. One thing I noticed while watching this is that they are focused on the wrong problems. Like many couples, when it comes to their money, they are down in the weeds despite going through the conscious spending plan, which is literally designed to help you zoom up and look at the big picture.
[00:31:33] Noah: It’s been an experience. I think some of it was related to what do we consider guilt-free spending? What do we consider a fixed cost? Also just some slight things like, is clothing a fixed cost or is it guilt free spending? Spent a number of hours having these conversations here. How about you?
[00:31:54] Christina: I think what surprised me the most is when I wrote in. I had thought, so my calculations are obviously off, but based on our gross income, I had thought that it would go up to 75% based on our gross, and you’re doing this from our net. Already, our fixed expenses are 74%, which is a lot, I guess.
[00:32:17] Again, going back the at the bottom line, it’s money in, money out, and I still think we have a problem, and whether or not shopping or entertainment is under guilt-free spending or if it under fixed expenses because you typically spend the same amount in these categories, it’s irrelevant.
[Interview]
[00:32:42] Christina: The contentious part for me was, or for both of us, was– so filling it out, it’s a ton of money.
[00:32:49] Ramit: The CSP wasn’t precise enough for how you’re used to it.
[00:32:54] Christina: Yeah.
[00:32:54] Ramit: Okay. I get that. I agree. The CSP is not precise. It’s designed not to be.
[00:33:00] Christina: Oh.
[00:33:01] Ramit: What do you think it’s designed for?
[00:33:03] Christina: I don’t know.
[00:33:04] Ramit: Let me ask you this way. You have a spreadsheet with 40-plus categories, multiple sheets. It’s very precise, would you say?
[00:33:12] Christina: Yes, I feel like I’m always making it more precise, but yes.
[00:33:16] Ramit: You didn’t have to tell me that. I already knew that. And does it give you the answers you need?
[00:33:23] Christina: On paper, but not emotionally.
[00:33:26] Ramit: In other words, precision doesn’t get you what you think it will. Not in most scenarios.
[00:33:31] Christina: Totally. 100%.
[00:33:33] Ramit: And when you become really fixated on precision, what do you end up doing more of?
[00:33:42] Christina: Being nitty gritty with the precision and making more categories and making things more complicated.
[00:33:46] Ramit: Yes. We got to account for this one thing that happens every fourth leap year and we got to add a line item, and now you have 40-plus line items, and you feel what? What do you feel?
[00:33:58] Christina: More stressed, more tense.
[00:34:01] Ramit: But ironically, the more and more precise you get, the less and less connected you are to your feelings. That’s because you’re down in the weeds.
[00:34:10] Christina: Mm-hmm.
[00:34:12] Ramit: So does anybody in this room feel good about this number? 863,000 in your mid-30s?
[00:34:21] Christina: I don’t think good is the word I would use, so no.
[00:34:24] Ramit: What would be the word that you use?
[00:34:27] Christina: Decent.
[00:34:28] Ramit: Mm-hmm. What would be good?
[00:34:31] Christina: For this point, I would probably have to honestly go to a spreadsheet and calculate what would feel good.
[Narration]
[00:34:38] Ramit: The idea that you’re going to derive your feelings from a spreadsheet is such a gross misunderstanding of how humans work that it’s actually comical to hear it. It’s like saying, are you proud of your kids? And then you say, well, let me look at their report card. Wait a second. Isn’t that how I was raised? Anyway, I’m going to play along with Christina just for the moment.
[Interview]
[00:35:02] Ramit: I have a spreadsheet, so tell me.
[00:35:05] Christina: Okay. This is silly.
[00:35:07] Ramit: Didn’t you actually tell me something like by 40 you should have two and a half times–
[00:35:11] Christina: Three times.
[00:35:12] Ramit: Three times your income because that’s what Fidelity’s cartoon said, right?
[00:35:15] Christina: Right.
[00:35:15] Ramit: Okay. Let’s just stick to that. Let’s do that for a second. You told me three times your income is what you need what?
[00:35:23] Christina: In two and a half years.
[00:35:24] Ramit: Your income is 300,000, so you need 900,000.
[00:35:30] Christina: I feel like it’s, yes, but they were calculating just mine. Okay, yes, let’s stick with that.
[00:35:36] Ramit: You have three times your income right now.
[00:35:39] Christina: Okay.
[00:35:39] Ramit: Do you feel good about money?
[00:35:43] Christina: I hate to say no, but yeah, no, because I want to be able to buy a house and not feel like we still don’t have enough invested as well. And we wouldn’t have 900,000 invested if we buy a house.
[00:35:56] Ramit: Mm-hmm. I agree.
[00:35:58] Christina: So then that would screw the plan.
[00:36:00] Ramit: But sometimes there’s more to life than what’s on a spreadsheet. Okay, what do you conclude from that little exercise we just did?
[00:36:13] Christina: What you want, you already have it. You’re 40k away.
[00:36:16] Ramit: Yeah.
[00:36:17] Christina: Less than 40k away.
[00:36:18] Ramit: And yet?
[00:36:19] Christina: I still don’t feel great about it.
[00:36:22] Ramit: Right. And your natural response, instinctual, was to what?
[00:36:26] Christina: Fight it.
[00:36:27] Ramit: Fight it. Yes, resist. Well, that doesn’t count because of this, this, this, this, this, this. The point is you will keep doing that for the rest of your life. You’re going to do it when you have a million, two million, five million, and more. Do you want to live like that?
[00:36:44] Christina: No.
[00:36:45] Ramit: No? Why did it take you so long to answer that?
[00:36:48] Christina: Because I was mentally processing, like, am I a product of my environment?
[00:36:52] Ramit: Of course, you are. We all are.
[00:36:56] Christina: So maybe I’m just surrounded by people who are constantly like, we have so much money, but we don’t make enough, and maybe that’s the problem.
[00:37:02] Ramit: Yeah. Fuck yes. I’m telling you, as someone who’s looking at your numbers, you set this arbitrary goal that you read from some website, you essentially already hit the goal.
[Narration]
[00:37:14] Ramit: I want to tell you a funny story about this concept of how our feelings are directly influenced by the people around us, but we hate to believe it. Recently, I posted a video on social media showing that we’re not actually living in the worst economy as many people believe.
[00:37:29] This is actually one of the best economies of our lives. Yes, I said it. I have actual data to show that. Record low unemployment, record low crime. I have tons more metrics on my YouTube channel. People literally sent me thousands of angry messages. They said I was out of touch. They used the word gaslighting, as in, Ramit, you’re gaslighting us. They said, I was obviously being paid by the Biden campaign.
[00:37:55] Honestly, first of all, I just want to say, I think a lot of us have gotten a little too comfortable weaponizing therapy words, because it is not gaslighting to post easily verifiable facts. Period. Most of us have only heard that this economy is terrible for years and years. It’s literally a punchline, “in this economy?” There are some people who right now, genuinely believe we’re in a recession. Y’all know we have almost record low unemployment.
[00:38:22] There are some people who right now claim we’re facing worse inflation than the Great Depression. It’s completely absurd and patently out of touch with reality. I’m sharing this because it’s not just that our feelings are out of touch with our finances, as we see with today’s couple and many other couples. It’s that our feelings are also out of touch with the economy even more so.
[00:38:44] As you hear from Christina and Noah, you can let your feelings create narratives that are genuinely, totally out of touch with reality. They have a lot of money, yet she doesn’t believe it. You can go your entire life feeling bad about something that’s actually very good if you don’t learn how to interrogate your stories and look beneath the claims that you read on social media.
[00:39:09] You can find my video with all the data cited on YouTube, by the way. And I encourage you, if you disagree, if you want to critique it with your own data, please do. But we can’t simply operate our entire lives based solely on feelings. We need to also know our numbers. That’s with our personal finances. That’s also with the economy around us.
[Interview]
[00:39:29] Ramit: Now let’s look at your fixed costs. What’s that number there?
[00:39:31] Christina: 74.
[00:39:33] Ramit: That’s pretty high.
[00:39:33] Christina: Very high.
[00:39:34] Ramit: So that tells me you’re investing, let’s see, if it’s 300,000, so you’re investing 60k a year. Great. Okay.
[00:39:44] Christina: But we have been.
[00:39:45] Ramit: Yeah, that’s– What do you mean have been?
[00:39:48] Christina: I know. I hate the fear thing, but I think I constantly am like, I’m pregnant. The baby’s going to come. How are we going to keep investing that amount?
[00:39:56] Ramit: Well, maybe you go down to 40k a year.
[00:39:59] Christina: That seems terrible.
[00:40:01] Ramit: It does.
[00:40:03] Christina: I know. You’re going to hate this.
[00:40:04] Ramit: I’m going to try to protect you from yourself, okay?
[00:40:06] Christina: Okay.
[Narration]
[00:40:06] Ramit: We’ll get back to the story after these brief messages.
[00:40:10] Let’s get right back to it.
[Interview]
[00:40:11] Ramit: I’m not here to tell you what to do with your money. What I’m here to do is to understand what kind of life you want, and then to tell you your options with your money. So I’m not the guy who’s going to tell you, you need to be investing 20%. It’s not my job. It’s not my money.
[00:40:28] I can tell you what’s going to happen if you stay at 20 or drop it to 10%, and I can show you a future that you may not have seen yourself. I think you’re going to be surprised when you see it. I think you’re going to probably realize that a lot of the stress that you’re experiencing individually and together as a couple is self-created.
[00:40:52] Christina: Hmm. Okay.
[00:40:55] Ramit: Let’s keep working down. You’re saving 13%, which is about $1,800 a month. I see that $1,000 of that is going towards future house savings. 666 bucks is going towards vacations and the rest assorted gifts and stuff like that. Fine. And you then have 10% for your guilt-free spending, which is $1,472 a month. Is that accurate?
[00:41:24] Christina: Yeah, I think it all is. Would you agree? Yeah.
[00:41:27] Noah: Yeah.
[00:41:27] Ramit: I love the answer. They’re like, yeah, it’s fucking accurate. We tracked this down to the penny. So based on the numbers, you’re investing $60,000 in one year.
[00:41:38] Christina: Yeah. So it feels fine. That’s fine.
[00:41:43] Ramit: It’s not feelings. It’s numbers on a page. Your numbers. Your question was, are we spending too much? What’s the answer?
[00:41:51] Christina: I don’t know what the answer is.
[00:41:52] Ramit: According to the spreadsheet, are you spending more than you make? No. You’re also saving 13% of net, 1,800 bucks a month. You’re spending 1,400 bucks on guilt-free spending. And you told me that that number is accurate. I believe you. So are you spending too much?
[00:42:17] Christina: On the spreadsheet, then no.
[00:42:19] Ramit: So there’s your answer. Stop looking at that. Your numbers are not going to change. Why are you fixated on those numbers instead of what’s going on here?
[00:42:35] Christina: I don’t know how to rationalize it.
[00:42:38] Ramit: Guys, I don’t find that I’m connecting with you at all right now.
[00:42:45] Christina: Huh?
[00:42:46] Ramit: Can I show you the numbers?
[00:42:47] Christina: Sure.
[00:42:48] Noah: Yes.
[00:42:49] Ramit: How much you have invested right now? 650,000, right?
[00:42:54] Noah: Yes.
[00:42:56] Ramit: How many years to grow? Should we just say 30?
[00:42:58] Noah: Say 30.
[00:42:59] Ramit: How much do you think you’re going to have by the time you’re 65?
[00:43:03] Christina: Well, that’s if we don’t take any of it out. We let it sit.
[00:43:06] Ramit: Oh, so now we’re talking about all the reasons it won’t work.
[00:43:08] Christina: No, no, no. You’re right.
[00:43:09] Ramit: Read that number out loud.
[00:43:11] Christina: 11 million? Oh, so we really shouldn’t buy a house. Oh my god.
[00:43:17] Ramit: So here you are.
[00:43:18] Christina: That would be amazing. We really shouldn’t buy a house.
[00:43:21] Ramit: What’s going on right now? What are you thinking when you see that number? The number is $11 million.
[00:43:26] Christina: I just shouldn’t buy a house, and then I’ll have plenty of money to send all my kids through college and still live the life I want to live.
[00:43:35] Ramit: This isn’t about a house.
[00:43:35] Christina: Okay.
[00:43:36] Ramit: You guys are still fixated on whatever is right in front of you. You’re arguing about Target bills. You’re arguing about a few thousand dollars here or there. You constantly walk on eggshells around each other, talking about minimizing how much you spend, and you’re going to have $11 million in your 60s. Do you even know what you would do with $11 million?
[00:44:09] Instead of you investing $60,000 a year, let’s say you only invest $30,000 per year. That means you take 30k of what you’re currently investing and you spend it. Spend it on a house keeper, spend it on renovations, spend it on whatever you want. What do you think would happen to that 11 million?
[00:44:32] Christina: Half. Six.
[00:44:35] Ramit: 7.9 million.
[00:44:36] Christina: That’s still a good amount.
[00:44:38] Ramit: That’s 8 million, which is throwing off roughly 800k in nominal amount every single year. That’s more than you make right now. Take it down by inflation, but yes.
[00:44:53] Christina: And this is 30 years projection, right?
[00:44:55] Ramit: Mm-hmm.
[00:44:56] Christina: Okay. So you’re saying if this count, the 2024 year, we only saved 30k, and then the next year I save 30k, and our income doesn’t come up and nothing changes and for some reason we just constantly make the same amount of money, that’s how much we would have.
[00:45:13] Ramit: You’d have almost 8 million.
[00:45:15] Christina: Still be able to afford our kids’ college.
[00:45:18] Ramit: You will have more than enough for your kid’s college. That’s not something to fixate on. You’re playing small.
[00:45:27] Christina: I didn’t know that before today, truly.
[00:45:29] Ramit: What are you thinking right now?
[00:45:33] Christina: I feel like all this stress is for naught.
[00:45:35] Ramit: But it’s still real.
[00:45:36] Noah: I literally don’t have an issue spending the money when it gets to spending it. It’s more. I will always provide a resistance in that initial.
[00:45:44] Ramit: But Noah, that’s the problem.
[00:45:45] Noah: Hmm.
[00:45:46] Ramit: Getting to it is most of the work. And by resisting it, you’re putting all the pressure back on her. And Christina, I sense her frustration. It’s incredibly frustrating to feel like you’re always trying to convince a friend to come out to dinner, much less your husband, to actually want to spend on things that will benefit them and our family. Add on the extra layer that we’re already on track to have $11 fucking million. Why am I, Christina, getting resistance over a 50-dollar purchase? Is that not incredibly frustrating to you to hear? Because it is to me.
[00:46:30] Noah: Hmm. I get it. I get why you should definitely be frustrated.
[00:46:36] Ramit: What do you get?
[00:46:37] Noah: I understand that concept. Like, yeah, it seems, just do it now. Why are you being an asshole where I’m slowing it down and just causing more of a problem the entire time.
[00:46:50] Ramit: Mm-hmm. What else?
[00:46:53] Noah: Get rid of your own way, I guess.
[00:46:58] Christina: That’s super interesting.
[00:47:00] Ramit: Yeah. You need to understand the full context. We are an 11-million-dollar couple. We just need time. That’s it.
[Narration]
[00:47:08] Ramit: I have to admit, sometimes I lose my temper when I see a multimillionaire couple just playing small. What a tragedy! Do you know how many people would do anything to have even a fraction of that amount of money, to know that they have safe housing or food for their kids?
[00:47:26] And yet here we have a couple where one member has concocted a narrative that they don’t have enough. The other simply crosses his arms and plays bad guy. It’s just such a waste of time. When people talk about gratitude, gratitude with your money. Christina and Noah are not displaying gratitude for their money. If they were, they would be focused on how they can be generous and spontaneous, but instead they’re fixating on will they have enough? And that is not a Rich Life. It’s actually the opposite of a Rich Life. Listen in now as we talk about an 8,000-dollar vacation.
[Interview]
[00:48:00] Christina: That seems like an obscene amount of money to him unless I over explain how we’re able to.
[00:48:07] Ramit: Okay. Noah, does that seem like an obscene amount of money to spend on vacations?
[00:48:11] Noah: I don’t think so. I think we spend the money, and I think, especially when I’m on the vacations, I don’t look at the cost of anything. I’m not like, oh, same sort of thing. If we’re out for dinner, I don’t care. It’s just the idea of it, spent that sort of money, is there a good reason for it? And yeah, it’s fair.
[00:48:31] Christina: Can I pause you? Because even just yesterday we were talking to friends, and I had to explain to them like, oh, well, we almost didn’t book a vacation we’re going to take in about a month because you didn’t think we could afford it. And practically speaking, I literally waited and waited to book these hotels on an app that I knew the hotels. I knew the dates, knew the prices, and you didn’t want me to book it because you’re like, do we really need to take this vacation? Do we need this vacation?
[00:48:59] We went to Disney this year. Couldn’t that just have been the one vacation a year. And I said, let’s take one little baby moon. It’s our summer vacation. Can we take this one other vacation? That’s it for the year. And it’s a shorter trip. And I know how much we’re going to spend, and I’ve calculated it, and still you were like, I don’t think we need it.
[00:49:20] So you were fighting the need to spend money in these avenues. And you’re totally right. When we go on them, you’re happy, and you don’t fight me, and you do look at something buying the chicken versus the beef. That is something you do.
[00:49:38] Ramit: Noah, is that accurate?
[00:49:40] Noah: I think need is the word. I don’t really think I need a lot of things. So I think that’s the differentiator here. Because I look at this. It seems like a reasonable amount of money to me if we’re going to spend and have decent vacations. But do I need to take a vacation? No, not really.
[00:49:58] Ramit: According to the savings goals that the two of you set up, you put away $666 a month for vacations, so 8,000 bucks a year. As long as you’re below that number, what does it matter to you?
[00:50:13] Noah: Right. No, that’s why I don’t fight it. I’m not saying let’s not have any vacations to spend money. It’s more of a stress coming up.
[00:50:21] Ramit: That sounds different than what Christina described your response about the vacation.
[00:50:25] Noah: It is very different.
[00:50:27] Ramit: So who’s telling the truth?
[00:50:29] Noah: Well, I think for me, I know I have to work right now. It’s not a fixed 300 a year that we’re making. It’s here if I can hit these numbers. That’s when it hits.
[00:50:41] Ramit: Did you tell her that when she brought up the vacation?
[00:50:43] Noah: She’s aware of that, very aware. And there’s a lot of stress behind that too because there’s an inconsistency to our income that can hit. I’m not worried that that is a bad use of money. I think that’s fine. Use that for your vacation. That’s we’ve allocated for it. It’s more that week off, the time that it takes to take off from that.
[00:50:59] Ramit: What if you don’t make the money back from that week? What will happen to your life?
[00:51:05] Noah: It’ll be the same.
[00:51:07] Ramit: What do you think my wife and I do? Do you think that we have the same conversation?
[00:51:12] Noah: I would imagine there’s a little trust assuming that, hey, this is my world. I’ve allocated for this. Just assume this.
[00:51:21] Ramit: Hmm. Have you considered that I might say, Oh my God, that sounds awesome. Spain? Wow, I’ve never been there before. Where would we go? Well, what are you thinking? Who would we bring with us? So in other words, meet her, match her energy, and even one up it? And say like, whoa, tell me more about that. What would that be like? Have you considered that dynamic?
[00:51:43] Noah: I haven’t.
[00:51:44] Ramit: Never done it, right?
[00:51:46] Noah: Probably not.
[00:51:46] Ramit: Yeah. So your response is to go negative, to take her dream, and what would you describe it as?
[00:51:55] Noah: Crunch it. Or squash it, if you will.
[00:51:58] Ramit: Dream squasher. Am I reading this right, Christina?
[00:52:02] Christina: Yeah.
[00:52:02] Ramit: Okay. And in your mind, you’re not the dream squasher. You’re the responsible one. I’m just looking out for the family. I’m making sure I “keep her in check.” But I don’t need to keep my wife in check. That’s not my job. She’s not a child. She’s my wife, my partner.
[00:52:24] Noah: It’s making her feel appreciated. And feeling like, hey, we’re in this together. Let me give you this sense of, let’s make this exciting plan together. Versus, hey, I’m going to be your dream killer, if you will.
[00:52:37] Ramit: What would that look like, getting you on the same page?
[00:52:40] Noah: I think it would get me to probably be more likely to plan with her for expenditures and be more active of a, hey, here’s what we’re going to do. Here’s how we’re going to spend the money, versus being there as the guardrail.
[00:52:58] Ramit: Yeah, guardrail is a very charitable term. Dream crusher is much more accurate. A guardrail implies that someone’s going to fly off a cliff. Is that happening here? Are you at any risk of flying off a financial cliff?
[00:53:17] Noah: I would say no. We were talking about houses beforehand, very expensive houses, and that might have been a different story.
[00:53:25] Ramit: Okay. You find it difficult to create solutions because in part, you fixate on all the reasons they won’t work. Do you notice that?
[00:53:34] Noah: Yeah.
[00:53:35] Ramit: How frustrating must that be for your wife?
[00:53:39] Noah: Frustrating, I’m sure.
[Narration]
[00:53:40] Ramit: Here’s what I notice happening here. She says he doesn’t accept an 8,000-dollar estimated annual vacation spending. He says, no, it’s fine, but I’d rather work, which is just another way of him being a dream crusher. She acts like she doesn’t know their numbers, but she’s actually incredibly informed, and yet she still seeks his approval.
[00:54:01] He has appointed himself the guardrail guy, when in fact they’re in very little danger. He claims to hate conflict, but his very disposition, the one that reflexively says no, or we don’t need that, causes conflict. What does he even want? He mentioned providing for his family, but truthfully, I haven’t really gotten many Rich Life details from Noah.
[Interview]
[00:54:25] Ramit: What is your Rich Life?
[00:54:26] Noah: I like being able to spend money without having to worry about the money. I love that. I love having the idea of the house and my walk into the house is not out of disorder.
[00:54:36] Ramit: Oh, like a housekeeper?
[00:54:37] Noah: Yes, exactly.
[00:54:38] Ramit: All right.
[00:54:39] Noah: Most of the meals are easy to have. My ideal day is I wake up, I can make myself food. I can work. The day goes well. The doing the laundry, that doesn’t have to be me. Or I don’t have to fix the other thing random around the house that just breaks. That would be great. That would be phenomenal.
[00:54:58] Ramit: You love convenience. That’s your money dial. You want to be able to open up the fridge, see the food, have it easily ready, house house should be clean, maybe not have to do the laundry, things like that.
[00:55:09] Noah: Yes.
[00:55:10] Ramit: Okay. Love it. And what about with the two of you? What’s your Rich Life together?
[00:55:15] Noah: I enjoy when we have dates, when it’s like we can go out, whether it be a show, for dinner, or whatever, not having to worry about what’s going on with our dog and children.
[00:55:28] Ramit: Mm-hmm.
[00:55:29] Noah: So that’s the huge one for me.
[00:55:31] Ramit: What else?
[00:55:32] Noah: I like conversations about money because it does show that she’s very interested in our family wellbeing. I think that’s helpful to have those conversations going forward. But I personally wish that that dynamic of it, because it’s such a large dynamic of our day to day, was lessened, hence the reason we’re even here in the first place, would be like–
[00:55:56] Ramit: You want a house?
[00:55:57] Noah: Yes. I would like a house. Yeah. I don’t need to own it, but I’m like, I’m weird about this. Renting’s fine if it’s a better, like, if I look at that as a better deal, if will.
[00:56:07] Ramit: Do you have the same vision for a house that she does?
[00:56:11] Noah: I think generally pretty close. We both might have a fenced yard. We’ll have the dogs be able to run around out there. It doesn’t have to be massive.
[00:56:18] Ramit: Okay. That’s the Rich Life.
[00:56:19] Noah: Mm-hmm.
[00:56:20] Ramit: Okay. I don’t find anything particularly exciting, Noah, about your vision. I’m on a mission to help men in particular realize it’s okay to have wants. And it could be a haircut. It could be a nice pair of socks, whatever. It’s your thing. Y’all seen sitcom dynamics where the husband doesn’t want anything.
[00:56:43] All he is is a provider. He’s basically a husk of a man. He has no desires at all. All he wants to do is be left alone, and the wife is always like, we should do this, we should do that, and he’s like, that’s going to cost too much. You’ve seen this, right, in a million TV shows. Do you see it here?
[00:56:58] Christina: Absolutely.
[00:56:59] Ramit: And you see it getting worse every time. You’re only in your 30s.
[00:57:01] Christina: Yes, and we don’t want that.
[00:57:04] Ramit: Good. Neither do I. So there’s a dynamic that’s clearly been co created here where your needs are unimportant, and actually you’ve embraced that. I don’t need much. I’m a simple guy. Probably same as your parents. I’m a simple guy. We don’t need all that fancy stuff. Seeing a lot of nods right now. Mm-hmm.
[00:57:26] And so what you don’t realize is that by saying, I don’t need anything, whatever, it’s fine. You’re actually putting more of the burden on Christina. So now she has to plan everything. Now she has to come and justify the budget and convince you. And actually a much healthier relationship is to have both partners saying, this is what I want to do. Christina, I can see you thinking as I share this. What’s going through your head?
[00:57:49] Christina: I feel like I’m not even allowed to dream that.
[00:57:53] Ramit: Mm-hmm.
[00:57:54] Christina: Genuinely. It’s almost pointless if I were to share that, because I can be creative, and I can create a whole scenario of the hotel we’re staying at, the view, all that.
[00:58:08] Ramit: Mm-hmm.
[00:58:09] Christina: And what we would do. It wouldn’t mean anything to him because at least before this moment, maybe things would change. And I hope they do. But it always comes back to the money.
[00:58:22] Ramit: Okay. Let’s talk about this. This is a great example. First off, nobody wants to hear their partner say, I feel like I can’t dream. If I heard that from my wife, I would feel like I failed at one of my core responsibilities as a partner, which is to get to help my wife dream even bigger. I can’t do it for her, but I can create the culture that would encourage her to do that.
[00:58:53] How would you feel if your son got to be age 13 and said, I can’t do any of these creative things I want to do because I need to maximize my Roth 401K? You’d feel like failures, right?
[00:59:05] Christina: Totally.
[00:59:05] Ramit: Yeah. And I think we can be fair to say that would not be good parenting.
[00:59:10] Christina: No.
[00:59:10] Ramit: So why is it okay that to create a culture in a relationship where your partner feels like they’re in a cage?
[00:59:18] Christina: Because every time, if I were to mention, let’s go to a show or let’s go and get cocktails, or whatever it is, it’s, can we afford that?
[00:59:26] Ramit: Can I be really direct with both of you?
[00:59:27] Christina: Yeah.
[00:59:28] Ramit: You’re going to go and do this for the rest of your life unless you actually decide to make a change. So the part I’m going to be direct about is the dynamic between the two of you is, you create the dreams, Christina, but then you mistakenly believe that you need to convince Noah.
[00:59:45] You give him the power of saying no. You delegate the power yourself. He doesn’t take it from you. You willingly give it away. And then Noah, you exploit that. You always respond by metaphorically crossing your arms and saying, what about cost? Do we need to do that? Which is extremely devastating to anyone who ever wanted to– it would be like your son coming to you at age 10 and saying, I want to be an astronaut. And you both go, are you really sure? The odds are so small of doing it? Devastating.
[01:00:23] Noah: I don’t want to make it so my son grows up this idea like, oh, okay, you have to be one of the other, and let me stamp on your dreams.
[01:00:29] Christina: Obviously, it’s going to impact how they view money, but in the sense of, yes, daddy buys new shirts, or yeah, we go on vacation, and I didn’t have to hear about, oh, the lobster roll was 30 at that place as opposed to, oh, it was 20 at that place.
[01:00:41] Ramit: That’s right. Or every time I watch mommy, she is asking daddy if it’s okay to spend this, or can we do that? And therefore I realize, daddies are the one who make the decision about money. Mommies are just there to ask. You want that?
[01:00:59] Christina: No, definitely not.
[01:01:00] Ramit: Your son will grow up like that. Just the same way as you saw your parents being extremely frugal, and now you believe that that’s necessary and in fact, it’s a good thing to question your wife when she’s the one who manages the day-to-day expenses. Do you get that? Your son will grow up like that.
[01:01:27] Noah: Mm-hmm. Yeah.
[01:01:27] Ramit: It’s actually existential for you to do that. First for your own relationship, which in my opinion is the most important, and then for the relationship between you and your kids. Because they will pick up on every little thing. How many little radioactive waves have I picked up from the two of you today in a few hours?
[01:01:43] Christina: All the time.
[01:01:44] Ramit: And your sons are with you every day of their life for 18 years. They’re still not going to pick up on every single little dynamic you send out. The eye rolls, the arm crosses, the fact that one of you is disengaged with money, the fact that the other one asks all the time, and even though you know your numbers, you pretend you don’t?
[01:02:02] Christina: Obviously there’s a layer of fear of, again, I think I need 9 million one day. There’s the other layer of, I revere to some degree what his parents did. And I think some aspects of it are smart and then some aspects limit you to actually live a life. And so I genuinely feel like I’m convincing him to spend our money all the time.
[01:02:23] Ramit: Does it work?
[01:02:27] Christina: Yes. I have to like nag, nag, nag, and eventually he caves.
[01:02:31] Ramit: Do you like nagging?
[01:02:32] Christina: I don’t. I think that’s the problem.
[01:02:33] Ramit: What do you get out of it?
[01:02:34] Christina: My way.
[01:02:34] Ramit: Mm-hmm.
[01:02:39] Christina: Action. I get what I want. I’m the one spending the money. I’m the one choosing to spend any of this. I’m the one who said we could spend that much on our rent, and that wasn’t insane.
[01:02:54] Ramit: So what’s the problem?
[01:02:55] Christina: You know what it is? I feel guilty spending money that two thirds of it, I think, comes from him. So I feel like it’s not fair that I’m spending a lot of the money he’s making.
[01:03:08] Ramit: Ask him if he thinks that’s fair.
[01:03:10] Christina: I’ll say it’s fine.
[01:03:11] Ramit: Ask him and ask him.
[01:03:13] Christina: Is it fair that I spend your money? I spend a lot of your money.
[01:03:16] Noah: I know. We’ve talked about this for years. That’s okay. That’s the point of when you get married, and you’re combining incomes and finances. That is the deal. That’s not a problem. I’m definitely–
[01:03:27] Christina: It’s not a problem to spend your money.
[01:03:29] Noah: No.
[01:03:29] Christina: Then is it not a problem if I say, hey honey, I know we’re looking at homes, and this one’s 900, and this one’s a little over a million.
[01:03:37] Noah: I want a home, but I wanted to make sure it’s the right home.
[01:03:42] Christina: I just don’t feel like you’re being real with me. I really don’t. I think you’re telling me as if like, oh, it’s fine, I’ll keel over and get whatever you want, but I know that’s not the truth. Let’s be real. Honestly, it feels frustrating that I even am bringing this up because I’m like, what will get you to the point where you take action to help your own life?
[01:04:04] Ramit: Maybe he doesn’t want to.
[01:04:09] Christina: Maybe you’re right.
[01:04:11] Noah: I’m having those conversations.
[01:04:13] Christina: Right. And you’re okay. And if I say we can afford this, I’ve looked at the numbers. Let’s buy that house. You’re going to find a way to go, how can we save 100k? You’re going to find a reason to–
[01:04:26] Ramit: Are you asking him or telling him what he’s going to do?
[01:04:29] Christina: We’ve had these conversations. This is what he does. Nothing changes.
[01:04:33] Ramit: Okay.
[01:04:33] Noah: First off, I think I would always be crazy if I didn’t want to save $100,000. I feel like that’s a good chunk of money.
[01:04:40] Ramit: Oh, okay. You all went to therapy before, right?
[01:04:44] Christina: Yes.
[01:04:45] Ramit: And did they advise you on not labeling your partner, he always does this?
[01:04:51] Christina: Yes, they did. They did. You’re right. You’re right.
[01:04:54] Ramit: Can we try that again? Can we try it assuming good intent? And can we try remembering that we are not adversaries here? You are married. You’re parents. You love each other. You’re going to be together for the rest of your lives. This isn’t a problem that he’s cheap or you spend too– it’s not that. It’s the two of you as partners holding hands together. Try it. Holding hands together. You’re trying to figure out your Rich Life. Nobody’s doing anything wrong right now. You’re trying to go on a journey together. Now ask the same question.
[01:05:35] Christina: What will make you more comfortable to spend more money on a house? There’s not an or. It’s just like, what would make you more comfortable? You see how much money we have. What would make you more comfortable to take 200 of that, put that towards the down payment? And then the debt of it is 800k or whatever. What would make you more comfortable to live our life?
[01:06:01] Noah: Probably just you being happy
[01:06:03] Ramit: So when we are discussing things like childcare, does it make financial sense? Can we still hit our 60,000-dollar a year number? Also, more importantly, do we even need $11 million? I don’t think the two of you need it. You can’t even spend the money you have right now. $11 million, you’re basically printing over $1 million a year, passively. What are you going to do with that?
[01:06:29] Christina: Right.
[01:06:31] Ramit: If you embrace the idea that we are an 11-million-dollar couple, where’s my time better spent? Is it on cleaning up the house or is it on having the energy and freedom to be able to speak to my wife and engage with our money and other critical parts of the family? I think that answer becomes very evident.
[01:06:49] Noah: Yeah.
[01:06:50] Christina: Yeah.
[01:06:50] Ramit: What’s amazing is both of you, pretty skilled with knowing your numbers. Every question I’m asking you, you thought it through. I like that. I appreciate it. And yet, even knowing your numbers does not necessarily change the way you feel about it.
[01:07:08] You can question yourself about something as large as your vacation expenditure or childcare. You can go the rest of your life doing it. You will accumulate millions. and you will have a miserable time along the whole way.
[01:07:21] Christina: I think we need to spend a little more and feel a little like breathing room.
[01:07:25] Ramit: It’s not a math problem. It is changing your money dynamic. What else, Noah?
[01:07:34] Noah: I think it’s less consequential for the education costs. I think that’s been a big thing. We’re like, how do we make this one year work here?
[01:07:42] Ramit: Think bigger.
[01:07:44] Noah: We’re going to be all right.
[01:07:45] Christina: I love that. I didn’t think it was possible.
[Narration]
[01:07:49] Ramit: I found that conversation to be incredibly fascinating and at times frustrating to imagine that you can go your entire life basically wearing a mask, and the mask is of a story that you concocted. One of you, the worrier, constantly worrying about things, actually quite sophisticated with money in certain ways, but also never really diving in and truly understanding how much money they have and what it means for them. That’s Christina.
[01:08:20] Then we have another role, another mask being worn, and that is Noah. Noah who has appointed himself, the guardrail guy, the protector, the one who needs to keep her in check. But that’s not how an intimate partnership works. You shouldn’t need to keep your partner in check. You are partners.
[01:08:40] And when we really dive in deep and ask, what do you want? What kind of Rich Life do you want to create? What kind of dynamic do you want to engender in your household? We discovered that Noah’s behavior is totally at odds with what he and Christina want. So I found that conversation fascinating and frustrating, but I also liked that moment of realization at the end where they realize, it’s going to be okay. And that is why I do what I do to get that right there, that moment where they realize, oh my gosh, everything is going to be okay. And now we can turn the page and look at the world through a different set of money lenses. That’s exciting to me. That changes them. That changes their family culture. That changes their children’s family culture. And I’m thankful that I got to play a small part in that. Now let’s check out Christina’s follow-up.
[01:09:29] Christina: Hi, Ramit. It’s Christina. I wanted to give you our feedback from the session. So my biggest surprise was how disrespectful I was to my husband in public. So that was really enlightening, and that will lead to one of our changes that we’re making, which is more couples therapy. And it was also a big surprise that, if we did nothing else, we would be on track to be an 11-million-dollar couple, which seems crazy.
[01:09:55] I want to say we’re doing fine, but we’re doing pretty good. And I can say that with a smile finally. We’ve realized that our investment portfolio is not as bad as we have perceived it to be, to keep up with the Joneses and our environment. Even if we take out money to buy a home for a down payment, given our habits to invest and save, we will still be on track to have enough of a net worth to afford our kids’ college and to afford retirement. And so those are two things that are very important to us. And that was a really big takeaway.
[01:10:35] Finally, the changes we’re going to implement. We have already begun a deep search for a house cleaner to come weekly, which is a huge change. It’s a definite an added expense, but in a convenience that we need, and finally, we’re going to fire our financial advisor. We didn’t talk about that too much, but we have a deadline, and the deadline is three weeks. So he will be fired, and we can’t wait. I can’t wait.
[01:11:04] Ramit: And now Noah’s follow-up.
[01:11:06] Noah: It was liberating hearing that we’re on the right track with our finances and should spend money to make our lives easier. We’ve spent many hours focused on spreadsheets and not enough time on building shared goals and dreams. We have a lot of work to do in our marriage. Hearing Ramit refer to us as a sitcom couple was eye-opening, because I know neither of us wants that. And I don’t want my wife or my children looking at me as a disengaged dad.
[01:11:37] The most surprising thing for me was how our financial spending isn’t the problem. Instead, it’s how my frugality and spending habits have negatively impacted our relationship and contributed to Christina’s financial insecurity. So what changes have we made and what’s the plan?
[01:11:57] First, we’ve been investing in help for ourselves. We started back up with couples therapy so that we can focus on our marriage. We found new part-time caregivers to watch our son, which allowed us to actually take a date over the weekend to a comedy show.
[01:12:13] And we’re in the process of hiring a house cleaner to make our lives a lot easier. I’ve removed the, can we afford it from my vocabulary to help Christina make and feel more comfortable in her decision making. And I’m making it a goal of my own to provide input and excitement when planning travel and other ideas. Finally, we’ve taken time each day for us to slow down, connect, discuss, and plan our future together.
[01:12:41] Ramit: My crew also had a chance to ask them what they thought of right after speaking to me. Let’s hear what they said.
[01:12:48] Christina: Working with Ramit was intense. It was really clarifying. He was very sharp, very intuitive and perceptive. I saw all the good and bad colors in my personality in those few hours.
[01:13:06] Noah: I’m thinking to focus things that I hadn’t really considered in the first place. And it was definitely very different and difficult to stomach some of that too at the same time. I feel much better from a standpoint of where we are financially walking out of this than I did walking in there, and that I very appreciate both.
[01:13:30] Christina: The experience was not what I expected. I thought we would go down different avenues. I thought he would criticize our numbers more. And it’s very comical when you are listening to the podcast and then now you’re in it. It really brought colors out of you that you probably didn’t realize were going to be brought out of you.